9911796707
TMI Blog1991 (7) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... he brief facts of the case are that the petitioner-company is an existing public limited company within the meaning of the Companies Act, 1956, hereinafter referred as "the Act" carrying on the business of printing and publishing various newspapers, weeklies and magazines in Hindi, English and Marathi. Petitioner No. 2 is the managing director of the company and petitioner No. 3 is the chairman and shareholder of the petitioner-company. Petitioner No. 2 is a highly qualified person in the field of personnel and company management and has gained wide experience during his long years of career in different capacities. Even though petitioner No. 2 was acting as general manager of the petitioner-company from September 1, 1976, he was not appointed as manager of the petitioner-company within the meaning of the Act. However, the board of directors of the petitioner-company at a meeting held on August 23, 1978, passed a resolution to the effect that application be made to the Central Government for approval of the appointment of petitioner No. 2 as manager under the Act for a period of five years from the date on which he assumes charge as manager after necessary approval of the Central G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by petitioner No. 2 on the basis of salary of Rs.6,000 per annum should be protected and necessary steps be taken to carry out changes in the rules and regulations of the Times of India Provident Fund, the Times Gratuity and Retirement Fund and the Times Officers' Superannuation Fund Deeds and Rules. The petitioner-company wrote to respondent No. 2 enclosing the aforesaid resolution dated April 6, 1979. By the said letter, the petitioner-company pointed out to the respondents that petitioner No. 2 has been drawing a salary of Rs. 6,000 per month effective from January 1, 1978, and provident fund, gratuity and superannuation benefits have been calculated on the basis of the said salary. As per the approval of the Central Government, petitioner No. 2 is entitled only for a salary of Rs. 5,000 per month and commission of Rs. 12,000 per annum inclusive of bonus. It was stressed that petitioner No. 2 is insisting on continuance of the benefits of provident fund, gratuity and superannuation benefits on the basis of a salary of Rs. 6,000 per month. In view of this, the petitioner-company sought approval of the Central Government with regard to payments of contributory provident fund, g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of commission. The respondents by rejecting the application of the petitioner-company seeking approval for including the commission for the purposes of calculating the percentage of provident fund, gratuity and superannuation benefits, etc., has deprived petitioner No. 2 of a considerable portion of the benefit which he was otherwise entitled to receive prior to his appointment as manager of the company. It was further submitted that petitioner No. 2 has been deprived of his right to receive the said benefits which have been unreasonably restricted and he has been discriminated against managerial (personnel) of public limited companies and managerial (personnel) employed by firms or other limited companies. Learned counsel for the petitioner challenges the action of the respondents as communicated on December 28, 1981, wherein the representation was rejected for inclusion of perquisites such as provident fund, gratuity and superannuation relateable to salary plus commission relating to the company's contribution. He contends that salary includes commission and the law is well-settled by the judgment of the Supreme Court in Gestetner Duplicators Pvt. Ltd. v. CIT [1979] 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.1 which may be reproduced as follows: "( a )The salary inclusive of dearness allowance and all other fixed allowances should not exceed Rs. 60,000 per annum. ( b )A commission on net profits up to 1% of the net profits may be allowed in addition to the salary as an incentive for efficient and sound management, but this should be at least 20% of salary subject to an overall ceiling that salary plus commission would not exceed Rs. 72,000 per annum (bonus will be treated as part of commission): ( i )The company's contribution towards provident fund not exceeding 10% of the salary as laid down under the Income-tax Rules, 1962". The respondents on their own have accepted the application of the Income-tax Rules for determining the company's contribution towards provident fund account and now take the stand that the salary would only be determinable by excluding commission in terms of the Provident Funds Act. There is no force in this contention and the law is fairly well settled by the Supreme Court. There is another aspect of the matter. The impugned order dated December 28, 1981, wherein the representation of the petitioner-company was rejected does not indicate any reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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