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Shree Durga Glass Works Vs. Presiding Officer, Industrial Tribunal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtOrissa High Court
Decided On
Judge
Reported in39(1973)CLT480; (1973)ILLJ467Ori
AppellantShree Durga Glass Works
RespondentPresiding Officer, Industrial Tribunal and ors.
Cases ReferredMis. Jalan Trading Co. Private Ltd. v. Mill Mazdoor Sabha
Excerpt:
.....by doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the orissa state financial corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. in other words, on payment of the sale proceeds of the confiscation proceeding to the orissa state financial corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002..........part of a scheme for providing for payment of bonus at rates which do not widely fluctuate from year to year and that is sought to be secured by restricting the quantum of bonus payable to the maximum rate of twenty per cent and for carrying forward the excess remaining after paying bonus at that rate into the account of the next year, and by providing for carrying forward the liability for amounts drawn from reserves or capital to meet the obligation to pay bonus at the minimum rate.7. on the aforesaid analysis it is clear that payment of minimum bonus has no nexus with the actual profits or loss of a particular year. thus, though the establishment might have incurred loss during the years under reference the liability to pay minimum bonus under section 10 of the act exists.8......
Judgment:

G.K. Misra, C.J.

1. The petitioner is an establishment in the private sector engaged in the manufacture of glass tumblers, jars, battles, etc., at Barang. The workmen of the petitioner's establishment, represented through the Barang Shramik Sangh, a trade union registered under the Indian Trade Union Act, are opposite party No. 2. They raised an industrial dispute claiming profit-sharing bonus for the years 1965-66, 1966-67, 1967-68 and 1968-69. The said dispute not being settled between the parties was ultimately referred to the Industrial Tribunal (opposite party No. 1) by the Government of Orissa (opposite party No. 3) on 4-1-70. The dispute referred to the Tribunal for adjudication was in the following terms:

Whether the employees of M/s. Shree Durga Glass Works, Barang, Cuttack, are entitled to profit-sharing bonus in accordance with the provisions of the Payment of Bonus Act, 1965 for the years 1965-66, 1966-67, 1967-68, and 1968-69; if so, what should be the quantum?

The Industrial Tribunal after taking evidence and hearing the parties gave his award (Annexure 1) on 8-6-71. The operative portion of the award runs thus:

Hence, I find that the employees of M/s. Shree Durga Glass Works, Barang, Cuttack are entitled to the minimum bonus of 4% of the salary or wage earned by the employees or Rs. 40, whichever is higher in accordance with the provisions of Section 10 of the Payment of Bonus Act, 1965 for the years 1965-66, 1966-67, 1967-68 and 1968-69.

After discussing the evidence given by the parties the Tribunal came to a positive conclusion that the management incurred loss during the years under reference. Despite such a finding the Tribunal, however, held that the employees are still entitled to the benefit of Section 10 of the Payment of Bonus Act, 1965 (hereinafter to be referred to as the Act). Aggrieved by the aforesaid award, the petitioner has filed this writ application under Articles 226 and 227 of the Constitution for issue of a writ of certiorari to quash the award.

2. In support of the petition Mr. Nanda pressed two contentions:

(i) As the petitioner incurred loss during the relevant years, opposite party No. 2 was not entitled to any bonus under Section 10 of the Act.

(ii) According to the terms of reference the Tribunal was to answer if profit-sharing bonus was payable to the employees under the Act. The Tribunal went beyond the scope of reference to find out if the employees were entitled to claim bonus even in case of loss which cannot be termed as profit-sharing bonus. Both the contentions require careful examination.

3. Section 10 of the Act, so far as relevant, runs thus:

10. Payment of minimum bonus,-Subject to the provisions of Sections 8 and 13, every employer shall be bound to pay to every employee in an accounting year a minimum bonus which shall be four per cent of the salary or wages earned by the employee during the accounting year or forty rupees, whichever is higher, whether there are profits in the accounting year or not: * * *

Mr. Nanda contends that the expression 'whether there are profits in the accounting year or not' conveys the meaning that minimum bonus is payable if the establishment either earns profits or the budget is a balanced one. It would not pay any bonus if there is loss. In support of his contention he places reliance on a single Judge decision of the Allahabad High Court reported in Kumaon Motor Owners'1 Union Ltd., Kathgodam v. State of Uttar Pradesh and Ors. 1969-1 L.L.J. 809, The decision supports his contention. I am, however, unable to accept it as laying down good law.

4. Three situations emerge in an establishment in relation to profit and loss. There may be positive profit, neither profit nor loss, and loss. Even in a case of balanced budget where there is no profit or loss, if bonus is ultimately paid it would result in loss to the establishment. The expression applies even to a case where there is less. On the plain language of the section, therefore, bonus is payable under S 10 even in cases where the establishment incurs loss in a particular year.

5. The position is clarified on a bare reference to item No. 8 in the fourth schedule of the Act. In that schedule the total amount of bonus equal to four per cent of the annual salary or wage payable to all the employees is assumed to be Rs. 50,000. Item No. 8 would show that though the available surplus allocable as bonus was nil due to loss, yet the establishment shall have to pay Rs. 50,000 which is equal to four per cent of the annual salary or wage.

6. The matter appears to be concluded by Mis. Jalan Trading Co. Private Ltd. v. Mill Mazdoor Sabha : (1966)IILLJ546SC . In paragraph 14, their Lordships said thus:

It may be broadly stated that bonus which was originally a voluntary payment out of profits to workmen to keep them contented, acquired the character, under the Bonus Formula, of right to share in the surplus profits, and enforceable through the machinery of the Industrial Disputes Act. Under the Payment of Bonus Act, liability to pay bonus has become a statutory obligation imposed upon employers covered by the Act.

In paragraph 24 their Lordships made the position wholly clear. They said:

Section 10 at first sight may appear to be a provision for granting additional wage to employees in establishments which have not on the year's working an adequate allocable surplus to justify payment of bonus at the rate of four per cent on the wages earned by each employee. But the section is an integral part of a scheme for providing for payment of bonus at rates which do not widely fluctuate from year to year and that is sought to be secured by restricting the quantum of bonus payable to the maximum rate of twenty per cent and for carrying forward the excess remaining after paying bonus at that rate into the account of the next year, and by providing for carrying forward the liability for amounts drawn from reserves or capital to meet the obligation to pay bonus at the minimum rate.

7. On the aforesaid analysis it is clear that payment of minimum bonus has no nexus with the actual profits or loss of a particular year. Thus, though the establishment might have incurred loss during the years under reference the liability to pay minimum bonus under Section 10 of the Act exists.

8. According to the terms of reference the Tribunal was to answer if profit-sharing bonus was payable to the employees under the Act. It was contended that the Tribunal went beyond the scope of reference and without determining this point examined the question if the employees were entitled to claim bonus even in case of loss. Mr. Nanda contends that claim of bonus even in case of loss cannot be termed as a profit-sharing bonus. There is no expression used in the Act as profit-sharing bonus. That word 'profit-sharing' was loosely used and is wholly redundant. In the circumstances, the Tribunal was justified in examining whether employees were entitled to bonus even if the establishment incurred loss during the year under reference.

9. In the result, the writ application has no merit and is accordingly dismissed with costs, hearing fee of Rs. 100.


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