LexTHE PRAKASH COTTON MILLS (PRIVATE) LTD. AND OTHERS versus THE STATE OF BOMBAY (NOW MAHARASHTRA)
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
l S.C.R. SUPREME COURT REPORTS
105
r96r
., _, Paiku v. Gaya (') and in Chunduri Panakala Rao v.
Penugonda Kiimaraswami (') and in our opinion as
Govc;mnent of
soon as the Collector determined the duty he became
uttar Pradesh
•
functus officio and he could not impound the instru-
&· ors.
ment under s. 33 and consequential proceedings could
v.
not, therefore, be taken.
Raja Mohammad
r
d
· h
Ainir Ahniad I<han
The appeal is there1ore dismisse wit costs.
Appeal dismissed.
THE PRAKASH COTTON MILLS (PRIVATE)
LTD. AND OTHERS
v.
THE STATE OF BOMBAY (NOW
MAHARASHTRA)
(P.R. GAJITINDRAGADKAR, A. K. SARKAR,
K. SUBBA RAO, K. N. w· ANCIIOO and
J. R. MUDHOLKAR, JJ.)
Bonus-Textile Mills in local area-Agreement for bonus with
specified mills-Award thereon-Extension of award to other mills
in the area-Notification by Government-Validity-Constitu.tional
validity of mactment -
Bombay Industrial Relations Act, r946
(Rom. II of r947), ss. 95A, n4(2).
The disputes regarding bonus to be paid to the workmen of
the appellant mill and other cotton textile mills in Greater Bom-
bay for the year 1952 and 1953 were referred to the Industrial
Court under the provisions of the Bombay Industrial Relations
Act, 1946, and while the references were pending, an agreement
was arrived at between the Mill~owners' Association, Bombay,
and the Rashtriya Mills Mazdoor Sangh, a Representative Union
of workmen in the cotton textile indnstry with respect to pay-
ment of bonus for the years 1952 to 1957. providing inter alia
for payment of bonus even where a mill made aotual loss, the
minimum bonus being 4·8 per cent., of the ba§ic wages earned
during the year, subject to such mill being entitled to adjust
the amount thus paid by it as the minimum bonus against any
available surplus in any subsequent year or years. 1'his agree-
ment was registered and was made enforceable as an award
(r) I.L.R. [r94BJ Nag. 950.
(2) A.I.R. 1937 Mad. 763.
14
Kapur J.
IQ6I
February 16.
Prakash Cotton
Mills (Private)
Ltd.
v.
State of Bombay
106 .
SUPREME COURT REPORTS
[1962]
against those mills which were parties thereto. The appellant,
however, did not sign the agreement, and its case before the
Industrial Court was that it had been continuously making loss-
es from 1950 to 1955· On July 31, 1956, the Government of
Bombay issued a notification under s. rr4(2) of the Act direct-
ing that the award made by the Industrial Court aforesaid, for
payment of bonus for the years 1952 and 1953 and also for the
years 1954 to 1957 be enforced against the appellant. The
appellant challenged the validity of s. rr4 on the grounds (1)
that it offended Art. 14 of the Constitution inasmuch as it gave
an unguided and arbitrary power to the State Government to
discriminate between various sets of employers and employees
and make an order on any one set at its pleasure leaving out
others, (2) that it offended Art. l9(1)(g) in that it put an unrea-
sonable restriction on a person's right to carry on business, and
(3) that it prevented a party from having an industrial dispute
decided by an Industrial Court under the Act. In any event,
the appellant contended that the notification was bad, because
(a) it was made while a reference was pending in an Industrial
Court and, therefore, took away the jurisdiction of that Court to
decide the pending reference, and (b) the notification went
beyond the powers conferred on the State Government bys. n4
since under that section the Government was bound by the
decisions of the Full Bench in view of s. 95A, but in the present
case it ignored a decision of the Full Bench which provided that
no bonus would be payable by an employer where it had made
no profits.
Held (Sarkar, J., dissenting), that the notification dated July
31, 1956, was beyond the powers conferred on the State Govern-
ment under s. u4(2) of the Bombay Industrial Relations Act,
1946, and must, therefore, be struck down.
There are three limitations on the power of the State
Government when acting under s. u4(2): (1) that it is limited
by the subject-matter of the agreement, or settlement, submis-
sion or award sought to be extended, (2) that it has to be in
conformity with the industrial law laid down by the Full Bench
of the Industrial Court and also by any decision of the Supreme
Court, and (3) that the State Government's power to make a
direction under that section is co-terminus with the power of
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