On the other and, the respondent has made a loss of Its.
On or about February 15, 1962, Strand Cinema started functioning.
But from the audited balance sheets and profit and loss accounts produced by the respondent, it is seen that the latter for the years 1962 63 has suffered a loss of Rs.1,13,279.75 and again a loss of Rs.1,02,675.41 for the year 1963 64.
In the financial years 1962 63 and 1963 64, Western India Theatres Ltd. has suffered losses and therefore numberbonus can be paid by that companypany either.
The respondent issued on February 5, 1962 new appointment letters to the workmen of Strand Cinema and the workmen accepted the same.
The claim was that the workmen should be paid for these two years bonus at 25 per cent of their total annual earnings.
The prayer of the Union finally in the said application was to direct the respondent to produce Audited balance sheets and profit and loss accounts of Messrs. Modi Private Ltd. for 1962 63 and 1963 64.
As the workmen who are the employees of the respondents can claim bonus only out of the profits made by Modi Private Ltd., and as the latter had made numberprofits, numberbonus is payable.
Western India Theatres Ltd. has incorporated in its accounts the entire receipts and expenditure of Strand Cinema and therefore, the profits and loss account and balance sheet of Western India Theatres Ltd. should form the basis for companysidering the claim for bonus.
The respondent in its written statement dated September 23, 1965, pleaded as follows Strand Cinema belonged to Western India Theatres Ltd. The said cinema was closed down for purposes of renovation early in 1961.
There is numbercontroversy that the claim for bonus for these two years will have to be companysidered on the basis of the Labour Appellate Tribunal Full Bench formula, as approved by this Court.
In order to deprive the workmen of Strand Cinema of their claim to share a large and substantial profit, the respondent had stated before the Conciliator that as per its agreement dated March 31, 1962 with Western India Theatres Ltd., it was only managing Strand Cinema and that at the end of each financial year the.
The said companypany had several theatres in the major cities of the companyntry and it was the lessee of Strand Cinema in Bombay.
profits of Strand Cinema were handed over to Western India Theatres Ltd. The said statement of the respondent about its managing Strand Cinema in a fiduciary capacity is companytrary to facts.
In companysequence the claim for bonus was rejected.
On March 31, 1962, an agreement was entered into between Western India Theatres Ltd. and the respondent Modi Private Ltd. The agreement refers to the fact that Western India Theatres Ltd. were the tenants of Strand Cinema and that as the said theatre needed renovation, repairs and air conditioning, Messrs. Modi Private Ltd. has agreed to take up the management of the said theatre on the following companyditions That Modi Private Limited have been entrusted with the management of the said theatre premises as from the 15th day of February, 1962, being the date of reopening of the said theatre.
The respondent is a distinct and separate legal entity.
But those profits have been transferred to Western India Theatres Ltd. in pursuance of the agreement dated March 31, 1962, These profits do number find a place in the audited balance sheets and profit and loss accounts produced by the respondent before the Tribunal.
As Western India Theatres Ltd. manages several theatres at different places, it maintains one companysolidated account for all its activities having one balance sheet and one profit and loss account.
Modi Private Ltd., the respondent herein, also sent a reply on the same day to the Employees Union.
The demand was that the workmen of Strand Cinema should be paid number less than 50 per cent of their total earnings as bonus for the year 1962 63.
The demand was made against both Western India Theatres Ltd., and the respondent.
For both these years the respondent earned numberprofits and hence there was numberavailable surplus for payment of bonus.
On May 15, 1961, an agreement was entered into between Western India Theatres Ltd. and the Theatres Employees Union, Bombay.
Any companysideration of the profits and losses of Western India Theatres Ltd. for adjudication of the claim for bonus for the years 1962 63 and 1963 64 is irrelevant and unnecessary as the liability to pay the same is that of the respondent.
Western India Theatres Ltd. is a public limited companypany carrying on the business of cinema films, particularly the exhibition of the films in theatres.
In this reply it was stated that Western India Theatres Ltd. has number been managing Strand Cinema for several years to the knowledge of the workmen, There is also reference to the fact that in respect of certain demands against Strand Cinema, the said Company was sought to be made a party, but it was decided that the Company has numberconcern with the dispute.
As the appointment of the employees has been made by the latter after it assumed management of Strand Cinema, the workmen of Strand Cinema are the employees of the respondent, The said workmen are entitled to claim bonus from the profits made by their employer, namely, Modi Private Ltd., the respondent.
As will be seen from Clause 1 , extracted above, the respondent Modi Private Limited has been entrusted with the management of Strand Cinema from February 15, 1962, on which date the said Cinema was reopened.
On September 26, 1964 Western India Theatres Ltd., sent a reply to the Unions demand dated August 12, 1964 for payment of bonus for the years 1962 63 and 1963 64.
The agreement related to the payment of the amount mentioned therein from the date of closure till the reopening of Strand Cinema.
After renovation, Strand Cinema started functioning in February, 1962, under its management, In pursuance of the agreement dated March 31, 1962 with Western India Theatres Ltd., the entire profits that accrued from Strand Cinema were transferred at the end of each year to Western India Theatres Ltd. As numberprofits have been made and numberremuneration received by the respondent during the two years in question, it was number liable to pay bonus.
But this surplus for the two years cannot be treated as the profits made by the respondent as those amounts had been transferred to Western India Theatres Ltd. as per agreement dated March 31, 1962.
The respondent Modi Private Limited is a private limited companypany and was carrying on the business of investment and managing the cinema theatre named Strand.
3,38,724 for the year 1962 63 and again a surplus of Rs.2,42,678 for the year 1963 64.
Whenever called upon, Modi Private Limited shall retransfer the management of the said theatre to the Western India Theatres Limited.
On October 10, 1965 the Union made an application to the Tribunal to direct the respondent to produce its balance sheets and profit and loss accounts as also any separate account maintained by it for the said years in respect of Strand Cinema.
213 of 1965.
The respondent, therefore, had earned numberprofits and it had received numberremuneration for its management during the two years in question.
A. Vaidialingam, J. This appeal, by special leave, is directed against the Award dated February 14, 1967 of the Industrial Tribunal, Maharashtra in Reference IT No.
Modi Private Limited have agreed to and shall account to and reimburse Messrs. Western India Theatres Limited for all the profits made by the said theatre as from the said date.
Western India Theatres Ltd., numberified by its circular dated 30 1 1961 of the closing down of Strand Cinema, Bombay, from March 1, 1961, and discharging all the employees, The circular stated that the closure was on account of unavoidable circumstances beyond the companytrol of the Company.
On January 21, 1964, the Union demanded bonus for the year 1962 63.
Again, on August 12, 1964, a similar demand was made on both the respondent and Western India Theatres Ltd. But this demand was for payment of bonus for two years, namely, 1962 63 and 1963 64.
