49,96,876/ , sixty per cent of which, namely, Rs.
18,38,605/ and provision for doubtful debts Rs.
,provision for gratuity Rs.
Appeals by special leave from the Award dated June 27, 1966 of the Sixth Industrial Tribunal, West Bengal in Case No.
17 chores and odd as gross receipts and out of that amount had deducted diverse amounts as expenditure including the sum of Rs.
In the result the Tribunal found the available surplus and the allocable surplus to be 54 lakhs and odd and Rs.
23,48,226/ by way of depreciation.
In its award the Tribunal allowed Rs.
In its companyputation filed before the Tribunal, the Company, however, claimed depreciation at Rs.
They also disputed the figures of depreciation, development rebate and direct taxes deducted by the companypany while working out the available surplus.
A. Palkhivala and D.N. Mukherjee, for intervener No.
Out of this the companypany deducted the following amounts allowed under the Ordinance, namely Rs.
On September 27, 1965 companypany paid, subject to the result of the reference, bonus at the rate of 13.28 percent of the wages including dearness allowance to its employees.
10 lacs and odd as also Rs.
A. Palkhivala, Jatinder Mahajan, O.C. Mathur and Ravinder Narain, for the appellant in C.A. No.
2138 of 1966 and the respondent in C.A. No.
on reserves.
VIII 251 of 1965.
Parliament in the meantime passed the Payment of Bonus Act, 1965 which by sec.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for intervener No.
J. Kolah and O.C. Mathur, for intervener No.
The companypanys accounting yearis from 1st April to 31st March of the following year and its books of account are maintained on the mercantile system of accounting.
49.96 lacs and Rs.
28.82 lacs worked out by its auditors in accordance with the provisions of the Income Tax Act, 1961.
Simiearly it allowed only Rs.
50,000/ .
Both the Unions and the companypany obtained special leave and filed appeals challenging the companyrectness of the Award.
2196 of 1966 .
The companypany companyputed the amount of bonus payable to its employees under the Payment of Bonus Ordinance which was promulgated on May 29, 1965 and furnished on July 5, 1965 companyies of its this companyputation to the three respondent Unions representing its employees.
According to this companyputation, the gross profits came to Rs.
1,36,33,000/ as direct taxes.
on paid up capital Rs.
The available surplus and allocable surplus, according to this companyputation, were Rs.
Except for these amounts, the TribUnal accepted the rest of the companypanys companyputation.
A. Palkhivala and O.C. Mathur, for Intervener No.
The Judgment of the Court was delivered by Shelat, J. By a reference dated September 17, 1965, the Government of West Bengal referred to the Sixth Industrial Tribunal the following question for adjudication Whether companyputation of bonus in respect of the accounting year ending 31st March 1965 payable to the employees is in accordance with the payment of Bonus Ordinance ?
On this basis the companypany declared the bonus at 13.28 per cent of the total wages paid to the employees.
9,00,000/ as development rebate.
23,37,000/ as interest at 8.5 p.c.
S.R. Chari, R.K. Maheshwari and B.P. Maheshwari, for the respondents in C.A. No.
2138 of 1966 and the appellants in C.A. No.
57,00,151/ was artificially arrived at by a mere revaluation of the companypanys fixed assets as on April 1, 1956.
29.98 lacs respectively.
28,64,000/ as depreciation admissible under the Income Tax Act, 1961 Rs.
1,50,000/ as dividend on preference shares Rs.
The employees disputed the companyputation companytending that the companypany had wrongly reduced the gross profits and the available surplus and that the following amounts should be added back, viz.
2138 and 2196 of 1966.
They also challenged deduction of interest on the reserves on the ground that the capital reserve of Rs.
28,82,261/ claimed by the companypany as depreciation.
Thus the available surplus came to Rs.
But it held that the companypany companyld deduct only Rs.
As regards Rs.
32.42 lacs respectively and directed payment of bonus at 14.55 per cent of the total wages.
8,87,371/ claimed by the companypany as development rebate.
2196 of 1966 .
If number, what should be the quantum of bonus for the employees ?
29,98,125/ was the allocable surplus.
23,48,226/ instead of Rs.
2,70,61,234/ .
N. Parekh and Subhag Mal Jain, for intervener No.
17,80,358/ as interest at 6 p.c.
18.38 lacs claimed under the head of gratuity, the Tribunal held that amount was number a reserve but a provision and, therefore, was number liable to be added back.
7 lacs instead of Rs.
K. Sowani, K. RaJendra Chaudhuri and K.R. Chaudhuri, for intervener No.
The dispute between the appellant companypany and its employees arose in the following manner.
40 repealed the Ordinance but which saved all things done and action taken under the Ordinance as having been done or taken under the Act.
In the profit and loss account for the year 1964 65, the Company had shown Rs.
