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Gopalan Vs. Angamali Chit Fund (P) Ltd. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Case NumberS.A. No. 836 of 1974
Judge
Reported inAIR1977Ker120; (1975)IILLJ296Ker
ActsCode of Civil Procedure (CPC) , 1908 - Sections 60(1); Payment of Wages Act, 1936 - Sections 2; Payment of Bonus Act, 1965 - Sections 2(21) and 10
AppellantGopalan
RespondentAngamali Chit Fund (P) Ltd.
Appellant Advocate Panicker and; Potti, Advs.
Respondent Advocate C.V. Joseph and; M.R. Parameswaran, Advs.
DispositionAppeal allowed
Cases ReferredPurshottam v. V. B. Potdar
Excerpt:
- .....exempt from attachment only if he is a labourer. there is no evidence as to the nature of the work which the appellants do and whether it requires any skill or training. neither the executing court nor the lower appellate court has adverted to this aspect. the question whether the appellants are labourers should be decided before holding that bonus payable to them is or is not liable to be attached.i set aside the order of the lower appellate court and remand the case to the executing court for fresh disposal. an opportunity will be given to the parties to establish whether the appellants 1 to 3 are labourers or not coming under section 60(1)(h) of the c. p. c. the appeal is allowed as above. the patties will bear then respective costs.
Judgment:

P. Janaki Amma, J.

1. In execution of a decree obtained against the appellant in this case the respondent Angamali Chit Fund Private Ltd., sought attachment of certain amounts due by way of bonus, to the appellants and the first judgment-debtor who are the employees of the Hindustan Machine Tools Ltd., Kalamassery. When the notice of interim attachment was received, the appellants and the first defendant in the case raised objections. After hearing the objections the interim attachment in respect of bonus due to the first judgment-debtor was made absolute and the attachment of the amounts due to the judgment-debtors 2 to 4 who are the appellants here was raised. The decree holder thereupon filed A. S. No. 115 of 1973, before the Additional District Judge, Parur. The appeal was allowed and the order raising the attachment was vacated as against judgment-debtors 2 to 4. The present Second Appeal is filed by judgment-debtors 2 to 4 against the above order.

2. The contention raised in the appeal is that the bonus amounts due to the appellants are not liable to attachment in view of Section 60(1)(h) of the C. P. C. Under Section 60(1)(h) of the C. P. C. the wages of labourers and domestic servants, whether payable in money or in kind, are not liable to be attached. The respondent, on the other hand, would deny that the amount attached fell under the category of wages. There is also the case that the appellants are not labourers coming under the purview of Section 60(1)(h) ofthe C. P. C. On the first point, the argument is that bonus allowed to a labourer comes under the category of ex gratia payment and cannot be considered to be part of the wages,

3. The question whether bonus paid to a labourer was part of wages came up for consideration in A. Muniswamy v. T. Viswanatha, AIR 1957 Mad 773. Ramaswami J., after an elaborate discussion of the meanings of the words 'wages' and 'bonus' in different enactments came to the following conclusion :--

'The sum and substance of the entire discussion is that bonus is not a regular part of the wages, deferred or otherwise and in essence is an ex gratia payment. But by statute or by agreement it can assume permanency and become part of the wages. Section 60 C. P. Code covers only a limited class of wage-earners, viz., labourers who earn their daily bread by personal manual labour or in occupations which require little or nu art, skill or previous education. If these conditions are fulfilled, bonus will stand protected under Section 60 C. P. Code.

The identical question came up before the same court in another case reported in Gana-pathia Pillai v. Swaminatha Pillai AIR 1969 Mad 440, Veeraswami J. (as he then was) referred to the decision of the Mysore High Court in P. Nathmal v. Dhasarath, AIR 1959 Mys 96 and observed-

'Quite apart from that, I am of the view that bonus, having regard to recent developments in the law relating to labour relationship, would be included in wages. Payment of bonus is a method of payment of wages. No doubt, payment of bonus is conditional upon payment of wages. But once bonus is paid, it has the true attribute of wages.'

The rulings in Ganapathia Pillai v. Swaminatha Pillai AIR 1969 Mad 440 and P. Nathmal v. Dhasarath, AIR 1959 Mys 96 were Followed in P. Krishna Rao v. Thimtir-shakhan AIR 1970 Mad 135. The Andhra High Court had also occasion to consider the question involved in I. Narasimha Rao v. A Mahalakashmayya, (1970) 1 Lab LJ 697 (Andh Pra), After referring to the cases A. Muniswamy v. T. Viswanatha, AIR 1957 Mad 773, Badlu Prasad v. Tirjuri Sitaram (1965) 2 Lab LJ 666 : (AIR 1965 Madh Pra 42) and Muir Mills Company Ltd. v. Suti Mills Mazdoor Union (1955) 1 Lab LJ 1 : (AIR 1955 SC 170) the Court deduced the following principles:--

'(1) The Civil Procedure Code has not defined 'wages'. The word 'wages' is used in a general sense or as genus of wages, with-out any qualification, including all payments made to an employee arising out of the relationship, but wages, has also a narrower or special meaning, connoting periodical payment. The phrase 'wages of labour' has to be understood in the context of the particular case before the court.

(2) 'Bonus' paid to a labourer is an 'ex gratia' payment and is not a wage deferred or otherwise, and as such cannot be a part of wages which has a permanence and a periodicity.

(3) The definition of 'wages' in enactments of a special nature made with a special purpose for giving the employee certain amount of protection cannot be imported by reference into Section 60(1)(h) of the Civil Procedure Code.

(4) Payment of bonus may also assume permanence and periodicity if it is the result of an agreement between the employer and an employee or is the result of a statute.

(5) Bonus declared under the Payment of Bonus Act, 61 of 1965, being the result of a statute, acquires permanence and periodicity, and is a part of wages within the meaning of the Civil Procedure Code.'

4. It is true that the definition of 'wages in the Payment of Bonus Act does not include bonus. But that is because for the purpose of that Act bonus has to be distinguished from wages and has to be determined in relation to the wages paid to the employee. The fact that bonus is specifically excluded from the definition of wages in Section 2(21) of the Act itself signifies that but for such exclusion bonus would fall under wages'.

5. A more appropriate enactment for reference for the purpose of deciding whether 'wages' in Section 60(1)(h) Civil Procedure Code include bonus, is the Payment of Wages Act, Section 2 (vi) defines wages. The relevant portion of the definition runs-

'3. (vi) (a) any remuneration payable under any award or settlement between, the parties or order of a court;

(b) any remuneration to which the person employed is entitled in respect of over tune work or holidays or any leave period;

(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);

(d) any sum to which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for thetime within which the payment is to be made;

(e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force; but does not include---

(1) any bonus (whether under a scheme of profit-sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a court.' XX XX XX

6. It is clear that bonus takes in wages unless it falls under the excluded category. The Supreme Court while dealing with the above definition in the case Purshottam v. V. B. Potdar AIR 1966 SC 856 observed:--

'It will be noticed that the definition of 'wages' is an inclusive definition. It includes within its purview categories of payments prescribed by Clauses (a) to (e) and excludes from its purview categories of payments prescribed by Sub-clauses (1) to (6). It is plain that remuneration payable to an employee under an award or settlement amounts to wages within the meaning of this definition. Similarly, bonus paid to the employees under an award amounts to wages. That is the effect of Sub-clause (1). Any additional remuneration payable under the terms of employment is covered by Sub-clause (c) and it is made clear by this sub-clause that it would be treated as such additional remuneration even if it is called a bonus or by any other name. Sub-clause (1) refers to bonus which is not such additional remuneration, it is bonus to which the employees are entitled under the principles evolved by industrial adjudication. This bonus may by under a scheme of profit sharing or otherwise. If such a bonus forms part of the remuneration payable under the terms of the employment, it is included in the definition. Similarly, if such bonus is payable under any award or settlement between the parties or order of the court, it is included within the definition, Thus it is clear that remuneration which may have been prescribed by an award amounts to wages under Section 2 (vi). Likewise, bonus properly so-called, which is payable under the award, is also included within the definition prescribed by Section 2 (vi).'

The word remuneration is synonymous with earnings. The definition of the word 'wages' does not appear to have undergone any change subsequent by the passing of the Payment of Bonus Act in 1965. Under Section 10 of the Payment of Bonus Act an employer is bound to pay everyemployee in an accounting year a minimum bonus which shall be four per cent (raised to eight and one third per cent from 1971) of the salary or wage earned by the employee during the accounting year or forty rupees, whichever is higher, whether there are profits in the accounting year or not. Thus, after the coming into force of the Payment of Bonus Act Bonus has become an implied term of employment, not dependent upon the profits that the employee gets out of the concent and therefore comes under the category of remuneration. Viewed in this light also the wages as a general term would include bonus.

7. But the Civil Procedure Code exempts from attachment only the wages of labourers and domestic servants. Therefore, 'bonus due to a person would become exempt from attachment only if he is a labourer. There is no evidence as to the nature of the work which the appellants do and whether it requires any skill or training. Neither the executing court nor the lower appellate court has adverted to this aspect. The question whether the appellants are labourers should be decided before holding that bonus payable to them is or is not liable to be attached.

I set aside the order of the lower appellate court and remand the case to the executing court for fresh disposal. An opportunity will be given to the parties to establish whether the appellants 1 to 3 are labourers or not coming under Section 60(1)(h) of the C. P. C. The appeal is allowed as above. The patties will bear then respective costs.


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