THE MAHARASHTRA STATE ELECTRICITY BOARD versus MAHARASHTRA VEEJ MANDAL KAMGAR SANGH AND ANR.

Citation: [1998] SUPP. 3 S.C.R. 479 · Decided: 10-12-1998 · Supreme Court of India · Bench: S.B. MAJMUDAR · Disposal: Disposed off

Judgment (excerpt)

THE MAHARASHTRA ST A TE ELECTRICITY BOARD 
A 
v. 
MAHARASHTRA VEEJ MANDAL KAMGAR SANGH AND ANR. 
DECEMBER I 0, I 998 
[S.B. MAJMUDAR AND U.C. BANERJEE, JJ.] 
B 
Labour Laws: 
Payment of Bonus Act, 1965-Sections 2(b), 4(b), 5, 6, 8, JO and I I 
read with Schedules II and Ill-Accounting years 1965-66 to 1969-70- C 
Allocable surplus-Statutory undertaking other than a banking company-
Computation of gross profits of-Interest on bonds and government loans-
Jf deductible under Section 6 or otherwise-Held, not deductible under 
Section 6(a) to (c) & (d) read with Schedule Ill-However, Industrial Tribunal 
directed to decide whether deductible to determine the net profits as mentioned D 
at item 1 of Schedule //-Contention regarding determination of net profits 
although raised for the first time before the Division Bench of the High Court 
in review petition and rejected by the Division Bench on that very ground-
As the Divison Bench of the High Court had already remanded the case to 
the Tribunal disallowing deductions on these two items from gross profits 
under Section 6, in the interest of justice, Tribunal to examine this contention E 
as well-Electricity-Electricity (supply) Act, 1948-Section 5-Constitzition 
of India, I 950-Article I 36-Practice and Procedure-Pleadings-New 
plea-Jn the peculiar circumstances of the case matter examined and remanded 
to Tribunal for decision. 
Words and Phrases-Words "allocable surplus"-Meaning of-In the F 
context of Section 2(b) of the Payment of Bonus Act, 1965. 
Respondents I and 2 on behalf of workmen of the appellant raised an 
industrial dispute pertaining to non-payment of appropriate statutory bonus 
to their members for the relevant years as the allocable surplus was sufficient 
to make available to the workmen more than 4 per cent bonus. This dispute G 
was referred for adjudication to the Tribunal which came to the conclusion 
that after effecting relevant deductions on various items which the appellant-
Board sought to get deducted from the gross profits for the relevant years, 
no allocable surplus for the relevant years rrsulted and hence the claim of 
the workmen was rejected. The respondents then challenged the findings of H 
479 
480 
SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R. 
A the Tribunal before the High Court and a single Judge of the High Court 
confirmed the findings of the Tribunal. On Letter Patents Appeal filed by the 
respondents the Division Bench took the view that the disputed items which 
were deducted by the Tribunal from the gross profits for the relevant years 
were not deductible and hence the Tribunal was required to recompute the 
B allocable surplus for the relevant years for which the matter was remanded 
Hence this appeal. 
It was inter-alia contended by the appellant, that net profits for the 
accounting years as per the accounting practice would entitle the appellant 
to get deducted from the gross profits the two items of interest which were 
C disputed in the present case and then only the net profit as per the accounting 
practice would be worked out. This contention was not raised before the 
Tribunal or Single Judge. 
Remanding the matter to the Tribunal, this Court 
· D 
HELD: 1. A mere look at Section 6 of Payment of Bonus Act, 1965 
itselfshows that interest on bonds or government loans do not get covered · 
by any of the clauses from (a) to (c). They are not included in the list of 
deductible sums as mentioned in the Third Schedule. Hence clause (d) also 
does not apply to them. Consequently, no fault can be found with the impugned 
decision of the High Court when it took the view that the interest paid by 
E the Board on bonds or government loans for the relevant accounting years 
were not items deductible under section 6 of the Act. (483-F; 484-A-D) 
F 
2.1. On the contention of the appellant-Board, which does not appear 
to have been placed before the Tribunal or before the learned singie Judge 
of the High Court but was placed before the Division Bench, this Court 
deems it fit to consider the same on merits as the said contention has a direct 
linkage with the computation of allocable surplus during the relevant 
accounting years for which the proceedings are remanded by the High 
Court. (484-E-F) 
G 
2.2. Section 11 provided that if allocable surplus exceeds the amount 
of minimum bonus payable to the employees, the employer shall, in lieu of 
such minimum bonus, be bound to.pay bonus in proportion to the salary or 
wage ea

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