K. C. P. EMPLOYEES' ASSOCIATION, MADRAS versus MANAGEMENT OF K. C. P. LTD., MADRAS

Citation: [1978] 2 S.C.R. 608 · Decided: 24-01-1978 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Dismissed
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Judgment (excerpt)

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.608 
K. C. P. EMPLOYEES' ASSOCIATION, MADRAS 
v. 
MANAGEMENT OF K. C. P. LTD., MADRAS 
January 24, 1978 
(V. R. KRISHNA IYER AND JASWANT SINGH, JJ.] 
Payment of Bonus Act (Act 21), 1965, s. 3, prov.iso to-Applicability of. 
Management-respondent is a public limited company carrying on three busi-
ness adventures viz., manufacture of sugar, of cement and of heavy engineering 
machinery, at three different places. 
In respect of the workers of the engineer-
ing unit known as Central Workshops and which was financially ill, the manage-
ment demurred the payment of bonus under the Act for the years 1964-65 and 
1965-66 on the ground that the central workshop was a separate undertaking 
to which the, proviso to Section 3 applied and consequently the claim for bonus 
on the basis of a single establishment within the meaning of the main s. 3 was 
untenable. The Labour Tribunal, however, upheld the claim of the workmen 
for both the years. 
When the said two awards were challenged by a writ 
petition, a single Judge of Madras High Court upheld the award for 1964-65. 
In further appeal by the management, the Division Bench set aside both the 
awards for 1964-65 and 1965-66 and directed the Tribunal to correct certain 
errors. 
Dismissing the appeals by special leave with directions for expediting and 
completing the /is within three months, the Court 
HELD : 1. In Industrial law, interpreted and applied in the perspective ot 
Part IV of the Constitution, the benefit of reasonable doubt on law and facts, 
if there be such doubt, must go to the weaker section, labour. [610 B-C] 
2. In the instant case : (a) Proviso to s. 3 is attracted. Separate balance 
sheet and profit and loss accounts have been prepared and maintained in the 
past and during the relevant years of accounting also and (b) The High Court 
is right in directing the Tribunal to re-enquire, rectify the balance sheets and 
profit and loss accounts for the years in question taking due note of the require-
ments of the Act. 
[609 G-H, 610 A] . 
Alloy Steel Project v. The Workmen, [1971] 3 SCR 620 (ratio inapplicable) 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2142-2143 of 
1970. 
ApP'~al from the Judgment and Order dated 3-9-1970 of the 
Madras High Court in Writ Appeals Nos. 350168 and 76 of 1969. 
M. K. Ramamurthi, M. P. Dhar and Vineet Kumar for the Appel-
lant. 
V. M. Tarkunde and Naunit Lal for Respond_ent No. 1. 
B. P. Singh for Respondent No. 2. 
For Respondent No. 3 in CA 2142 and RR 3-6 in C.A. 2143170 
ex-parte. 
The Judgment of the Court was delivered by 
KRISHNA IYER, J.-Affirming judgments need not speak elaborately, 
and so, in these two appeals where we do not disagree with the High 
H 
Court, only a brief statement of reaso'ns is called for. 
Tho subject matter is a bonus dispute between the management-
respondent and the workmen union revolving round the applicability 
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EMPLOYEES v. K.C.P. LTD. (Krishna Iyer, J.) 
609 
of the proviso to Section 3 of the Payment of Bonus Act 1965 (here-
tnafter referred to as the Act) for the years 1964-65 ~nd 1965-66. 
A thumbnail sketch of the facts : 
The K. C. P. Limited, a public limited company, carries on three 
business adventures, viz., manufacture of sugar, of cemwt and of heavy 
engineering machinery. 
The concerned factories are in three different 
places in South Ihdia and employ workmen on different terms in three 
different units. 
We are directly concerned with the engineering unit 
known a~ the Central Workshops run at Tiruvottiyur, Madras. 
When 
the Payment of Bonus Act, 1965 came into force the workmen of this 
unit, which was financially faring ill unlike the other two sister units, 
demanded bonus on the footing that the three different undertakings 
must be treated as one composite establishment and on the basis of the 
overall profits, bonus must be reckoned as provided in the Act. 
The 
respondent demurred on the ground that the Central workshop was 
a separate undertaking to which the proviso to Section 3 applied and 
consequently the claim for bonus on the basis of a ·sihgle establishment 
was untenably over-ambitious. 
Although the concerned unit was 
perhaps a losing proposition for the re:evant years, (we do not know 
for certain) the Tribunal upheld the claim of the workmen for both the 
years, but the two awards were challenged, by Writ Petition, in the 
High Court. The award relating to 1964-65 was upheld by a Single 
Judge of the High Court who to
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