LexSANGHI JEEVARAJ GHEWAR CHAND & ORS. versus SECRETARY, MADRAS CHILLIES, GRAINS KIRANA MERCHANTS WORKERS UNION & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
SAl\GHLlEEVARAJ GHEWAR CHAND & ORS.
v.
SECRETARY, MADRAS CHILLIES,
GRAINS KIRANA
MERCHANTS WORKERS' U1"I0l\ & ANR.
July 16, 1968
[J.M. SHEi.AT AND K. S. HFulll·, JJ.]
Payment of Bonus Act (21 of 1%5), ss. 1(3), 22, 32(x) and 39-
Acl whether exhaustive on the la1v relating to bonus-Whether employees
c:ntitled to pay1nrnt -:J.f bonus dchOr'.'. the Acr in cast' of excluded and
exempted establishmenJs-Scope of ss. 22 and 39.
A
B
Legislative history and Statement of Objects and Reasons '"hen can
C
he looked imo.
The appellants arc: (i) an estahlishmcnt with less than 20 employees
:inli Ylhich was not a factory; and (ii) an establishment in the
public
sector.
On the question, whether in view of the non-app!icahility of the
Payinent of Honus Act, 1965, to the two appellants-in the first case by
reason of exclusion under s. 1 (3) and in the other by reac;on of exemption
under s. 32(x)-the employees of the two appellants
were entitled
to
D
claim honus dehors the Act.
HELD : Considerin~ the history of the legislation, the background and
1he circumstances in \Vhich the Act was enacted the object of the Act
and it'i scheme, it is not possible to :i.cccpt the construction suggested on
behalf of the n .. 'Spondents (employee~) that the Act is not an exhaustive
Act dealing comprehensively vtith the
subjcct-n1:i.ttcr of
honus in all
its asp..-cts, or that Parliament ~till left it open to those to whom the Act
E
dOC'l not apply by r~ason of exclusion or exemption to 'raise a dispute
with regard to bonus dehors the Act through industrial adjudietion under
the Industrial Dispute<> Act, 1947, or other corresponding lavls.
( 1) The Court is justified in looking into the history o[ the lcgisla-
tilitt and the statement of objects and reasons, not for the pu'rposc of
construing. the Act. hut for the limited purpose of ascertaining the back-
ground. the conditions and circumstances which led to it'>
pa~sing. the
}"
mischief it was intended to prevent and the remi:dy it furnished to prevent
such mischief. (3 72 H-{:]
fleydon's case. 76 E.R. 637. Bengal ln11nunity Co. Ltd. v. Stale of
Rihar, fl955] 2 S.C.R. 603, R. M. D. (,'hanuirbaugluvalla v.
Union
of
/nlliu, (19571 S.C.R. 910. Central Bank of India v.
Their
Workmen,
fl960] I S.C.R. 200. Corporation of the City of Nu1;pur v. Its En1ployee.L
(19601 2 S.C.R. 942. Statr of Wert Bengal'" Union of India. [1964] I
G
S.C.R. 371 and Acree Basha v. Union of India. (1968] 1 S.C.R. 833
referred to.
Until the cnactn1cnt df the Payment of Bonu..., Act. 1965, payment of
bonu<> was not a 5tatutorv obligation on the part of the
employer
nor
\Vas it a statutorv right Or an employee.
It wa-.; originally a voluntary
payment.
Undc.r ·the Full Hench formula, evolved by the Labour. Appel-
late Tribunal \\'Ith respect to disputes for payment
of
honus
in
the
){
Bombay Textile Industry, it acquired the character o.f a right to share
in the surplus of profil<:. enforceable through the n1ach1nery of the lndu'>-
trial Dispites Act, 1947. and other cormspandin~ Act.
Under . that Act.
workmen of industrial estahlic;hmcnts could raise an industrial dispute and
•
•
'
A
B
...
c
·n
'E
G
H
GHEWAR CHAND V. WORKERS' UNION
367
demand by way df bonus a proportionate share in profits on the principle
that both capital and labour had contributed. to the making of profits and
therefore both were entitled to a share therein.
As a result of the obser-
vations of this Court in Associated Cement Companies Ltd. v. Its Work-
. men, ~1959] S.C.R. 925 and in
Ahmedabad
Miscellaneous
Industrial
Workers' Union v. The Ahmedabad Electricty Co., [1962] 2 S.C.R. 934,
the Government of India appointed a Commission to make recommenda-
tions with resp<et .to legh>iation
regarding
bonus.
The
Government
accepted the majority of the Comnussion's recommendations and spon-
sored the enactment of the
Payment of Bonus
Act. Under this Act.
liability to pay bonus has now become a statutory obligation imposed on
employers. In providing such statutory liability Parliament has laid down
a statutdry formula on which bonus would be payable irrespective of
whet11tr the establishment had, during .a particular accounting year, made
profit or not.
Parliament further laid down that the formula it had
evolved and the statutory liability it provided, shall apply only to certain
establ~5Ilments and not to all.
In such circumstances, Parliament has not
to providExcerpt shown. Read the full judgment & AI analysis in Lexace.