# Mohan Chowdhury v. ChieJ Ct1mm issiomr 1

- **Citation:** [1964] 3 S.C.R. 456
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Bench:** P. B. Gajendra.Ga.Djur, K. N. Wa.Nch00, K. C. DA.s GUPTA
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mohan-chowdhury-v-chiej-ct1mm-issiomr-1-2908
- **Pages:** 11

## Headnote

Industrial dispute-Bonus-Industry operaiing in India
. and Pakistan, if, form one ; .. ;egrated industrial actillityTests-Full Bench Formula-A' ,,ticability to -a part only of tM,
total operations-Inspection •
document• by workmen if and
when acce'8ible-Jndustrial 1 1pulu Act, 1947 (14 of 1947),
s. 21.
The respondent comp nies were carrying on transport
business in the t:astern part of Lhe country in co-operation with
each other, which continued even after the partition of India.
The main traffic of the company in the years 1949 to 1952 was
as before, namely, (a) traffic within India; (b) traffic withil!
3 S.C.R.
SUPRENIE COURT REPORTS
457
Pakistan and (c) traffic between India and Pakistan. The
major portion of the large fleet of vessels in which the companies carried on their business remained in common use for
traffic origaniting in Pakistan and for traffic originating in
West Bengal and Assam, so that no appreciable part of the
fleet could be classed as being in use specifically in one country
or the other. The workmen claimed bonus for all the four
years and the dispute was referred to the Industrial Tribunal.
The workmen's claim was .rejected by the Tribunal and the
order was confirmed by the. Labour Appellate Tribunal. On
appeal by special leave, the main controversy between the
parties in this Court was whether, the Full Bench Formula has
to be applied on the basis of the overall results of the companies operations in India and Pakistan or on the results of the
operations in India only. The appellants' main contention was
that assuming that the operation in India and Pakistan formed
parts of one integrated industrial activity, a way should still be
found for separating the two sets of operations for the purpose
ef the application of the Full Bench Formula.
Held that in the present case, on applying the tests laid
down by this Court, the operations of a company carrying on
transport business between two different places cannot be said
to be carried on as different and distinct industrial activities
at these two places.
Assooiat<d Oement Oompaniu v. Their workmen, [1959]
S. C. R.
925; A. 0. 0. Ltd., v. Their Workmen, 1960 (I)
L. L.J. l; Pratap Press v. Their Workmen, 1960 (1) L. L.J.
497;.The Management of Pak8hiraja Studio v. Their Workmen,
1961 (3) F. L. R. 369; Fine Knitting Oo. Lid. v. I. 0. & o,..,
1962 (1) L. L.J. 275 and D. 0. M. Ohemiool Works v. 118
Workm•n, 1962 (1) L. L.J. 388, referred to.
Held further, that in the present c.ase on the materials on
record, this court was not in a position to apply the Full Bench
to a
only of the total operations of the ·companies
m India and Paktstan and the Labour Appellate Tribunal was
right in rejecting the workmen's claim for bonus for the years
1949 to 1952.
Subject to the protection of s. 21 of the Industrial Disputes Act and in the absence of any special circumstances, the
Tribunal, in its judicial discretion would ordinarily be justified
in asking the employees to give to tho workmen reasonable
11ccess to all n;_levant papers,
/96J
W1trim111 of l•i"r
Sleame:t Ctmt;aitin
v.
I oi81 Sllam"
C•mP•rnis
l96S
WMkmen of Joint
Steam" Companies
.. v.
Joi•t Steamer
!Iompqni"
Das Gupt• J.
458 SUPRENm COURT REPORTS [1964:1 VOL.
In the present case however, even if the acco11nt books
were made available to the workmen, it would be impossible
on the materials on record to arri.ve at proper 6guns for the
different items involved in the Full Bench Form11la. The
appeals therefore, must be dismissed.
CrvrL APPELLATEjURit=;DIOTION: Civil Appeals
Nos. 811and812 of 1962.
Appeals by special leave from the judgment
. and order dated May 31, 1956 of the Labour Appellate Tribunal of India at Calcutta in Appeals Nos.
Gal. 225 and 224 of Hl55.
N. 0. Chatterjee <\nd P. K, Mukherjee, for the·
appellants.
A. V. Viswanatha Sastri, S. 0. Mazumdar and
B. N. Ghosh, for_ respondents Nos. I and 2.
1963. April 29. The Jugment of the Court was
delivered by
DAS GUPTA ].-These two appeals raise a so·
mewhat

## Text

1963
Mohan Chowdhury
v.
ChieJ Ct1mm issiomr 1
Unirm Territory
of Tripura
Sinh• C. I.
!9S
A;ril 29,
456 SUPRENl.FJ COURT REPORTS (1964] VOL.
leaves no room for doubt that the detention order
passed against the petitioner was intended to be continued even after the repeal of the Ordinances which
were incorporated in the Act (LI of 1962). That
being so, the Order of the President must have the
effect of suspending the petitioner's right to move
this Court for a writ of habeas corpus under Art. 32
of the Constitution. After the petititioner had been
deprived, for the time being, of his right to move
this Court, it is manifest that he cannot raise any
questions as regards the vires of the Ordinances or of
the Rules and Orders made thereunder. In the
result, the application is held to be not maintainable,
and, is therefore, dismissed.
Petition tlismi1aed.
WORKMEN OF JOINT STEAMER
COMPANIES
v.
JOINT STEAMER COMPANIES
(P. B. GAJENDRA.GA.DJUR, K. N. WA.NCH00
and K. C. DA.s GUPTA JJ.)
Industrial dispute-Bonus-Industry operaiing in India
. and Pakistan, if, form one ; .. ;egrated industrial actillityTests-Full Bench Formula-A' ,,ticability to -a part only of tM,
total operations-Inspection •
document• by workmen if and
when acce'8ible-Jndustrial 1 1pulu Act, 1947 (14 of 1947),
s. 21.
The respondent comp nies were carrying on transport
business in the t:astern part of Lhe country in co-operation with
each other, which continued even after the partition of India.
The main traffic of the company in the years 1949 to 1952 was
as before, namely, (a) traffic within India; (b) traffic withil!
3 S.C.R.
SUPRENIE COURT REPORTS
457
Pakistan and (c) traffic between India and Pakistan. The
major portion of the large fleet of vessels in which the companies carried on their business remained in common use for
traffic origaniting in Pakistan and for traffic originating in
West Bengal and Assam, so that no appreciable part of the
fleet could be classed as being in use specifically in one country
or the other. The workmen claimed bonus for all the four
years and the dispute was referred to the Industrial Tribunal.
The workmen's claim was .rejected by the Tribunal and the
order was confirmed by the. Labour Appellate Tribunal. On
appeal by special leave, the main controversy between the
parties in this Court was whether, the Full Bench Formula has
to be applied on the basis of the overall results of the companies operations in India and Pakistan or on the results of the
operations in India only. The appellants' main contention was
that assuming that the operation in India and Pakistan formed
parts of one integrated industrial activity, a way should still be
found for separating the two sets of operations for the purpose
ef the application of the Full Bench Formula.
Held that in the present case, on applying the tests laid
down by this Court, the operations of a company carrying on
transport business between two different places cannot be said
to be carried on as different and distinct industrial activities
at these two places.
Assooiat<d Oement Oompaniu v. Their workmen, [1959]
S. C. R.
925; A. 0. 0. Ltd., v. Their Workmen, 1960 (I)
L. L.J. l; Pratap Press v. Their Workmen, 1960 (1) L. L.J.
497;.The Management of Pak8hiraja Studio v. Their Workmen,
1961 (3) F. L. R. 369; Fine Knitting Oo. Lid. v. I. 0. & o,..,
1962 (1) L. L.J. 275 and D. 0. M. Ohemiool Works v. 118
Workm•n, 1962 (1) L. L.J. 388, referred to.
Held further, that in the present c.ase on the materials on
record, this court was not in a position to apply the Full Bench
to a
only of the total operations of the ·companies
m India and Paktstan and the Labour Appellate Tribunal was
right in rejecting the workmen's claim for bonus for the years
1949 to 1952.
Subject to the protection of s. 21 of the Industrial Disputes Act and in the absence of any special circumstances, the
Tribunal, in its judicial discretion would ordinarily be justified
in asking the employees to give to tho workmen reasonable
11ccess to all n;_levant papers,
/96J
W1trim111 of l•i"r
Sleame:t Ctmt;aitin
v.
I oi81 Sllam"
C•mP•rnis
l96S
WMkmen of Joint
Steam" Companies
.. v.
Joi•t Steamer
!Iompqni"
Das Gupt• J.
458 SUPRENm COURT REPORTS [1964:1 VOL.
In the present case however, even if the acco11nt books
were made available to the workmen, it would be impossible
on the materials on record to arri.ve at proper 6guns for the
different items involved in the Full Bench Form11la. The
appeals therefore, must be dismissed.
CrvrL APPELLATEjURit=;DIOTION: Civil Appeals
Nos. 811and812 of 1962.
Appeals by special leave from the judgment
. and order dated May 31, 1956 of the Labour Appellate Tribunal of India at Calcutta in Appeals Nos.
Gal. 225 and 224 of Hl55.
N. 0. Chatterjee <\nd P. K, Mukherjee, for the·
appellants.
A. V. Viswanatha Sastri, S. 0. Mazumdar and
B. N. Ghosh, for_ respondents Nos. I and 2.
1963. April 29. The Jugment of the Court was
delivered by
DAS GUPTA ].-These two appeals raise a so·
mewhat difficult problem as regards the grant of bonus to workmen of an industry operating not only in
India but also outside this country. The appellants
are the workmen of two Steamer Companies, the Indian General Navigation and Railway Co., Ltd., and
the Rivers Steam Navigation Co., Ltd., which have
for many years been oμerating jointly and are conveniently referred to as "Joint Steamer Companies".
Disputes having arisen between these companies and
their workmen on the question of bonus for the years
1949, 1950, 1951 and 1952, they were referred by the
Government of West Bengal to the Industrial Tribunal, by two separate orders of reference, one in respect of the dispute for bonus for the years 1949 and
1950 and the other in respect of the years ! 95! a!ld
J952.
.
3 s.c.P..
SUPREl\lE COURT REPORTS
459
The Tribunal disposed of these two references
by one common judgment and rejected the
men's claim for bonus for all the four years. This
order of rejection was confirmed by the Labour
Appellate Tribunal, though on different grounds. It
is against this' decision of the Labour Appellate Tribunal that these appeals have been filed on special
leave granted by this Court.
The respondent companies were established
more than a century ago and for more than half a
century before India was partitioned, they were carrying on transport business in the eastern part of the
country in co-operation with each other. Their bu·
siness of transporting goods and passengers is carried
on in 600 or 700 vessels plying on the Ganges and
the Brahmaputra rivers and their tributaries. This
business continued even after the partition of India
as a result of which a portion of the State of Pakistan
intervened between Assam and the remainder of
India. The main traffic of the company in the
years with which we are concerned, viz., 19!9 to
1952 has been as before, namely, (a) traffic within
India; (b) traffic within Pakistan, and (c) traffic between India and Pakistan. The headquarters of the
Companies remained as before at Calcutta. The
major portion of the large fleet of vesels in which the
companies carried on their business remained in
common me for traffic originating in Pakistan and
for traffic originating in East Bengal and Assam, so
that no appreciable part of the fleet could be classed
as being in use specifically in one country or the
other.
The workmen's claim for bonus was substan-
. tially based on the contention that large profits were
earned by the companies on their operations in India.
To these, the workmen contenJed, they had contribnted and so they were entitled to bonus.
196S
WorAmen of Joinr
St1om,r Com;ani1s
••
Joint St1amer
Comja1Ji1s
Dfll Gupta J ,
196J
W1ri11111 of loin.t
St1tt1fter Cm;tnties
v.
Joint Suawur
D•• Gupta J.
460 SUPREME COURT REPORTS (1964] VOL.
In resisting this claim the companies submitted
that the transport business which they carried on in
India. and Pakistan was one single, ·integrated, industrial undertaking and the overall result of the entire
business had to be considered in deciding the question of bonus.
According to them, if the principles
for
profit bonus that are embodied in
what is known as the Full Bench Formula, finally
crystallized by this Court in AssociatiJd Cement
Companies' Case ('), be applied, it \\ill be found that
no available surplus for distribution of bonus remall:is.
In support of this case the companies submitted
charts sbowing their version of the calculation of
available surplus in accordance with the Full Bench
FormQ.la:.
The workmen's Counsel conceded before the
Appellate Tribunal that they had no case for bonus
if that claim had to be applied to available surplus
on the basis of the profits of the companies derived
from the entire business in India and Pakistan.
Their contention was that the Full Bench Formula
had to be applied on the basis of profits derived in
West Bengal 0r at any rate on the basis of the profits
derived in India to the exclusion of Pakistan which
is a foreign country.
The Appellate Tribunal accepted the Companies' contentions and accordingly rejected the workmen's claim for bonus.
As before the Appellate Tribunal, so before
this Court the main controversy between the parties
has centred round the question whether the Full
Bench Formula has to be applied on the basis of the
overall
results
of
the
Companies'
operations in India and Pakistan or on the results of the
operations in India only. If all these operations are
carried on as parts of one integrated industrial activity there would ordinarily be no justification for
(I) 119191 I. C. R, 925,
3 s.c.R.
SUPREME COURT REPORTS
461
deciding the question of bonus on the operations in
llldia only.
question whether different operations carried on by the same employer form one
integrated industrial activity or not has often been
considered by industrial adjudication. This Court
has also had to deal with the question on several
occasions and has in a series of decisions
indicated a number of tests which are of assistance in
deciding it.
Integrality of functions; inter-depen-.
dence of finance; community of control and management; community of man-power and of recruitment
and discipline in respect of them; whether the employer himself has treated the different parts as forming part of one unit or not-these are some of the
many tests that have been laid down.
It has also
been emphasised that the application of one single
test in preference to the other has to be generally
avoided and the weightage to be given to the different tests applied will depend on the circumstances
of each case and the nature of the industrial activity.
A.C.G. Ltd., v. Their Workmen ('); Pratap Press v.
Their Workmen('); The Management of Pakshiraja
Studio v. Their Workmen (1); Fine Knitting Co.,
Ltd., v. J.C. ('); D. C. M. Chemical Works v. Its
Workmen(').
Cases often occur where the same employer
carries on the same industrial activity at different
places and the question arises whether the units at
the different places are one and the same or distinct
and separate.
Thus, where the same company engaged [in the manufacture of cement starts two different factories at two pl'lces, A and B, they may
well be distinct and separate, so that the claim for
bonus of the workmen of the Factory at A will be
decided on the results of the Factory working at A
and not on the combined result of the working of the
two factories at A and B. If of these two places,
one is in India, and the other in a foreign country,
that will
no difference; for it will still be
(5) 1911(3) F.L.li.869.
(t 11162 (l)L.h;J,275,
(I) 1960(1) L,L.J,l.
(211Q60(1).L.L •• J-697.
(I) IUQ (l) .. Lf 1118,
196!
W.,hm1• •f Joint
Sttmer C1.,;.•i11
v.
Joint SteMn1t
C«n/l•ni1s
n., Gu;t• 1.
1963
Workmt11n of Jeirtl
St1•" ComjJt!tli,s
v.
Joint St1MT1er
<Am parties
Da1 Gupto J.
462 SUPREME COURT REPORTS [1964) Voi..
possible to ascertain the different items for the application of the Full Bench Formula.
It is difficult to see however how the operations
of a company carrying on transport business between
two different places can be said to be carried on as
different' and distinct industrial activities at these
two places, It is unnecessary to discuss in detail the
application of the tests mentioned above for deciding
whether the companies' operations in Pakistan and
their operations in India form two different units of
industrial activity or they are really one as Mr.
Chatterjee, who appeared before us for the appellants,
did not seriously contend that they form two different units. It was however strenuously contended by
Mr. Chatterjee that assuming that the operations in
India and Pakistan form part of one integrated industrial activity,a way should still be found for separating
the two sets of operations for the purpose of the application of the Full Bench Formula. The bulk of the
companies' operations, Mr. Chatterjee, contends, is
carried on in India.
As the companies' own witness
admits, 61 •4% of the total receipts was in India. It
appears reasonable to think also that the greater part
of the traffic was from one point to another point in
India. The workmen contend that a proper scrutiny
of the companies' accounts would show that these
operations where the traffic originated in India and
the destination was also in a part of India, resulted in
considerable profits to the companies, and it will be
unjust that they should be denied a share of the
profits in the form of bonus merely because other
operations. carried on by the companies, whether
within Pakistan or between India and Pakistan resulted in loss.
It is suggested that conditions in Pakistan are so very different from conditions in India
that it would be denial of justice to the workmen. in
India to tie them to whatever happened in Pakistan.
We find it impossible to say that there is not much
force in these submissions. We might have been
3 S.C.R.
SUPREME COURT REPORTS 463
prepared therefore to consider whether it would be
possible to evolve some principles for the application
of the Full Bench Formula to these peculiar condi.
tions, if we could derive assistance for the same on
the materials on the record. The evidence that has
been given in the
however affords us little
assistance in the matter. This becomes painfully
clear when we try to apply the Full Bench Formula
to the facts of the case.
At the threshold of the task, we are faced with
the difficulty of ascertaining the profits of the com·
panics for what is called its "Indian operations".
Asmming that wherever the traffic originates in
India the receipts in freights and fares for such traffic
should be held to constitute the receipts for the
Indian operations, even such an approximation can·
not tJOSSibly be applied to the allocation of the ex·
pend1ture. For the same vessel which carries traffic
originating say, in Calcutta in India to a destination
in India. say, Dibrugarh in Assam, would often
carry traffic also from Calcutta to some points in
Pakistan and from points in Pakistan to some points
in Assam.
There is no indication in the evidence
we have· got on the record to show how in these circumstances the total expenditure incurred should be
allocated between purely Indian operations of the
traffic and the rest.
Mr. Chatterjee drew our attention to a notification of the Government of India dated December
10, 1947 which gave effect to an agreement between
the Government of the Dominion of India and the
Government of the Dominion of Pakistan for the
avoidance of double taxation of income, and suggested that the principles laid down in this agreement
for calculating what proportion of the total income
each of the Dominion would be entitled to charge in
respect of concerns, which do business both in India
and Pakistan, may be coveniently applied for
196/J
W1rkm1n •/ loi•t
Sttatnw C.mjdtli11
v.
Joint Sttsmer
rompanies.
!963
Wtrim• •J Jeint
St••" Cem;anfos
••
J oiat Stioier
C1111peus
Du
J,
464
SUPREME COURT REPORTS [1964] VOL.
ascertaining the profits, for the Indian operati@ns,
for the purpose of the Full Bench Formula.
It is difficult to see how this agreement between
the two Governments for the specific purpose of
action under the Income-tax Act can furnish a just
or proper basis for computation of profits for the
purpose of Full Bench Formula for bonus.
Assuming, however,
that some guidance is
available from what is stated in this agreement as
to the calculation of the profits for the companies'
operations in India, other difficulties in the way of
applying the Full Bench Formula still remain. How
is one to calculate the paid-up capital on which
interest is to be allowed? Admittedly, no demarcation
is made between vessels used in the companies'
purely Indian operations and vessels used for the
· traffic within Pakistan and for traffic between India
and Pakistan. As we have mentioned earlier, the
same vessel may carry and will in
many cases
actually carry cargo for Indian destinations as also
for Pakistani destinations.
As far as we ca,n see
from the evidence on the record there is no easy way
of ascertaining what portion of the total paid up
capital of the companies could be said to have been
used for the purpose of the Indian operations. It is
equally
difficult to ascertain
the extent of the
working capital . used for their Indian operations.
Unless these difficulties can be removed it is not
possible to arrive at any figure for the prior charges
to be deducted on account of interest on paid-up
capital and interest on working capital. Equally difficult is the assessment of the amount necessary for rehabilitation. By far the major part of the capital that
will require rehabilitation consists of
vess.els in
which the goods and passengers are carried. If 1t was
known that out of the total fleet of 600 or 700 ve&sels
some are ear-marked for purely Indian operations,
it might be possible to find out what was required
3 S.C.R. SUPREME COURT REPORTS
465
for their rehabilitation. Admittedly, however, there
is no such Par-ma1king.
Apart from the fact as
mentioned above that an identical vessel is often
med for carrying goods of the purely Indian traffic
as also goods of the traffic within Pakistan and the
traffic between India and Pakistan in one and the
same trip, it also seems likely that some vessels which
are at times confined to purely Pakistani traffic are
from time to time transferred to Indian traffic. In
these circumstances, it is not possible with the materials at our disposal to ascertain the amount for
rehabilitation of the capital used for Indian operations only.
Learned Counsel for the appellant was cons·
cious of these difficulties. He appealed to us however to try to find out some means for applying the
Full Bench Formula to the companies' Indian operations.
He himself has not been able to suggest any
solution to the problem except suggesting that a
way out may be found by apportioning the income,
expenditur'!, paid-up capital and working capital for
the entire operations in India and Pakistan between
those in India and those in Pakistan. Some of the
difficulties in the way of such apportionment have
been indicated by us above. We must hot however
be understood to say that the task is wholly impossible of achievement. It may be that in another case
the workmen may be able to adduce such evidence
by examining expert witnesses,
like actuaries,
accountants or others that the tribunals may feel
in computing, in respect of the Indian
bu1iness, reasonably accurate figures for the different
items of the Full Bench Formula. All we wish to
say is that on the materials on the present record we
are not in a position to apply the Full Bench Formula
to a part only of the total operations of the compa·
'nies in India and Pakistan.
We have therefore come to the conclusion that
-the Labour Appellate Tribunal has ril'htly rejected
1969
Workmen of Joinl
Stltlmtr Comp.Yr
••
Joint Sl•t111111
Companiu
Das Gupta J.
196J
Wwkm,. ·of loi•I
Sl#am,, Com;ani1i
v.
Joi111 St1mn"
CMnpanU1
Da,1 G.pra /,
-
466 SUPREME COURT REPORTS (196t) VOL.
the workmen's claim for bonus for the years, 194 g,
1950, 1951 and 1952.
Before we part with these appeals, we have to
refer to a complaint vehemently pressed before us
by Mr. Chatterjee that there has not been a fair
hearing of these cases inasmuch as the workmen or
their representatives were not given access to certain
account books which they wanted to consult. We
think it necessary to examine how far this complaint
is-justified as, in our opinion, even if these account
books were made available to the workmen, -it would
be impossible on the materials on the record to
arrive at proper figures for the different items involved
in the Full Bench Formula. We think ic proper
however to emphasise the importance of both employers and workmen making available to industrial
adjudication all relevant papers, including account
books which are likely to assist a proper decision of
the questions at issue.
The provisions of s. 21 of
the Industrial Disputes Act afford ample protection
against disclosure of information which a party may
wish to be treated as confidential. Where workmen
or their representatives ask for inspection of such
papers and account books, it should ordinarily be
possiqle for the employers to comply with the request,
subject however to the protection of s. 21 of the
Industrial Disputes Act. When any such prayer is
made, the Tribunal has to use its judicial discretion
in the matter and in the absence of any special circumstances would ordinarily be justified in asking
the employers to give to the workmen reasonable
access to all relevant papers.
As has been stated above, we have come to the
conclusion that the Appellate Tribunal has rightly
rejected the workmen's claim for bonus. The appeals
are accordingly diamissed. There will be no order as
. to costs.
A ppe11la dismissed.