Judgment Summary — S.S. Kang, J. (Oral)

Factual and Procedural Background

This matter is a petition under Articles 226 and 227 of the Constitution of India challenging an order dated September 20, 1975 of the Labour Court, Patiala which declared that Darshan Kumar (respondent No. 2) was entitled to Rs. 532/- by way of bonus. The petitioner is M/s Industrial Cables (India) Ltd., Rajpura, a manufacturing company governed by the Industrial Disputes Act and the Payment of Bonus Act.

For the year 1973–1974 the company declared and paid bonus at 8.33%. To preserve industrial peace, management and workers entered into a settlement dated June 19, 1974 under which employees who were in the company's employ on that date and who satisfied specified conditions would be entitled to an additional ex-gratia payment. Darshan Kumar was not in employment on the date of that settlement and therefore did not receive the additional ex-gratia payment.

Darshan Kumar filed an application under section 33‑C(2) of the Industrial Disputes Act before the Presiding Officer, Labour Court, Patiala. The Labour Court allowed the application despite objections by the petitioner-company. The present petition sought writ relief (certiorari) quashing the Labour Court's order. The judge in this opinion relies upon and applies an earlier judgment (Dalima Biscuits (P) Ltd., Rajpura v. The Presiding Officer, Labour Court, Patiala (C.W.P No. 6702 of 1975), decided April 12, 1983) in which a similar issue was decided.

Legal Issues Presented

Whether a workman who was not in the service of the company on the date of a settlement (and whose case is not covered by that settlement) is entitled to maintain an application under section 33‑C(2) of the Industrial Disputes Act for computation/award of bonus or ex‑gratia payment.
Whether proceedings of the nature in which an application under section 33‑C(2) is filed (execution proceedings) permit the Labour Court to embark upon an enquiry to determine the substantive claim of a workman and the employer's liability when the applicant has no subsisting right.
Whether a claim to a "good-will" bonus in these circumstances is properly the subject of an application under section 33‑C(2) of the Act, or whether it constitutes an industrial dispute triable on reference under the Bonus Act and the Industrial Disputes Act (specifically section 22 of the Bonus Act and section 10 of the Industrial Disputes Act).

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Dalima Biscuits (P) Ltd., Rajpura v. The Presiding Officer, Labour Court, Patiala (C.W.P No. 6702 of 1975), decided April 12, 1983	Held that a workman not in the service on the date of the settlement and not covered by the settlement cannot maintain an application under section 33‑C(2) of the Industrial Disputes Act because such a workman has no subsisting right for computation of bonus by the Labour Court under that provision; execution proceedings cannot be used to determine substantive entitlement where no subsisting right exists; claims to a goodwill bonus must stem from adjudication or be otherwise provided or be the subject of an industrial dispute.	The court treated the present case as squarely covered by that authority and applied its principles to conclude that the Labour Court lacked jurisdiction to entertain respondent No. 2's application under section 33‑C(2). The Labour Court's order of September 20, 1975 was set aside on this basis.

Court's Reasoning and Analysis

The court's analysis proceeded in the following steps, as reflected in the oral judgment:

The court recalled that the June 19, 1974 settlement granted an additional ex‑gratia payment only to those employees who were in the employ of the company on that date and who satisfied specified conditions; the Bonus Act itself did not mandate such an ex‑gratia payment, which was given as an industrial peace incentive.
Because Darshan Kumar was not employed on the date of the settlement, he was not included within the class of persons entitled to that ex‑gratia payment under the settlement and therefore had no subsisting right to such payment that could be executed under section 33‑C(2).
The court relied on its earlier decision in Dalima Biscuits (P) Ltd. to underline that an application under section 33‑C(2) is not competent where the applicant lacks any subsisting right; execution-type proceedings cannot be converted into a forum for adjudicating fresh claims of entitlement or employer liability.
The court emphasized that the workmen had not established any entitlement to a "good-will" bonus arising from prior adjudication or other lawful provision; the mere fact that employees in service on the settlement date received the bonus does not confer a right upon those who were not in service on that date.
The court noted the statutory framework: Section 22 of the Payment of Bonus Act classifies disputes about payment of bonus as industrial disputes, which may be resolved by reference under section 10 of the Industrial Disputes Act. Thus, claims of the kind asserted by respondent No. 2 are properly the subject of industrial adjudication rather than execution under section 33‑C(2).
On these bases the court concluded that the Labour Court's order was without jurisdiction and could not stand.

Holding and Implications

HOLDING: The court set aside the order of the Labour Court dated September 20, 1975, declaring it to be wholly without jurisdiction.

Implications:

The immediate effect is that the Labour Court's grant to Darshan Kumar of Rs. 532/- by way of bonus/ex‑gratia is nullified by this judgment.
The court reaffirmed the principle that a person not in service on the date of a settlement and not covered by that settlement has no subsisting right to be executed against under section 33‑C(2); such a claimant must pursue remedies available for industrial disputes (e.g., reference under section 10), particularly where section 22 of the Bonus Act treats bonus-payment disputes as industrial disputes.
The order expressly provides that there shall be no order as to costs.
The opinion applies and follows prior authority (Dalima Biscuits) rather than announcing a newly formulated legal principle; the decision's consequences are confined to the correctness of the Labour Court's jurisdictional exercise in these facts.

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Industrial Cables (India) Ltd. Rajpura v. The Presiding Officer (Shri H.S Ahluwalia) Labour Court, And Anr.

S.S Kang, J. (Oral):— This is a petition under Articles 226/227 of the Constitution of India for issuance of a writ of certiorari for quashing the order dated September 20, 1975 of the Labour Court, Patiala declaring that Darshan Kumar respondent No. 2 was entitled to Rs. 532/- on account of bonus. It has been filed in the following circumstances:

2. M/s Industrial Cables (India) Ltd. Rajpura is a company registered under the Companies Act and is carrying on its manufacturing business at Rajpura. It is governed by the provisions of Industrial Dispute Act (for short ‘the Act’) and Payment of Bonus Act (for short the ‘Bonus Act’). Pursuant to the different provisions of the Bonus Act, the petitioner company declared and paid bonus at the rate of 8.33 per cent for the year 1973-1974. In order to maintain harmonious industrial relations between the workers and the management, both of them entered into a settlement dated June 19, 1974 whereby it was agreed inter alia that the persons who were the employees of the petitioner company on that date and had fulfilled certain other conditions, will be entitled to an additional sum as ex-gratia payment. The Bonus Act, in the facts and circumstances of the case did not warrant any such payment. It was given only as an incentive to maintain industrial peace and healthy relations between the employer and the employees. Admittedly Darshan Kumar, respondent No. 2 was not in the employ of the petitioner-company on the date of this settlement. Consequently, he was not paid the additional ex-gratia payment. He filed an application under section 33-C(2) of the Act before the Presiding Officer, Labour Court, Patiala and the same was allowed despite the objections raised by the petitioner-company. It is not necessary to go into the details of the case set up by the petitioner because the matter is squarely covered by my judgment in Dalima Biscuits (P) Ltd., Rajpura v. The Presiding Officer, Labour Court, Patiala (C.W.P No. 6702 of 1975) decided on April 12, 1983, wherein I have held that a workman who was not in the service of the company on the date when the settlement was entered into, Page: 585and whose case was not covered by the settlement was not entitled to maintain an application under section 33-C(2) of the Act because such a workman has no subsisting right for computation of any bonus by the Labour Court under section 33-C(2) of the Act. These proceedings are in the nature of execution proceedings and the Court cannot, while deciding such an application venture into an enquiry to determine the claim of the workmen and the liability of the employer. It was further held that the workmen had not been able to establish that they had any right to receive good-will bonus stemming from any adjudication or which may have been otherwise duly provided. Simply because the other workmen who were serving the company on the date of settlement were given the good-will bonus, will not confer any right to get good-will bonus on other employees who were not in the service on that date. Such a claim can more appropriately be a subject matter of an industrial dispute. Section 22 of the Bonus Act specifically provides that any dispute regarding the payment of bonus is an industrial dispute and can be resolved on a reference under section 10 of the Act. The application under section 33-C(2) of the Act was not competent. The order of the learned Labour Court, dated September 20, 1975 is wholly without jurisdiction. The same is set aside, but there shall be no order as to costs.

Industrial Cables (I... v. The Presiding Office...