BARODA RAYON CORPN LIMITED Vs. HANUMANSINGH JAGNARAYANSINGH
LAWS(GJH)-1979-11-25
HIGH COURT OF GUJARAT
Decided on November 29,1979

BARODA RAYON CORPORATION LIMITED Appellant
VERSUS
HANUMANSINGH JAGNARAYANSINGH Respondents

JUDGEMENT

P.D.DESAI - (1.) The petitioner is a company incorporated in the year 1958 under the provisions of the Companies Act 1956 After setting up its plant the petitioner company went into production in December 1962. By 1972 it had about 2000 employees on its pay-roll. At the material time the respondent was employed in the textile department of the rayon division of the petitioner Company on a monthly salary of Rs. 225.00.
(2.) The case of the petitioner Company is that during the initial years after commencement of production it made no profit; and that therefore no demand for bonus was made by the workmen for the first few years. During the account years 1963-64 to 1966-67 no profit having been made the petitioner Company was not even otherwise liable to pay bonus to its employees in view of the relevant provisions of the Payment of Bonus Act 1965 (hereafter referred to as The Bonus Act). The question of bonus was for the first time raised by Baroda Rayon Mazdoor Union for the year 1967. By that time the Bonus Act had come into force. in the course of negotiations it was brought to the notice of the Union that in view of section 16 of the Bonus Act no bonus was payable to the workmen since no profit was earned for the 12 months period ending with December 1967 The Union however pressed for payment of ex-gratia bonus and in the interest of continued cordial relations the petitioner Company agreed to make ex-gratia payment of bonus as a goodwill gesture. The petitioner and the Union therefore entered into a settlement on February 14 1968 and under the said settlement the petitioner agreed to pay ex-gratia bonus at the rate of 4 per cent of the total wages (inclusive of dearness allowance but exclusive of other allowances overtime perquisites and ex gratia payments) for the period commencing from January 1 1967 and ending with December 31 1967 to those workmen who satisfied the conditions laid down in the settlement. The settlement in terms provided that the question of bonus for future years would be considered as and when admissible strictly in accordance with the provisions of the Bonus Act.
(3.) On February 9 1977 the respondent preferred an application under sec. 33C(2) of the Industrial Disputes Act 1947 (hereafter referred to as the Act) in the Court of the Presiding Officer Labour Court Ahmedabad seeking to recover a sum of Rs. 350/per year or such other sum which may be determined by the Labour Court as bonus for the years 1964 1965 and 1966-67 and praying that a certificate be issued for the recovery of the said amount from the petitioner. The substance of the application was that the provisions of the Bonus Act were applicable to the establishment of the petitioner and that therefore the workmen including the respondent employed by the petitioner company were entitled to payment of bonus. In terms the plea was that the petitioner having made huge profit during the relevant period the respondent was entitled to the minimum bonus at the rate of 4 per cent under the provisions of the Bonus Act. The said recovery application was resisted by the petitioner by its written statement dated April 26 1977 In the forefront the petitioner raised a preliminary objection to the effect that the Labour Court had no jurisdiction to entertain and try the respondents application under sec. 33C(2) of the Act and to grant relief to him as prayed. The petitioner relied upon the provisions of sec. 22 of the Bonus Act and contended that the question whether the respondent was entitled to claim bonus depended upon the determination of a further question viz whether the petitioner was entitled to infancy benefit under sec. 16 of the Bonus Act and that by virtue of the provisions of sec. 22 of the Bonus Act a dispute of such a nature would be deemed to be an industrial dispute within the meaning of the Act and that therefore an application under sec. 33C(2) was not maintainable. Certain other preliminary objections as well as contentions on merits were also raised in the course of the said written statement. The Recovery Application came to be transferred to the Presiding Officer Labour Court Surat upon the establishment of the said Court. The Labour Court tried the aforesaid preliminary objection raised on behalf of the petitioner as a preliminary issue. At the hearing of the said preliminary issue written arguments were submitted on behalf of the petitioner on October 18 1977 Upon a perusal of the written arguments it appears that the petitioner buttressed its preliminary objection also on the ground that a proceeding under sec. 33 of the Act could be instituted only when there is an existing right to an amount or to any benefit which is capable of being computed in terms of money and that since the question whether the respondent was entitled to claim bonus for the period in question was seriously in dispute in view of the provisions of sec. 16 of the Bonus Act and such a dispute could only be resolved in the course of an industrial adjudication an application under sec. 33C(2) of the Act was not maintainable. By its impugned decision rendered on November 17 1977 the Labour Court rejected the preliminary objection and held that it had jurisdiction to entertain and decide the individual claim for bonus raised by the respondent notwithstanding the provisions of sec. 22 of the Bonus Act. Hence the present writ petition.;


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