SAKHKKAR MILLS MAZDOOR SANGH versus GWALIOR SUGAR CO. LTD.

Citation: [1985] 2 S.C.R. 958 · Decided: 22-02-1985 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

958 
A 
SAKHKT<AR MILLS MAZDOOR SANGH 
B 
v. 
GWALIOR SUGAR CO. LTD. 
Feburary 22, 1985 
C 
(0. CHINNAPPA RHODY, E.S. VENKATARAMIAH AND R.B. MISRA, JJ.J 
D 
E 
F 
G 
H 
The Payment of Bonus Act 1965, sections 10and13 'seasonal' employees-
Whtther entitle4 to payment of minimum bonus. 
Words and Phrases : 
•working days in any accounting year'-Meaning of-Section 13 Pay~ 
ment of Bonus Act l96j. 
The first respondent. a Company engaged in the manufacture of Sugar, 
employed workers both on a permanent basis as weJI as on a seasonal basis. 
The einployer refused to pay bonus to the seasonal employees on the 
ground that they were not employed throughout the year, and the 
conse~ 
queotial dispute that arose between the management and the appellant·union 
was referred to the Industrial Court under section 49 of the Madhya 
Pradesh Industrial Relations Act. 
The Industrial Court decided in favour of the workers and he Id that 
they were entitled to payment or the minimum bonus. 
The Writ Petition filed by the company was allowed and the award 
of the Industrial Court was quashed. The- High Court interpreted the words 
"working days in any accounting year" in section 13 of the Payment of 
Bonus Act 1965 as meaning all those days or the year except holidays, and 
held that the workers were only entitled to proportionate bonus and not 
the minimum bonus guaranteed under section 10 of the Act. 
Allowing the Appeal of the Union to this Court, 
HELD: 1. in the case of a factory which works seasonally during an 
accounting year, reworking days in any accounting year" can only mean 
those days of the year du.ring which the employee concerned is actually 
allowed to work. Having regard to the scheme and purpose of the Payment 
of Bonus Act 1965, the High Court was not justified in placing a different 
MAZDOOR SANGH v. GWALIOR SUGAR co. (Chinnappa Reddy, J.) 959 
construction on the meaning of the expression "working days in any 
accounting year". [960H; 96IA] 
2. The judgment of the High Court is set aside and the award of the 
Industrial Court is restored. The bonus payable to the employees will carry 
ioter~t at nine per cent per annum~ from the date bonus became due until 
date of payment. [96 IB] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 338 of 1972. 
From the Judgment and Order dated the 30th January, 1970 
A 
B 
of the Madhya Pradesh High Court in Miscellaneous Petition No. 
c 
437 of 1967. 
K. K. Jain, Pramod Dayal, A. D. Sangar and Ajay K. Jain for 
the appellant. 
B. Datta, Rishi Kesh, B. P. Singh and Ajit Puddiserry for the 
D 
respondent. 
H. K. Puri and C. L. Sahu for the Interveners. 
The Judgment of the Court was delivered by 
CH!NNAPPA REDDY, J. The first respondent is a company 
engaged in the manufacture of sugar and employing over 1100 
workers, 300 of them on a permanent basis and 800 on a seasonal 
basis. The permanent employees are those employed on the clerical 
side and in the operation and maintenance of machines. The other 
800 employees are seasonal employees who are so employed because 
the factory itself does not work through out the year but works 
during a certain season every year from December when the sugar-
cane crop is ready for crushing until the crushing is over. The 
employer refused to pay bonus to the seasonal employees during the 
year 1964-65 on the ground that they were not employed through 
out the year. 
A dispute arose between the management and the 
Mazdoor Sangh which was referred to the Industrial Court Madhya 
Pradesh, Indore for arbitration under sec. 49 of the Madhya Pradesh 
Industrial Relations Act. 
The Industrial Court decided in favour of 
the workers, but on a writ petition filed by the company, the award 
of the arbitrator was quashed and it was held that the workers were 
only entitled to proportionate bonus and not the minimum bonus 
E 
F 
G 
H 
A 
B 
c 
960 
SUPRBMB COURT RBORTS 
[198S] ~ s.c.P.. 
guaranteed by sec. 10 of the Payment of Bonus Act, 1965. This 
appeal has been filed by the Mazdoor Sangh under a certificate 
granted by the High Court of Madhya Pradesh. 
To our minds the question is a simple one and is capable of 
only one answer. Sections 10 and 13 of the Payment of Bonus Act, 
as they stood at the relevant time, were as follows: 
• 
"Section 10. PAYMENT OF MINIMUM BONUS-
Subject to the provisions of ss 8 and 13 every employer 
shall be bound to pay to every employee in an accounting 
year a minimum bonns which shall be four per cent of 
the salary
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