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Eagle theatres and ors. Vs. R.K. Baweja and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 241 of 1972
Judge
Reported inILR1973Delhi675
ActsIndustrial Disputes Act, 1947; Payment of Bonus Act, 1965 - Sections 22
AppellantEagle theatres and ors.
RespondentR.K. Baweja and ors.
Advocates: R. Dhawan and; D.K. Aggarwal, Advs
Cases ReferredFedders Lloyd Corporation (Pvt..) Ltd. v. Lt. Governor
Excerpt:
(i) bonus-demand for - quantification of, wheather necessary - industrial disputes act, 1947.; (rejecting the contention that in order that a demand fore bonus may be valid, it must be quantified) that a dispute as to bonus may arise whether it has reached the stage where the figures are known or not. it arises because a demand for bonus or more bonus is made and refused. the definition of the word 'demand' does not show that the concept implies or requires quantification. neither general considerations not the meaning of the word lead to the conclusion that a demand for bonus must need be quantified.; (ii) payment of bonus act, 1965 - section 22 - dispute for bonus arising under payment of bonus act - reference to arbitration under - validity of.; in the instant case, there was a..........as the 'employers'. by an order dated 15th july 1971, the lieutenant governor, delhi, referred an industrial dispute between the employers and their employees to the tribunal. the terms of reference were: 'whetherthe workmen are entitled to any additional bonus for the year 1968-69 and, if so, what directions are necessary in this respect'(3) in the proceedings which followed, the tribunal made an ordef rejecting certain preliminary objections to the reference taken by the employers. that is the order which this petition impugns. before us, the same points were canvassed as before the tribunal, and we proceed to consider them. (4) the first point urged on bahalf of the employers is that the order of reference was without juridiction as no dispute had arisen before it was made, so cone.....
Judgment:

T.P.S. Chawla, J.

(1) This petition under Articles 226 and 227 of the Censtitution of India is brought against an order of the 15th December 1971 made by the Industrial Tribunal, Delhi, presided over by Mr. R.K. Baweja.

(2) There is a firm called Eagle Theatres which carries on business as exhibitors and owns and runs the Plaza Cinema in Connaught Circus, New Delhi. We will refer to it as the 'employers'. By an order dated 15th July 1971, the Lieutenant Governor, Delhi, referred an industrial dispute between the employers and their employees to the Tribunal. The terms of reference were:

'WHETHERthe workmen are entitled to any additional bonus for the year 1968-69 and, if so, what directions are necessary in this respect'

(3) In the proceedings which followed, the Tribunal made an ordef rejecting certain preliminary objections to the reference taken by the employers. That is the order which this petition impugns. Before us, the same points were canvassed as before the Tribunal, and we proceed to consider them.

(4) The first point urged on bahalf of the employers is that the order of reference was without juridiction as no dispute had arisen before it was made, so cone could be referred. The basis on which this contention was sought to be founded was, that before conciliation proceedings were started, the employees had made no demand for bonus for the year 1968-69 (the year mentioned in the reference), and hence no dispute relative to that year could arise. It is, thereforee, necessary to determine whether the letters which admittedly passed, prior to the conciliation proceedings, between the employers and the Cine-Employees Association representing the employees, contained a demand.

(5) There are only three such letters. The first is addressed by the Association to the employers and is dated 1st May 1970. At the top, the subject mentioned is 'Annual Bonus for the year 1967-68 and 1968-69'. After referring to certain matters in connection with bonus for the year 1967-68, it states :

'WEwould like to be satisfied in the above matter and also for the year 1968-69 on the basis of relevant record which are in possession of the management alone. Under the Payment of Bonus Act, 1965 the workmen are entitled to look into the position relating to bonus on the basis of balance sheets etc. I hope, you will not put obstacle to the law taking its own course. In the alternative the management will be at liberty to settle the matter mutually as has teen done in almost all the cinemas except a few new cinemas only. It is up to the management to indicate the position. We always stand for mutual settlement. If you like I will be too glad to send you a list of cinemas showing bonus paid to workmen.'

(6) In their reply dated 13th May 1970 the employers acknowledged receipt of the Association's letter and said that it was receiving attention. They also requested the Association to send a copy of the list of cinemas which had paid bonus. The third and last letter was written by the Association on 12th August 1970. The subject was again 'Annual Bonus for the year 1967-68 and 1968-69'. It confirms that the required list had been sent, and then complains.

'THEmanagement has only paid 8 % of wages as bonus unilaterally. The workmen are not satisfied. Please let us know if you are even now willing to settle the matter mutually or by arbitration'.

(7) In our opinion, these letters read in a common sense may clearly contain a demand for bonus not only for the year 1967-68, but also for 1968-69. The subject of both letters written by the Association is both the years. They convey the dissatisfaction of the employees with the bonus paid, and demand to see the relevant record : obviously, to ascertain whether a larger amount of bonus was payable. Asking the employers to settle the matter amicably or by arbitration presumes the demand. Underlying all that was said is the demand for more bonus. The employers never complained they had cot understood what the Association meant. They said they were considering the matter. Their subsequent, and probably considered, reticence must be equated to a refusal. So a dispute arose. The demand may not have been worded with the precision that may be expected from a person legally trained, or perhaps, even from a more literate class of person; but, we think, the conclusion is irresistible, on a fair reading of those letters, that a demand for bonus for the year 1968-69 was made.

(8) It was suggested for the employers that a demand for bonus must be quantified, and without that it was not a valid demand. The reason, it was said, was that the employers ought to have the opportunity to consider whether they would meet the demand or prefer to resist it. This they could not do unless the demand was specific. We do not think that is correct. A dispute as to bonus may arise whether it has reached the stage where the figures are known or not. It arises because a demand for bonus or more bonus is made and refused. The dispute may be about quantum or liability or both. An employer may deny liability to pay bonus altogether. He may dispute that his is an establishment to which the Payment of Bonus Act 1965 applies. He will not then, understandably, give access to the relevant record. It is impossible for the employees, in that event, to quantify the demand. But, a dispute as liability for bonus will have arisen all the same. Otherwise, an employer could always stifle a dispute by the simple expedient of not giving access to the relevant record ; and a stalemate would ensue. That is what happened here. The definition of the word 'demand' in Webster's dictionary, to which we were referred, does not show that the concept implies or requires quantification. Neither general considerations nor the meaning of the word lead to the conclusion that a demand for bonus must need be quantified. The point in Fedders Lloyd Corporation (Pvt..) Ltd. v. Lt. Governor, Delhi, : AIR1970Delhi60 was different. There the demand was addressed to the conciliation officer. It was held, that to raise a dispute it ought to have been addressed to the employers. No such point can arise here because the Association's letters were addressed to the employers.

(9) It was also suggested that no inference could be drawn from the correspondence to which we have referred or otherwise, that the employers had refused to pay bonus for the year 1968-69, as the statutory time allowed for payment had not expired. Section 19(b) of the payment of Bonus Act 1965 requires that bonus shall be paid 'within a period of eight months from the close of the accounting year'. In the case of an employer, not being a corporation or a company, accounting year is defined by section 2(1) as 'the year commencing on the 1st day of April', unless the employer has exercised a different option. Though counsel for the employers stated that the accounting year adopted by them commenced on the 1st day of October, there is nothing on record to prove it. The burden was on the employers to place the recessary material on record on which they relied for their contentions. In the elserce of anything to the contrary, the relevant accounting year of the employers must be taken to have commenced on the 1st day of April 1968. Consequently, the letters written by the Association of the employees in 1970 were beyond eight months of the close of the accounting year on 31st March 1969, and the time for payment of bonus had already expired. The foundation for the argument on behalf of the employers is, thereforee, missing.

(10) For these reasons, we hold, that a demand for bonus for 1968-69 had been made and refused, and a dispute had arisen when it was referred.

(11) It is convenient to consider together the other two grounds on the order of reference was assailed, as they involve the same provisions of law. The general grievance of the employers was that the dispute, if any, had arisen under the Payment of Bonus Act 1965, wheras the order of reference went on the assumption that it had arisen under the Industrial Disputes Act 1947. The result was, they said, that the order of reference was invalid : (a) because it recited the Industrial Disputes Act instead of the Payment of Bonus Act, or the two together and (b) because the terms of reference used the word 'workmen' in place of 'employees' which was the appropriate word to use. These are points of some nicety and we have heard an interesting argument. It is, of course, correct that the order of reference is phrased entirely as if the dispute had arisen under the Industrial Disputes Act. In the recitals it refers to that Act alone. There is not even a hint or remote suggestion of the Payment of Bonus Act. So also it uses the word 'workmen throughout, which is defined in the Industrial Disputes Act. In the Payment of Bonus Act the word is 'employees'. Nothing in the order directs the mind to the Payment of Bonus Act, except perhaps the word 'bonus' if at all.

(12) But, the apparent mystery in the order is unravelled by section 22 of the Payment of Bonus Act completely. That section provides :

'WHEREany dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act 1947, or of any corresponding law relating to investigation and settlement of Industrial disputes in State and the force in a provisions of that Act, or, as the case may be such law, shall, save as otherwise expressly provided, apply accordingly'.

(13) The fiction which this section creates transports a dispute arising under the payment of Bonus Act to the position it would have occupied had it arisen under the Industrial Disputes Act. Working the fiction fully and giving literal effect to it requires that the order of reference be drafted in the shadow of the Industrial Disputes Act, and not the Payment of Bonus Act. The reference in the recitals must now be to the former and not the latter Act. It could be to both, but that would make little difference, and strictly only the Industrial Disputes Act ought to be recited, as in the present case. Mentioning the Payment of Bonus Act alone would be a failure to give effect to the fiction in section 22, and hence unsatisfactory.

(14) The same fiction requires the word 'workmen' to be used instead of 'employees'. Having arrived at the conclusion that the appropriate Act to recite is the Industrial Disputes Act, it would be a corollary that the vocabulary of that Act should be used in drafting the order of reference. The appropriate word is thereforee 'workmen' because it is used in that Act. The word 'employees' is not. To use 'employees' alongside the Industrial Disputes Act would introduce incongruity in the order, more especially when it is defined in the Payment of Bonus Act. When the dispute notionally passes from under one Act to the other, the equivalent pharases must also be substituted to maintain the fiction. So 'workmen' must be used for 'employees'. If the order of reference is read in the light of section 22 of the Payment of Bonus Act it is technically perfect. In any event, the objections are of a verbal nature and would not affect the substance of the matter.

(15) But, counsel, for the employers apprehended that they would. He said, the definition of 'employees' in section 2(13) of the Payment of Bonus Act comprehended a wider class of persons than the definition of 'workmen' in section 2(s) of the Industrial Disputes Act. The terms of reference covered only workmen and not employees'; and, thereforee, employees not falling within the definition of 'workmen' were excluded from the reference and no parties to it. Such employees, it was said would not be bound by an award made oa the reference as presently framed and could re-agitate the matter. Thus the award would lack finality, at least as regards employees outside the reference, and the employers were not freed from the prospect of further or fresh proceedings.

(16) This reasoning is fallacious because it forgets the fictions which section 22 of the Payment of Bonus Act creates. It is important to remember that the fiction made it appropriate to use the word workmen instead of employees. The two words were equated by the need of the case. If the dispute has arisen under the Payment of Bonus Act, the word workmen in the order of reference is not to be understood in the sense in which it is defined in the Industrial Disputes Act, but as equivalent to employees as defined in the Payment of Bonus Act. That verbal change was demanded by the fiction. It is not the purpose or the effect of the fiction to alter the concept of the dispute arising under the Payment of Bonus Act, which remains one between employers and employees. It is only a drafting device to make availa ble the machinery for investigation and settlement of disputes already established by the Industrial Disputes Act. The fiction works both ways, and must now he held in reverse. The fault in the reasoning propounded by counsel for the employers is that it breaks away from the fiction at the point of return, which is not legitimate. Adhering to it, workmen in the order of reference means employees as defined, not workmen as defined.

(17) There is also another answer to the point. Having created the fiction, section 22 goes on to state that the provisions of the Industrial Disputes Act shall 'apply accordingly'. One such provision is section 18(3)(d) of that Act which provides that an award, in respect of a dispute to which workmen are a party, shall be binding on 'all persons who were employed in the establishment' on the date of the dispute. Even if the reasoning put forth on behalf of the employers was sound, this provision ought to allay their fears. No employee in the establishment could possibly re-agitate the matter after an award, because, he would be bound.

(18) Though we were referred to section 39 of the Payment of Bonus Act and the judgment of the Supreme Court in Sanghvi Jeevraj Ghewar Chand and others v. Madras Chillies Grains and Kirana Merchants Workers Union and another (1969) 35 F.J.R. 162 (2) we have found nothing in them of relevance to the questions raised.

(19) We find no error or want of jurisdiction in the order of reference or the order made by the Tribunal, let alone a patent error. Accordingly, the petition is dismissed with costs. Counsel's fee Rs. 100.00.


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