Nainar Sundaram, J.:— The petitioner in Writ Petition No. 4690 of 1978, is the appellant in this writ appeal. The respondent in that writ petition are the respondents herein. For the sake of convenience, we shell refer to the parties as per their array in the writ petition. The petitioner is the secretary of the union of the Workmen of India Cements, Ltd, Sankari West, Salem District. The first respondent is the management of India Cements, Ltd., Sankari West, Salem District.
2. The petitioner filed the writ petition against the award of the second respondent herein, the Industrial Tribunal. Madras, made in Industrial Tribunal No. 23 of 1978, in and by which the claim of the workmen for a higher bonus at 25 per cent for the accounting year 1976–77 was dented. The workmen were given by the first respondent the minimum bonus of 8.33 per cent. Mohan J., who heard the writ petition, dealt with the two contentions urged before him, found no substance in them and as a result, the writ petition was dismissed. This writ appeal is directed against the order of the learned Judge.
3. The first contention that did not find countenance with the learned Judge related to the alleged exclusion of 137.12 lakhs for the purpose of calculation of bonus. The learned Judge found that factually there was no such exclusion and the Tribunal committed an error in this behalf, but the facts disclosed do not establish such exclusion. We did not, in fact, hear any argument on this aspect from the learned counsel for the petitioner-appellant herein.
4. The second point which has not found countenance with the learned Judge related to the audited balance sheet and the profit and loss account marked as exhibit M4 in the case and relied on by the first respondent and which was impeached by the petitioner. It is true that Tribunal has observed that the union cannot have any grievance since the profit and loss account has been prepared by the company's auditors and the same cannot also be called in question by the union. Here we are not concerned with the certificate as such given by the auditor and we are concerned with the audited balance sheet and profit and loss account exhibited as exhibit M4. Section 23 of the Payment of Bonus Act, 21 of 1965, hereinafter referred to as the Act is unambiguous in its terms when it speaks about presumption about accuracy of balance sheet and profit and loss account of a Corporation or a company. In order to appreciate as to how far the statements and particulars contained in the balance sheet and profit and loss account can be presumed to be accurate, we feel obliged to extract the contents of that section as hereunder:
“23. (1) Where, during the course of proceedings before any Arbitrator or Tribunal under the Industrial Disputes Act, 1947, or under any corresponding law relating to investigation and settlement of Industrial Disputes in force in a State (hereinafter in this section and in Ss. 24 and 25 referred to as the said authority) to which any dispute of the nature specified in S. 22 has been referred, the balance sheet and the profit and loss account of an employer being a corporation or a company (other than a banking company), duly audited by the Comptroller and Auditor-General of India or by auditors duly qualified to act as auditors of companies under Sub-sec. (1) of S. 226 of the Companies Act, 1956, are produced before it, then, the said authority may presume the statements, and particulars contained in such balance sheet and profit and loss account to be accurate and it shall not be necessary for the corporation or the company to prove the accuracy of such statements and particulars by the filing of an affidavit or by any other mode:
Provided that where the said authority is satisfied that the statements and particulars contained in the balance sheet or the profit and loss account of the corporation or the company are not accurate, it may take such steps as it thinks necessary to find out the accuracy of such statements and particulars.
(2) When an application is made to the said authority by any trade union being a party to the dispute or where there is no trade union, by the employees being a party to the dispute, requiring any clarification relating to any item in the balance sheet or the profit and loss account, it may, after satisfying itself that such clarification is necessary, by order, direct the corporation or, as the case may be the company, to furnish to the trade union or the employees such clarification within such time as may be specified in the direction and the corporation or, as the case may be, the company shall comply with such direction.”
5. As we could see from the above provision, when in the course of proceedings before an authority like the second respondent herein, the balance sheet and the profit and loss account of an employer being a corporation or a company (other than a banking company), duly audited by the Comptroller and Auditor-General of India or by auditor duly qualified to act as auditors of companies under Sub-sec. (1) of S. 226 of the Companies Act, 1956, are produced before it, then the said authority may presume the statements and particulars contained in such balance sheet and profit and loss account to be accurate and it shall not be necessary for the corporation or the company to prove the accuracy of such statements and particulars by the filing of an affidavit or by any other mode. The proviso to Sub-sec. (1) empowers the authority, if a doubt is felt, to take steps to find out the accuracy. The proviso will come into play, only when authority is satisfied that the statements and particulars are not accurate, Sub-sec. (2) is an enabling provision for the opposite party who impeaches the correctness of the balance sheet or the profit and loss account to apply for clarification and if such an application is made, the authority before whom the proceedings are pending after satisfying itself that such clarification is necessary may give directions to the company to give such clarification.
6. In the present case, the petitioner in the claim-statement averred as follows, with regard to the profit and loss account, in Para. 5 thereof'.
“The workmen state that the management included in their profit and loss account for the accounting year 1976–77 many inadmissible items so as to reduce the allocable surplus. To point out a few instances, capital items such as bad debts and decrease in stocks are deducted from the profit. The management has provided Rs. 53,50,000 for direct tax. But this is inadmissible since there are past losses. There are so many other inadmissible items in the profit and loss account of the management.”
From the above extract we are not able to say that there was any specific challenge of the accuracy of the statements and particulars in the balance sheet and profit and loss account. The averments are general in nature and the grievance could be stated to be against the method of accounting and alleged inadmissible items getting included. Even otherwise, if it is a case of challenge requiring any clarification relating to any item on the ground of inaccuracy, the section contemplates an application for a clarification assuming that any of the entires cannot be accepted as accurate for its face value. By virtue of S. 23(1) of the Act, the authority has to presume the statements and particulars, contained in the balance sheet and profit and loss account to be accurate and the burden was on the opposite party, in the present case, the petitioner, to disprove the accuracy of the said statements and particulars. If the accuracy of the particulars contained in these documents are not challenged in any manner known to law, reliance could certainly be placed on them. In the instant case, the petitioner did not choose to ask for any clarification relating to any item on the ground of inaccuracy by filing any application therefor as contemplated under S. 23(2) of the Act and the contentions raised in the claim statement stopped with the general attack, relating to the method of accounting and alleged inadmissible items getting included. If such a clarification has been asked for by filing an application as contemplated under S. 23(2) of the Act, the Tribunal, second respondent herein, would have considered the question of directing the first respondent to give clarification and if there is a failure on the part of the first respondent to comply with such direction, there will be scope for adverse comments and inferences. It is true the presumption under S. 23 of the Act is confined only to the accuracy of the statements and particulars contained in the balance sheet and the profit and loss account, and the presumption is not extended to the tenability or correctness of the methods of accounting. If any item is wrongly included or excluded, that could be the subject-matter of review and investigation by the authority. Taking that the challenge of the petitioner was only with reference to the method of accounting and the alleged inadmissible item getting included, we find that the petitioner ventured to file the worksheet for bonus, marked in the case exhibit W1. The worksheet has absolutely no basis on the statutory requirements and it cannot be accepted. It has not been demonstrated by the petitioner with any conviction that neither the method of accounting nor any item admitted was untenable and that any item requires adding back. On the other hand, the worksheet prepared by the first respondent and marked in the case as exhibit M2 was in accordance with the statutory requirements and deserved acceptance. In the said circumstances, if the presumption that the statements and particulars contained in the audited balance sheet and profit and loss account are accurate is drawn, that is a statutory presumption and that requires acceptance.
7. Learned counsel for the petitioner in this connection relied on before us a pronouncement of the Supreme Court in Metal Box Company Of India Ltd. v. Workmen [A.I.R 1969 S.C 612]. We find that the facts dealt with by the Supreme Court in the said case are entirely different from facts of the present case. There the Court was more concerned with the auditor's certificate. There was a claim for depreciation by the company. There were three figures for depreciation; one in the profit and loss account which was not in accordance with the Income Tax Act; another in the computation; and yet another subsequently claimed by the company as the revised figure of depreciation and on those circumstances, it was pointed out that mere production of auditor's certificate would not be conclusive. It has been further pointed out that under S. 23 of the Act, the presumption of accuracy is allowed only to the balance sheet and the profit and loss account of the companies and no such presumption is provided with regard to auditors' certificate. We do not think that the learned counsel for the petitioner could place any reliance on this pronouncement on the facts of the present case. As a result, we do not feel obliged to interfere with order of the Single Judge and accordingly, the writ appeal fails and the same is dismissed. No costs.
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