RASHTRIYA MILL MAZDOOR SANGH, NAGPUR versus THE MODEL MILLS, NAGPUR AND ANR.

Citation: [1985] 1 S.C.R. 751 · Decided: 18-09-1984 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

RASHTRIYA MILL MAZDOOR SANGH, NAGPUR 
v. 
THE MODEL MILLS, NAGPUR AND ANR. 
September 18, 1984 
[D.A. 0ESAI, V. BALAKRISllNA ERADI AND V. KHALID, JJ.] 
The Payment of Bonus Act 1965, Section 32(/V)-Scope of-Employees of 
·undertaking managed by an author;zed controller under Section 18A lDR Act-
Whether entitled to payment of bonus.' 
The Industries (Development and Regulation) Act 1951, Section 18A 
Industrial' undertaking~Appointment of authorized controller-Such undertaking 
whelher an industry carried on under the auth0r/ty of the Department of the 
Central Government-Employees of undertaking whether entitled to payment of 
bonus. 
The Sick Textile Undertaking (National/sat/on) Act 1974, Sul/on 5(2J(C) 
•wages, $alarles and other dues of the , emp/oyees'-JVhether includes statutory 
· 1or.us payable under Bonus Act. 
· 
Words and Phrases : •Carried on by ·or' . under the authority of any 
Jepartment of the Central G~vernment•-Meaning of_;_Section 32(JV) Payment of 
Bonu1Act1965. 
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The appellant-Union served a notice of demand' for· the grant or 
-....._bonus for the period 1964-6S to J967 .. 68. The matter was taken into conci .. 
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liation. 
The Conciliation Officer recorded a failure, issued. a certificate 
~ 
under Section 73A of the Bombay Industrial Relations Act, 1946 certifying 
-. 
that the dispute was not capable of being settled by conciliation. The Union 
thereupon made four independent referenc!s to the Industrial Court, for the 
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grant of bonus for each of the four accounting years 1964-6S to 1967-68. The' 
Union further alleged that it could not 'make a specific demand for bonus 
calculated at a certain percentage of the salary as it had not got the requisite 
infonnation about the fina.hcial position and the balance sheet of the 
Employer, and that the Indu5trial Court should compute the bonus which 
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become~ payable under the Bon.·s Act, and award the same to the workmen. 
The employer resisted the eferences contending that once a notified 
order was issued uilder Section 1 81\ of the Industries (Development and 
Regulation) Act, 1951 appointing all authorised controller in respect of an 
industrial undertaking, it was run by the authorised controller under the 
authority or a D~partment of the Central G~verrunent and therefore, in view· 
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SUPREME COURT PEPORTS 
[l 985) l.S.C.R 
of the prov1s1ons contained in Section 32fIV) of the Bonus Act its einployees 
were excluded from the application of the Bonus Act and the references must 
consequently be rejected. 
The Industrial Court upcld the aforesaid contention on behalf of the 
en1ployer that having r~gard to_ the provisions. contained in Section 32(1V) of 
the Bonus Act read V-.'Ith Section 18A of the IDR Act, the workmen employed 
by the e1nployer,.wcrc excluded from the operation of the Bonus Act as it was 
not applicable 'to the e111ployer. The Industrial Court howcve1 rejected the 
alternative contention that even if the workn1cn c1nploycd by the employer 
were not entitled to bouus under the Bonus Act, they were yet entitled to claim 
bonus apart from the Bonus Act as a nonn of industrial relations by observing 
that ::is the demand was made for bonus under the Bonus Act, and the alter-
native demand was not '.n1adc before the Conciliation Officer, the scope of 
the references could not be enlarged to cover the same. 
In the appeals to this Court on the questions : 
(1) On the appointment of the authorised controller under Section 18A 
of the IDR Act by the Central Government in respect of an industrial under_ 
taking whether the undertaking acquires the status of an establishment 
engaged in an industry carried on under the authority of the Department of 
the Central Government, and (2) Whether the employees employed in such an 
industrial undertaking were excluded from the operation of the Bonus Act. 
Allowing the Appeals, 
HELD : l(a) If on the issue of a notified order appointing an autho-
rised controlller under Sec. 18A Industries (Development and Regulation) 
Act 1951, the management of the industrial undertaking undergoes a change, 
yet it does not become an establishment engaged in an industry carried on by 
the department of the Central Government, and therefore its employees would 
not be excluded from the operation of the Payment of Bonus Act 1965 as 
provided in Sec. 32(1V). [768 E-G] 
Heavy Engineering Mazdoor Union v. The State of Bihar & Ors., [1969] 
3 SCR 995 and M/s

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