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A. Munuswamy Vs. T. Viswanatha Nair - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1957)2MLJ400
AppellantA. Munuswamy
RespondentT. Viswanatha Nair
Cases Referred and Union of India v. Smt. Hira Devi
Excerpt:
- .....the remuneration received by capital in its various forms. this economic or technical sense of the word wages is broader than the current sense, and includes not only amounts actually paid to labourers, but the remuneration obtained by those who sell the products of their own work, and the wages of superintendence or management, which are earned by skill in directing the work of others.6. funk and wagnalls:payment for service rendered, especially the pay of'a artisans or labourers receiving a fixed sum per day, week, or month, or for, a certain amount of work (piece work); hire; usually in the plural, often construed as singular.7. rural econ.-the remuneration received by labour in its broadest sense as distinguished from that received by capital, and including the expenses incurred for.....
Judgment:
ORDER

Ramaswami, J.

1. The point for determination in this application for stay is whether the bonus granted to a workman is exempt from attachment under Section 60(A) of the Code of Civil Procedure.

2. The facts are.-T. Viswanatha Nair employed in Wimco at Tiruvothiyur filed a suit against Munuswami, the petitioner before us, for Rs. 400 odd. This Munuswami had been granted a bonus of about Rs. 200 by the West India Match Factory in which he was employed. This Viswanatha Nair filed an application for attachment before judgment and attached that sum. Munuswami has thereupon filed this Civil Revision Petition and obtained an order of interim stay.-

3. In order to decide this controversy we must first of all find out the meaning of the terms ' wages ' and ' bonus ' as can be gathered from (a) standard lexicons (b) various Acts and (c) case-law the the subject.

Meaning of the word 'Wages'.

4. Webster (International Dictionary of English Language, 1927). Pay given for labour, usually manual or mechanical, at short stated intervals, as distinguished from salaries or fees.

5. Theoretical Economics.--The share of the annual product or national dividend which goes as a reward to labour, as distinct from the remuneration received by capital in its various forms. This economic or technical sense of the word wages is broader than the current sense, and includes not only amounts actually paid to labourers, but the remuneration obtained by those who sell the products of their own work, and the wages of superintendence or management, which are earned by skill in directing the work of others.

6. Funk and Wagnalls:Payment for service rendered, especially the pay of'a artisans or labourers receiving a fixed sum per day, week, or month, or for, a certain amount of work (piece work); hire; usually in the plural, often construed as singular.

7. Rural econ.-The remuneration received by labour in its broadest sense as distinguished from that received by capital, and including the expenses incurred for superintendence and management, called respectively wages of superintendence and wages of management. Ballentine (Law Dictionary, II Edn.t 1948). As the word is employed in common parlance, it refers specifically to the payment made for manual labour, or other labour of menial or mechanical kind, as distinguished from '' salary ' and from ' fees ' which denote compensation paid to professional men. In its application to labourers and employees, it conveys the idea of subordinate occupation which is not very remunerative, of not much independent responsibility, but rather subject to immediate supervision.35 Am. Jur. 496

8. As the word is used in the exemption statutes, it is intended to include what an employer owes his employee for personal services rendered in that relation, and it matters not whether it is called wages or salary.23 Am. Jur

9. Burrows.-(Words and Phrases Judicially Defined (1943)).

10. By codicil a testator bequeathed two years ' wages ' to his head gardener. ' The question is what the testator meant by the word '' wages '. I can find no assistance from the Truck Acts or the Workmen's Compensation Acts, nor is there any authority, curiously enough, which covers the question. Suppose a friend had asked the testator what he paid his head gardener. No doubt the testator would have said that he paid him 3, 9s. 9d. a week, and he might have added; ' Remember that we are in the country and he has a house '. In the ordinary use of language the testator would have mentioned the cash payment made week by week. . . It appears to me that in the gift in the 14th codicil cash wages were meant'. Re Peacock, Public Trustee v. Birchenougk (1929) 45 T.L.R.301, per Clauson, J., at page 302. Barclay and Co. v. Earles' Shipbuilding and Engineering Company (1901)W.N. 78, Palace Shipping Company Ltd. v. Caine (1859) 2 B. & S. 61 at 67 : 121 E.R, 996, Archer v. James(1859) 2 B. & S. 61 : 121 E.R, 996 Gordon v. Jennings'1.

11. Wharton.--The compensation agreed upon by a master to be paid to a servant, or any other person hired to do work or business for him.

12. Wages of any ' servant, labourer, or workman ' cannot be attached to satisfy judgments--Wages Attachment Abolition Act, 1870, (33 and 34 Viet. c. 30).

13. Murray {.New English Dictionary).--A payment to a person for service rendered. Formerly used widely, e.g., for the salary or fee paid to persons of official or professional status. Now (except in rhetorical language restricted to mean : the amount paid periodically, especially by the day or wtellror month for the labour or service of a workman or servant.

14. Stroud's Judicial Dictionary Vol. 4, page 3243. ' Though this word might be said to include payment for any service, yet, in general the word 'salary' is used for payment of services of a higher class, and 'wages' is confined to the earnings of labourers and antisans' (per Grave, J., Gordon v. Jennings. See hereon Per Parke, B., Riley v. Warden, Per Bramwell, B., Sleeman v. Barrett and Ingram v. Barnes. In that case Bramwell, B., said 'whatever definition one gives to the term 'wages', a portion of what the plaintiff here gets is 'profits', made and makeable by the employment of other people under him. If a portion is that, the whole is not wages'; see also per Gockburn, C.J., same case. It would therefore seem that 'wages' are the personal earning of labourers and artisans.

15. Meaning of the word ' Bonus '--Meaning of the word;--Murrays.--The Boon or gift over and above what is normally due as a remuneration to the receiver, and which is therefore something wholly to the ' Good'.

(a) Money or its equivalent, given as a premium or as an extra or irregular remuneration in consideration of offices performed, or to encourage their performance; sometimes merely a euphemism for douceur, bribe.

(b) An extra dividend paid to share-holders in a joint stock company from surplus profits; a portion of profits of an insurance company distributed 'pro rata' to the policy holders.

(c) a gratuity paid to workmen, masters of vesseles etc. over and above their stated salary.

16. Webster's.-Something given in addition to what is ordinarily received by, or strictly due to, the recipient;

(a) a premium given for a loan, or for a charter, or other privilege granted to a company.

(b) An extra dividend to the share-holders of a company, out of accumulated profits.

(c) Money or other valuable given in addition to an agreed compensation.

(d) Life-insurance-An addition or credit allotted to policy holders out of accumulated profits, as in mutual companies, usually, by the reduction of premium; In America usually called dividend.

17. Funk & Wagnall's. (1) An allowance in addition to what is usual, current, or stipulated; as a bonus on stocks.(2) Compensation for the obtaining of a loan.

18. Ballentine's.-An absolute gift or donation. The word is used in some connections as meaning a gratuity, a voluntary donation, a gift, but that is not Webster's definition. He defines it as 'a premium' given for a loan or charter or other privilege granted to a company; as the Bank paid a bonus for its charter; a sum Daid in addition to a stated comnensation.

(i) any contribution paid by the employer to any pension fund or provident fund;

(c) any travelling allowance or the value of such travelling concession;

(d) any sum paid to the person employed to defray special expenses entailed on him by th' nature of his employment; or

(e;) any gratuity 'payable on discharge.

The Minimum Wages Act, defines wages as follows:

Wages 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 to a person employed in respect of this employment or of work done in such employment, but does not include-

(i) the value of-

(a) any house-accommodation, supply of light, water, medical attendance, or

(b) any other amenity or any service excluded by general or special order of the appropriaty Government;

(ii) any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance;

(iii) any travelling allowance or the value of any travelling concession;

(iv) any sum paid to the person employed to defray special expenses entitled on him by the nature of his employment; or

(v) any gratuity payable on discharge.

19. The definition of 'wages' given in the Madras Shops and Establishments Act, is the same as in the Payment of Wages Act.

20. The Workmen's Compensation Act, defines 'wages' as follows:

Wages includes any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concession or a contribution paid by the employer of a workman towards any pension or provident fund or a sum paid to workman to cover any special expenses entailed on him by the nature of his employment.

21. The English case-law on the subject is summarised in Halsbury's Laws of England (Second Edition)., Volume 14, Para. 1227 (Page 65o),in the following statement:

Any money or other thing had or contracted to be paid, delivered, or given as a recompense, reward, or remuneration for any labour done or to be done, whether within a certain time or to a certain amount, or for a time or an amount uncertain, is deemed to be the wages of such labour.

22. Any agreement, understanding adevice, contrivance, collusion, or arrangement whatsoever on the subject of wages, whether written or oral, direct or indirect, to which the employer and workman are parties or are assenting, or by which they are mutually bound to each other, or whereby either of them has endeavoured to impose an obligation on the other of them, is deemed to be a contract'.

23. The American Law on the subject is summarised in 67 Corpus Juris, pages 284-285 as follows:

It has been said that the word ' wages' has no fixed definite legal meaning, and that wages and loss of time are understood to be the same thing. As generally defined, however, the term means compensation for labour or services, which may be in the form of money paid or other value given such as board, lodging, or clothes; compensation or reward agreed upon by the master to be paid to a servant or to any other person hired to do business for him; compensation given to a hired person for his or her services; compensation paid or to be paid for services by the day, week, month, or year, or other sub-division of time, the amount to be ascertained by agreement or the proved going rate or market value of the same at the time and place rendered; consideration which an employer bestows upon one who is serving him in consideration of his services, and usually a consideration in money, and never applied in describing the gain, profit, or recompense which accrues to one who is conducting a business of his own and on his own account; price paid for labour; reward of labour; specified sum for a given time of service; or a fixed sum for a specified piece of work; stipulated payment for services performed; sum of money periodically paid for services rendered; that for which one labours; that which is paid for a service rendered; what is paid for labour; what the labourer earns by his own labour. The fact that a portion of the compensation is to some extent uncertain does not make such portion, when actually earned, any the less ' wages'. Also, the term may be employed as referring to a guage, a pledge, a stake. Sometimes the plural form of the word is usued as singular

24. Having discussed the terms 'wages' and 'bonus' we have to consider Clause (h) of Section 60, Civil Procedure Code which states that the wages of labourers and domestic servants, whether payable in money qr in k;incl, sh,a,ll Rot be liable tQ attachment or sale in execution of a. decree

25. The case-law on the subject may now be briefly summarised. The wages of labourers and domestic servants are wholly exempt from attachment. A person is a 'labourer' within the meaning of this clause who earns his daily bread by personal manual labour, or in occupations which require little or no art, skill or previous education. A person who spins cotton and receives wages according to the quantity spun is a 'labourer'. Similarly, coolies employed on railway or other works and paid by the number of baskets of earth carried are 'labourers'. A clerk in one of the departments of a mill doing no manual labour cannot be regarded as a labourer or domestic servant. Where bonus is payable by agreement to an employee and depends on the kind of work which the employee is doing and on the number of days for which he has worked, such bonus is 'wages'; Kulkami v. Ganpat Teli A.I.R. 1942 Bom. 191, Raghunandan v. Jaigobind A.I.R. 1943 Patna 194. Manilal Bhaichand v. Mohanlal A.I.R. 1946 Bom. 10a., Jivan Lai v. Ramtuji Bhaiji : AIR1945Bom119 . (See D.V. Chitaley & N. Ramaratnam's ' The Fifty Years Digest' (i 901 -1950) Vol. Ill Note 27 Pages 157-158 fora handy and accurate collection of Case Law) on wages under Section 60(h) Civil Procedure Code.

26. In JV. M. Shanmughasundaram Mudaliar v. Chidambaram Pillai (1952) M.LJ. 891., this Court held that bonus as such would mean ex gratia payment.

27. In Harji Malla v. Karsanji (1952) 2 M.L.J. 265 : (1952) S.C.T. 326, it has been held that bonus paid to the labourers employed in a mill from time to time is part of their wages within the meaning of Section 60(h) of the Code of Civil Procedure and as the first Explanation to the section makes it clear that wages are exempt from attachment and sale whether before or after they are payable, the amounts of bonus cannot be attached as arrears in the hands of the employer. Jivan Lai v. Ramtuji Bhaiji (1952) M.LJ. 891., relied on and Union of India v. Smt. Hira Devi, distinguished.(1952) M.LJ. 891.

28. In Muir Mills Co., Ltd., v. Suti Mills Ma,zdoor Union, Kanpur (1952) 2 M.L.J. 265 : (1952) S.C.T. 326, it has been held:

The term bonus is applied to a cash payment made in addition towages. It generally represents the cash incentive given conditionally on certain standards,of attendance and efficiency being attained.

There are two conditions, which have to be satisfied before a demand for bonus can be justified and they are (1) when wages fall short of the living standard and (2) the industry makeshuge profits part of which are due to the contribution which the workmen make in increasing production. The demand for bonus becomes an industrial claim when either or both these conditions are satisfied.

29. The formula for the grant of bonus is as follows : As both labour and capital contribute to the earnings of the industrial concern, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges. The first charges on gross profits are (1) provision for depreciation, (2) reserves for rehabilitation, (3) a return at 6 per cent, on the paid up capital and (4) a return on the working capital at a lesser rate than the return on paid up capital. The surplus that remained after meeting the aforesaid deductions would be available for distribution as bonus.

30. The claim for bonus can be made by the employees only if as a result of the joint contribution of capital and labour the industrial concern has earned profits. If in any particular year the working of the industrial concern has rasulted'*m loss there is no basis nor justification for a demand for bonus. Bonus is not a deferred wage. If it were so, it would necessarily rank for precedence before dividends. The dividends can only be paid out of the profits and unless and until profits are made no occasion or question can arise for distribution of any sum as bonus amongst the employees.

31. 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 of the Code of Civil Procedure covers only a limited class of wage earners viz., labourers who earrutheir daily bread by personal manual labour or in occupations which require little or no art, skill or previous education..; If these conditions are fulfilled, bonus will stand protected under Section 60 of the Code of Civil Procedure.

32. Bearing these facts in mind if we examine the facts of this case, we find that the learned District Munsif came to the correct conclusion that Section 60 of the Code of Civil Procedure is not applicable to arrears of bonus of Rs. 200 in deposit and attached it because bonus in this case was nothing more than an ex gratia payment as neither by statute nor agreement had it assumed permanency and had become part of the wages and the revision petitioner does not fall within the definition of ' labourer ' contemplated under Section 60, Civil Procedure Code.

33. There are no grounds to grant the stay asked for. The interim stay already granted is dissolved and this application is dismissed with costs.


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