MANAGEMENT, CHITAVALSAH JUTE MILLS LTD. versus WORKMEN OF CHITAVALSAH JUTE MILLS

Citation: [1968] 3 S.C.R. 8 · Decided: 02-02-1968 · Supreme Court of India · Bench: G.K. MITTER · Disposal: Dismissed

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Judgment (excerpt)

MANAGEMENT, CHITAVALSAH JUTE MILLS LTD. 
A 
v. 
WORKMEN OF CHITAVALSAH JUTE MILLS 
February 2, 1968 
(G. K. MITTER AND K. S. HJ!GDE, JJ.) 
Industrial Dispute-Gratuity scheme framed by Ti-ibunal-Comidera-
tions in framing scheme. 
The appellant was a jute mill. The Industrial Tribunal framed a gra· 
tuity scheme for its workers. It was challenged by tbe appellant before 
this Cou'rt in an appeal under Art. 136 of the Constitution. Two conten-
tions were urged, namely: (i) tbat the wage board was unable to recom-
mend a gratuity scheme for the jute industry and hence tbere 'was no justi· 
fication to frame the impugned scheme; (ii) in view of the losses incurred 
by tbe appellant during the years 1960-65, no additional burden should 
have been cast on it by introducing a gratuity scheme. 
HELD : (i) The Wage Board's recommendation pertained to the jute 
industry as a whole and not to anv individual industrial unit. It cannot 
be understood as recommending tbat there should be no gratuity scheme 
for the employees in any particular unit in that industry. What was re· 
levant to find out was whetber tbe appellant could bear tb-, additional 
burden. [10 BJ 
(ii) The Tribunal recommended the gratuity scheme after taking into 
consideration the financial position of the appellant as well as the fact that 
in a sister concern such a scheme was in existence. The losses suffered 
by tbe appellant were considered by the Tribunal to he a passing phase. 
What is of essence is tbe profit makin~ capacity of the concern. In deter-
mining that question one has to take into consideration the paid up capital 
of the company, its reserves, its earnings in the past and its futlll'e pros-
pects. .f>. practical view of the question has to he taken. [10 D, G] 
In the light of these principles and on the ma!erial placed before the 
Tribunal it was not possible to hold that the Tribunal's conclusion was 
without any just basis. [12 A] 
· 
B 
c 
D 
E 
National Iron & Steel Co. Ltd. & Ors. v. State of West Bengal & Anr. 
F 
(1967] 2 S.C.R. 391 and Calcutta Insurance Co. Ltd. v. Their Workmen, 
(1967] 2 S.C.R. 596, relied on. 
CML APPELLATE JURISDICTION: Civil Appeal No. 1627 of 
1967. 
Appeal by special leave from the Award dated March 31, 1967 
of the Industrial Tribunal, Andhra Pradesh in Industrial Dispute 
No. 55 of 1965. 
H. R. Gokhale and D. N. Gupta, for the appellant. 
M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for 
the respondents. 
The Judgment of the Court was delivered by 
Hegde, J. This appeal has been brought to this Court by 
special leave. It arises from the decision of the Industrial Tribunal, 
G 
H 
• 
A 
I 
c 
D 
E 
CIIlTAVALSAH MILLS v. WORKMEN (Hegde, J.) 
9 
Andhra Pradesh, Hyderabad. The only question that arises for 
decision is whether on the basis of the material on the record 
there was any justification for framing a gratuity scheme for 
appellant's staff. 
The admitted facts are these : The appellant concern is hav-
ing about 500 looms. 
It has a subscribed capital of a little over 
35 lakhs. Its built up reserve is over thirty lakhs. In three out 
of the six years during the period 1960-65 it has suffered sub-
stantial losses. Out of the "remaining three years, in ooo year It 
made a profit of about Rs. 45,000 in another year about Rs. 13,000 
and in 1962 over rupees twelve lakhs. The annual expenses of 
the appellant's 
~ncern under the head 'salaries, wages and 
bonus' are nearly 4 7 lakhs. 
It was found by the tribunal that the appellant concern and 
the Nellimarla Jute Mills are sister concerns. Both of them are 
under a single management, viz.. M/ s. Mcleod and Company, 
Calcutta. They are located in the same region, the distance bet-
ween the two being about 25 miles. In Nellimarla Jute Mills a 
gratuity scheme for the staff is in existence and that in addition 
to provident fund benefits. Our attention wa& not invited, to any 
material on record to show that these findings are not correct. In 
the appellant concern also there is a provident fund scheme for 
the staff. 
The appellant iri its counter-affidavit filed before the 
tribunal admitted that it had always been the policy of the mana-
gement to introduce identical terms of employment for the work-
men at Nellimarla and Chitavalsah. From the material before us 
it is not possible to find out the financial position of the Nellimar-
la mills. We ascertained from the learned counsel for the appel-
lant that the appellant concern had made a profit o

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