Aryabhushan Press, Poona vs K.R. Powar and Another

D.P. Madon, J.—By this petition under Art. 227 of the Constitution, the Aryabhushan Press, Poona, which is run by the Servants of India Society, a society registered under the Societies Registration Act, 1860, seeks to set aside an award made by Mr. K. R. Powar, Member, Industrial Tribunal, directing payment of gratuity to the workmen of the petitioner. The Servants of India Society was formed with the objects, inter alia, of promoting by all constitutional means the national interests of the Indian people without distinction of caste or creed and of assisting educational movements and the elevation of the depressed classes. The members of the Society are pledged throughout their lives to give the best that is in them to the cause of the country in all secular fields. This Society has its headquarters in Poona and branches in several parts of India. This society also runs a press at Poona which is known as "Aryabhushan Press", the petitioner before us.

On January 31, 1966, a reference was made by the Government of Maharashtra under S. 10 of the Industrial Disputes Act, 1947, referring for adjudication the demand of the workmen of the petitioner for framing a scheme of gratuity with effect from January 1, 1965. The award was made on February 28, 1967, and by the said award the employers were directed to pay gratuity. The relevant directions in the award are as follows :

"The employer shall pay gratuity to -

(1) a workman on the termination of his services -

(a) on his death,

(b) on account of physical or mental disability to continue his service.

Explanation : In case of death, the gratuity shall be paid to the legal heirs and successors of the deceased workman.

(2) a workman who has completed service of not less than ten years, on the termination of his services -

(a) by retirement on superannuation,

(b) by voluntary resignation,

(c) by discharge or dismissal from service,

Provided that the payment of gratuity to a workman who is discharged or dismissed from service for misconduct involving financial loss to the employer, shall be subject to a deduction to the extent of such loss caused by him.

(3) The amount of gratuity shall be equivalent to fifteen days'' wages (inclusive of dearness allowance, if any) for every completed year of service subject to a maximum of twelve years.

Explanation : The fifteen days'' wages shall be computed on the basis of the average of the wages (inclusive of dearness allowance, if any) earned by the workman concerned during a period of six calendar months next preceding the month in which the gratuity accrues due."

Mr. Gadgil, learned advocate for the petitioner, has challenged this award before us on three grounds, namely, (1) gratuity should have been awarded by the Tribunal only if a concern is a purely profit-making and commercial concern which it is contended the petitioner is not, (2) the financial position of the Servants of India Society was not such as to justify the Tribunal in making an award directing the press to pay gratuity to its workmen, and (3) the Tribunal erred in considering the petitioner as separate entity and not as an integral part of the activities of the Servants of India Society.

So far as the first ground urged by Mr. Gadgil is concerned, this ground does not take into account the object underlying payment of gratuity. Gratuity is a retirement benefit, a provision for old age, being the reward to the employee for long and efficient services put in by him. The real question to be determined is whether the financial capacity of the employer is such as to bear the additional burden by way of gratuity. We also find on the record that it is not correct to say that the petitioner is not a profit-making and commercial concern. The Aryabhushan Press is not a press which is confined merely to printing literature propagating the aims and objects of the Society. It is printing press like any other printing press run for profit. It takes orders for printing work from all persons. It, therefore, cannot be said that this press is not a commercial concern. In fact, the petitioner has made of the years 1962-63 to 1965-66 profits in the respective sums of Rs. 1,15,900, Rs. 1,03,961, Rs. 1,30,346 and Rs. 1,44,126. It is, however, the contention of Mr. Gadgil that these profits should not be taken into account as the profits earned from the press are utilised by the Servants of India Society for its charitable activities such as the uplift of the depressed classes and running educational classes. The question whether a concern is a profit-making concern or not does not depend upon the ultimate destination or utilization of the profits. Profits are the excess of return over outlay. What the employer may, thereafter, do with the return can have no bearing on the question whether it should be considered as profit or not. If such as argument were to be accepted, it would lend to very anomalous results. Even an individual employer who may in course of time become very charitable-minded can come forward and urge that he should not be allowed to provide for higher benefits to his workmen because he is disbursing the entire net return in the cause of charity. The fact that by its objects the Servants of India Society is required to utilise its income in a certain direction can have no relevance to the fact whether the press run by it is a profit-making concern or not. If by giving higher benefits to its workmen the profits of the press are reduced, the only result would be that there will be less moneys available to the Society for disbursing for its other objects.

The second ground canvassed by Mr. Gadgil, learned advocate for the petitioner, really arises for consideration only after the third ground, because if it were held that the Tribunal was not in error in considering the press as a separate entity, then the question of the financial position of the Society will not arise for consideration. Now, this press is not run as a part of the Society. The object of running the press is that the press should earn profits, so that moneys may become available to the Society for the purpose of disbursement for its charitable and philanthropic objects. Since the running of the press is not an integral part of the other activities and objects of the Society, it cannot be said that the press is not a separate entity. In support of this contention Mr. Gadgil referred us to The Associated Cement Companies Limited, Chaibassa Cement Works, Jhinkpani Vs. Their Workmen, . A question that arose for consideration of their Lordships of the Supreme Court in that case was the test to be applied in determining whether a particular unit was part of a bigger establishment. In that case, the petitioner-company owned a cement factory and also a limestone quarry which supplied limestone exclusively to the factory. The quarry was situated near the factory. The quarry was a feeder to the factory and without limestone from the quarry, the factory could not work. In considering the question whether the factory and the limestone quarry were one establishment the Supreme Court held that the Industrial Disputes Act not having prescribed any specific tests for determining what is one establishment, the Court must fall back on such considerations as in the ordinary industrial or business sense determine the unity of an industrial establishment, having regard in that particular case to the scheme and object of the Industrial Disputes Act and the relevant statutory provisions, namely, the Mines Act, 1952 and the Factories Act, 1948. Mr. Gadgil has placed reliance upon the following passage from the judgment :

"It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units, etc. If in their true relation they constitute one integrated whole, we say that the establishment is one; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes a disqualification, therefor. Thus, in one case the unity of ownership, management and control may be the important test; in another case functional integrality or general unity may be the important test; and in still another case, the important test may be the unity of employment. Indeed, in a large number of cases several tests may fall for consideration at the same time. The difficulty of applying these tests arises because of the complexities of modern industrial organisation : many enterprises may have functional integrality between factories which are separately owned; some may be integrated in part with units or factories having the same ownership and in part with factories or plants which are independently owned. In the midst of all these complexities it may be difficult to discover the real thread of unity."

So far as the facts of that case were concerned, the Supreme Court found that though there was a manager of the quarry, he was under the manager of the factory. There were thus unity of ownership, unity of management, supervision and control, unity of finance and employment, unity of labour and conditions of service of workmen, functional integrality, general unity of purpose and geographical proximity, and in view of these facts and applying the principles laid down by it, the Supreme Court held that the factory and the quarry were one establishment. Now, the facts of this case are quite dissimilar to the facts of the case before the Supreme Court. As mentioned above, there is no functional integrality or general unity of purpose between the business of the press and the other activities of the society, the object of the press being merely to earn income for the Society; nor is there any unity of employment between the workmen employed in the press and the other workers of the Society.

The next case relied upon by Mr. Gadgil is Baroda Borough Municipality Vs. Its Workmen, . In that case, the dispute arose out of the demand for bonus by the workmen of the electrical department of the Baroda Borough Municipality. The contention of the workmen was that the electrical department which generated and supplied energy to private consumers made profits and hence the workmen were entitled to bonus. After considering the provisions of the Bombay Municipal Boroughs Act, 1925, the Supreme Court pointed out that under the said Act, it was not open to the Baroda Borough Municipality to treat its electricity department, the property thereof and the income therefrom, separately from other departments and spend a part of the income for the benefits of the employees of that department only, treating it as profits of the particular department and not as part of the entire municipal fund or property and that such income in its true nature or quality was not profit in the sense in which that expression has been held to be the basis for the grant of bonus. According to the Supreme Court, the claim of bonus was not maintainable also from the point of view that the different activities of the Municipality constituted one integrated whole and the activities of its different departments were not distinct and unconnected activities so as to permit isolation of one department from another or of an earning department from a spending department. If such a claim were granted, harmful consequences may arise by invidious distinction being made amongst the employees. Now, as we have pointed out above, in the present case, the business of the press and the other activities of the Society cannot be said to constitute one integrated whole. The real question for decision by the Supreme Court in that case was whether profits had been made by the employers so that bonus may be paid to the employees. The question here is of the financial capacity of the press itself. This authority too, therefore, cannot help the petitioner.

The last authority relied upon by Mr. Gadgil is a judgment of the Assam High Court in Assam Rashtra Basha Prachar Samiti v. Their Workmen and others 1965 II L.L.J. 361. In that case, a peon employed in the general office of Assam Rashtra Basha Prachar Samiti was dismissed and the dispute regarding his reinstatement was referred for adjudication to the Labour Court. The Labour Court directed reinstatement. The validity of that award was challenged before the High Court on the ground that the cultural and educational activities carried on by the samiti did not fall within the definition of "industry" contained in S. 2(j) of the Industrial Disputes Act. The main object of the samiti was to propagate the learning and knowledge of Hindi language amongst the people of the State of Assam. To print its books and literature for the advancement of its objects, the samiti was also running a press. Though the peon was employed in the general office of the samiti, it was contended that since the samiti was running a press, it must be held to be an industry. These contentions were negatived by the Assam High Court. Before us, there is no point taken that this press is not an industry. Even otherwise, that case on facts is distinguishable from the case before us. The press run by the samiti was not a press carrying on business like any other printing press for all who may choose to place printing orders with it. It was a press printing literature propagating the objects of the samiti only. This authority too, therefore, does not advance the petitioner''s case. We, therefore, do not find any substance in the contention that the Tribunal erred in considering the press as a separate entity.

In view of the conclusion we have arrived at on the third ground, the second ground raised by Mr. Gadgil, namely, that the financial position of the Society was not such that gratuity could be awarded, really does not arise for consideration. We may, however, mention that the Tribunal has pointed out that even if the financial position of the Society were to be looked at, there was in the year 1964-65 a surplus of Rs. 44,060 and in the year 1965-66 a surplus of Rs. 19,426 and that the figures given by the Society which showed a surplus of only Rs. 4,060 for the year 1964-65 and a deficit of Rs. 4,791 for the year 1965-66 were arrived at by taking into account the provision for bonus and that according to the general accounts and balance-sheets of the Society, the financial position of the Society was satisfactory.

In the result, the petition fails and is dismissed. The rule is discharged.

The petitioner will pay to the first respondent the costs of the petition.