UPENDRA CHANDRA CHAKRABORTY AND ANR. versus UNITED BANK OF INDIA

Citation: [1985] 3 S.C.R. 1057 · Decided: 30-04-1985 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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UPENDRA CHANDRA CHAKRABORTY AND ANR. 
v. 
UNITED BANK OF INDIA 
April 30, 1985 
[D.A. DESAI, V. BALAKRISHNA ERADI AND V.KHALID, JJ.] 
Bonus-Custortiary bonus. concept of-Tests to be applied-Bonus paid to 
the employees of the respondent Bank during. the pooja period, whether has the 
charaeteristic of customary bonus know to /aw-Applicability of section 33-C 
(2) of the Industrial Disputes Act, 1947. 
Two employees of the respondent Bank preferred a claim on the basis of 
the existence of legal right in thent to the payment of a customary bonus on the 
eve of pooja. Th-o;ir case was that the bonUs paid to them every year on the eve 
of pooja at the rate of pay as on 1st September of the respective year was un-
related to any profit or loss niade by- the company and that the consecutive 
·payment for more than 16 years without any break of such bonus bas_ developed 
into a condition of service giving rise to a right and an e~pectancY which in 
law assumed the characteristics of cu-stomary bonus. The claim was resisted 
by the bank on the grounds, namely, (a) the application itself was not main .. 
tainable since the alleged right ple~ded by the workmen was not a condition of 
service and that such a right·did not exist in fact also ; (b) the conditions of 
se'rViCe of the employees of the Bank are governed _by various awards and settle-
ments ; (c) though there were ·agreements entered into between the bank and 
its employees on several matters there was no agreement at any time on the 
question of payment of bonus ; and (d) though the bonus was paid, as a result 
of the employees demand every year .as per separate agreement for the: payment 
thereof the bonuspa id was related to profit and not based on any custom. After 
considering the correspondence that passed between the -Bank and its em .. 
ployees, the La~our Court .dismissed the application:halding that on the basis 
of the material on record, there was no existing right to customary bonus and 
that t'1e Labour Court could not ~ither create or declare a right which . was 
not in existence to stretch its jurisdiction under section 33-a(2) of the Indus 
trial Disputes Act. Hence· the appeal by special leave. 
HELD : l. In the facts and circumstances of the case the bonus received 
by the appellants did not. have the characteristic of customary boiius as known 
to law and therefore they were not entitled to the quantification of that amount· · 
under section 33-c(2) of the Industrial Disputes Act, on the basis of the existence 
of a lcaal right in them. [1063 F] 
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SUPBRBME COUR ~ REPORT 
o9ssi 3 s.c.R.) 
2. In Vegetable Products Ltd. v. Their Workmen, 1965 (1) LLJ 468, the 
Supreme Court has laid down the tests to determine what exactly is custom3rY 
or festival bonus. The tests laid down are ; (I) that the payment has been made 
over an 'unbroken series of years ; (2) that it has been for a sufficiently long 
period-the period has to be longer than in the case.of an implied term of 
employment; (3) that it has been paid even in years of loss and did not depend 
on the earning of profits ; and (4) that the payo1ent has been <it a uniform rate 
throughout. ·In the instant case. the record shows that the bonus paid docs not 
satisfy the requirements laid down by the Court. The n1ere fact the payments 
were made in the month of September or thereabout every year, by itself will not 
make the bonus paid a customary pooja bonus. The ~ate has not been uniform. 
The management has at all times taken the definite stand that the payment was 
related to profits and that it was in anticipation of making profit. Further.the 
payments were made .at all time pursuant to demands made by the employees. 
[1061 C-F] 
Vegetable Products Ltd. v. Their Workmen, (1965) I LLJ 468 applied. 
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3. The concept of any customery bonus is unkQ.Own to nationalised 
banks. All the nationalised banks are wholly owned undertakings of the 
Goverllmeht of India. In the matter of bonus, the employees of the. nationalised 
banks inust be dealt with on a common denominator. If therefore, the contention 
of the appellants were to prevail the employees of the respondent •. which iS only 
one a1nongst many nationalised banks, would enjoy an undeserved advantange 
compared to their counterparts in other nationalised banks and even in the other 
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branches of the respondent bank and may become a cause of disharmony and 
inequality. Therefore, in Ja

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