JUDGMENT : Caveat No. 5643/2018 1. Caveators on being represented and heard, Caveat stands discharged. LPA No. 9/2019 & LPA No. 10/2019. These two Letters Patent Appeals have been filed assailing the judgment dated 29th November, 2018 passed in OWP No. 135/2015 & SWP No. 2058/2015. Both the appeals raise an identical questions of law and fact, with the consent of learned counsel for the parties, are taken up together for hearing as well as disposal. 2. In SWP No. 2058/2015, the writ petitioners were retired employees of the J & K State Road Transport Corporation (hereafter 'writ petitioners in OWP No. 2058/2015'). In OWP No. 135/2015, the writ petitioner is the J & K Rajya-Parivahan Nigham Karamchari Union representing the interests of the employees of J & K SRTC (hereafter 'writ petitioner in OWP No. 135/2015'). 3. The controversy in the writ petitions pertains to the entitlement of the retired employees of J & K SRTC to claim bonus in terms of the Payment of Bonus Act, 1965 (hereafter 'the Act'). The writ petitioners laid a claim in respect of their entitlement, as an industrial dispute resulting in reference thereof to the Industrial Tribunal/labour Court. The dispute which was referred to adjudication was in the following terms: "i. Legality or otherwise of the action of the management of State Road Transport Corporation in denying the demands put forth by the applicant. ii. Award appropriate relief to the workers of the applicant union, in case the illegality of the action of the management as established." 4. After a detailed consideration, by an award dated 24th March, 2014, the Industrial Tribunal/labour Court rejected the claim of the writ petitioners holding that the provisions of the Act were not applicable to the employees of J & K SRTC. In this regard, reliance was placed by the Tribunal on the provisions of Section 20(2) of the Act which define "establishment in public sector". Aggrieved thereby, two writ petitions as afore stated came to be filed. The same came up for consideration before the learned single Judge, who by judgment dated 29th November, 2018, allowed the same holding that the provisions of the Payment of Bonus Act, 1965 were applicable to the employees of the J & K SRTC which included the writ petitioners. Aggrieved thereby, two writ petitions as afore stated came to be filed. The same came up for consideration before the learned single Judge, who by judgment dated 29th November, 2018, allowed the same holding that the provisions of the Payment of Bonus Act, 1965 were applicable to the employees of the J & K SRTC which included the writ petitioners. In this background, the matter was remanded to the Industrial Tribunal/labour Court for determination of exact entitlement of the writ petitioners to receive the bonus in terms of the Act. 5. Aggrieved thereby, the J & K SRTC has filed these two appeals laying a challenge to the judgment dated 29th November, 2018 passed by the learned single Judge in the writ petitions as afore stated. 6. The controversy placed before us is within a narrow compass. It does not require any further examination of the factual background, inasmuch the challenge rests on the interpretation of the statutory provisions. 7. So far as the liability to pay bonus is concerned, both the parties have placed reliance on the provisions of Section 2(16) which defines "establishment in public sector" and Section 20 of the Act. For expediency, we extract the statutory provisions of Section 2(16) and Section 20 of the Act here after: "2(16) "establishment in public sector" means an establishment owned, controlled or managed by- (a) a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); (b) a corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by- (i) the Government; or (ii) the Reserve Bank of India; or (iii) a corporation owned by the Government or the Reserve Bank of India; "20. Application of Act to establishments in public sector in certain cases.- (1) If in any accounting year an establishment in public sector sells any goods produced or manufactured by it or renders any services. in competition with an establishment in private sector, and the income from such sale or services or both less than twenty per cent, of the gross income of the establishment in public sector for that year, then, the provision of this Act shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector. (2) Save as otherwise provided in sub-section (1) nothing in this Act shall apply to the employees employed by any establishment in public sector." 8. Learned counsel for the appellant would submit that in view of the provisions of sub-section 2 of Section 20 of the Act, the Payment of Bonus Act, 1965 is not applicable to the employees of J & K SRTC, it being an establishment in the public sector. We may note that it was on such reading of the statutory provisions that the Industrial Tribunal/labour Court had also rejected the claim of the employees of J & K SRTC. 9. A bare examination of the statutory provisions would show that sub-section (2) of Section 20 of the Act opens with the words "Save as otherwise provided in sub-section (1)". The Act shall not apply to the employees employed by any establishment in the public sector. Therefore, the exception provided in sub-section (2) of Section 20 has to be read in the context of the provisions of sub-section (1) of Section 20 of the Act. 10. Sub-section (1) of Section 20 of the Act specifically stipulates that if the condition that if in any accounting year, an establishment in public sector sells any goods produced or manufactured by it or renders any services, in competition with an establishment in private sector whose income from such sale or services or both is not less than twenty per cent, of the gross income of the establishment in public sector for that year was satisfied, the provisions of the Act shall apply in relation to such establishment in public sector just as they apply in relation to a like establishment in private sector. 11. Neither before the writ court nor before us is there any dispute that the J & K SRTC is carrying on business or providing service which is in competition with an establishment in private sector. Even the criterion is not in dispute. 12. The writ petitioners before the writ court in the writ petition has pleaded as follows: "5. That the J & K State Road Transport Corporation (hereinafter referred to as "The Corporation") is plying and running almost all types of commercial vehicles i.e. heavy goods carried (truck), passenger buses, luxury coaches, high tech buses etc. The Corporation has been constituted and established in the year 1976. 6. That the J & K State Road Transport Corporation (hereinafter referred to as "The Corporation") is plying and running almost all types of commercial vehicles i.e. heavy goods carried (truck), passenger buses, luxury coaches, high tech buses etc. The Corporation has been constituted and established in the year 1976. 6. That the Corporation has been established on commercial principles to provide service to the public in general in competition with private sector. The entire income of the Corporation is being derived from playing the above mentioned commercial vehicles. The Corporation has no other source of business whatsoever. 7. That the Corporation has about 1000 following types of vehicles: i. Goods vehicles (trucks) ii. Passengers buses. iii. Luxury coaches. iv. High Tech buses. 8. That since the Corporation (respondent No. 1) is doing the business by plying all types of commercial vehicles competition with establishment in the private sector, all the industrial laws including the Payment of Bonus Act. 1965 are applicable to it and its employees". (Emphasis by us) 13. The appellant (respondent in the writ petition) filed its objections the writ petition. We find that in the objections, the appellant has not disputed at all these pleas raised by the writ petitioners. Sub-section (16) of Section 2 of the Act defines "establishment in public sector", a Corporation in which not less than forty per cent of its capital is held by the Government. 14. In view of the provisions of sub-section (1) of Section 20 of the Act, the J & K SRTC has to be held to be a public sector establishment to which the provisions of the Payment of Bonus Act, 1965 squarely apply. 15. As a result, we are informed that the entire capital of the J & K SRTC is held by the Government of J & K and, it is, therefore, covered within the meaning of the expression "establishment in public sector" as defined in Section 2(16) of the Act. 16. The learned single Judge has also held in the above terms. The finding of the learned single Judge, therefore, is clearly in consonance with the statutory provisions. We see no reason to disagree with the same. 17. After so concluding, the learned single Judge has held that the employees of J & K SRTC would be entitled to payment of bonus and has remanded the matter to the Industrial Tribunal/labour Court. 18. We see no reason to disagree with the same. 17. After so concluding, the learned single Judge has held that the employees of J & K SRTC would be entitled to payment of bonus and has remanded the matter to the Industrial Tribunal/labour Court. 18. Before us, it is contended by Mr. R. Koul, learned counsel for the appellant that the learned single Judge has failed to consider a material fact so far as the payment of bonus is concerned. It is contended that even if it was held that the Payment of Bonus Act, 1965 applied to the J & K SRTC, the direction to make payment of bonus to the employees could have been passed only if the Corporation was running in profit. The submission is that the rights of the employees of J & K SRTC are secured by the Service Rules and consequently the Labour laws applicable to other establishments could not be invoked in the case of the Corporation. 19. Our attention is drawn by Mr. Koul, learned counsel for the appellant to the submissions made in the objections filed to the writ petitions wherein it was stated that "even on the score of profit making organization, the Corporation had been reeling under financial crunch and had been managing its affairs on account of financial assistance being provided by the State Government from time-to-time". Premised on the above submissions, it is urged that no liability could be fastened upon the appellant for making payment of the bonus. 20. In this regard, our attention is drawn by Mr. R.K.S. Thakur, learned counsel for the respondents to the mandate of Section 10 & Section 11 of the Payment of Bonus Act, 1965. These statutory provisions set out liability of an employer to make the payment of bonus. We may usefully extract these statutory provisions which are in the following terms: "10. R.K.S. Thakur, learned counsel for the respondents to the mandate of Section 10 & Section 11 of the Payment of Bonus Act, 1965. These statutory provisions set out liability of an employer to make the payment of bonus. We may usefully extract these statutory provisions which are in the following terms: "10. Payment of minimum bonus.-- Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent, of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year: Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted. 11. Payment of maximum bonus.-- (1) Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent, of such salary or wage. (2) In computing the allocable surplus under this section, the amount set on or the amount set off under the provisions of section 15 shall be taken into account in accordance with the provisions of that section. 21. A bare reading of the statutory provisions shows that the statute has anticipated a situation where an establishment may not be making profits. In such eventuality, Section 10 mandates payment of the minimum bonus. The position is amply clear, inasmuch as the specific legislation mandates that the minimum amount would be payable, whether or not the employer has any allocable surplus in the accounting year. In this background, the second ground of challenge laid to the impugned judgment must also fail. 22. In such eventuality, Section 10 mandates payment of the minimum bonus. The position is amply clear, inasmuch as the specific legislation mandates that the minimum amount would be payable, whether or not the employer has any allocable surplus in the accounting year. In this background, the second ground of challenge laid to the impugned judgment must also fail. 22. In view thereof, we see no reason to disagree with the findings of the learned single Judge that the J & K SRTC is an establishment in public sector which is liable to pay the bonus to the employees of the J & K SRTC. So far as the contention that the J & K SRTC is a loss making establishment is concerned, the same would be a factor which would be required to be considered by the Industrial Tribunal/labour Court while effecting quantification of the bonus. It shall be open for the parties to make an appropriate submissions in this regard before the Industrial Tribunal/Labour Court which would assess as to whether the J & K SRTC is liable to pay the minimum bonus or any other amount in terms of the provisions of Section 10 and Section 11 of the Payment of Bonus Act, 1965. 23. Accordingly, both these appeals are dismissed. In view of the dismissal of the appeals, the applications filed along with do not survive for adjudication and are dismissed.