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Judgment
Rajagopalan, J.—On 15th December 1949 the Secretary of the Mysore City Hotel Workers'' Association preferred a demand on behalf of
the workers in 61 hotels in the City, that the employers should pay their workmen four months wages as bonus. An attempt at conciliation failed.
On 8th December 1951 the Government of Mysore referred the question as an industrial dispute u/s 10(1)(c) of the Industrial Disputes Act, for
adjudication by the Industrial Tribunal, Bangalore. It should be noticed there were other items of dispute also, but I am concerned at this stage only
with the claim for bonus as an industrial dispute. It should also be noticed at this stage that both before the Industrial Tribunal and be-fore the
appellate Tribunal the claim was treated as one for bonus for the years 1947-48, that is, for the period of 12 months ending with 30th June 1948.
The Industrial Tribunal by its award dated 32-10-1953 negatived the claim for bonus, principally on the ground that it was belated and was
preferred long after the period for which the bonus was claimed had elapsed. The Workers'' Union appealed to the Labour Appellate Tribunal. A
number of concerns originally involved in the dispute had by then closed down, and the appeals against them were not pressed.
Eventually in the case of the seven petitioners before me the appellate tribunal reversed the award of the Industrial Tribunal and directed payment
of bonus at varying rates.
The petitioners challenged the validity of the decision of the Appellate Tribunal dated 22-12-1955 by an application under Article 226 of the
Constitution for the Issue of a writ of certiorari. The validity was attacked mainly on two grounds: (i) it was not legally permissible for the appellate
tribunal to maintain a demand on behalf of workmen for bonus long after the relevant year had terminated; and (ii) there was no proof of any
available surplus in the hands of any of the seven petitioners for any distribution of bonus to its workers.
(4) The Appellate Tribunal itself recorded in paragraph 12 of its order:
No doubt if the claim for bonus is made long after the year for which the bonus is claimed has ended and the accounts have been closed, the
tribunals would be justified in rejecting such a belated claim.
That was the principle the Labour Appellate tribunal laid down in -- ''Kasi Iron Foundry v. Their Workmen'', 1952 1 Lab LJ 199 at P. 202 (Cal)
(A) :
''''It is a well known principle that the bonus is allowed from the profits of the year for which it is claimed and it would not be possible to reopen the
accounts of the previous years ..... The employees pleaded that as there was no Union they had no opportunity to raise their demands. But this
would not entitle them to raise as belated demand.
As the learned counsel for the petitioner pointed out, that principle was consistently followed by the appellate tribunal. See -- ''Burmah Shell Oil
Storage and Distributing Co; of India, Ltd., Madras v. Their Employees, 1954 1 Lab LJ 21 (Luck) (B):--''Associated Electrical Industries, India
Ltd., Emolovees Welfare Association v. Associated Electrical Industries India Ltd., 1954 1 Lab LJ 790 (Bom) (C) : -- Forbes Forbes Campbell
and Co. Ltd v. Their Workmen: 1954 2 Lab LJ 477 (Bom) (D) : -- Haji Abdul Khaliq Steel Trunk Factory v. Their Workmen'', 1955 1 Lab LJ
282 (UP) (E).
It was a similar principle that the Labour Appellate Tribunal applied in -- ''Caltex India Ltd. v Their Employees'', 1952 2 Lab LJ 183 (F) :-- The
learned Counsel for the petitioners referred to Muir Mills Co. Ltd. Vs. Suti Mills Mazdoor Union, Kanpur, . At page 175 their Lordships laid
down:
On the accounts of each year being made up, and the profits of the Industrial concern being ascertained, the workers during the particular year
have their demand for bonus fully satisfied out of the surplus profits and the balance of the profits is allocated and carried over in the accounts. No
further claim for payment of bonus out of those reserves or undistributed profits can therefore survive.
At page 176, their Lordships pointed out that in the case before them the appellate tribunal did not even apply the formula it had evolved to the
facts of that case. But it should be remembered that the case before the Supreme Court was one that came up by way of appeal with special leave.
The learned counsel for the petitioner at one stage contended that the appellate tribunal had no jurisdiction at all to direct the grant of bonus, if
the claim for that bonus was preferred long after the close of the year to which the claim related, that is, long after the accounts for that year had
been made up by the employer. I am unable to accept this contention, that the Labour Appellate Tribunal is divested of its jurisdiction merely
because the claim is a belated one.
It is, however, a totally different question, whether the exercise of that jurisdiction was vitiated by Ignoring the well settled principle of adjudication
by the Labour Appellate Tribunals especially, in view of the fact, that the Labour Appellate Tribunal in this case did riot intend to depart from that
principle which had been well denned.
The Appellate Tribunal observed: ""We shall therefore examine whether the circumstances and facts of the present case justify the upholding of
the plea of belatedness raised by the Association of Hotel owners."" Eventually it came to the conclusion:
In the circumstances and also considering that the demand was made against the Association of which a majority of hotels were members on 15th
December we are not prepared to shut out the claim of the workmen on the ground of belatedness.
The Appellate Tribunal pointed out that the majority of the hotel workers were illiterate and were unorganised till February 1947. Apparently the
Labour Appellate Tribunal overlooked the fact, that in 1952 1 Lab LJ 199 (Cal) (A)'', to which they referred and the principles laid down in which
they purported to follow the Labour appellate tribunal had specifically pointed out that the fact that the employees had no Union ""would not entitle
them to raise belated demand.
Virtually that would be an irrelevant factor. The other factor on which the labour appellate tribunal relied was that the employers had not taken up
the plea of belatedness in the statements they filed before the Industrial Tribunal. Nonetheless that was one of the main issues debated before the
Industrial Tribunal, and the Industrial Tribunal upheld the plea of the employers.
The Appellate Tribunal was bound to adopt a consistent standard. In fact, I have already pointed out. In this case the Appellate Tribunal did not
purport to depart from the principle laid down in 1952 1 Lah LJ 199 (Cal) (A). In the present case, It should be remembered that the year to
which the claim for bonus related ended on 30th June 1948.
It was more than 17 months after, on 15th December 1949, that the demand for bonus was made for the first time. The appellate tribunal itself was
aware of the fact that in the case of one of the petitioners before it, which was a part- nership concern, the profits had been ascertained and
distributed.
The difficulty of reopening the accounts lone after they had been closed, the profits ascertained and even appropriated was realised when the
labour appellate tribunal evolved the principle, that a belated claim for bonus should not be investigated. That had received the approval of the
Supreme Court when they pointed put that the ""claim did not survive.
In my opinion, the contention of the petitioner''s counsel is well founded, that the exercise of the jurisdiction the appellate tribunal had was
vitiated by that tribunal, in effect, flouting the principle which it purported to apply to the facts of the case,
The next contention of the learned coun-sel for the petitioner was that if the claim for bonus could not be rejected on the ground that it was
belated, the appellate tribunal erred in directing the payment of bonus without any real attempt to find out if surplus profits were available. The
principles on which the available surplus could be computed were laid down by the Labour Appellate tribunal in -- ''Mill Owners Association
Bombay v. Rashtriya Mill Mazdoor Sangh Bombay'', 1950 2 Lab LJ 1247 (H).
It may not be necessary to set them out in detail at this stage. That was again a principle which the Appellate Tribunal purported to keep in view.
What happened in the case was they called upon the learned counsel who appeared for the employers to file a statement showing the available
surplus profits. It was on that basis the labour appellate tribunal determined the quantum of bonus payable by each of the employers.
It may not be open to the petitioners to challenge the correctness of the statement that was filed on their behalf by their advocate. Nor will it be
open to me to verify within the scope of the limited Jurisdiction vested in this court by Article 226 of the Constitution whether the computation of
the surplus profits available to each of the em-ployers, made by the employers themselves and acc-epted by the Appellate Tribunal was correct.
Though the second ground of attack fails, the first, in my, opinion, succeeds.
This petition is allowed and the rule is made absolute. The order of the Appellate Tribu nal dated 22nd December 1955 is set aside. There will
be no order as to costs.