Proof of working-capital use governs deduction of general reserves from rehabilitation in bonus calculations.

General reserves may be deducted from rehabilitation for bonus calculation only where the employer proves, with admissible evidence, that the reserves were actually used as working capital; amounts reasonably earmarked for binding obligations are excluded from available rehabilitation resources. Mere balance-sheet availability or a nominal book entry is insufficient. The burden rests on the employer to establish the factual basis for exclusion, and the Industrial Court should require clear proof and permit workmen to test the case by cross-examination, with affidavit evidence governed by principles reflected in Order XIX CPC. On the facts, the employer failed to prove use as working capital, so the deduction was upheld.

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Issues: Whether general reserves can be deducted from the amount required for rehabilitation for the purpose of calculating bonus, and whether the employer must prove by admissible evidence that such reserves were used as working capital or were reasonably earmarked for a binding purpose.

Analysis: The Court held that general reserves are deductible from the rehabilitation amount only if it is shown that they were actually used as working capital, while amounts reasonably earmarked for specific binding obligations are outside the employer's available rehabilitation resources. Mere availability in the balance-sheet or a nominal book entry is not enough. The burden lies on the employer to establish the factual basis for exclusion of the reserves, and the Industrial Court must insist on clear proof. In the absence of agreement, the tribunal should ordinarily require proper evidence and afford the workmen an opportunity to test the employer's case by cross-examination, with affidavit evidence governed by the principles reflected in Order XIX of the Code of Civil Procedure.

Conclusion: The employer failed to prove that the reserves had been used as working capital, so the deduction made by the Industrial Court was upheld and the appeal failed.

Ratio Decidendi: General reserves may be deducted from rehabilitation only on proof that they were actually used as working capital, and the burden of establishing that fact lies on the employer.

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