1. Dalmia Biscuits (Private), Ltd., Rajpura, petitioner-company, have filed this writ petition, seeking the issuance of a writ of certiorari quashing the impugned order, dated 29 July, 1975, of the Presiding Officer, Labour Court, Patiala.
2. A brief survey of the relevant facts leading up to the legal controversy seeking resolution in this writ petition will help focus forensic attention to the statutory provisions, which bear upon the issue.
3. The company is engaged in the business of manufacturing biscuits and other bakery products. The company decided to declare 8.33 per cent bonus in accordance with the provisions of the Payment of Bonus Act (for short the Bonus Act) for the year ending 31 December, 1973, to all the employees), who had worked for it for thirty days or more in that year. The management of the company and the workmen entered into negotiations which concluded amicably. The workmen undertook that they will maintain due norms of production and healthier industrial relations. The management agreed to pay ex gratia goodwill bonus at the rate of 7.67 per cent to all the employees who had worked for more than thirty days with the company during the year 1973 and were on its rolls on 19 August, 1974. The upshot of this arrangement was that those workmen who were not in the service of the company on 19 August, 1974, were not entitled to the ex gratia goodwill bonus, even if they had worked for more than thirty days for the company in 1973. However, they were entitled to the bonus at the rate of 8.33 per cent. These decisions of the petitioner-company were communicated by an office order, dated 19 August, 1974, issued by the secretary of the company.
4. Bhagat Ram and five other workmen of the petitioner-company, who have been arrayed as respondents 2 to 7 to this writ petition, filed six separate applications under S. 33-C(2) of the Industrial Disputes Act, 1947 (hereinafter called the Act), before the Presiding Officer, Labour Court, Patiala. They claimed that the petitioner-company had disbursed bonus for the year 1973 to certain other workmen at the rate of 16 per cent but the same had not been paid to them. They prayed that the amounts due to them be determined by the Court. The petitioner-company put in detailed replies to the petitions filed by the workmen. Preliminary objections were raised. It was contended that the applications under S. 33-C(2) of the Act were not maintainable. The workmen's claims for payment of bonus could not be entertained and determined in the summary proceeding. The Bonus Act is a special enactment. The disputes regarding bonus have to be raised in the forum prescribed by that Act. By these application, the workmen had in fact raised industrial disputes by seeking an adjudication on the disputed quantum of bonus. These matters could be decided only on a reference under S. 10 of the Act.
5. On merits it was averred that the management had not disbursed bonus at the rate of 16 per cent. The bonus had been negotiated, declared and disbursed at the rate, of 8, 33 per cent. Respondents 2 to 7 were entitled to bonus at this rate but the management was within its rights to set off certain sums due from the workmen against claim of bonus. The Labour Court dismissed the preliminary objections vide order, dated 28 February, 1975, holding that since the petitioner-company had disbursed bonus at the rate of 16 per cent to its other employees, the Court could calculate the amount payable to the applicants-workmen. On merits, he came to the conclusion that the Bonus Act did not contemplate any goodwill bonus, the amount paid to the workmen is either bonus or it is not. Relying on Ss. 10 and 11 of the Bonus Act, he held that the applicants-workmen were entitled to bonus along with other employees. No distinction could be made between the employees inter se for payment of bonus, unless certain employees were disqualified from receiving bonus under S. 9 of the Bonus Act. The management had conceded the right of workmen to receive bonus. When bonus was paid at a certain rate the question of allocable surplus is wholly immaterial. The Bonus Act does not contemplate payment of bonus on different rates to different classes of employees for any reason whatsoever. Once the management has chosen to pay bonus at a rate higher than the required minimum, it would be payable to every employee and it is not open to the management to pick and choose the employees. He computed the bonus in the case of the applicants at the rate of 16 per cent as claimed by the workmen. The claim of the management to set off was declined with the observation that it was open to the management to claim set off through a Court of competent jurisdiction. Aggrieved, the petitioner-company has filed this writ petition.
6. Sri Arun Nehra, advocate, the learned counsel for the petitioner-company, has argued that the management had declared bonus for the year 1973 in accordance with the provisions of S. 10 of the Bonus Act. The workmen were not entitled to get bonus at a higher rate. In order to produce a healthy and congenial relationship between the management and the workmen and as a measure of goodwill, the management had decided to pay goodwill bonus ex gratia at the rate of 7.67 per cent. This was by way of a gesture of goodwill only. The management was not obliged to pay this bonus and it was not done under any provision of law. A condition was laid that only those workmen (employees) will be entitled to the payment of this bonus, who were working with the company on 19 August, 1974. This was a condition precedent. Since the applicants were not working with the company on the material date, they were not entitled to the bonus. The applicants had no existing right to this bonus. They were not entitled to any other benefit which was capable of being computed in terms of money. The applicants raised a claim to bonus at the rare of 16 per cent whereas the management had allowed them bonus at the rate of 8.33 per cent. There was thus a dispute regarding bonus and under S. 22 of the Bonus Act, where any dispute arises between an employer and employees with respect to bonus payable under the Bonus Act, then such a dispute shall be deemed to be an industrial dispute within the meaning of the Act, and the provisions of that Act shall apply for the determination of such a dispute. The private-respondents had through their applications raised industrial disputes and the Labour Court could not take cognizance of the same without a valid reference made to it under S. 10 of the Act.
7. It will be appropriate to notice the relevant statutory provisions at this stage:
“The Payment of Bonus Act, 1965
10. Payment of minimum bonus.— (1) Subject to the provisions of Ss. 8 and 13, every employer shall be bound to pay to every employee in an accounting year a minimum bonus which shall be 4 per cent 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:
Provided that where such employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this sub-section shall have effect in relation to such employee as if for the words “forty rupees”, the words “twenty-five rupees” were substituted.
22. Reference of disputes under the Act.— Where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947 (14 of 1947), or of any corresponding law relating to investigation and settlement of the industrial dispute in force in a State and the provisions of that Act or, as the case may be, such law, shall, save as otherwise expressly provided, apply accordingly.
The Industrial Disputes Act, 1947
2(k) ‘industrial dispute’ means any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person;
10. Reference of disputes to Boards, Courts or Tribunals.— (1) Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing,—
(a) refer the dispute to a Board for promoting a settlement thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or
(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication; or
(d) refer the dispute o??? any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication;
33-C (2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government”.
8. It is manifest from the pleadings of the parties that the workmen claimed that the management had disbursed bonus to the other employees at the rate of 16 per cent and they were entitled to the same. On the other hand, the management contended that bonus had been negotiated, declared and disbursed at the rate of 8.33 per cent. This was payable to all the employees who had worked for more than thirty days during the year 1973. The ex gratia goodwill bonus had been paid in pursuance of an agreement between the workmen and the management at the rate of 7.67 per cent to those employees only who were in service of the company on 19 August, 1974. This was one of the conditions of the agreement. For an application under S. 33(2) of the Act to succeed, there must be an existing right to the money or benefit claimed either on the basis of some previous adjudication or it may otherwise be duly provided for. The petitioner-company claims that it had declared bonus at the rate of 8.33 per cent in accordance with the provisions of S. 10 of the Bonus Act. The ex gratia bonus had not been paid under any provision of this Act. The workmen have not been able to lead any evidence to show that this bonus at the rate of 7.67 per cent to some of the employees had been paid in accordance with Ss. 10 and 11 of the Bonus Act. No Labour Court had held that the applicants were entitled to 16 per cent. So, there was no previously adjudged right to claim bonus at the rate of 16 per cent. Neither there is any settlement nor agreement, which may entitle the applicants-workmen to receive bonus at the rate of 16 per cent. The agreement rather goes against them because it expressly lays down that the workmen, who were not working with the petitioner-company on 19 August, 1974, were not entitled to any bonus. So, the claim for relief is not based on any settlement also. The workmen have also not been able to establish before the Labour Court or before me that the right to receive this bonus had been provided for in any other manner. The applications of the workmen were thus not competent under S. 33-C(2) of the Act. The Labour Court went wrong when it held that the applications under S. 33-C (2) of the Act were competent. He had observed that the workmen had alleged that the management had disbursed bonus at the rate of 16 per cent to some of the other employees. On that basis alone, he concluded that he could allow bonus at that very rate to the applicants-workmen also. He has not given any other reason for this conclusion. To say the least, it is difficult to subscribe to this view. Simply because, a workman stakes a claim to some benefit, which is capable of being computed in terms of money, the Labour Court cannot assume that such a right exists. It cannot also venture into an inquiry to determine the claim of the workmen and the liability of the employer. It cannot arrogate to itself the functions of any Industrial Tribunal and to adjudicate upon the claim. The proceedings under S. 33-C (2) of the Act are in the nature of execution proceedings. Their scope is limited to the matters relating to the execution like the determination of the identity of the person by whom or against whom the claim is made. This has been consistently held by the final Court in a number of decisions. The Supreme Court, in Central Inland Water Transport Corporation, Ltd. v. Its workmen, [1974 — II L.L.N 78], had observed in Paras. 12 and 13, at pages 83 and 84:
“…a proceeding under S. 33-C (???) is a proceeding, generally, in the nature of an execution proceeding wherein the Labour Court calculates the amount of money due to a workman from his employer, or if the workman is entitled to any benefit which is capable of being computed in terms of money, the Labour Court proceeds to compute the benefit in terms of money. This calculation or computation follows upon an existing Tight to the money or benefit, in view of its being previously adjudged, or otherwise, duly provided for…
13. In a suit, a claim for relief made by the plaintiff against the defendant involves an investigation directed to the determination of—
(i) the plaintiff's right to relief;
(ii) the corresponding liability of the defendant, including whether the defendant is, at all, liable or not; and
(iii) the extent of the defendant's liability if any. The working out of such liability with a view to give relief is generally regarded as the function of an execution proceeding.
Determination (iii) referred to above, that is to say, the extent of the defendant's liability may sometimes be left over for determination in execution proceedings, but that is not the case with the determination under heads (i) and (ii). … Since the proceeding under S. 33-C(2) is in the nature of an execution proceeding it should follow that an investigation of the nature of determinations (i) and (ii) above, that is, normally, outside its scope. It is true that in a proceeding under S. 33 2(2), as in an execution proceeding, it may be necess-sary to determine the identify of the person by whom or against whom the claim is made if there is a challenge on that score. But that is merely ‘incidental’ … Therefore, when a claim is made before the Labour Court under S. 33-C (2) that Court must clearly understand the limitations under which it is to function. It cannot arrogate to itself the functions — say of an Industrial Tribunal which alone is entitled to make adjudication in the nature of determinations (i) and (ii) referred to above or proceed to compute the benefit by dubbing the former as ‘incidental’ to its main business of computation. In such cases determinations (i) and (ii) are not ‘incidental’ to the computation. The computation itself is consequential upon and subsidiary to determinations (i) and (ii) as the last stage in the process which commenced with a reference to the Industrial Tribunal…”
To the same effect are the decisions in Central Bank of India, Ltd. v. P.S Rajagopalan, [A.I.R 1964 S.C 743], State Bank of Bikaner and Jaipur v. R.L Khandelwal, [1968 — I L.L.J 589] and East India Coal Company, Ltd. v. Rameshwar, [A.I.R 1968 S.C 218].
9. The workmen had not been able to establish that they had any right to goodwill bonus stemming from any adjudication or which may have been otherwise duly provided. The fact that other workmen who were still in the employment of the company on 19 August, 1974, were given the goodwill bonus will not confer any right to get bonus on other employees who were not in service on that day. Such a claim can mere appropriately be the subject-matter of an industrial dispute only, requiring reference under S. 10 of the Acts Section 22 of the Bonus Act specifically provides that any dispute regarding payment of bonus is an industrial dispute and can be resolved only on a reference under S. 10 of the Act. It has been so held in Aranha (Major D.) v. Universal Radiators, Coimbatore, [1974 — II L.L.N 260], at Para. 2, at page 261:
“…Section 33-C(2) of the Industrial Disputes Act, 1947, is a machinery, section. Even so, it has been construed by Courts to have a wide scope, the computation embracing not merely simple arithmetical calculation. Whatever claim may or may not be attracted within the scope of the section, an industrial dispute as defined in the Act will not clearly be within the purview of that provision. This is because of the scheme of the Industrial Disputes Act, which provides for a specific forum and procedure for adjudicating industrial disputes. Section 22 of the Payment of Bonus Act, 1965, deems any dispute that arises between an employer and his employees with respect to the bonus payable under the Act to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947. That being so, the dispute in question which is regarding payment of bonus will have to be adjudicated in the regular way and not resolved by an application under S. 33-C(2). Section 22 of the Payment of Bonus Act does not override S. 33-C(2) of the Industrial Disputes Act but when S. 22 of the former Act deems a dispute with respect to bonus payable under the Act to be an industrial dispute within the meaning of the latter Act, then the forum and the procedure under the Industrial Disputes Act will be the only means by which the dispute can find a solution and it is not through S. 33-C(2)”.
10. It is apparent from the impugned order that the learned Labour Court has adjudicated upon the claims of the workmen as an industrial dispute. He disposed of the applications under S. 33-C(2) of the Act, as if they were references made to him under S. 10 of the Act. He has painstakingly gone into the entitlement of the workmen and come to the conclusion that the management could not deprive them of the goodwill bonus. Once it had granted goodwill bonus to some other employees, it cannot discriminate against another set of employees and refuse to pay this bonus. This claim can only be decided by the Labour Court on a reference under S. 10 of the Act. It was not within the province of the Labour Court to adjudicate upon this entitlement of the workmen while deciding an application under S. 33-C(2) of the Act. Whether the management could discriminate between the workmen inter se, is a question, which more aptly can be termed to be an “industrial dispute” triable only on a reference Simply because in pursuance of an agreement an ex gratia bonus has been paid to some workmen, the other workmen cannot claim through an application under S. 33-C(2) of the Act that they are entitled to the same and especially so, when they are expressly excluded from this benefit. Since in the present case, the ex gratia goodwill bonus had neither been paid in compliance with the award of a Court nor had it been duly provided for, the applicants-workmen could not claim it by filing applications under S. 33-C(2) of the Act.
11. The Division Bench decision of this Court in Bawa Singh v. State of Punjab, [1973 — II L.L.N 331], is of no help to the private respondents. The facts of that case were entirely different. In that case, the employer-company had made payment of bonus at the rate of 20 per cent to other workers. The company, in response to the claim made by the workmen before the Labour Court, had not denied that bonus was paid at the rate of 20 per cent. The only denial was regarding the amount. Therefore, it was in this context that it was observed that the dispute before the Labour Court was as to what amount the workmen were entitled to. In that case, there was no agreement between the management and the workmen excluding a certain segment of the employees from the benefit of bonus. Similarly, the ratio of the Supreme Court in Shiva Bangles Stores v. Second Industrial Tribunal, Uttar Pradesh, [1972 L.L.N 123], does not help the workmen. The facts in that case were also different and have no bearing on this case.
12. For the foregoing reasons, this writ petition is allowed; the orders, dated 28 February and 29 July, 1975 (annexures P-1 and P-2, respectively), are set aside and the case is remitted back to the Labour Court to decide the application of the workmen in relation to bonus at the rate of 833 per cent.
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