LexTHE MANAGEMENT OF WORTH TRUST versus THE SECRETARY, WORTH TRUST WORKERS UNION
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[2025] 5 S.C.R. 360 : 2025 INSC 432 The Management of Worth Trust v. The Secretary, Worth Trust Workers Union (Civil Appeal No. 4717 of 2025) 02 April 2025 [Sudhanshu Dhulia* and K. Vinod Chandran, JJ.] Issue for Consideration Issue arose as to whether the appellant-trust which is engaged in charitable and also commercial activities can be exempted under section 32 of the Payment of Bonus Act, 1965 and thus, not liable to pay any bonus to its workmen. Headnotes† Payment of Bonus Act, 1965 – ss.10, 11, 32 – Factories Act, 1948 – Industrial Disputes Act, 1947 – Appellant-trust was doing charitable activities and it was also engaged in industrial activities of commercial nature – Workmen employed by appellant-trust largely comprise of workers cured of leprosy and they had formed a union – Respondent-union raised the issue demanding bonus and ex-gratia for the year 1996- 97 – Tribunal held that respondent-union claim of bonus and ex-gratia was justified – Tribunal ordered that workmen were entitled to a bonus of 8.33% on their annual earnings and further held that they were entitled to an ex-gratia amount – The Single Judge of the High Court upheld the award of the Tribunal but modified the relief to the extent that bonus be awarded after deducting the amount already paid ex- gratia – Writ appeal filed by the appellant was dismissed – Correctness: Held: Workmen do not deny the fact that the appellant has been doing charitable work and they also admit that most of the workmen are the persons cured of leprosy who had been rehabilitated by the trust, but again it is a fact that these workmen are working in factories and fall within the definition of ‘workmen’ and ‘employee’ under the Factories Act, 1948 as well as the Bonus Act – Since, * Author [2025] 5 S.C.R. 361 The Management of Worth Trust v. The Secretary, Worth Trust Workers Union admittedly, they work in factories, the Bonus Act is applicable in their case, as are all other beneficial legislations such as the Factories Act, Employees’ State Insurance Act, Employees Provident Fund Act etc. – Just because factories run by the appellant come under the broad umbrella of the appellant-trust, which is also involved in some charitable work, the workers cannot be deprived of the benefit of the Bonus Act – Workmen of the respondent-Union are liable to receive their bonus under the Payment of Bonus Act – Though appellant has been already paying some amount, which is called ex-gratia, as a measure of charity to the workmen – However, same cannot be ground to avoid paying a bonus, which is a statutory duty and right of the appellant and workmen respectively – Thus, appellant is not exempted u/s. 32(v)(a) or (c) of the Bonus Act, and the workmen of the respondent-Union, who are engaged by the appellant in its factories, are entitled to get the bonus in accordance with law. [Paras 14, 16, 17, 19] Payment of Bonus Act, 1965 – Statement of objects and reasons – Scheme and applicability – Discussed. [Para 7] List of Acts Payment of Bonus Act, 1965; Factories Act, 1948; Industrial Disputes Act, 1947. List of Keywords Section 32 of Payment of Bonus Act, 1965; Workshop for Rehabilitation and Training of the Handicapped Trust’ (WORTH); Swedish Red Cross Society; Charitable activities; Rehabilitation of leprosy-cured patients; Commercial activities; WORTH Trust Workers Union; Claim of bonus and ex-gratia; Scheme and applicability of the Bonus Act; Indian Red Cross Society; Institution of a like nature; Payment of bonus; Established not for the purposes of profit; Statutory duty and right of the appellant and workmen. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4717 of 2025 From the Judgment and Order dated 20.03.2019 of the High Court of Judicature at Madras in WA No. 1732 of 2013 362 [2025] 5 S.C.R. Supreme Court Reports Appearances for Parties Advs. for the Appellant: R. Anand Padmanabhan, Sr. Adv., Arimardhan Sharma, Ms. Ruchi Arya, Shashi Bhushan Kumar. Advs. for the Respondent: Gautam Narayan, Sr. Adv., Ms. Asmita Singh, Abheet Mangleek, Tushar Nair, Anirudh Anand, Punishk Handa. Judgment / Order of the Supreme Court Judgment Sudhanshu Dhulia, J. 1. Leave granted. 2. The appellant before this Court is a trust presently known as ‘Workshop for Rehabilitation and Training of the Handicapped Trust’, or ‘WORTH’. Prior to the year 1985, the name of this trust was ‘Swedish Red Cross Rehabilitation Trust’ a
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