JUDGMENT 1. THE petitioner in this is a company incorporated under the Indian Companies Act, and carries on the business of engineering and/or manufacturing and sale of engineering products. The petitioner maintains its accounts in what is known as the 'mercantile system' of accounting; that is to say, an expense is debited as soon as the petitioner has become liable to such expenditure whether the amount thereof has actually been paid or not, and similarly the price of goods sold or any other amount due to the petitioner is credited as soon as the sale is effected or the amount becomes due, whether the price or amount has actually been realised or not In respect of the financial year ending 31st December, 1956 the petitioner (hereinafter referred to as the 'company') made a payment of bonus to its workmen equivalent to one month's wages and dearness allowance amounting to Rs. 45,000/-. According to the petitioner, it had no available surplus, but this payment was made out of goodwill towards the workmen and in order to secure their goodwill in return. This payment was made in March 1956. The workmen, however, were not satisfied and raised a dispute which was referred for adjudication to the 5th Industrial Tribunal (being the first respondent hereto). The issue that was referred was as follows:- "whether the workmen are entitled to any extra bonus in addition to the amount already paid for the year 1956 payable in 1957? If so, what should be the quantum of such bonus?" 2. BEFORE the Tribunal, the company filed its audited profit and loss account and balance-sheet for the year ending 31st December, 1956 and various other calculations based upon them to show that there was no available surplus in accordance with the Full Bench formula, but that there was actually a deficit. On or about 7th May, 1959 the Tribunal made an award by which he has held that the company had an available surplus of Rs. 84,000/- and after crediting Rs. 45,000/- already paid, the Tribunal directed the company to pay to its workmen a further 15 days' wages as bonus which, I am told, amounts to approximately another sum of Rs. 11,000/-. This award is challenged by the company on four grounds which I shall now proceed to examine. The first item of dispute relates to 'bad Debts'. 45,000/- already paid, the Tribunal directed the company to pay to its workmen a further 15 days' wages as bonus which, I am told, amounts to approximately another sum of Rs. 11,000/-. This award is challenged by the company on four grounds which I shall now proceed to examine. The first item of dispute relates to 'bad Debts'. As I have already mentioned, the accounts of the company are kept in the mercantile system. The balance-sheet (Ext. C to the petition) shows that the share-capital of the company is Rs. 10,00,000/- of which the subscribed capital is Rs. 4,80,000/-. We find that in 1955 the fixed asset was Rs. 21,31,648/- and in 1956 it was Rs. 22,34,340/-. The stock in 1956 was valued at Rs. 18,73,182/- on the heading of 'sundry debtors'. Against 'loans and advances' there was shown a sum of Rs. 6,21,814/15/- from which has been deducted a sum of Rs. 31,767/2/-as 'provisions for Bad Debts'. Coming to the profit and loss account, we find that for the year 1956 a sum of Rs. 17267/2/- has been shown as 'bad Debt reserve'. In other words, this amount has been shown as the 'bad Debt Reserve' for the year in question. In this award, the Tribunal states that the Union claims to add back the Bad Debt Reserve amounting to Rs. 17,000/- and the management resists the claim. The Tribunal has held that it was not a reserve which could be taken into revenue expenditure against the workmen and so it should be disallowed. In other words, it should not be considered in the calculation of the available surplus which it is necessary to calculate under the Full Bench formula, for arriving at the figure of bonus payable to the workmen. The legal position is that in calculating the available surplus, the heading, 'bed Debt' must be deducted. In G. F. Mills v. Employees of G. F. Mills (1) A.I.R. (1958) S.C. 382 at 387 it has been laid down that if the debts were irrecoverable, they would, to that extent reduce the gross profits and therefore such a deduction is permissible. If the debts are fortunately recoverable they would be credited when they would be so recovered. The Tribunal has accepted the position that for determining the gross profits, the amount of irrecoverable debts must be deducted. If the debts are fortunately recoverable they would be credited when they would be so recovered. The Tribunal has accepted the position that for determining the gross profits, the amount of irrecoverable debts must be deducted. What is argued on behalf of the respondents is that a deduction is permissible for an irrecoverable debt when it is, in fact irrecoverable, and not in anticipation. What is pointer out is that in this case the amount of Rs. 17,000/- and odd, that is sought to be deducted, is not deducted as 'bad Debt' but as a 'bad Debt Reserve'. It is explained that a 'bad Debt Reserve' is merely the notional sum which is set apart in anticipation that this amount would not be recovered. It is said that this item can not be treated as a revenue item. It is argued that there is a difference between writing off a 'bad Debt' which is actually a 'bad Debt' and making provision for doubtful debts. Reference has been made to a treaties on Advanced Accounting by Batliboi (page 66) where it is stated as follows :- "even after all bad debts have been written off, there might be a number of other overdue accounts the recovery of which may be more or less doubtful. The provision for loss on account of such doubtful debts must be made by debiting Profits and Loss Account and crediting Reserve for Doubtful Debts Account with an estimated amount of such loss or with a certain percentage of the total debtors. The credited balance of Reserve for Doubtful Debts Account is shown in the Balance-sheet by way of deduction from the item Sundry Debtors." 3. IT is argued that in order to arrive at the gross profit you deduct debts which are irrecoverable, but not the amount which you simply set apart as a Reserve for Doubtful Debts, which may or may not be recovered. At first sight, this seems to be quite a plausible argument. It seems to me that the answer lies in the system of accounting that has been followed. In the mercantile system of accounting, which is the system followed by the company, the amounts that are shown in the Balance-sheet and Profit and Loss Account are not actual amounts. Thus, if the company is liable to pay something, it is shown there although payment has not been made. In the mercantile system of accounting, which is the system followed by the company, the amounts that are shown in the Balance-sheet and Profit and Loss Account are not actual amounts. Thus, if the company is liable to pay something, it is shown there although payment has not been made. Correspondingly, if it is entitled to receive an amount, that is shown although not actually received. In such a system of accounting, one would not expect to see the item of actual Bad Debt, but only 'bad Debt Reserve'. Of course, what is a 'bad Debt' is always a matter of opinion, and must be so in the nature of things. When can a debt be said to be bad? Even if it is expected that it will not be paid, such expectation may be belied and the amount may be received. Therefore, as is pointed out by the Supreme Court in the decision above-mentioned, the showing of a debt as irrecoverable does not mean that in future years it can not be recovered. It is not as if the Tribunal has rejected the system of accounting of the company and insisted that the accounting should be made on a cash basis. On the liability side, no dispute is raised when the figures are not real but hypothetical. How then can be actual figure be insisted upon on the asset side? It is, therefore, not correct to disallow this intern on the ground that it is not a revenue item. In such matters, the profit and loss accounts and the balance-sheet put forward by the company must prima facie be accepted This appears from the Supreme Court decision, Associated Cement Cos. v. Their Workmen (2) A.I.R. (1959) S.C. 967 at 985 where Gajendragadkar J., says as follows:- "the working of the formula begins with the figure of gross profits taken from the profit and loss account which are arrived at after payment of wages and dearness allowance of the employees and other items of expenditure. As a general rule the amount of gross profits thus ascertained is accepted without submitting the statement of the profit and loss account to a close scrutiny. As a general rule the amount of gross profits thus ascertained is accepted without submitting the statement of the profit and loss account to a close scrutiny. If, however, it appears that entries have been made on the debit side deliberately and mala fide to reduce the amount of gross profits, it would be open to the Tribunal to examine the question and if it is satisfied that the impugned entries have been made mala fide it may disallow them." 4. IT is argued on behalf of the respondents that if you allow such an uncertain item namely 'bad Debt Reserve' then the company can name any amount to be a 'bed Debt Reserve', thus depleting the gross profit, just in order to deprive the workmen of bonus. Where a duly audited profit and loss account and balance-sheet has been produced, no such inference should be made without proof that this is what the company was trying to do. In other words, it will be for the workmen who allege mala fides on the part of the company to prove it. In this particular case, if they could have shown that the amount was unduly large and deliberately inflated, in order to reduce the gross profit, that would be one thing. We see, however, that the amount of Bad Debt Reserve is quite insignificant in comparison with the total out-turn of the company. There is no basis whatever to show that there was any deliberate manipulation with the intent of inflating bad debts or reducing the gross profits. The reason given by the Tribunal for disallowing this amount is simply that it was not an item which can be taken into the revenue expenditure against the workmen. This, in my opinion, is an erroneous view. The second point of dispute relates to the interest that has been allowed upon the working capital. The Tribunal has held as follows:- "the company has claimed 4 per cent. on the working capital of 1.31 lacs. The Union contends that if any return is to be given, it should be given on the general reserve. Of course, I must admit that the company has not placed before me sufficient data to show that the whole of this working capital was utilised throughout the year in business. But the amount of the working capital can not be disputed. Of course, I must admit that the company has not placed before me sufficient data to show that the whole of this working capital was utilised throughout the year in business. But the amount of the working capital can not be disputed. The working capital can be said to be fixed assets minus paid-up capital plus current assess minus current liabilities. In that view also the amount of working capital would stand at the figure given by the company. In the circumstances I allow a return on working capital at 2 per cent. only The amount would stand at 65 lacs as given above." 5. ACCORDING to the petitioner, the Tribunal should have granted 4 per cent. and not 2 per cent. The principle upon which this interest is granted on the working capital is stated as follows in the Full Bench case of the Appellate Tribunal. The Mill-Owners' Association, Bombay v. Rashtriya Mill Mazdoor Sangh, Bombay, (3) L.L.J. (1950) 1247 at 1254, "the reserves which are carried over from year to year in law belong to the company, and in our view the company is entitled to some return for the money employed as working capital. The company is entitled to deal with this return as it chooses, and neither the shareholders individually nor the employees can as of right claim any direct benefit accruing out of employed capital; therefore this amount has to be credited to the company. There cannot be any doubt that the employment of the reserves as working capital obviates the borrowing of money protanto from outside sources for the same purpose, and may be at higher rates of interest. The payment of higher interest would necessarily reduce the gross profits; to that extent the employment of reserves as working capital would be beneficial to the employees. The paid-up, capital however runs a double risk, viz., (1) normal trade risks and (2) risks incidental to trade cycles; whereas in the case of the reserves employed as working capital the incidence which is more liquid than fixed capital the incidence of risk to which it is subject is rather small. So the fair return of reserves employed as working capital must necessarily be much lower than fair return on paid-up capital." 6. WE next come to the decision of the Labour Appellate Tribunal, Associated Cement Co. So the fair return of reserves employed as working capital must necessarily be much lower than fair return on paid-up capital." 6. WE next come to the decision of the Labour Appellate Tribunal, Associated Cement Co. Ltd. v. Workmen Employed by them (4) (1955) L. A. C. 454 at 458. This is what the Tribunal says:- "the concern has also pressed that they would have been allowed 41/2 per cent. on reserves utilised as its working capital as against 4 per cent, which has been given. Shri Sule on the other hand contends that only 2 per cent should have been allowed. Considering that the funds of the concern which have been utilised as working capital could have earned about 4 per cent by way of investment, we cannot say that the Adjudicator was wrong in the view that he took that 4 per cent was reasonable. In some cases we have allowed only 2 per cent. on reserves utilised as working capital, but there were special reasons for it and we do not think that a case has been made out for interfering with the Adjudicator's decision to give 4 per cent. (this year)". This matter went to the Supreme Court, Associated Cement Co. v. Their Workmen (2) A.I.R. (1959) S.C. 967 at 988. Although the appeal was allowed on the ground that there was no available surplus, this is what was stated on this point:- "the next step in the working of the formula relates to the deduction of an appropriate amounts, in respect of the return on paid-up capital as well as working capital. We have already noticed that the formula provides generally for the payment of interest at 6 per cent per annum on the paid-up capital and at 2 per cent. on working capital. Subsequent decisions show that the Tribunals do not regard the said rates as inflexible and they have suitably modified them in the light of the relevant circumstances in each case. We think that this is a correct approach and that it is necessary to fix the rates of interest on the two items of paid-up capital and working capital according to the circumstances of each case." 7. ACTUALLY, in that particular case the Supreme Court allowed 4 per cent. on the working capital (page 1001). In Indian Hume Pipe Co. v. Their workmen (5) A.I.R. (1959) S.C. 1081, 4 per cent. ACTUALLY, in that particular case the Supreme Court allowed 4 per cent. on the working capital (page 1001). In Indian Hume Pipe Co. v. Their workmen (5) A.I.R. (1959) S.C. 1081, 4 per cent. was allowed on the working capital (page 1088 ). In Titaghur Paper Mills Co. v. Their Workmen (6) A.I.R. (1959) S.C. 1095, 4 per cent. interest was allowed on the working capital (page 1109). 8. THE position, therefore, is that interest must be paid on the working capital, and whereas paid-up capital gets 6 per cent. the question of the rate of interest to be given on working capital is a question dependent on the facts and circumstances of each case. Coming back to the facts and circumstances of this case, we find that the reason for granting 2 per cent. and not the customary 4 per cent., is stated to be the failure of the company to show that the entire working capital was utilised throughout the year. It is argued before me that the mere production of the balance-sheet is not enough. Reliance is placed on the Supreme Court decision, Associated Cement Co. v. Their Workmen (2) A.I.R. (1959) S.C. 967 at 989. Gajendragadkar, J. says as follows:- 'we think it is commonsense that if the concern utilizes liquid funds available in its hands for the purpose of meeting its working expenses rather than borrow the necessary amounts, it is entitled to claim some reasonable return on the funds thus used. It is of course necessary that the employer must show that the amount under the depreciation fund was in fact available and that it has actually been used as working capital during the relevant year. What return should be allowed on such funds must inevitably be a question of fact to be decided by the Tribunal in its discretion in each case, in the light of the relevant circumstances. It would thus be noticed that in working out these two items under the formula there is no fixed or rigid rule about the rate of interest which can be claimed and awarded." Reference has also been made to the Supreme Court decision, Textile Machinery Co. Ltd. v. Their Workmen (7) 1960-61 (18 F. J. R. page 77) where Gajendragadkar, J., says as follows:- "in regard to the claim for interest of 4 per cent. Ltd. v. Their Workmen (7) 1960-61 (18 F. J. R. page 77) where Gajendragadkar, J., says as follows:- "in regard to the claim for interest of 4 per cent. on the reserves on the ground that they had been used as working capital, the Tribunal has found that there was no evidence to show that the said reserve had been either partly or wholly used as working capital during the relevant year. The appellant sought to rely on the balance-sheet in respect of this claim but the Tribunal took the view that the entries in the balance-sheet were of no assistance because the balance-sheet in question, that is for the year 1955 was prepared and published in the month of August, 1956, and so the Tribunal held that it was obvious that the items in question were not and could not have employed in the business in the year 1955. It not disputed that some of the mace rial items in the balance-sheet has been introduced for the first time and there was no corresponding entry in the balance-sheet in the previous year, and so the finding of the Tribunal that the subsequent balance-sheet cannot be used for the purpose of showing what, if any, amount of the reserve was utilised as working capital during the relevant year cannot be successfully challenged. Having found that there was no evidence to show that any part of the reserve had been used as working capital the Tribunal has nevertheless purported to adopt what it calls the broad and sensible view of the matter and has in the end allowed to the appellant interest at the rate of 4 per cent. on the amount of general reserves only which was Rs. 3,51,406/-- as on 31st December, 1954. If the finding of the Tribunal that no evidence had been adduced to show that any part of the reserve had been used as working capital is correct then the amount of interest allowed by it on the said amount of general reserves may strictly not be justified." 9. BEARING in mind these principles, laid down in the Supreme Court decisions cited above, the question is whether the finding of the Tribunal upon this point can be justified. The calculation of interest on working capital, according to the company, appears in a statement of account annexed to the petition at page 23. BEARING in mind these principles, laid down in the Supreme Court decisions cited above, the question is whether the finding of the Tribunal upon this point can be justified. The calculation of interest on working capital, according to the company, appears in a statement of account annexed to the petition at page 23. The amount claimed is Rs. 1,31,342/-. It will be observed that 4 per cent. has been charged on each heading, 'rolled throughout the year'. The Tribunal has held that the company has not placed before him sufficient data to show that the whole of the working capital was utilised throughout the year. It is by no means easy to follow the reasonings given by the Tribunal, the relevant part of which has been quoted above. The Tribunal seems to think that the working capital is 1. 81 lacs whereas this merely represents the interest claimed thereon. It is said that the working capital was to be calculated by adding the fixed and the current assets and deducting therefrom the paid-up capital and the current liabilities, which amounts to nearly 121/2 lacs. If this money had been utilised throughout the year then at 4 per cent. the yield will be 1.31 lacs. While actually deducting the return on the working capital at 2 per cent., the Tribunal has correctly deducted Rs. 65,000/-, but in the reasons given, he has treated the working capital to be 1.31 lacs. It is very difficult to say whether this mistake is due to a confusion as to the principles to be observed or merely because of a typographical error. Regards the principle laid down, namely that the Tribunal must be satisfied that the whole of the working capital has been utilised throughout the year, there is nothing to say because it is entirely correct. Mr. Ginwalla referred me to the balances-sheet and the profit and loss account and tried to prove that upon these two documents themselves it was amply proved that the working capital had been utilised throughout the year. Referring to the principle laid down by the Supreme Court, namely that the mere production of the balance-sheet was not enough, Mr. Ginwalla argued that the profit and loss account made a difference in this case. I am unable to follow this argument. Referring to the principle laid down by the Supreme Court, namely that the mere production of the balance-sheet was not enough, Mr. Ginwalla argued that the profit and loss account made a difference in this case. I am unable to follow this argument. When the Supreme Court laid down that the mere production of the balance-sheet, would not suffice it could only mean that the figures as given in the balance-sheet, by themselves, could not prove the investment of the working capital in a manner which will justify the granting of 4 per cent. interest. That is something which has to be proved aliunde. According to the Tribunal this was not done in this case. Since I accept the principle laid down, I do not see how I can interfere upon a finding of fact, namely that it had not been proved that the working capital was utilised throughout the year. In order to do so, I would have to scan all the evidence which I should not do in an application under Article 226. So far as the figures are concerned, although the Tribunal has made a wrong statement namely that 1.31 lacs was the working capital, it has nevertheless given the correct figure so far as 2 per cent. interest is concerned. The whole point is as to whether, even if the Tribunal has committed an error of this nature, I should spend my time investigating the balance-sheet and the profit and loss account to find out what the working capital should be and whether it was utilised throughout the year. I do not think that without further evidence it could ever be decided merely upon the balance-sheet and the profit and loss account that the working capital was utilised throughout the year. That would require a consideration of the whole record to find out whether such evidence can be spelt out. This I am not in a position to do. Therefore, so far as this application is concerned, the point must fail. 10. THE third point taken is in respect of rehabilitation charges. These charges can be explained thus: Normally, the company is entitled to a normal statutory depreciation of its plant, machinery, building etc., as would be allowed under the Income Tax Laws. Therefore, so far as this application is concerned, the point must fail. 10. THE third point taken is in respect of rehabilitation charges. These charges can be explained thus: Normally, the company is entitled to a normal statutory depreciation of its plant, machinery, building etc., as would be allowed under the Income Tax Laws. Where the price of the replacement goes up steeply, as it is doing for the last decade or so, merely allowing the normal depreciation is not enough. If the company has to replace out-of-date machinery. etc., it cannot do so by expending the amount allowed by way of normal depreciation. It would require more funds, and this excess is called the rehabilitation charge. This is how it has been stated in the Full Bench formula in Millowners' Association, Bombay v Rashtriya Mill Mazdoor Sangh (3) (1950) L.L.J. 1247 at 1254. "as investment necessarily implies the legitimate expectation of the investor to secure recurring charges on the money invested by him in the industrial undertaking, it is essential that the plant and machinery should be kept continuously in good working order for the purpose of ensuring that return, and such maintenance of plants and machinery would also be to the advantage of labour, for, the better the machinery the larger the earnings and the better the chance of securing c good bonus. The first charge on the gross profits should, therefore, be the amount on money that would be necessary for rehabilitation, replacement and modernization of the machinery. As depreciation allowed by the Income Tax authorities is only a percentage of the written down value, the funds set apart yearly for depreciation and designated under that head would not be sufficient for this purpose An extra amount would have to be annually set apart under the heading of 'reserves' to make up that deficit." As is evident, this is only a general principle, and does not lay down any hard and fast rule. The rule that has now been laid down by the Supreme Court in (4) is as follows:- "for determining the total amount required for rehabilitation it is the original cost that has to be multiplied by an appropriate multiple, for instance 2. 7, for the purpose of ascertaining the replacement value of the machinery, building and plant. From the amount thus obtained, 5 per cent. 7, for the purpose of ascertaining the replacement value of the machinery, building and plant. From the amount thus obtained, 5 per cent. of the original value is to be deducted as breakdown value. The balance is treated as sufficient to complete replacement of machinery and buildings. Then the amount in hand under the heading of depreciation, general reserve and rehabilitation have to be totaled and this total has to be deducted from the aforesaid balance which is required to complete replacement of machinery and buildings. It is the balance thus drawn that has to be spread over a number of years, as for instance 15, for the purpose of rehabilitation. In other words, the balance has to be divided by 15 and the amount thus determined has to be treated as prior charge under the heading of the rehabilitation in the relevant year. " 11. IN Associated Cement Cos. v. Their Workmen (2) A.I.R. (1959) S.C. 967 at; 992 Gajendragadkhar, J., said as follows :- "in dealing with the employer's claim for rehabilitation the Tribunals have always placed the onus of proof on the employer. He has to prove the price of the plant and machinery, its age, the period during which it requires replacement, the cost of replacement, the amount standing in the depreciation and the reserve fund, and to what extent the funds at his disposal would meet the cost of replacement. If the employer fails to lead satisfactory evidence on these points the Tribunals have on occasions totally rejected his claim for rehabilitation. The main difficulty in deciding the questions about rehabilitation arises from the fact that satisfactory evidence is not always placed before the Tribunals and it is urged that the evidence given by the employer's expert is interested and the workmen with their limited resources are not able to test the said evidence by adequate or effective cross-examination. . . . . . . . . . . . . . . . The questions which the Tribunal has to consider under this item are essentially questions of fact and its final decision on them is bound to be hypothetical, since it would be based on a fair evaluation of several circumstances which are by no means certain and which cannot be predicated that any amount of precision or even definitiveness. . . The questions which the Tribunal has to consider under this item are essentially questions of fact and its final decision on them is bound to be hypothetical, since it would be based on a fair evaluation of several circumstances which are by no means certain and which cannot be predicated that any amount of precision or even definitiveness. That is why it is of the utmost importance that all relevant and material evidence should be adduced by the employer and it should be properly tested by cross-examination. When that is done the Tribunal must at its best consider the said evidence objectively and reach its final decision in a judicial manner. " 12. IN this case, the company has given a statement of computation regarding calculation of rehabilitation charges in 1956. It is included in annexure 'a to the petition, at page 26. The Tribunal accepts the computation and proceeds to calculate on that basis. Unfortunately, the calculation made by the Tribunal is erroneous on the face of it. The Tribunal states thus:-"the management claims Rs. 66,000/-. The Union contends that as the normal statutory depreciation is 1.10 lacs during the year in question, nothing can be given on the head of rehabilitation charge. The replacement charge will be the balance that will be found to be in excess after deduction of the initial statutory depreciation of the year. In the present case, as the rehabilitation charge claimed by the company is less than the statutory depreciation of the year, the company is not entitled to claim any deduction on the head of rehabilitation. . . . . . . . . . . . Regarding the calculation of rehabilitation charge, I accept the computation given by the company. I accept that the original cost up to 1947 should be had from the balance-sheets to be 1.46 lacs. That is to be multiplied by 2.7. From that scrap value to the extent of 5 per cent., should be deducted. The balance will be 2.32 lacs on the score of plants and machineries. It is to be divided by 15. So the total amount under this head would stand at 16 lacs roughly. So far as the principle is concerned, namely that the rehabilitation charge can only be allowed where the statutory depreciation will not be enough it has been correctly expounded. It is to be divided by 15. So the total amount under this head would stand at 16 lacs roughly. So far as the principle is concerned, namely that the rehabilitation charge can only be allowed where the statutory depreciation will not be enough it has been correctly expounded. But in applying this principle, and making calculations, the Tribunal has gone wrong. 1.46 lacs multiplied by 2.7 can not be 2.32 but will be about 3.93 lacs. What has been overlooked is that in arriving at the figure 3.32 lacs depreciation has already been deducted. Similarly, in the case of buildings, the depreciation has already been deducted. The amount claimed is, therefore, after deducting the depreciation. It is, therefore, incorrect to calculate on the basis that the rehabilitation charges claimed is less than the depreciation, because in that event one would be deducting the depreciation twice over. In my opinion, the Tribunal has gone wrong on this point and its calculations are erroneous. 13. I now come to the fourth and the last point taken, and this relates to the distribution of the available surplus. The principle to be followed upon this heading has been thus stated by the Supreme Court in Associated Cement Cos. v. Their Workmen (2) A.I.R. (1959) S.C. 967 at 992:- "once the amount of rehabilitation is thus determined the available surplus for the bonus year is ascertained and the final stage is reached when the tribunal has given directions for the distribution of the said available surplus. It is not seriously disputed that three parties are entitled to claim a share in this available surplus; labour claims bonus from it, the industry claims a share for the purpose of expansion and other needs, and shareholders claim a share by way of additional return on the capital invested by them. . . . . . . The ratio of distribution would obviously depend upon several facts: what are the wages paid to the workmen and what is the extent of the gap between the same and a living wage? Has the employer set apart any gratuity fund ? If yes, what is the amount that should be allowed for the bonus year ? What is the extent of the available surplus? What are dividends actually paid by the employer and what are the probabilities of the industry entering upon an immediate programme of expansion? Has the employer set apart any gratuity fund ? If yes, what is the amount that should be allowed for the bonus year ? What is the extent of the available surplus? What are dividends actually paid by the employer and what are the probabilities of the industry entering upon an immediate programme of expansion? What dividends are usually paid by a comparable concern? What is the general financial position of the employer? Has the employer to meet any urgent liability such as redemption of debentures bonds? These and similar considerations will naturally determine the actual mode of distribution of the available surplus. " 14. THERE can be no doubt that upon this point the award of the Tribunal is entirely defective, inasmuch as it is entirely silent on this point, and has not taken into consideration at all the principles laid down above. It is not as if these headings are fanciful or unimportant. They are matters of supreme importance, and cannot be ignored. Nothing has been considered on this heading, and the Tribunal has proceeded as if it need not consider such things at all. Either it is a deliberate omission, or shows an ignorance of the law. The learned counsel for the respondents was really unable to answer this point. A somewhat involved argument has been put forward to the effect that after all, the Tribunal has only allowed about 11 thousand more to the workers, leaving quite a substantial sum for the shareholders etc. It is even argued that I must assumes that the Tribunal had calculated according to the principles laid down by the Supreme Court, although he has not expressed it in his award. In my opinion, I am unable to accept this argument. The award has set out all the reasonings and calculations made by the Tribunal. I am not in a position to assume that the Tribunal has made secret calculations not to be found in the body of the award. That would in any event be a very unsatisfactory manner of making an award inasmuch as the correctness or otherwise of it cannot be checked by a higher court. In this application, the Tribunal has been made a party, but it has not made any affidavit to the effect that such calculations had at all been made. To accept this contention would be highly speculative. In this application, the Tribunal has been made a party, but it has not made any affidavit to the effect that such calculations had at all been made. To accept this contention would be highly speculative. It is obvious, therefore, that the Tribunal has not done its duty by taking into account the various factors necessary for the calculation of the net available surplus and, therefore, the final figures upon which the bonus is dependent are defective and cannot be accepted. Learned counsel for the respondents have drawn my attention to the Supreme Court decision: Indian Hume Pipe Co. v. Their Workmen (5) A.I.R. (1958) S.C. 1081 at 1084, where Bhagwati, J., said as follows:- "in the working of the said formula, however, regard must be had both to the interests of capital and labour. In any given industry, there are three interests involved viz., the shareholders, the company and the workmen and all these interests have got to get their proper share in the surplus profits ascertained after due provision made for these 'prior charges'. The shareholders may look to a larger dividend commensurate with the prosperity of the industrial concern, the company would, apart from the rehabilitation and replacement of buildings, plant and machinery, look forward to expansion and satisfaction of other needs of the industry and the workmen would certainly be entitled to ask for a share in the surplus profits with a view to bridge the gap between the wages earned by them and the living wage. All these needs have, therefore, got to be duly and properly provided for, having regard to the principles of judicial justice and once surplus profits available for distribution among these respective interests are determined after making due provision for the 'prior charges' as aforesaid, the industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same, having regard, of course, to the considerations mentioned hereinabove. But so far as the determination of the surplus profits is concerned, the formula must be adhered to in its essential particulars as otherwise there would be no stability nor uniformity of practice in regard to the same." 15. IT is argued that the Supreme Court in this decision has modified its previous views with regard to the distribution of the available surplus. IT is argued that the Supreme Court in this decision has modified its previous views with regard to the distribution of the available surplus. In other words, it is said that the latest view is that the only point to be considered is the view of social justice. In my opinion, it is entirely an erroneous interpretation. This decision not only does not go back on the previous decisions of the Supreme Court, but confirms the same. It lays down that the calculation of the available surplus must be made by following the principles which have been already laid down. It is only after the calculations have been made and all the interests concerned properly taken into account, that the question of social justice arises. After all 'social justice' must be done not only to labour but also to capital. In my opinion, this point is of no substance. 16. THE result is that this award cannot be supported and there will be a writ in the nature of certiorari quashing and/or setting aside the same. There will also be a writ in the nature of mandamus directing the respondents not to give effect to it. This is however without prejudice to a proper reference being made and a proper award being made in accordance with law, regarding the bonus payable to the workmen during the relevant period. There will be no order as to costs.