Skip to content


M. Tilak and Co. Vs. Third Industrial Tribunal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Case NumberCivil Revn. Case No. 2691 of 1956
Judge
Reported inAIR1959Cal797,63CWN697
AppellantM. Tilak and Co.
RespondentThird Industrial Tribunal and ors.
Appellant AdvocateNirmal Chandra Chakravarty and ;D.N. Basu, Advs.;Nani Coomar Chakravarty, Adv.
Respondent AdvocateA.P. Chakravarty and ;Madan Mohan Shah, Advs. for Respondent No. 3
DispositionApplication dismissed
Cases ReferredGraham Trading Co. (India) Ltd. v. Its Workmen (since
Excerpt:
- .....claim when either or both these conditions are satisfied'. that means that these two conditions of living wages and profits were not conjunctive conditions in the sense that they both must be satisfied before a claim for bonus can be substantiated. the learned advocate for the petitioner tries to make a distinction by saying that in the first part of the paragraph, the two conditions are laid down as conjunctive conditions and not as disjunctive conditions because the first sentence in that paragraph means that a demand for bonus cannot be justified unless those two conditions were satisfied whereas if one of the conditions were satisfied, then it was an industrial claim. i do not see the distinction which the learned advocate for the petitioner tried to make on this point. if a claim.....
Judgment:

P.B. Mukharji, J.

1. In this application under Article 226 of the Constitution, the Management of M. Tilak and Co., a transport business firm, seeks for a writ of certiorari to set aside the awards of the Industrial Tribunal and the Labour Appellate Tribunal. Many disputes were referred to the Industrial Tribunal of which only two are now important. The first one was : 'What should be the quantum of bonus for the years 1951, 1952 and 1953'? The second one was whether the workers were eligible to receive wages for the entire strike period from the 26th August, 1953 to the 11th February, 1954.

2. The Industrial Tribunal by its award dated August 18, 1953, decided that bonus equivalent to one month's basic wages for the year 1951 and bonus equivalent to two months' basic wages for the year 1952 should be paid to the workmen who were on the muster roll of the Company respectively during these respective financial years. The question of bonus for the year 1953 was left open and not decided. The Labour Appellate Tribunal varied this finding of the Industrial Tribunal by holding that there was no available surplus for the year 1950-1951 and, therefore, no bonus was payable for the said year. It, however, maintained the Tribunal's finding that two months' basic pay as bonus should be paid for the year 1951-1952.

3. On the other issue of wages during the strike period, the Tribunal came to the finding that the strike was unjustified but it awarded that the workmen should receive wages for only a portion of that period being from the 4th February 1954 to the 11th February 1954. The reason for granting wages for this period, even though the strike was held to be unjustified, is the fact that by the settlement dated the 3rd February 1954, the strike was withdrawn from the 4th February 1954, when the Company agreed to grant ten days' time for resumption of duty and when it further stipulated that the actual work should begin from the 12th February 1954. This decision does not seem to be unfair. The strike was withdrawn unequivocally from the 4th February 1954. From the agreement, it is clear that the Company granted ten days' time from the 4th February 1954 to the workmen to resume duty. This particular decision of the Tribunal was upheld by the Labour Appellate Tribunal.

4. The learned Advocate for the petitioner has challenged these decisions on both these issues.

5. I shall take up the second issue of wages--first, namely, the award of wages for a portion of the strike period between the 4th February 1954 to the 11th February 1954. It is entirely a question of fact and there has been no error of law or of jurisdiction by the Tribunals concerned in this respect. A point was made by the learned Advocate for the petitioner that once the finding is that the strike was unjustified, the Tribunal had no jurisdiction to award wages during the period of such strike. That is so. That proposition is not disputed. But the finding of the Tribunal is that there were certain very cogent facts so far as this particular period of ten days was concerned. Those facts were the agreement between the parties and the settlement. The Company, which is the applicant in this case, agreed to grant ten days' time for resumption of duty. The strike was withdrawn from the 4th February 1954 and, therefore, in those circumstances, I do not think that the point can be elevated to a question of manifest error of law or of jurisdiction so as to attract a writ under the Constitution.

6. On the first issue of bonus, the learned Advocate for the petitioner relied on the leading decisions of the Supreme Court on the question of bonus. Reliance was placed on the cases of Munir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur, : (1955)ILLJ1SC Baroda Borough Municipality v. Its Workmen, : (1957)ILLJ8SC and Sree Meenakshi Mills Ltd. v. Their Workmen, : (1958)ILLJ239SC . The argument on behalf of the petitioner is based on the following observation made by Bhagwati J. of the Supreme Court in the Munir Mills case, : (1955)ILLJ1SC :

'There are, however, 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 makes huge profits parts 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.'

7. The Baroda case, : (1957)ILLJ8SC and Sree Meenakshi Mills case, : (1958)ILLJ239SC also refer to these observations in the Munir Mills case.

8. On the strength of the above observations in the Munir Mills case, : (1955)ILLJ1SC , the learned Advocate for the petitioner has argued that both these conditions must be satisfied before a bonus can at all be granted. His contention is that even if there be 'huge profits', no bonus can be claimed unless the actual wages paid fell short of the living standard. It was contended that this was what was laid down by the Supreme Court in the Munir Mills case, : (1955)ILLJ1SC .

9. I do not think that either that decision or the two other decisions of the Supreme Court in the Baroda case, (S) : (1957)ILLJ8SC and in Sree Meenakshi Mills case, : (1958)ILLJ239SC went to the length of saying that no bonus could ever be paid to or claimed by a workman unless his wages were below the living standard. The last sentence of the paragraph in the judgment on which reliance was placed and which I have quoted, expresses itself in this way: 'The demand for bonus becomes an industrial claim when either or both these conditions are satisfied'. That means that these two conditions of living wages and profits were not conjunctive conditions in the sense that they both must be satisfied before a claim for bonus can be substantiated. The learned Advocate for the petitioner tries to make a distinction by saying that in the first part of the paragraph, the two conditions are laid down as conjunctive conditions and not as disjunctive conditions because the first sentence in that paragraph means that a demand for bonus cannot be justified unless those two conditions were satisfied whereas if one of the conditions were satisfied, then it was an industrial claim. I do not see the distinction which the learned Advocate for the petitioner tried to make on this point. If a claim could be made on one of these points and if it could be defeated on the ground that both the conditions were not satisfied, then there was no point in making it an industrial claim when only one of those conditions was satisfied.

10. This much is clear that ordinarily and apart from agreement or custom no bonus can be claimed or justified unless there is profit out of which the bonus is to come and that profit is a result of the joint contribution of labour and capital. Whether in a particular case, 'huge profits' are made or not is a question of degree. I think what was intended by the Supreme Court decision was 'sufficient profits'. That is plain from the observations of the Supreme Court in the Munir Mills case where the surplus is described as the surplus after meeting four prior or necessary charges such as (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 rate on the paid up capital.

11. It was contended on behalf of the petitioner that there was no huge profits out of which the bonus could come. This point again depends on facts. It has been found as a fact both by the Industrial Tribunal as well as by the Labour Appellate Tribunal that there were at least sufficient profits to allow the bonus for the year 1951-1952. The Labour Appellate Tribunal set aside the Industrial Tribunal's grant of bouns for the year 1950-1951 on the ground that there were no profits for that year. I am not prepared to interfere with this finding of fact specially in a case where the petitioner's own accounts were not even audited and where no registered Auditor reported on the accounts and where the allegations made by the workmen were that some of the accounts were not genuine. I do not think that in these disputed questions of fact, there is any manifest error of law or of jurisdiction which will entitle this Court to issue a writ under Article 226 of the Constitution.

12. It was then contended by the learned Advocate for the petitioner that having regaid to the other condition laid down by the Supreme Court that the wages must fall short of the living standard, the evidence here did not show that. Now, the first answer to this is that I do not think, as I have said before, that the Supreme Court intended to lay down the extreme proposition by that observation that unless a workman's wages were below the living standard, he could never be granted bonus however high the profits of his Company may be to which he contributed. In my opinion, that would be misreading the real ratio of the Supreme Court's decision. The other two decisions of the Supreme Court also did not consider this point and cannot be said to have laid down that proposition.

13. Bonus as a concept in economics and as a concept of social justice will lose its essential meaning and message if it is to be crippled by the theory that unless the wages of the workers fall below the living standard, they do not qualify for the bonus in any circumstances and specially in the circumstances where there are available profits of the industry to which they have contributed, after meeting the necessary expenses and other charges included in the formula recognised by the Supreme Court in the Munir Mills case. I need only refer to the still later decision of the Supreme Court in Mysore State v. Workers of Gold Mines, : (1958)IILLJ479SC , where the Supreme Court states:

'The recognition of the workmen's claim for bonus rests on the view, which is now well-established, that both labour and capital contribute to the earnings of the industrial concern and that social justice requires that workmen should be allowed a reasonable share in the profits made by the industry.'

I need only emphasise here that in this decision the Supreme Court does not say, as contended by the petitioner, that the wages of the workers must be below the living standard before a claim for bonus can be made and entertained. To make bonus depend invariably on starvation wages as its indispensable prerequisite is to adopt a primitive view no1 in harmony with the trends of modern economics and the modern industrial aspirations.

14. The point is that bonus is a concept of many connotations. It may be a term of the contract of employment in which event the question if such bonus is payable out of profit only or only when the wages fall below living standards will depend on the terms of such contract of employment. It is within the range of economics and legal possibility that in a particular contract of employment it is stipulated that bonus will be paid irrespective of profits or living standards. It may be a cash incentive to a greater efficiency and production as indicated by the Supreme Court in the Lipton Ltd. v. Their Employees, : (1959)ILLJ431SC even when there is no question of absence of living 'wage. Akin to this conception of bonus is the case of a bonus annexed to the employment by custom or social practices such as Customary bonus and Puja or Festivity bonus. In case of such customary and traditional bonus, the question of profit may or may not arise at all and such customary and traditional bonus will depend on the content and terms of that custom or the tradition on which the claim for bonus is made. The unreported Supreme Court decision in Graham Trading Co. (India) Ltd. v. Its Workmen (since reported in : (1959)IILLJ393SC ) illustrates the case of a Pujah bonus, and the relevant considerations thereunder.

Each claim for bonus must depend on the facts of such claim. No doctrinaire view about bonus is possible or desirable. This much however is judicially settled that bonus is not deferred wages. It is a narrow and static view that considers bonus as always an ex gratia payment or a glorified tip or 'Bakshish' or a mere cash patronage payable at the pleasure of the employer. In the industrial jurisprudence of a modern economic society, it is a legal claim and a legal category, whose potentialities are not as yet fully conceived, but whose types and boundaries the Courts in India are struggling to formulate. It is a vital instrument of industrial peace and progress, dynamic in its implication and operation.

15. The second answer to this argument is that the wages show that the workmen in this case were paid dearness allowances. Normally, one would assume that a dearness allowance is paid to maintain the living standard and to keep workers' wages above the starvation level. From that, the natural inference will be that the wages were not commensurate with the living standard or else dearness allowance would not be necessary. But then, this was not a ground of appeal by the petitioner before the Labour Appellate Tribunal.

16. For these reasons, I overrule both the objections taken in challenging the decisions of the Tribunals below. I, therefore, discharge the Rule and dismiss the application but I shall make no order as to costs.

17. Interim order, if any, is vacated.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //