JABALPUR BIJLIGHAR KARAMCHARI PANCHAYAT versus JABALPUR ELECTRIC SUPPLY CO., LTD. & ANR.

Citation: [1972] 1 S.C.R. 60 · Decided: 09-08-1971 · Supreme Court of India · Bench: G.K. MITTER · Disposal: Dismissed

Cited by 1 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

60 
JABALPUR BIJLIGHAR KARAMCHARI 
PANCHAYAT 
v. 
JABALPUR ELECTRIC SUPPLY CO., LTD. & ANR. 
August 9, 1971 
(G. K. MITTER AND P. JAGANMOHAN REDDY, JJ.] 
, 
Industrial 
Law-Bonus-Principles for awarding festival bonus-
Available surplus for distribution-Principles for calculation of. 
A 
The employees of the respondent claimed bonus on two counts : (I) 
festival bonus at 10 % of their total earnings as an implied term of the con-
C 
tract of employment and as an established practice of payment from 1-940-
41 without any break; and (2) bonus out of the profits quantified at 50% 
of the said total earnings. The Industrial Tribunal rejected the claims. 
In appeal to this Court, 
· 
HELO : (I) The criteria to be considered when a question of ccs' 
tomary or traditional bonus arises are: (a) whether the payment was 
uniform and has been over an unbroken series of years; (b) whether it 
D 
has been for a sufficiently long period, the length depending on the cir-
cumstances of each case (the period may have to be longer to justify an 
inference of traditional and customary festival bonus than in the case 
when the claim for festival bonus is based on an implied term of 
employment); (c) Whether it was connected with a festival; and (d) it 
must be shown that the payment was made even in a year of loss, thay E 
is, it was not. a bounty depending on the earning of profits. 
[67 G-H, 
· 
68A. 70f-G.] 
in tbe present case, it was proved that the payment of bonus 'Y'ls 
made at 10% for a large number of years and at II% for an mtervenmg: 
period. But the payment was not related either to .any festival or to 
an implied term of employment between the parties. In fact, for the 
F 
years from 1940-41 to 1945-46 there was no claim for the payment of 
either customary bonus or festival bonus. 
On the other hand, the 
express claim was made for war bonus. The 111ajor part of the entire 
period was covered by awards and exceptmg m one of those awards 
there was no reference to any festival 
bonus. 
The intervening 
period was covered by an express agreement between the. parties. 
Further the raie was not uniform. Consequently, ·the claim made 
G 
by the ~mployees that they should· be paid 10% 
eit~er as festival 
bonus or under an implied term of employment could not be accepted. 
[71A-D] 
Jspahani ·Ltd. 
Calcutta v. lspahani Employees Unions, 
[1960]1 
S.C.R. 24, The Graha Trading Co. (India) Ltd v. Its Workmen, [1960] l 
S.C.R. 107, M/s Tulsidas Khimji v. Their Workmen, [1963]1 S.C.R. 
H. 
675 
Vegetable Products Ltd v. Their Workmen 
A I R 1966 S.C, 
1449 and.Management of Churkulam Tea Estate (P) Ltd. v. The Workmen 
fl969] t S.C.R. 930, followed. 
i 
• 
A 
B 
c 
D 
•• 
E 
F 
G 
c 
• 
H 
KARAM CHARI PANCHAYAT v. JABALPUR ELECT. co. (Milter, !. ) 61 
(2) The amount of bonus must be computed in terms <tf the Full 
Bench formula as accepted by this Court in the case of Associated Ce-
ments Co. Ltd. v. Its Workm""• [1959] S.C.R. 925. 
[71D-E] 
(i) In the present case, in calculating the net profits tLe Tribunal 
should bave included the following three items, in the gross profits. 
(a) The cost of coal and fuel shown in the 'summary of technicar 
and Financial Particulars' for the year, prepared under r. 26(3) of the 
Indian Electricity Rules, 1937 was less than the figure shown by the· 
respondent in its revenue account. The respondent had failed to explain 
the discrepancy. Therefore the amount of difference between the two 
figures should have been added to the gross profits in the revenue ac-
count. 
[71H,72A-B,H;73A-B] 
(b) 
There was no p~oper explanation supported by accounts for the 
large amount for repairS to furniture as shown in the revenue account. 
Therefore the much smaller amount suggested in the oral evidence should 
alone have been taken into account. The difference between the two 
figures should also be added to the gross profits. 
[73F-H] 
(c) 
Although the statutory contigency reserve fund investments 
are not to be taken into account in the statement of surpluses and defi-
ciercies of profits, the interest earned was included by the respondent 
in the statement of net profits for the calculation of the managing agetns' 
commission. If the managing agents were entitled to claim a share of 
it the workers were equally entitled to claim its inclusion in the reve-
nue account. The result is that the gross profits of the company would 
have to be augmented by this sum also. 
[74D-G] 
(ii) The employees' contention reg

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