B.C. Misra, J.
1. The management-petitioner has filed this writ petition against the order of the Labour Court dated January 15, 1966 by which in proceedings instituted under Section 33C (2) of the Industrial Disputes Act (hereinafter referred to as the Act) a sum of Rs. 560 has been computed as bonus payable to Padam Sain Jain, workman (who is second respondent in this petition) for the financial year 1963-64. The Labour Court also allowed payment of another sum of Rs. 100 which had become due on account of a mistake in some calculation, thereby making a total of Rs. 660.
2. The material facts of the case briefly stated are that respondent No. 2 workman was employed with the petitioner as an accountant but the management terminated his services with effect from May 9, 1964. The respondent was alleging wrongful dismissal and so both the parties approached the Conciliation Officer for settlement of the dispute. A settlement was arrived at between the parties on September 8, 1964 (copy filed as Annexure 'B'). Reference to its terms would be made in detail hereafter. Broadly speaking, under this settlement the management agreed to pay to the workman a sum of Rs. 2,500 in full and final settlement of all his claims on the management. The amount was paid the same day by cheque and a receipt for the amount has been filed (copy Annexure 'D') while the covering letter of the cheque is Annexure 'C'. There is, thereforee, no dispute that the respondent had obtained the amount that had been settled under the said settlement.
3. Subsequently the workman claimed bonus for the year 1963-64 and he moved the Labour Court on March 1, 1965 claiming four months' salary as bonus for the year 1963-64 besides an unauthorised deduction of Rs. 150, making a total claim of Rs. 1, 270. The grounds mentioned in the petition were that the management had declared bonus for the year in dispute, namely, 1963-64 in or about November, 1964 and the petitioner was entitled to it and that the settlement before the Conciliation Officer mentioned above did not cover the claim to the said bonus. It is also mentioned that the management had paid him bonus formerly from 1955 up to 1962.63 and so he was for 1963-64 entitled to four months' salary as bonus. The management opposed the said application and they relied upon the settlement (copy Annexure 'B') and contended that the settlement was in respect of all claims, including the claim for bonus and the application of the workman was frivolous. The Labour Court has found as a fact that the bonus for the year 1963-64 had been declared by the management sometime in October or November, 1964 and made the payments to their workmen in November, 1964 and disputed claim was the bonus for the financial year 1963-64. In respect of the legal effect of the settlement the Labour Court came to the conclusion that the bonus for the year in dispute had not fallen due on the date of the settlement and so it was not included within the settlement and since the bonus had been declared subsequently, the workman was entitled to receive the same. The Labour Court used as an argument that if a sum is paid in full and final settlement and by a statute something is granted to the worker working during the years prior to the settlement, then he would be entitled to that amount in spite of the fact he had already settled with the management. In this view of the matter, the Labour Court passed the order mentioned above.
4. In the writ petition before me the order for payment of Rs. 100 which became due on account of a mistake is not challenged. The challenge is, thereforee, confined to the order for payment of Rs. 560 on account of bonus. Mr. Vohra supporting the writ petition has contended that the order of the Labour Court suffers from an error apparent on the face of the record and it has erred in law in construing the terms and legal effect of the settlement (Annexure 'B'). He has also contended that the settlement arrived at is binding on the parties under Section 18(3) of the Act and it is not open to any party to raise a dispute in contravention of the settlement.
5. The first respondent in the writ petition is the Presiding Officer of the Labour Court who is naturally not represented. The writ petition has been contested on behalf of the workman (second respondent) and a counter-affidavit has been filed. The gravamen of the counter-affidavit is that the settlement covered only the disputes relating to bonus and other items due till the date of settlement and that the bonus which was declared subsequently was not included within the terms of the settlement and, thereforee, the order of the Labour Court is correct.
6. There is no doubt that the settlement is binding on the parties. Section 18(3) of the Act provides that the settlement arrived at in the course of conciliation proceedings under the Act shall be binding on all the parties to the industrial dispute. The question for consideration, thereforee, is the construction of the terms of the settlement. The Memorandum of settlement (Annexure B') reads as follows: After short recital of the case.
On May 25, 1964, the Shops and Commercial Karamchari Sang, Delhi filed a statement of the claim on behalf of Shri Padam Sen Jain, one of the workmen employed by M/s. Northern India Theatres, Delhi regarding alleged wrongful termination of services of the workman. The matter was discussed with both the parties and as a result of the discussions, the following agreement was arrived at:
TERMS OF SETTLEMENT
1. The management agrees to pay lump sum of Rs. 2, 500 to Shri Padam Sen Jain, in full and final settlement of all his claims on the management including earned wages, leave, gratuity, wages, bonus, etc. He shall not claim reinstatement or any further relief from the management.
2. From the amount due to the workman under Clause 1 the management shall be entitled to the refund of cheque of Rs. 280 issued to Shri Jain, provided he has not encased the cheque. In case he has encased the cheque, the management shall be entitled to make deduction of Rs. 280 from the above amount. In addition to this the management shall be entitled to deduct any amount that may be due from Shri Padam Sen Jain on account of advance given to him and not yet paid back by him.
3. After making the adjustment referred to in Clause 2 the management shall pay the balance within a week of the date of singing the settlement.
A perusal of the said memorandum shows that the sum of Rs. 2,500 had been agreed to be paid in lump sum in full and final settlement of all the claims of the workman on the management and express mention is made of the claims to include earned wages, leave, gratuity, wages and bonus and the word, 'etc.' is also added to it. The further provision made is that the workman would not claim reinstatement or any further relief from the management. The letter accompanying the cheque for payment Annexure ''C' also recites that the amount was being paid in terms of the said settlement in full and final settlement of his account with the management. It is further expressly mentioned that this settled all claims of the workman against the management as well as from the management to the workman concerned. The letter was given to the Conciliation Officer. This was followed by a receipt Annexure 'D' of the same date signed by the workman (the second respondent) through the Conciliation Officer. The receipt after acknowledging the cheque states that it had been received on account of full and final settlement of all claims towards salary, bonus, leave, wages, etc., as per memorandum of settlement dated September 8, 1964.
7. In my opinion, the settlement covered all claims of the workman whatsoever and did not leave any scope for any future dispute or claim to arise. The various subjects and topics of possible dispute were settled to mutual satisfaction. They include, as has been expressly mentioned earned wages, leave, gratuity and bonus and, etc. It also stipulated that the workman would not be entitled to any further relief from the management. The result of the settlement is that all existing and potential disputes and possible claims of the workman with the management in respect of his employment and termination of service had been put an end to expressum facit cessare tacitum. The Settlement does not contain any detailed account as to how much money was legally or in fact due to the workman on various counts like arrears of salary, gratuity, arrears of bonus, if any, and the compensation for wrongful dismissal. Probably nothing was actually due and the expression used were intended to exclude any future claims or disputes whatsoever, including the claim for future honus. The settlement was a lump sum over all. It must, thereforee, be concluded that the management as well as the workman has taken into consideration all the potential claims. The argument of the counsel for the respondent is that the bonus became due on a declaration of the amount of bonus later in 1964 and it would depend on the management earning profits and it was not known whether the bonus would be two months' salary or four months' salary and so the workman could not contemplate the amount of bonus and claim it from the management on the date of the settlement. This argument is, in my opinion, fallacious. The workman knew in his own case that he had been receiving bonus from the management in the previous years and he had actually received the bonus for the financial year 1962-63 and so he was well aware of his claim to bonus. If he had any reservation about the bonus for the financial year to be declared in future, he had reasonably would be expected to certainly make an express reservation in its regard in the terms of the settlement. More over, if there were any doubt with regard to the declaration of bonus or the amount of bonus, the workman would prudently make calculations himself and claim the amount in full and final settlement without waiting for the declaration of the bonussubsequently which may or may not be declared or may be large or less than expected by the workman. This argument would support the plea of the management that all conceivable disputes between the parties which were existing or potential had been settled mutually. Afterall the workman was getting a lump sum of Rs. 2,500 and it is not known how much of it was his arrears of salary and how much was compensation, but if it was compensation for his wrongful dismissal, it certainly included all his claims on all accounts whatsoever including bonus. It must not be forgotten that what was being settled was not any particular amount of bonus for any particular year, but it was generally regarding all claims against the management. The counsel for the respondent has suggested in the argument that there was no scheme for payment of gratuity in the petitioner's company, but still the word 'gratuity' has occurred in the settlement. This again would support the contention of the petitioner. It suggests that the parties were-alive to and had made arrangements for full and final settlement of all pending and potential present or future disputes. The workman was getting a large amount of money and was severing his connection with the management and naturally neither party would, after the settlement, like to have any further disputes between them on any account whatsoever. All subjects of dispute and mutual claims of the parties had been fully and finally settled.
8. The Labour Court below has legally erred in construing the legal effect of the settlement. The only reason given by the Labour Court in support of its order is that the bonus for the financial year 1963-64 had not fallen due on the date of the settlement and that it was declared subsequently and as such the workman was entitled to get the amount notwithstanding aprevious settlement to the contrary. The argument of reference to the statute is really misconceived. The statute is an act of the sovereign and it operates of its own force without the will or consent of the parties. If a statute confers any benefit or obligation, then the legal effect of it would be determined on the language of the statute and not on any other extraneous considerations. It is admitted case of both the parties that the Payment of Bonus Act, 1965 does not apply to the facts of the case nor to the case of the respondent and no claim has been or could be made under the said statute. The reference to the statute by the Labour Court is, thereforee, irrelevant. The Labour Court has also fallen into an error in considering that the amount had not fallen due. The workman had worked with the petitioner during the financial year 1963-64 and the bonus if any payable for the said financial year would normally be the same as was payable in previous years and so he was well aware that, as in previous years, he would be entitled to get bonus for the year in dispute. What the workman was not likely to know on the date of the settlement was the amount of bonus, whether it should be less or more or in the event of loss, the company may not declare it at all. His claim to bonus was. however, an existing claim and not a future claim and this claim he made and settled by the settlement in dispute. The order of' the Labour Court is, thereforee, legally erroneous and is not sustainable. However, since the petitioner has of challenged the order in respect of Rs. 100 the order of the Labour Court is quashed only to the extent of the awarding he sum of Rs. 560 on account of bonus he payment of the amount in dispute had been ordered to be made in terms of the order of this Court dated March 16, 1966 on furnishing security. In view of this judgment, the respondent will now refund the sum of Rs. 560/to the petitioner.
9. As a result, the writ petition is allowed with costs.