M/S. TULSIDAS KHIMJI versus THEIR WORKMEN

Citation: [1963] 1 S.C.R. 675 · Decided: 11-04-1962 · Supreme Court of India · Bench: T.L. VENKATARAMA AIYYAR

Cited by 3 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

i s.c.R. 
SUPREME COURT REPORTS 
675 
M/s. TULSIDAS KHIMJI 
v. 
THEIR WORKMEN 
(B. P. SINHA. c. J., K. SUBBA RAO, N. RAJAGOPALA 
AYYANGAR, J. R. MuDHOLKAR and T. L. 
VENKATARAM.A AIYAR, JJ.) 
Industrial Dispute-Bonus -Profit·sharing bonus- Cus-
tomary festival bonus-Quantum oj- Deductions from profits 
for income-tax purposes in partnership .firm-Nature of control 
of Supreme Court ovrr Tribunal-Importance of Rules of 
Supreme Court-Industrial Disputes Act, 1947 (14 of 1947). 
The appellants are a registered partnership firm. 
The 
firm carries on business in the name of Messrs. Tulsidas 
Khimji. It has six partners. It carries on four different 
kinds of business. The respondents are workmen employed 
under the firm. 
Disputes arose between the appellants and the respon· 
dents and the question referred to the Tribunal was the quan-
tum of bonus payable to the respondents for the year ending 
October 30, 1958. 
The relevant issue were whether the claim 
under reference should be restricted to a claim for profit-shar-
ing bonus or customary bonus on the basis of implied terms 
of contract, and whether it was open to the respondents to 
claim bonus on the basis of the surplus profits and at the 
same time claim bonus on the ground of custom or practice 
or implied terms and conditions of service, or whether the 
workmen should elect the basis on which they claimed 
bonus. 
The Tribunal held that the workmen were entitled to 
claim bonus on each of the three alternative bases, namel}, 
profit-sharing bonus, bonus as an implied term of service and 
customary or traditional bonus on the occassion of Divali. 
The Tribunal fixed the amount of bonus at one-fourth of the 
tofal basic wages earned by the workmen during the year 
under reference, less the amount of bonus equivalent to one 
month's wages already paid for the year under reference. 
The Tribunal also held that the workmen had succeeded in 
proving their claim for traditional or customary bonus at the 
uniform rate of one month's basic wages plus dearness allow-
ance. The Tribunal also held 1hat the amount deductable 
on aHcnmt of inuuc 0 ta ~as a little O\Cr 5 ftr ctnt of the 
1962 
April 11. 
.... 
... 
1968 
Tutsidat Khimji 
v. 
Their Workmen 
676 
SUPREME COURT REPORTS [1963] 
total amount of gross profits. The Tribunal also fixed the 
remuneration of the partners at Rs. 20,000 in all. 
Against the award of the Tribunal, the appellants came 
to this Court by special leave. 
Held, (per Sinha, C. J., Subba Rao, Mudholkar and 
Venkatarama Aiyar, JJ., Rajagopala Ayyangar, J., dissenting) 
that a sum of Rs. 53,000 should b., allowed under the head of 
income-tax. It was not right to give the employers the double 
benefit of granting deduction on the basis of income-tax 
payable by each partner in tespect of his share in the profits 
of the firm, and at the same time adding the registered firm 
tax which was paid by the firm in order to obtain certain 
reliefs under the Income· tax Act which they would not other-
wise have obtained. 
As regards the remuneration to be paid to the partners 
of the firm, the amount fixed by the Tribunal was found to be 
inadequate, but as this Court does not function as a regular 
court of appeal from the Tribunal and its function is merely 
to see that the law is being properly administered in accord-
ance with the well· settled rules of natural justice, this Court 
refused to determine the amount of remuneration to be allowed 
to the partners. 
The Tribunal was fully justified in coming to the con-
clusion that the traditional or customary bonus had been 
established in this Case. 
What is important to negative a 
plea for customary bonus is the proof that it was made 
ex gratia and accepted as such or that it was unconnected 
with any such occasion as a festival. 
This Court refused to allow the respondents to prove that 
a bonus could be granted as an implied term of contract of 
service. 
Such a case had not been made out in the statement 
of the case. This Court is very strict in enforcing the rules of 
pleading as laid down in the Supreme Court Rules. Those 
rules have been laid down with a view to help the court in 
narrowing down the controversies between the parlies and also 
for the purpose of giving notice to the other side that a parti-
cular question will be raised and that party should be ready to 
meet that particular point. This Court would not ordinarily 
permit any laxity in the matter of pleadings in this Court. 
Th

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