DISHERGARH POWER SUPPLY COMPANY LTD., CALCUTTA & ANR. versus WORKMEN OF DISHERGARH SUPPLY CO. LTD. & ORS.

Citation: [1986] 3 S.C.R. 184 · Decided: 15-07-1986 · Supreme Court of India · Bench: V. BALAKRISHNA ERADI · Disposal: Appeal(s) allowed

cites 2 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
DISHERGARH POWER SUPPLY COMPANY LTD., 
CALCUTTA & ANR. 
v. 
WORKMEN OF DISHERGARH 
SUPPLY CO. LTD. & ORS. 
JULY 15, 1986. 
.I 
[V. BALAKRISHNA ERADI AND V. KHALID, JJ.] 
.! 
c 
D 
Payment of Bonus Act, !965, sections 5, JO and 34(3)-Bonus-
Paymen't of-Obligation of employer to pay higher bonus than the 
minimum prescribed by the Act-When arises-Settlement before Con-
ciliation.Officer-Effect of-Power of Industrial Court to impose new 
obligations on parties before it-Limitations-What are. 
A dispute regarding bonus payable to the workmen-respondents 
of the two companies-appe~lants for the year 1971-72 was referred to 
conciliation under section 12(1) of the Industrial Disputes Act, 1947. 
The workmen contended before the Conciliation Officer that they were 
entitled to bonus equivalent to three months' basic wages as on 3 lst 
E 
March, 1972 as customary bonus or in any event as bonus payable 
under the provisions of the Act. The appellant-companies, on the other 
hand, argued that the workmen were entitled to only minimum bonus 
as provided under the Act. The said dispute was ultimately settled 
before the Conciliation Officer on the terms: (a) that each eligible work-
man will he paid an amount equal to three months' basic wages as on 
F 
31.3.1970; and (b) that the demand of the Union for bonus this year will 
be referred to a Tribunal for adjudication. Accordingly, the Govern-
ment referred the dispute for adjudication to the ninth Industrial Tri-
bunal of West Bengal. 
After a detailed discussion of the evidence produced before the 
G 
Tribunal, it found (i) that the workmen had failed to make out the claim 
of customary bonus or that they were entitled to maximum bonus of 20 
per cent as provided under the Act; and (ii) that there was no available 
surplus during the year in question and that only the minimum bonus 
was payable under the provisions of the Act. However, after having 
l'ecorded the aforesaid findings, it proceeded to hold that it was legally 
H 
open to it to substitute for the agreement entered into between the 
+
\.
I 
\ 
j 
, 
• 
POWER SUPPLY CO. v. THE WORKMEN 
r ss 
parties before the Conciliation Officer a new contract and pass an 
award on that basis, if such a step would be conducive to industrial 
peace. On this basis the Tribunal, held that there would not be 
material alteration in the financial liability of the companies in case 
the agreement was modified by substituting for the words "that the 
workmen will he paid the amount equal to three months' basic wages as 
on 31.3.1970" by the words "an amount equal to basic wages as on 
31.3.1972" and accordingly it passed an award in those.terms. 
In appeal to the Supreme Court, the appellants-companies chal-
lenged the legality of this award. 
Allowing the appeal, 
HELD: I. The impugned award passed by the Ninth Industrial 
Tribunal is not legally sustainable and has to be set aside. The rights of 
the workmen for payment of bonus for the year in question will be 
governed by the terms of the agreement entered into before the Concili-
ation Officer on October 9, 1972. [190F] 
2. The rights and liabilities of the parties regarding profit bonus 
are governed by the provisions of the payment of Bonus Act, 1965 which 
are exhaustive on the subject and the adjudication had to be conducted 
by the Tribunal strictly in accordance with those provisions. I 189C-D[ 
In the instant case, the Tribunal has categorically found that there 
was no "available surplus" in respect of the two companies for the year 
in question on a computation made under section 5 of the Act. The 
settlement entered into before the Conciliation Officer constituted an 
agreement under section 34(3) of the Act and but for the said agree-
ment, the liability of the appellants under the provisions of the Act 
would have been only to pay minimum bonus under section 10 of the 
Act. [189E-F] 
SanghiJeevraj Ghewar Chand and Ors. v. Secretary Madras Chil-
lies, Grains Kirana Merchants Workers" Union and Anr., [ 1969] 1 SCR 
366 and Mumbai Kamgar Sabha. Bombay v. M /s Abdulbhai Faizul-
labhai & Ors., [1976] 3SCR 591 referred to. 
It is certainly open to an Industrial Court in an appropriate case 
to impose new obligations on the parties before it or modify contracts in 
A 
B 
c 
D 
E 
F 
G 
the interest ofindnstrial peace or give awards which may have the effect 
H 
186 
SUPREME COURT REPORTS 
11986] 3 S.C. R. 
A 
of extending the agreement or making new one, but this power is

Excerpt shown. Read the full judgment & AI analysis in Lexace.