Research › Browse › Judgment

Madras High Court · body

1978 DIGILAW 262 (MAD)

Messrs. Chemical Enterprises, Private Ltd. , represented by Director R. M. Ranganathan v. K. P. Krishnan

1978-03-31

S.NAINAR SUNDARAM

body1978
JUDGMENT.-The defendant in suit No. 6825 of 1973 on the file of the III Judge, Court of Small Causes, Madras, is the petitioner in this revision. The respondent herein is the plaintiff in that suit. The plaintiff laid the suit for the recovery of a sum of Rs. 340 as bonus due from the defendant, stating that he was employed under the defendant during 1972-73 and the defendant paid one month’s salary as bonus every year and for 1972-73 also the defendant paid bonus to other employees and the plaintiff having resigned from the defendant only on 30th August, 1973, the plaintiff is also entitled to the bonus for the year 1972-73. This suit was contested by the defendant mainly on the ground that neither under any contract nor under any law bonus is payable and the claim of the plaintiff is not sustainable. The trial Court accepted the case of the plaintiff and decreed the suit. The defendant preferred the New Trial Application No. 175 of 1974 to the New Trial Bench of the Small Causes Court, Madras and the said Bench confirmed the judgment and decree of the first Court. The present revision is directed against the judgment and decree of the New Trial Bench of the Small Causes Court, Madras. I find that the Courts below have not at all appreciated the position in law with reference to payment of bonus. Until the payment of Bonus Act XX of 1965 was enacted "there was no obligation on the part of the employer to pay bonus during any particular period and an employee cannot as of right make a claim for the payment of bonus. Merely because the employer voluntarily paid bonus to some of the employees that will not entitle any other employee to make a claim for such a bonus. After the enactment of the Payment of Bonus Act, (hereinafter referred to as the Act), the employees of establishments to which the said Act does not apply cannot claim bonus de hons the Act. The Act was intended to be a comprehensive and exhaustive law dealing with the entire subject of bonus and the persons to whom it should apply. It will be relevant to consider section 1 (3) of the Act: "1. (1) This Act may be called the Payment of Bonus Act, 1965. The Act was intended to be a comprehensive and exhaustive law dealing with the entire subject of bonus and the persons to whom it should apply. It will be relevant to consider section 1 (3) of the Act: "1. (1) This Act may be called the Payment of Bonus Act, 1965. (2) * * * * (3) Save as otherwise provided in this Act, it shall apply to (a) every factory; and (b) every other establishment in which twenty or more persons are employed on any day during an accounting year." 2. The exclusion of establishments where less than 20 persons are employed in section 1 (3) of the Act is not a criterion suggesting that Parliament has not dealt with the subject-matter of bonus comprehensively in the Act. Considering the history of the legislation, the background and the circumstances in which the Act was enacted, the object of the Act and its scheme, it is not possible to accept the contention that the Act is not an exhaustive one dealing comprehensively with the subject-matter of bonus in all its aspects or that Parliament still left it open to those to whom the Act does not apply by reason of its provision either as to exclusion or exemption to make a claim for bonus. Such is the opinion pronounced by the Supreme Court in S. J. G. Chand v. Secretary, M. C. G. & K. Merchants Workers Union1. 3. In the present case, it is not the case of the plaintiff that his claim for bonus is under the Payment of Bonus Act, XX of 1965. A perusal of the plaint discloses that such was not the case put forth by the plaintiff. In answer to my question, the learned counsel appearing for the respondent-plaintiff states that the claim of the plaintiff is not based on the provisions of the Payment of Bonus Act XX of 1965. In the said circumstances it would be not possible to sustain the claim of the plaintiff. May be, the claim for bonus could be based upon an award, or settlement or agreement. Such is not the case here. 4. Even if we take it that the claim of the plaintiff is based on the provisions of the Payment of Bonus Act XX of 1965, the remedy of the plaintiff would not lie before the civil Court. May be, the claim for bonus could be based upon an award, or settlement or agreement. Such is not the case here. 4. Even if we take it that the claim of the plaintiff is based on the provisions of the Payment of Bonus Act XX of 1965, the remedy of the plaintiff would not lie before the civil Court. In the present case, the defendant (employer) disputes his liability to pay bonus. When such a dispute is raised it becomes an industrial dispute. Section 22 of the Payment of Bonus Act reads as follows: “22. 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 (XIV of 1947), or of any corresponding law relating to investigation and settlement of industrial disputes 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.” 5. If we consider section 22, it is obvious that where any dispute arises between an employer and his employees with respect to the bonus payable under this Act, then such a dispute must be deemed to be an industrial dispute and it has to be dealt with under the industrial law as an industrial dispute. Only after the industrial dispute results in an award or a settlement or an agreement, the employee can recover all the bonus due from an employer as per section 21 of the Payment of Bonus Act. 6. Considering the import and implications of the law discussed above, the suit of the plaintiff cannot be held to be competent and his claims cannot be sustained . The Courts below have omitted to take note of the principles of law applicable to the facts of the case and they have committed an error in law when they countenanced the suit of the plaintiff and granted him reliefs. In this view I am inclined to interfere in revision. Hence, this revision is allowed, the judgments and decrees of the Courts below are set aside and the suit of the plaintiff will stand dismissed. But, there will be no order as to costs throughout.