LexTHE INDIAN HUME PIPE CO., LTD., versus THEIR WORKMEN
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948 SUPREME COURT REPORTS [1959] Supp. '959 n.llowing only one month's basic wages to its workmen C who are respondents to these appeals instead of 2i rompton th ' b . "d d . h d b • Parkiuson (Wo>ks) mon s as10 wages as prov1 e m t e awar , su Ject, Private Ltd., of course, to the conditions laid down in the awn.rd. Be Bombay it noted here that the company has paid this bonus to v. the respondents and nothing remains due and payable Its Workmen for bonus for 1954-55. Considering all circumstances & Others of these appeals, we r.lirect each party to bear its own Das c. J.. costs of these appeals. '959 May 5. Appeal allowed ·in part. THE INDIAN HUME PIPE CO., LTD., v. THEIR WORKMEN (S. R. DAS, c. J., N. H. BHAGWATI, s. K. DAS, P. B. GAJENDRAGADKAR and K. N. WANCHOO, JJ.) Inditslrial Dispute-Boniis -Available Surplus - Previous losses written off-Expenditure on patents written off-Debenture redemption reserve-If proper prior charges-Preference shares. return on-Calcitlations 011 All-India basis, whether proper. The appeliant manufactured hume pipes and had factories in different parts of India, Pakistan and Ceylon. For determin- ing the available surplus for the payment of bonus for the year 1954-55 the appellant claimed deductions as prior charges on account of (i) losses suffered on the Lahore factory written off, (ii) expenditure on patents written off, and (iii) debenture redemption reserve. It also claimed 6% retnrn on the preference shares as return on paid up capital. The losses on the Lahore factory had been incurred in the previous years which had been carried forward from year to year and had been written off ~s irrecoverable in the bonus year. The amounts spent on the purchase of the patents which had been worked off in the previous years had also been written off in the bonus year. The appellant had issued debentures in 1942-43 redeemable in 1962-63 and claimed Rs. 3,50,000 as the annual contribution towards the redemption reserve. The appellant had issued pre- ference shares on which the share-holders, under the terms of the issue, were not entitled to more than 5%, but the appellant claimed a return of 6% on these shares also as return on paid up (2) S.C.R. SUPREME COURT REPORTS 949 capital as provided in the Full Bench formula. The dispute 1959 regarding bonus had been raised by the workmen of the \Vadala factory alone, the workmen of other factories having settled The btdian Hume the matter had been paid the agreed bonus. The respondents Pipe Co., Ltd., claimed that the bonus calculations should not be made on the v. basis of All-India figures but on the basis of the actual amounts Their Workmen paid or payable by the appellant under the settlements. Held, that the losses on the Lahore factory and the patents written off could not be allowed as prior charges as they were merely debits in connection with the working of previous years. Nor could the amount on account of the debenture redemption reserve be allowed as a prior charge as no such charge was envisaged by the Full Bench formula of the Labour Appellate Tribunal ; but this amount could be taken into consideration when distributing the available surplus among the various interests entitled thereto. In determining the available surplus the Full Bench formuta must be adhered to in its essential parti- culars as otherwise there would be no stability or uniformity of practice. A deduction of more than 5% return on the preference shares could not be allowed as that was the maximum return which the share-holders could get on these shares. Even though the Full Bench formula mentioned 6% return on paid up capital it was not to be literally construed and the Tribunal could, if the circumstances warranted, increase or decrease the i;ate. In calculating the actual amount of bonus to be paid calcu- lations had to be made on the basis of All-India figures other- wise the respondents would have an advantage over those work- men with whom settlements had been made and would get larger amounts of bonus merely by reason of the fact that the appel- lant had managed to settle the claims of those workmen at lesser figures. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 54 of 1958. Appeal by special leave from the Award dated January 14, 1957, of the Industrial Tribunal at Bom- bay in Reference (I. T.) No. 75 of 1956. M. 0. Setalvad, Attorney-General for India and J. N. Shro
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