LexBASTI SUGAR MILLS CO. LTD. versus STATE OF U.P. & ANR.
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A B 590 BASTI SUGAR MILLS CO. LTD. v. STATE OF U.P. & ANR. September 11, 1978 [V. R. KRISHNA IYER AND D. A. DESAI, JJ.] Payment of Bonus A.ct 1965-Sec. 34-U.P. Industrial Disputes Act, 1947 -s. 3(b), 3(c) Trade Unions A.ct 1926 (S. 211)-Wlietlier bonus can be paid under order passed under. s. 3 of U.P. I.D. Act-Whether appointment of a Tripartite Committee amounts to agreement within meaning of s. 34 of Bonus Act-Whether an association of employers can bind individual tniployer. C The appellant runs two Sugar Factories at two different places. There are about 71 such factories in U.P. The economy of U.P. in large measure, depends on the sugar industry. Moreover, sugar is an essential commodity. Thus, these factories and the asmy of workers employed therein fall within the strategic sector of the State economy. Section 3 of the U.P. lndus!rial Disputes Act, 1947 provides that if in the opinion of the State Govt., it is necessary or e.xpedient so to do for securing the public safety or convenience D or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employn1ent it m:.i.y by general or special order ma-ke provision for prohibiting strikes lock~outs and for ap-point· ing committees representative both of employers and ·workmen for securing: amity and good relations between the en1ployer and the workmen and for settling industrial disputes by conciliation. The Payment of Bonu!i Act, 1965 lays down what bonus is payable to the \Vorkmen. Using the power under E S. 3(c) of the 1947 Act and based oo the suggestion of the State Labour Conference (Sugar), the State Govt appointed a tripartite committee in Octo· ber 1968 consisting of 3 nominees of the Indian Sugar Mills Association arid their representatives of the workmen, the Labour Commissioner being tile Chairman of the Committee. The notificatioo under s. 3 (b) who issued with a view to consider and make recommendations to Government on 1he question of grant of bonus for 1967-68 by the Vacuum Pan S\Jgar Factories of the F State on the basis of the Payment of Bon11c; Act 1965, subject to such modifica- tions as may be mutually:. agreed upon. The Association is a Trade Union registered under the Trade Unions Act, 1926. Its functions are indicated in lhe definition of 'trade union' in Section 2(h) of that Act, and include regula .. tion of relations between the workmen and en1ployers. Thus, the Association was within its competence to nominate three representa·tives to sit on the • Committee to regulate the relations between the Me1nber-employees and the · G workmen employed. The ilPpellant is a Member of the said Association. H The Committee held several sittings and at some stages, the appeUant or his representative did participate directly or indirectly in the deliberations. The workers' representatives actua11y accepted the formula put forward by the President of the Management's Association. On receipt of the recommenda- tion under Section 3(c), the Govt. issued an order under s. 3(b) implementing those rec9mmendations. Although Section 3(b) does not depend for coming into play upon any· report under s. 3 ( c), the Govt. constituted the Committee under ~- 3(c) before taking a~~ step under s. 3(b) as n measure to ensure the fairne8s to the concerned parties. The appellant filed a writ petition in I • • BAST! SUGAR MILLS V. U. P. STATE 591 the High Court. The learned single Judge dismissed the writ petition taking a view that an agreement which is recognised by s. 34 of the Bonus Act, existed i11 this case and, therefore, the order which merely gave effect to that agreement was not bad in law. On appeal the two Judges of the Bench dis~ agreed and the case went before the third learned Judge of the High Court who upheld the order of the learned single Judge on the ground that there was an agreement under s. 34 of the Bonus Act. The ~ppellant contended :- 1. The State Govt. cannot a.ct in the area of bonus without breach of ~e embargo in s. 34 of the Bonus Act, and, therefore, the impugned notifica- tion must fail for want of power. 2. S.nce the Bonus Act is a complete Ccx.ie covering profit sharing bonus, no other la\\' can be pressed into service to force payment of Bonus by the Management. A B c ""' 3. Section 3(b) of the U.P. Act is independent of any agreement between the affected parties and the notification ther
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