Employees of Central Sales Organisation and Central Transport and Shipping Organisation of Hindusthan Steel Ltd. vs Hindusthan Steel Ltd.

M.M. Dutt, J.—This appeal is at the instance of the employees of the Central Sales Organisation and Central Transport and Shipping Organisation (hereinafter referred to as the said Organisations) of the Hindusthan Steel Ltd. represented by the Association of Hindusthan Steel Employees and it is directed against the judgment of the learned Single Judge disposing of the Rule nisi issued on the application of the Respondent Hindusthan Steel Ltd.

The Government of West Bengal by its order dated December 19, 1973, made a reference of an industrial dispute to the Eighth Industrial Tribunal with the following two issues:

(1) Whether the employees of the Central Sales Organisation and Central Transport and Shipping Organisation of Hindusthan Steel Limited who have claimed Bonus (under the Payment of Bonus Act) @ 12% for the years 1969-70, 1970-71 and 1971-72 on the basis of the published Profit and Loss Accounts of the Company, are entitled to the same?

If not, at what rates are they entitled to?

(2) Whether as a consequence of the Management having presented the Profit and Loss Accounts for the year 1972-73 in a different manner from the last 4 years, the employees'' entitlement to higher Bonus has been affected?

If so, what rate of Bonus are they entitled to?

An additional issue was framed by the Tribunal at the instance of the Company which is as follows:

Whether the workmen are entitled to claim that for the purpose of computation of Bonus payable to the workmen, the Company should follow the system of accounting and preparing Balance-Sheet as in the preceding years, viz., 1969-70, 1970-71 and 1971-72 or whether the Company can justifiably claim that the Bonus should be made payable on system of accounting as was followed by it actually in the year 1972-73?

It may be stated that the dispute covered by the first issue has been amicably settled between the parties. The Tribunal is now concerned with the determination of issue No. 2 and the additional issue framed by it.

The case of the Association is that the Bonus payable to the employees of the said Organisations should be determined upon the Profit and Loss Accounts of the same. It is alleged that during the years from 1969-70 to 1971-72, the Bonus payable to the employees was computed on the basis of the Profit and Loss Accounts of the said Organisations. In the year 1972-73, however, the Company had followed a new system of accounting by which the profits arising from the said Organisations were diverted to the accounts of the Central Head Office and were adjusted against the accounts of other organisations and as a result of which, nil profit was shown in respect of the said Organisations It is contended that the Company was not entitled to follow this system of accounting for the purpose of depriving the workmen of their legitimate claim for Bonus. It was, accordingly, prayed that the Tribunal should interfere and make the Company revert to the previous system of accounting.

The Company has opposed the claim of the Association. The case of the Company Is that it is free to follow its own system of accounting in preparing the Profit and Loss Accounts after taking into consideration the business of its branch organisations. It is contended that the Tribunal cannot direct the Company to change the system of accounting followed by it and to revert to the old system. Further, it is contended that the Tribunal cannot make the accounting according to the contentions of the employees of the said Organisations.

The Association filed an application before the Tribunal praying for a direction upon the Company to produce certain documents for the purpose of showing the real position as regards the profit and loss of the said Organisations in support of the case of the employees for a higher percentage of Bonus. The Company opposed the said application for production of documents on a number of grounds including that such documents called for were voluminous and it was not practicable to comply with the claim of the Association. The other grounds related to merits of the case and it is not necessary to mention the same.

The Tribunal, by its order No. 32 dated March 24, 1975, took the view that not only for deciding the eligibility of the employees of the said Organisations for a particular percentage of Bonus in relation to the Profit and Loss Accounts of the same, but also for deciding the issue as to whether or not the Association was entitled to claim that the said Organisations must follow the old system of accounting, the relevant account papers as called for by the Association, should be placed before the Tribunal. The objection of the Company that certain documents were voluminous was overruled by the Tribunal on the ground that the Company could produce certified copies of the relevant documents. Upon the said findings, the Tribunal allowed the application of the Association and directed the Company to file within one month from the date of its order the documents as called for by the Association and/or to file the true copies of such documents and certified as such by a responsible officer of the Company.

Being aggrieved by the said order of the Tribunal, the Company moved this Court under Article 226 of the Constitution and obtained the Rule. In the judgment out of which this appeal arises, the learned Judge has recorded a statement of the learned Advocate of the Association that it is in possession of the copies of the combined Balance-Sheet and the Profit and Loss Accounts of the said Organisations. In the opinion of the learned Judge, it is not necessary for the Company to produce the documents as directed by the Tribunal. It has been directed by the learned Judge that the Association will produce the copies of the Balance-Sheet and the Profit and Loss Accounts of the said Organisations and if upon examination of the same they are certified by the Company to be the true statement of accounts, in that case, the Tribunal would proceed on the basis of the same. If, however, it is found by the Company that they are not the correct statement of accounts, the Tribunal shall not proceed on the basis of such copies. The Rule has been disposed of by the learned Judge in the above manner.

The question that is involved in this appeal is whether the Tribunal was justified in directing the Company to produce the documents and account papers as prayed for on behalf of the Association. The learned Judge has taken the view that as the Association has with it the copies of combined Balance-Sheet and the Profit and Loss Accounts of the said Organisations, it is not necessary for the Company to produce any document and the Tribunal will be at liberty to rely on such copies of Balance-Sheet and Profit and Loss Accounts, provided they are certified by the Company to be true and correct. It seems that the learned Judge has overlooked the case of the Association that the said copies are not sufficient to prove its case before the Tribunal. In para. 7 of the application filed by the Association before the Tribunal, the specific case of the Association is that the Management, instead of keeping the profits earned by the said Organisations in the year 1972-73 and disclosing such profits in the Balance-Sheet and Profit and Loss Accounts, diverted the same before the closing of the accounts through journal entries and/or Inter-Unit Current Accounts to different other unite of the Company including the several steel plants. It is alleged that as a result of the said action of the Company, the Balance-Sheet and Profit and Loss Accounts of the said Organisations for the year 1972-73 do not reveal the actual profit position of that year. Although the learned Judge directed the Association to file the copies of the Balance-Sheet and the Profit and Loss Accounts, it appears that it had already filed the same along with the said application.

There can be no doubt that a Tribunal has jurisdiction to direct any party to produce any document that may be in possession of such party for the purpose of proper adjudication of any issue refused to it by the Government or framed by it. It is also desirable that the Tribunal should allow evidence to be adduced in respect of all the issues and not piecemeal. In the instant case, the Tribunal considers that relevant account papers would be necessary for the purpose of deciding the eligibility of the employees of the said Organisations for a particular percentage of Bonus as also for deciding the issue as to whether or not the Association is entitled to claim that the said Organisations must follow the old system of accounting. The Tribunal has, therefore, acted within its jurisdiction in directing the Company to produce the account papers for the purpose of deciding the issues relating to the disputes between the parties.

It is contended on behalf of the Company that in view of the proviso to Section 23(1) of the Payment of Bonus Act, 1965, the Tribunal not having satisfied itself as to the inaccuracy of the statements and particulars contained in the Balance-Sheet and the Profit and Loss Accounts of the said Organisations, the direction of the Tribunal for the production of the documents by the Company is illegal and without jurisdiction. We are unable to accept this contention. u/s 23(1) there is a presumption about the accuracy of the Balance-Sheets and Profit and Loss Accounts of Corporations and Companies. The proviso to that section confers jurisdiction on any Arbitrator or Tribunal to take such steps as it thinks necessary to find out the accuracy of such statements and particulars if such authority is satisfied that such statements and particulars contained in the Balance-Sheet or the Profit and Loss Accounts of the Corporation or the Company are not accurate. Section 23(1) does not relate to the production of documents necessary for the adjudication of any dispute between the parties. We do not, therefore, think that the power of the Tribunal to direct production of any document for the purpose of proper adjudication of an issue is in any way restricted or circumscribed by Section 23(1). There can be no doubt that if the accuracy of the statement and particulars contained in the Balance-Sheet or the Profit and Loss Accounts is called in question, the Tribunal will have to act in accordance with the provision of Section 23. The Tribunal has not and in our opinion, quite rightly made any observation on the merits of the issues before it, but as stated already, it considers that the determination of the issues involves the consideration of the documents and account papers as called for by the Association. It is quite true that the Company would, to some extent, be put to inconvenience in the matter of production of documents, but such inconvenience cannot be a ground for withholding the documents required by the Tribunal for the proper adjudication of the disputes between the parties. In the circumstances, we are of the view that no illegality has been committed by the Tribunal in directing the Company to produce the documents. The Company, however, is not to produce any and every document relating to the period in question, but it will produce such documents and account papers or the copies thereof and certified by it to be true copies as would enable the Tribunal to calculate the profits earned by the said Organisations in the year 1972-73.

For the reasons aforesaid, the judgment of the learned Judge is set aside and the Rule is discharged. The appeal is allowed, but there will be no order for costs.

The operation of this judgment will remain stayed for a period of four weeks from date, as prayed for on behalf of the Respondent Company.

D.C. Chakravorti, J.

I agree.