JUDGMENT : Bhargava, J. 1. An industrial dispute between two firms, M/s Bhailal Raichand & Co., and M/s Bhailal & Co., registered under the Indian Partnership Act, and their workmen was referred to the Industrial Tribunal, Maharashtra, Bombay, by the State Government for adjudication under Section 10(1)(d) of the Industrial Disputes Act by a notification dated 1st October, 1963. The firms raised some preliminary objections, one of which related to the question whether there could be one single reference in respect of the two firms. These preliminary objections were rejected by the Tribunal and need not detain us, because the decision of the Tribunal on these preliminary objections has not been challenged before us. 2. The reference related to four demands made by the workmen relating to gratuity, bonus, casual leave and reinstatement of one workman, Manek Subedar Khopde. The two firms, which are appellants in this appeal, sought special leave to appeal against the award in respect of only two items of gratuity and bonus, and this appeal has been filed on the basis of leave granted in respect of these two points. In this appeal, therefore, we are concerned with the correctness of the award on these two items of reference only. In the appeal, despite service, appearance has not been put in on behalf of the workmen, so that the appeal has been heard ex parte. 3. Learned counsel appearing for the appellants first took up the appeal relating to the grant of bonus by the Tribunal and, in that behalf, raised two points before us. One was that the Tribunal, in calculating the surplus available for working out bonus, committed the error of making no deduction in respect of the remuneration of the working partner of the firms. The second ground was that, in that calculation, the Tribunal wrongly failed to deduct the prior charge of income tax. So far as the first point is concerned, we find from the pleadings put forward before the Tribunal, as well as from the Award, that the appellants did not at any stage claim before the Tribunal that, in calculation of surplus, any deduction could be made in respect of the remuneration of the working partner. In fact, there was no claim at all in respect of partner's remuneration. The legitimate claim of return on capital invested by the partners was accepted by the Tribunal. In fact, there was no claim at all in respect of partner's remuneration. The legitimate claim of return on capital invested by the partners was accepted by the Tribunal. In these circumstances, we could not permit the appellants to raise this point in this appeal under Article 136 of the Constitution before us for the first time. 4. The grievance with regard to non-deduction of income tax in calculation of surplus appears to be justified. At the initial stage, learned counsel for the appellants claimed that income tax should have been deducted @ 50% of the net profits as calculated in the profit & loss account, because income tax is deducted on a national basis and tax @ 50% is charged from companies. This claim, on the face of it, was incorrect, because the appellants are not a company registered under the Companies Act. They constitute partnerships, and even the notional tax payable by a partnership cannot be equated with the tax payable by a company incorporated under the Indian Companies Act. In Tulsidas Khimji v. Workmen, (1963) 1 SCR 675 this court considered the principles that apply to deduction in respect of income tax in calculating surplus available in accordance with the Full Bench formula approval by this Court in the case of Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka v. Workmen, (1959) SCR 925, in the case of a partnership firm. The Court rejected the contention that deduction should be on the same basis as in the case of a company by holding :- "In our opinion, it would not be right to equate a registered firm to a company for the purpose of deduction of income tax. It is true that the income tax deduction has to be made on a notional basis, as laid down by a Bench of 5 Judges in this Court in Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka v. Workmen, (1959) SCR 925. But even so, the notional basis must have relevance to the law of income tax in respect of firms." Thus, the first contention raised on behalf of the appellants that the Tribunal in the present case should have permitted deduction of income tax on the notional basis of 50% is negatived by that decision of this Court. 5. But even so, the notional basis must have relevance to the law of income tax in respect of firms." Thus, the first contention raised on behalf of the appellants that the Tribunal in the present case should have permitted deduction of income tax on the notional basis of 50% is negatived by that decision of this Court. 5. In the same case of Tulsidas Khimji the Court then proceeded to consider the four alternative methods which could possibly be urged for arriving at the figure of notional income tax payable by a firm, and, after rejecting three of the suggestions, explained the principle to be applied in the following words : "The last alternative of allowing deduction under this head of calculating income tax on the actual figures of the profits of each of the partners separately appears to be reasonable, because the figures are known and the tax of each constituent members of the firm can be easily calculated on the basis of his share. But it has been argued on behalf of the respondents that the amount of income tax payable by the firm as such viz. about Rs. 10,000 should be permissible deduction and not what each partner had to pay on his share of the profits, because it is the firm which is the employer and which can claim deduction under this head. But this contention cannot be pushed to its logical conclusion because a firm is not a legal person within the meaning of the Industrial Disputes Act. It is the partners of the firm who are the employers. It is that fact that has to be taken into account in considering the question of income tax, even as in other matters like remuneration etc.; i.e. the amount of tax payable by each partner, qua the business of the firm, irrespective of their other sources of income or loss, because notional is quite different from the actual, though not wholly dissociated from it." 6. Thereafter, the Court considered the argument that the registered firm tax should be added to the figure of income tax arrived at by the process indicated, but that contention was also rejected. 7. Thereafter, the Court considered the argument that the registered firm tax should be added to the figure of income tax arrived at by the process indicated, but that contention was also rejected. 7. We called upon learned counsel to give us figures of the income tax payable by each of the two partners of the present firms in respect of the incomes of the two firms in accordance with the principle indicated above, and also asked him to work out a surplus, after deducting the amount of tax so payable by the two partners. The figures of surplus calculated by learned counsel were placed before us and we found them to be correct. On the basis of the figures of surplus available, after deduction of income tax, we are satisfied that, in the present case, that surplus would not justify grant of bonus to the extent of 30 per cent of the wages of the workmen as granted by the Tribunal. Considering the usual principles of allocating the surplus between the employers and the employees, we find that, in this case, there would be justification for granting bonus equal to 14 per cent of the wages of each workman. We have refrained from giving the exact figures of calculations, on the basis of which we have arrived at this conclusion, at the specific request of the appellants, who desired that their accounts should be kept confidential, and in view of the fact that, even before the Tribunal, the accounts submitted by the appellants were kept confidential and were sealed in an envelope when placed on record. 8. Next, we come to the question of gratuity. It was first urged that the Tribunal committed an error in framing a scheme of gratuity at all without properly considering the financial impact of the scheme and the ability of the appellants to bear the burden. This aspect has already been examined by the Tribunal which rightly held that the material placed by the appellants before the Tribunal was not sufficient for the Tribunal to examine whether the financial burden could be borne by the appellants. This aspect has already been examined by the Tribunal which rightly held that the material placed by the appellants before the Tribunal was not sufficient for the Tribunal to examine whether the financial burden could be borne by the appellants. The Tribunal has given figures to show that, during the last three years, before the introduction of this gratuity scheme, the appellants have been earning profits and, in fact, it appears that the average amount of profit earned during these three years would be in the region of Rs. 51,800 a year. The figures also show that, during these three years, the profits have been progressively increasing. On these facts, the Tribunal was right in concluding that the appellant firms are in a sound financial position and can meet the burden of gratuity granted by the Tribunal. The exact number of employees employed by the appellants was not disclosed to the Tribunal, so that, after finding that the appellants had a flourishing business, the Tribunal was unable to work out the total impact of the scheme. This difficulty arose because of the default on the part of the appellants themselves. In these circumstances, we cannot hold that the Tribunal was wrong in introducing the scheme of gratuity. 9. On the details of the scheme, one objection taken was that the Tribunal wrongly directed that the amount of gratuity payable will be calculated on the basis of total wages, including allowances, instead of making a direction that the gratuity should be calculated only on the basis of wages. In this case, the appellants gave no information whether any separate dearness allowance or any other allowance of some other nature was being paid by the appellants to their workmen. It is quite likely that the wages being paid are consolidated wages. It was, in any case, admitted by learned counsel that no separate dearness allowance is paid to the workmen. While there is no information as to what other allowances are being paid, we consider that there is no reason at all for us to interfere with the direction made by the Tribunal in its direction, as it is not possible to hold that that direction violates any principles applicable to such cases. 10. While there is no information as to what other allowances are being paid, we consider that there is no reason at all for us to interfere with the direction made by the Tribunal in its direction, as it is not possible to hold that that direction violates any principles applicable to such cases. 10. The second point urged by learned counsel was that the Tribunal has fixed the gratuity at too high a rate by laying down that the amount of gratuity will be equivalent to one month's wages for every year of service, with a maximum of 15 month's wages. In support of this proposition, learned counsel referred us to a decision of this Court in British Paints (India) Ltd. v. workmen, (1966) 2 SCR 523 where the workmen assailed the gratuity scheme, putting forward the case that they should have been granted 30 days' wages as prayed for by them, instead of 21 days' basic wages fixed by the Tribunal. The Court held :- "We do not think there is any case for increasing the quantum of gratuity fixed by the Tribunal at 21 days' basic wages as modified by us for each completed year of service, for there is a provident fund scheme also in force in this concern and the workmen are thus getting two retiring benefits." It was urged that the appellants also have a Provident Fund scheme and consequently, the rate at which gratuity was payable should not have exceded 21 days' wages, particularly when the maximum of 15 months' wages has been fixed. The case cited by learned counsel does not, in our opinion, lay down that in no case can a Tribunal, in its discretion, direct that, in a gratuity scheme, the amount of gratuity should be equal to one month's wages for each year of service, with a maximum of 15 months' wages. In fact, there have been a number of cases where this Court has approved of schemes allowing gratuity at this rate. The rate to be prescribed is in the discretion of the Tribunal and, unless we find that the Tribunal has committed any gross error, we do not consider that there is any reason for interfering with the decision of the Tribunal. This point also, therefore, fails. 11. The rate to be prescribed is in the discretion of the Tribunal and, unless we find that the Tribunal has committed any gross error, we do not consider that there is any reason for interfering with the decision of the Tribunal. This point also, therefore, fails. 11. The last point urged by learned counsel was that, in laying down the scheme for gratuity, the Tribunal committed an error of not prescribing a minimum period at all for the workmen to earn gratuity even in cases of voluntary retirement, resignation, or termination of service. This Court in British Paints (India) Ltd. Calcutta Insurance Co. Ltd. v. Workmen, (1967) 2 SCR 596 and Hydro (Engineers) Pvt. Ltd. v. Workmen, Civil Appeal No. 1934 of 1967 decided on 30.4.1968 held that, ordinarily, the qualifying period in such cases should be 10 years. In the first case, the Tribunal had fixed the period at 5 years and the Court increased it to 10 years. Consequently, we think that the appeal should succeed to the extent that the gratuity scheme should stand modified by prescribing a qualifying period of 10 years in cases of voluntary retirement, resignation or termination of service. 12. As a result, the appeal is partly allowed, so that the rate of bonus granted by the Tribunal is reduced from 30 per cent of the wages of the workmen to 14 per cent. This bonus will, of course, be the total bonus in respect of the year, so that the actual amount to be paid by the appellants will be calculated after deduction of the amount of bonus, if any, already paid in respect of this year. Further, the scheme of gratuity will include the provision that gratuity will be payable on voluntary retirement, resignation or termination of service only after a workman has put in a minimum of 10 years of service. Since the workmen did not appear to oppose the appeal, we make no order as to costs.