LexWORKMEN versus MANAGEMENT OF DUNLOP RUBBER COMPANY OF INDIA LIMITED
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228
WORKMEN
MANAGEMENT OF DUNLOP RUBBER COMPANY OF INDIA
LIMITED
May 4, 1973
I.A. N. GROVER AND c. A. VAIDIALINGAM, JJ.]
Industrial dispute--Claini for additional bo11us-'Extra11eous profit' -Rerurn
-011 share prc111i1an-Rehabilitation clain1-When may not be included in-profitr-
Reserves use<..l as lt'orking capital-Mode of proof of.
A
B
For the years 1962 and 1963 the appellant~-workmen def!Ianded ~dditio~al
·bonus of three months' basic wages.
The tnbunal, to which ... the 1ndustnal
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dispute was referred on a consideration of the materials placed before it _by
both the parties, accepted the case of the
respofident-rnanagement,
regard1~g
certain deductions made from the profits. and held that the bonus alread¥ _paid
to the workmen was sufficient and that they were not entitled to any add1t1onal
bonus for those two years.
Dh,missing the appeal to this Court.
.
HELD : (i) The commission and royalties received from Dunlop, L.K.,
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fclr the two years were rightly not included by the respondent in its profits,
because, the evidence established that the circumstances under which the
respondent earned the amounts· showed that appellants had not made any
-contribution of work or labour for earning those araounts. It accrued to the
,respondent as extraneous income.
[233D~F]
Work1nen of Mjs Hindustan Motors Ltd. v. Mjs Hindustan Motors Ltd. &:
A11r. [19681 2 S .. C.R. 311, !ollowed.
E
Tata Oil Mills Co. Ltd. v. Its W01kme11 and Others [1960] l S.C.R. 1,
rreferred to.
(ii) The contention of the appellants that no return should be allowed on
the share pren1ium of Rs. 70 lacs was rightly rejected by the tribunal.
\Vhen
..a company makes a Rights issue, the Government, while giving consent, fixes
a cerlain amount of premium to be charged for those shares. Those shares
are issued only to the shareholders who ask for them and who pa;· the
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premium an1ount in addition to the nominal value of the share. Under the
Companies Act. 1956. as amended, a capital introduced by lhe r.hareholders
in a company had to be shown in accordance with schedule VI as a separate
item.
But the share premium is not undistributed profit and cannot be distri~
buted as dividend. It is really the share capital of the respondent and therefore,
the respondent was justified in claiming 6% return on this amount. [234 A·Cl
(iii) Mere production of a balance·sheet by a company cannot be taken
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as proof of a claim as to what portion of the reserves had been actually
used as working capital. The utilisation of any amount from the reserYes as
working capital has to be proved by an employer by adducing proper evidence
by wav of "affidavit or otherwise after giving opportunity to. the workn1en to
contest its correctness in cross·examination. The company will have to satis-
factorily prove that the amount on which the return is claimed has been
actually used as working capital:
But in the present case the respondent has
-adduced oral and documentary evidence. It is not a case where merely profit
and loss account alone has been filed witbout any further evidence beirig
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adduced by the respondent.
Therefore there is no basis for
the
contention
of the appellants that the respondent had not properly established its claim
for return on working capital [234G-H, 235 C-D]
A
B
WORKMEN v. MANAGEMENT DUNLOP RUBBER co. (Vaidialingam, J.)229
The Oriental Gas Company Ltd. v. Their Workmen, [197l] II L.k.J. 657
and liareilly Electricity Supply Co. Ltd. v. The Workmen & ·Ors. (1972)' I S.C.R.
241 referred to.
(iv) _(a) Even if the claim of the company for rehabilitation is rejected
completely, on the basis of the findings, that is, after taking into account the
claims of the respondent. allowed and rejected, and the rebate in income~tax
that may be received by the company, the workmen would still have been paid
bonus at a rate which has been accepted as correct by this Court. [237 <>Dl
(b) On the basis of the education to b.:: made according to the appellants
in respect of rehabilitation ctaim. the respondent will be entitled to son1e
amount at least in that regard. Even if that lesser amount is taken into account
the available surplus will be reduced further, and, the result will be that even
the amount paid as bonus already by the respondent will be more than what
the workmen will be entitled to accordin2 to the decisions of this Court. {238
E-HJ
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(c) 'fhc Industrial Tribunal, Calcutta, in relExcerpt shown. Read the full judgment & AI analysis in Lexace.