STATE OF TAMIL NADU versus K. SABANYAGAM AND ANR. ETC.

Citation: [1997] SUPP. 5 S.C.R. 345 · Decided: 25-11-1997 · Supreme Court of India · Bench: S.B. MAJMUDAR · Disposal: Dismissed

Judgment (excerpt)

STATE OF TAMIL NADU 
A 
v. 
K. SABAN A Y AGAM AND ANR. ETC. 
NOVEMBER 25, I 997 
[S. B. MAJMUDAR AND M. JAGANNADHA RAO. JJ.] 
B 
Payment of Bonus Act, 1965 : 
Section 36-Exemption orders thereunder-Whether could be 
restrospective-Order of exemption passed exempting TN. Housing Board C 
from all the provisions of the Act-Such orders issued several years after the 
expiry of the operation of the previous exemption order-Such an order 
could be interpreted as granting exemption for the remaining part of the then 
current accounting year from the date of issuance of the order and not as 
operating retrospectively and granting exemption from the earlier accounting D 
year-GO Ms No. 2018 dated 31-10-1979 and GO Ms No. 1033 dated 23-
11-1982 issued by the Government of Tamil Nadu. 
Sections 32(v)(c) and 36-Plea of statutory exemption under Section 
32(v)(c) and grant of exemption under Section 36-Housing Board of the 
State of Tamil Nadu, in various legal proceedings, consistently taken the· E 
view that it required exemption from the provisions of the Act-Held, the 
High Court, on the principle of waiver and estoppel, rightly rejected the 
Board's claim to statutory exemption from payment of bonus under Section 
32(v)(c) of the Act-Estoppel-Sections 115 and 58 of the Evidence Act, 
1872-Admission-Waiver. 
Nature of opportuntiy to be afforded to employees-Persona/ hearing, 
held not necessary-However; opportunity to submit rebuttal evidence or 
material against the material famished by the employer seeking exemption, 
is necessary-Adminstrative law-Natura/justice-Hearing or notice-Nature 
F 
of opportuntiy to be afforded before exercising power of conditional G 
legislation. 
Expression "other relevant circumstances"-Scope of-Held, has to be 
read with the financial position of the claimant-establishments themeslves 
and has to be seen on the touchstone of public interest to enable the 
345 
H 
346 
SUPREME COURT REPORTS [1997] SUPP. 5 S.C.~. 
. A formation of opinion qua claim of such existing establishments-Does not 
refer to any future establishment, yet to be set up. 
Section 32(v)(c)-Facts require lo be proved for claiming exemption 
under-Restated. 
B 
Nature of Act-Held, is a piece of welfare legislation-Constitution of 
India-Article 21. 
Administrative Law : 
Subordinate legislation-Conditional legislation and delegated 
C legislation-Distinction pointed out-Delegation of legislative function and 
power-Delegated legislation viz-a-viz conditional legislation. 
Conditional legislation-Classification of-Exercise of power in respect 
of conditional legislation-Cannot be said to exclude totally the principles 
of fair play, consultation or natural justice-Payment of Bonus Act, 1965-
D Section 36-Power of exemption under. 
E 
F 
Words and phrases : 
Words "other circumstances "-In the context of Section 36 of the 
payment of Bonus Act, 1965. 
In exercise of its power under Section 36 of the Payment of Bonus Act, 
1965, the Housing and Urban Development Department of the State of Tamil 
Nadu issued Government Order Ms No. 2018 dated 31-10-1979, exempting 
the Housing Board of the State from all the provisions of the Act for a period 
up to accounting year 1977-78. By a subsequent Government Order Ms No. 
1033 dated 23-11-1982 which provided that having read the eariler Government 
Order dated 31-10-1979 and other relevant letters, the Governor exercising 
the power under Section 36 of the Act, exempted the Housing Board of the 
State from all the provisions of the Act for a further period up to the 
Accounting year 1982-83. The employees who were to get statutory bonus 
G under the Act, feeling aggrieved by the said exemption orders, moved the 
High Court. Their writ petition was allowed and the Housing Board was 
directed to pay the minimum statutory bonus to the employees from the 
Accounting year 1978--79 onwards. Writ appeal filed by the Housing Board 
&nd the State Government was also dismissed. Hence this appeal by the State. 
fl 
It was contended on behalfof the appellants that the employees of the 
1 
1 
STATE v. K. SABA NAY AGAM 
347 
Board will not be entitled to the statutory bonus under the Act or. twin A 
grounds: Firstly, in view of the statutory exclusion of the Housing Board 
from the applicability of the Act as per Section 32(v)(c) of the Act; and 
secondly, on the ground that the State of Tamil Nadu for the relevant years 
had exercised its power of exempting the Housing Board under Section 36 
of the 

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