A.P. FOODS versus S. SAMUEL AND ORS.

Citation: [2006] SUPP. 3 S.C.R. 203 · Decided: 04-07-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Case Partly allowed
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Judgment (excerpt)

A.P. FOODS 
A 
v. 
S. SAMUEL AND ORS. 
JULY 4, 2006 
[ARIJIT PASAYAT AND TARUN CHATTERJEE, JJ.] 
B 
Labour Laws: 
Industrial Disputes Act, 1947; S.9-A/Payment of Bonus Act, 1965; 
Sections 20, 22 and 32(v)(c): 
C 
State Government Establishment-Supplying foods to children and woman 
under a Social Welfare Scheme-Raising of demand of payment of bonus by 
its employees-Rejected by Labour Commissioner-Sanctioning of ex-gratia 
in lieu of bonus by the State Government-Withdrawn-Challenge to-Allowed D 
by Single Judge-Affirmed by Division Bench of the High Court-On appeal, 
Held: The disputes between employer and employees with regard to payment 
of bonus in a Public Sector Undertaking deemed to be an industrial dispute 
within the meaning of ID Act-The High Court has failed to consider the basic 
issues-Since a disputed question of fact was involved for which alternative 
remedy available under the ID Act, the High Court should have directed the E 
petitioners to avail the statutory remedy-Jn the facts and circumstances of 
the case, the appropriate Government is directed to refer the disputed question 
for adjudication to the appropriate tribunal-Constitution of India, 1950-
Artic/P. 226. 
Appellant, a non-profit motive establishment, run by the Andhra F 
Pradesh Nutrition Council, owned and controlled by the State Government 
of Andhra Pradesh. It has been entrusted with the function of supplying 
foods to women and children selected by the State Government under its 
Social Welfare Programme but it neither sell nor distribute its product 
either in public or to outsiders. In April, 1982, its employees raised demand G 
of payment of bonus to them under the Payment of Bonus Act, 1965. The 
appellant-organisation opposed the demand on the ground that the factory 
is a non-commercial venture; and that it falls outside the ambit of the Act. 
The Commissioner of Labour held that the provisions of the Payment of 
Bonus Act have no application to the factory of the appellant. However, 
203 
H 
204 
SUPREME COURT REPORTS (2006] SUPP. 3 S.C.R. 
A the appellant sanctioned ex-gratia payment to the employees of the said 
organization for the year 198.3-84. In the year 1986, the Executive 
Committee of the Nutrition Council decided to sanction ex-gratia of one 
month's salary each year in li~:u of bonus to the employees. Later, in 
compliance with the directions of the State Government, the appellant 
B stopped payment of ex-gratia to its employees. A Writ Petition was filed 
by the aggrieved employees, which was allowed by a Single Judge of the 
High Court. The writ appeal filed against the order of the Single Judge 
was dismissed by the Division Bench of the High Court. Hence the present 
appeal. 
Appellant contended that on a combined reading of Sections 20, 22 
C and 32(v)(c) of the Payment of Bonus Act, the inevitable conclusion is that 
the writ petition should not havt! been entertained; that Section 22 of the 
Act clearly stipulates that the dispute in question is an industrial dispute; 
and that since disputed questions of fact were involved, the writ petition 
should not have been entertaim:d. 
D 
Partly allowing the appeal!, the Court 
HELD: 1.1. A Writ Petition under Article 226 of the Constitution 
of India should not be entertaint!d when the statutory remedy is available 
under an Act, unless exceptional circumstances are made out. Both the 
E Single Judge and the Division Bench of the High Court have failed to 
consider the basic issues. [208-E] 
Basant Kumar Sarkar and Ors. v. Eagle Rolling Mills Ltd. and Ors., 
(1964) 6 SCR 913, followed. 
U.P. State Bridge Corporation Ltd. and Ors. v. U.P. Rajya Setu Nigam 
F S. Karamchari Sangh, (2004] 4i SCC 268; Premier Automobiles Ltd. v. 
G 
H 
Kamlekar Shantarum Wadke, [1976) 1 SCC 496; Rajasthan SRTC v. Krishna 
Kant, [1995) 5 SCC 75; Chandrakant Tukaram Nikam v. Muncipa/ 
Corporation of Ahmedabad and Anr., [2002] 2 SCC 542 and Scooters India 
and Ors. v. Vijai V. Eldred, [1998[ 6 SCC 549, relied on. 
2.1. S1~ction 22 of the Payment of Bonus Act makes the position clear 
that where the dispute arises between an employer and employees with 
respect to the bonus payable under the Act or with respect to the 
application of the Act in public sector then such dispute shall be deemed 
to be an industrial dispute withiin the meaning of Industrial Disputes Act. 
[210-C) 
A.P. FOODS v. S. SAMUEL 
205 
2.2. As disputed questions of fact were involved, and alternative A 
remedy is ava
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