STATE OF UTTAR PRADESH AND OTHERS versus BASTI SUGAR MILLS CO., LTD.

Citation: [1961] 2 S.C.R. 330 · Decided: 11-11-1960 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

330 
SUPREME COURT REPORTS 
(1961) 
i96u 
law validly made and applicable to a case pending in 
Tl 
C-. . 
appeal must be considered and given effect to by the 
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01n1niss1oner A 
II 
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Th 
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. 
of Income-tax 
ppe ate ourt. 
e cone us10n we have reached IS 
Hyderabad ' that the notification of 1956 was validly made and 
v. 
applies to the present case. In view of this conclusion 
Dtwan Bahadur we have considered it unnecessary to examine the 
Ramgopat Mi.'; notification of 1953 or the reasons for which the High 
Ltd. 
Court held that notification to be bad. 
s. 1c Da' 1. 
For the reasons given above, we allow this appeal 
and set aside the judgment and order of the High 
Court dated February 16, 1954. The question referred 
to the High Court is answered in favour of the appel-
lant. The appellant has succeeded by reason of the 
notification of 1956 and taking that circumstance into 
consideration, we direct that there will be no order for 
costs for the hearing in this Court. 
Appeal allowed. 
zv6o 
STATE OF UTTAR PRADESH AND OTHERS 
November II. 
V. 
BASTI SUGAR MILLS CO., LTD. 
(P. B. GAJENDRAGADKAR, A. K. SARKAR, 
IC SuBBA RAO, K. N. WANCHOO and 
J. R. MUDHOLKAR, JJ.} 
Indt<striaJ Dispt<te-Bonus-Statute empowering Government 
to direct payment of bonus by notification-Validity of-Whether 
retrospective-United Provinces Indt<striaJ Disputes Act, I947• 
(U. P. z8 of I947), s. 3(b) and (d)-Constitt<tion of India, Art. 
I9(I)(j). 
The Government of U. P. appointed a Court of enquiry 
under ss. 6 and 10 of the United Provirlces Industrial Disputes 
Act, 1947, and referred to it the present dispute. The Court of 
enquiry submitted its report to the Government, whereupon the 
Government issued a notification in July, 1950, directing the 
various sugar factories to pay bonus to their workmen for the 
years 1948-49 as well as to pay certain amounts as bonus for the 
years 1947-48. 
• 
The respondents obtained writ of prohibition from the High 
2 S.C.R. SUPREME COURT REPORTS 
331 
Court against the Government, prohibiting it from enforcing the 
I960 
notification. The State Government came up in appeal, urging 
that the provisions of cl. (b) of s. 3 of the United Provinces 
State of Uttar 
Industrial Disputes Act, 1947, were wide enough to permit it to Pradesh & Others 
issue such a direction to the employer because by doing so the 
v. 
State Government would be imposing a condition of employment Basti Sugar Mills 
in future. 
Co , Ltd. 
The respondents, inter alia, contended that (r) clause (b) of 
~· 3 of the Act does not operate retrospectively ; (2) bonus could 
only be a term of employment by agreement and could not be 
imj,losed by itatute; (3) where there was an ind~strial dispute 
cll{d) and not cl. (b) of s. 3 of the Act would apply and (4) if cl. (b) 
was applicable it was ultra vires being discriminatory and viola-
tive of Art. 14 of the Constitution and also violative of Art. 19(1) 
of the Constitution as it-confers arbitrary powers on the State 
Government. 
Held, that (i) though cl. (b) of s. 3 of the United Provinces 
Industrial Disputes Act, 1947, could not be given a retrospective 
effect, yet there was nothing therein which prohibited the State 
Government from giving a direction with regard to the payment 
of bonus and by giving such a direction the State Government 
was not giving retrospective effect to the provisions of that 
clause nor did it add a new term or a condition for a period 
which was over, it merely required the employer to pay an addi-
tional sum of money to their employees as a term and condition 
of employment in future; 
(ii) though normally wage is a term of contract it can be 
made a condition of employment by statute, and it was open to 
the State Government under ch (b) of s. 3 to make the payment 
of bomu; to workmen a condition of their employment in 
future; 
(iii) where the employees bargained in their collective 
capacity, the fact that the personnel of the factory when the 
order for the pa~·ment of bonus was made by the Government 
and in the year to which dispute related were not the same, did 
not affect the power of the Gov.ernment as the order would 
apply only to those employees who had worked during the 
period in question and not to new employees ; 
(iv) the normal way of dealing with an industrial dispute 
would be to have it dealt with judicially and not by resort to 
executive action, but cl. (b) of s. 3 empowers the Government to 
act promptly in case of an 

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