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William Goodacre and Sons Ltd., Asramam, Quilon Vs. Mathan - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Case NumberS.A. No. 615 of 1955 (E)
Judge
Reported inAIR1957Ker16; (1957)ILLJ515Ker
ActsPayment of Wages act, 1936 - Sections 2, 15 and 22; Code of Civil Procedure (CPC) , 1908 - Sections 9; Travancore Payment of Wages Act, 1116 - Sections 2(7), 15 and 22; Evidence Act, 1872 - Sections 115
AppellantWilliam Goodacre and Sons Ltd., Asramam, Quilon
RespondentMathan
Appellant Advocate T.K. Kurien, Adv.
Respondent Advocate K.P. Abraham, Adv.
DispositionAppeal dismissed
Cases ReferredHeilgers and Co. v. Nagesh Chandra
Excerpt:
- - all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed, or otherwise, to a person employed in respect of his employment, and includes any bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment. but the evidence in the case clearly showed that there had so far been no discrimination in the selection of the employees when once a bonus had been declared for particular period......was only an ex gratia payment and could not be demanded as of right. they also pleaded that the bonus in question was intended to be distributed in favour of such only of the employees as were in actual service at the time of the declaration, and plaintiff having then ceased to be an employee, could not make claim. finally they relied upon a receipt dated 22-7-1947 passed by the plaintiff when he received his provident fund and saying that he had no further claim against the company as constituting an estoppel against the plaintiff's subsequent demand for the bonus.4. the learned additional district munsiff of qulion, before whom the case came on for trial, found on the basis of the admission of the head clerk of the defendant company, examined as dw. 1, that the practice of the.....
Judgment:

Varadaraja Iyengar, J.

1. This second appeal is by the defendants in a suit for recovery of bonus, which has been decreed concurrently by both the courts below in favour of the plaintiff.

2. The defendants are Messrs. William Goodacre and Sons Ltd. having their Head Office at Alleppey and a branch at Quilon and engaged in the business of manufacture and sale of coir yarn. The plaintiff was employed by the defendants as their Labour Welfare Officer at the Quilon branch as and from 1-4-1943 on a pay of Rs. 107-8-0. but his services were terminated on ground of retrenchment on 30-6-1947. Plaintiff's Provident Fund claims were settled and paid off to his satisfaction on 22-7-1947. In September 1947, the defendant's Head Office in London announced a payment of bonus to their employees in Travancore for the year ending 30-6-1947. Plaintiff then made claim for his share of bonus but the defendants refused and so this suit was laid on 5-4-1123 for recovery of an estimated bonus of Rs. 700.

3. The defendants resisted the suit mainly on the footing that bonus was only an ex gratia payment and could not be demanded as of right. They also pleaded that the bonus in question was intended to be distributed in favour of such only of the employees as were in actual service at the time of the declaration, and plaintiff having then ceased to be an employee, could not make claim. Finally they relied upon a receipt dated 22-7-1947 passed by the plaintiff when he received his Provident Fund and saying that he had no further claim against the company as constituting an estoppel against the plaintiff's subsequent demand for the bonus.

4. The learned Additional District Munsiff of Qulion, before whom the case came on for trial, found on the basis of the admission of the Head Clerk of the defendant company, examined as DW. 1, that the practice of the company had never been to refuse to any employee, his share of the bonus, once It was declared for particular period by the London Office and that the fact that the plaintiff was not on the roll of employees when the bonus In question was declared, did not debar him from claiming his share. For, the only criterion, according to the court, was whether he was in service during the period which contributed to the profits out of which the bonus came. On the question of estoppel the court found that Ext. I was executed without reference to bonus, which Indeed was not and could not then have been in the contemplation of both parties and therefore did not stand in the way of the plaintiff. In the result the court granted a decree in favour of the plaintiff for the sum of Rs. 700 claimed.

5. In appeal before the Additional District Judge. Quilon, the defendant company would appear to have stressed only the ground of estoppel based on Ex. I and given up the rest of the grounds of contest they had raised in the court of first instance. But the Judge easily repelled that ground and hence this second appeal by the defendant company as abovesaid.

6. Mr. T. K. Kurien, learned counsel appearing for the defendant, urged as his first point that a suit of this type did not lie in the light of Section 23 of the Payment of Wages Act XX of 1116 (Travancore). According to learned Counsel, Section 2 Clause (7) of the Act defined 'wages' so as to include bonus. Section 15 then provided for the enquiry by particular authority in respect of claims arising out of deductions from wages or delay in payment of wages at the instance of the employed persons or others. Section 23 finally debarred suits among others for the recovery of wages or any deduction from wages in so far as they could have been recovered by an application under Section 16. Now it may be conceded that the authority constituted in Section 15 could alone exclusively try and adjudicate upon the disputes which arise under the Payment of Wages Act and to that extent, the jurisdiction of ordinary civil court is ousted, but the fundamental premise is that the bonus claimed should be part of the wages as defined in the Payment of Wages Act and it is here that the argument breaks. For, 'wages' according to Section 2(7) means:

'all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed, or otherwise, to a person employed in respect of his employment, and includes any bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment.'

By Section 4 of the Act it is provided that every person responsible for the payment of wages under Section 3 shall fix periods in respect of which such wages shall be payable and that no wage period shall exceed one month and Section 5 says that such wages must be paid before the expiry of the 7th or 10th day after the last day of the wage-period in respect of which the wages are payable. It is clear therefore that wages and therefore the 'bonus' included therein should, for the purpose of the Act, be an ascertained sum, the deduction from or the delay in payment of which by the employer, forms the subject of enquiry under Section 15. As observed by Kania, C. J. in Heilgers and Co. v. Nagesh Chandra AIR 1949 FC 142 (A):

'The definition of 'wages' properly read shows that the amount must be an ascertained sum before it falls under the definition. Indeed it expressly includes the word bonus or other additional remuneration which would be payable under the con-tract of employment. In order to bring a particular, payment under the definition of wages, two things are necessary, (1) a definite sum, and (2) a contract indicating when the sum becomes payable.'

7. But the bonus, with which we are concerned, is totally unascertainable and unascertained when the remuneration of the employee is stipulated. It is a matter 'after the event' and depends upon the amount of profits earned and may or may not be declared for particular years. The definition of wages could not therefore cover the bonus in question. It follows that the argument as to lack of jurisdiction of the civil court has no sub-stance and has to be repelled.

8. Learned counsel next said that the bonus here should be deemed to be ex gratia payment made at the discretion of the employer to such employee as he may select and the plaintiff could not insist on a selection. But the evidence in the case clearly showed that there had so far been no discrimination in the selection of the employees when once a bonus had been declared for particular period. The only criterion adhered to was that the employee must have served during the period which contributed to the profits out of which the bonus came, the bonus declared was distributed in proportion to the pay of the employee concerned. So long as it is not said that the plaintiff was disqualified from this point of view, the plaintiff cannot be refused payment.

9. Learned counsel finally raised the question of bar of suit on ground of estoppel. But in the light of the concurrent findings of the courts below, that the aspect of bonus was far from the minds of either party at the time Ex. I receipt was passed, no such question could possibly arise.

10. The second appeal fails in the result andis dismissed with costs.


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