Madras High Court
The Managing Director vs Tamil Nadu Kudineer Vadigal Variya on 14 February, 2012
Author: K.Chandru
Bench: K.Chandru
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 14.02.2012 CORAM: THE HONBLE MR. JUSTICE K.CHANDRU W.P.Nos.24934 of 2007 and Writ Petition Nos.7686 and 7687 of 2008 & M.P.No.1 of 2007 The Managing Director Tamil Nadu Kudineer Vadigal Variyam Chennai 5 .. Petitioner in W.P.No.24934/2007 E.Viswanathan Podhu Seyalalar Tamil Nadu Kudineer Vadikal Mathiya Amaippu A.Nallasivan Ninaivagam No.27, Masoothi Theru Chepauk, Chennai 5 .. Petitioner in W.P.Nos.7686 & 7687 of 2008 Vs. 1. Tamil Nadu Kudineer Vadigal Variya Oozhiyar Central Organisation rep.by its General Secretary 2. The Presiding Officer Industrial Tribunal Chennai .. respondents in W.P.No.24934/2007 1. The Presiding Officer Industrial Tribunal High Court campus Chennai 104 2. The Nirvaga Izhakkunar Tamil Nadu Kudineer Vadigal Variyam 31, Kamarajar Salai Chennai 5 .. Respondents in Writ Petition Nos.7686 & 7687 of 2008 Prayer in W.P.No.24934 of 2007: Petition under Article 226 of the Constitution of India praying for a Writ of Certiorari to call for the records made in impugned award I.D.No.30 of 2000 dated 17.3.2006 on the file of the Industrial Tribunal, Chennai 2nd respondent herein and quash the said award. Prayer in W.P.No.7686 of 2008: Petition under Article 226 of the Constitution of India praying for a Writ of Certiorarified Mandamus to call for the records of the 1st respondent's order dated 17.3.2006 in I.D.No.27 of 2001, quash the same and direct the 2nd respondent to pay maximum bonus with interest for the accounting year 1998-99. Prayer in W.P.No.7687 of 2008: Petition under Article 226 of the Constitution of India praying for a Writ of Certiorarified Mandamus to call for the records of the 1st respondent's order dated 17.3.2006 in I.D.No.55 of 2002, quash the same and direct the 2nd respondent to pay maximum bonus at the rate of 20% with interest for the accounting year 2000-2001. For Petitioner in W.P.No.24934/2007 & for 2nd respondent in W.P.7686 & 7687 of 2008 :: Mr.S.S.Karthikeyan For 1st Respondent in W.P.No.24934/2007 & for petitioners in W.P.7686 & 7687 of 2008 :: Mr.M.Muthupandian COMMON ORDER
These three Writ Petitions challenge a common award passed by the Industrial Tribunal, Chennai in I.D.No.30 of 2000, I.D.No.27 of 2001 and I.D.No.55 of 2001 dated 17.3.2006. All the three disputes relate to the demand of the trade union, namely, Tamil Nadu Kudineer Vadikal Variya Oozhiyar Madhiya Amaippu to the maximum bonus at the rate of 20% in respect of the accounting years 1997-98, 1998-99 and 2000-2001,
2. On the dispute raised by the trade union, the State Government issued G.O.(D) No.86, Labour and Employment Department dated 8.2.2000 referring the dispute relating to payment of bonus at the rate of 20% for the accounting year 1997-98 for adjudication by the Industrial Tribunal.
3. The Industrial Tribunal took up the dispute as I.D.No.30 of 2000 and issued Notice to the parties. Thereafter, for the successive year 1998-99, once again similar dispute was raised and that was referred for adjudication by G.O.(D) No.243, Labour and Employment Department dated 31.3.2001. That dispute was taken on file as I.D.No.27 of 2001. Similarly for the year 2000-2001, the Trade Union demanded interest plus ex-gratia payment at the rate of 20% and that issue was referred for adjudication by G.O.(D) No.1027, Labour and Employment Department dated 26.11.2002. The said dispute was taken on file I.D.No.55 of 2002. The Tribunal consolidated all the three disputes and conducted a joint trial.
4. Before the Tribunal, on behalf of the trade union, S.Chandrasekaran was examined as W.W.1 and on their side, 26 document were filed and marked as Ex.W.1 to Ex.W.26. On the side of the Tamil Nadu Water Supply and Drainage Board (for short 'TWAD Board'), one S.Paranthaman, who was the Office Superintendent was examined. On the side of the TWAD Board, 10 documents were filed and marked as Ex.M.1 to Ex.M.10.
5. A perusal of the impugned award clearly shows that the Tribunal is unfamiliar with the calculation of bonus as per the Payment of Bonus Act, 1965. The Tribunal while awarding 20% bonus in respect of accounting years 1996-97 and 1997-1998, in respect of the accounting years 1998-99 and 2000-2001, it declined to grant any relief. Therefore, as against the Award in I.D.No.30 of 2000, the TWAD Board has filed W.P.No.24934 OF 2007. That Writ Petition was admitted on 23.7.2007. Pending the Writ Petition, this Court granted an interim stay.
6. Aggrieved by the other two awards, namely I.D.No.27 of 2001 and 55 of 2002, the trade union has filed the two Writ Petitions, namely W.P.Nos.7686 and 7687 of 2008. Those two Writ Petitions were admitted on 28.3.2008. Subsequently, they were directed to be posted along with the earlier Writ Petition filed by the TWAD Board. Hence, all the three Writ Petitions were grouped together and a common order is passed.
7. The contention of the TWAD Board was that in all the three accounting years, the Board has paid minimum bonus at the rate of 8.33% as per the provisions of Payment of Bonus Act. But the Tribunal while ordering bonus in respect of the years 1996-1997 and 1997-98 failed to note that there was no allocable surplus payment even in respect of the said years and they passed an erroneous award. The bonus paid to the workmen was as per the directions and circulars issued by the State Government. Therefore, the workmen were not entitled for any bonus other than what has been paid already.
8. In the affidavit filed by the trade union in respect of two industrial disputes, it was contended that the Tribunal erred in denying relief to them without going into the calculation in terms of the II Schedule to the Payment of Bonus Act and not made by the Balance Sheet and Profit and Loss Account produced before the Tribunal. The working sheet produced by the trade union fairly shows that there was availability of surplus as well as allocable surplus and hence it was wrong on the part of the management to deny the bonus.
9. As to whether the provisions of the Payment of Bonus Act are applicable to the TWAD Board is the question, which is no longer res integra. The Supreme Court vide its judgment in Tamil Nadu Water Supply Drainage Board vs. Tamil Nadu Water Supply Engineers' Association and others reported in 1998 Labour Law Notes 941 has held that the Act applies to them and the Board cannot seek for exemption in terms of Section 32(5)(c) of the Payment of Bonus Act. On the other hand, when a dispute is raised in respect of the Payment of Bonus, the bonus will have to be applicable in terms of Section 15 of the Payment of Bonus Act, wherein the calculation has to be made as set out in the Schedule.
10. Since the trade union has demanded maximum bonus, Section 11 of the Payment of Bonus Act provides the method under which it has to be calculated and Section 11 reads as follows:
"11. Payment of maximum bonus: (1) Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent, of such salary or wage.
(2) In computing the allocable surplus under this section, the amount set on or the amount set off under the provisions of section 15 shall be taken into account in accordance with the provisions of that section."
11. Under Section 25 of the Payment of Bonus Act, if any dispute is raised regarding the quantum of bonus under Section 22, the Act makes it very clear that if the accounts of such employer audited by any auditor duly qualified to act as auditor of company, then the accounts cannot be questioned before any forum and it is made clear that the said authority will not permit any trade union or employees to question the correctness of the said account.
12. In the present cases, a perusal of the impugned award does not show that the Tribunal kept in mind the parameters under which the bonus calculation has to be made and the Tribunal has made the easy way by recording that there was a surplus of Rs.20,23,04,927/- in respect of balance brought forward from the balance sheet for the year 1997-1998. Therefore, in the financial year ending 31.3.1998, there was an excess of income over expenditure, which was transferred to the balance sheet, which is more than Rs.20 Crores. Hence, there was was a surplus income and it is available for distribution of bonus.
13. A perusal of the entire award clearly shows that the Tribunal did not keep in mind the procedure to calculate bonus as directed in Section 11 read with Section 15 of the Bonus Act. On the other hand, the Tribunal in paragraph 13 records that as per the document produced by the Trade Union in Ex.W.3, it clearly proves that there was no surplus income for the year 1996-1997 and hence they are not entitled for maximum bonus and the union demand was unjustified in respect of the year 1996-1997. Having so observed in paragraph 13, in paragraph 20 of the impugned award, the Tribunal held that the workers are entitled for 20% bonus for the year 1996-1997 in I.D.NO.30 OF 2000. But, in respect of I.D.No.27 of 2001 and I.D.No.55 of 2002, it held that there was no allocable surplus for grant of maximum pension. Thus, the Labour Court is erred that the findings are contradictory and the calculation has not been made in terms of the Accounts produced by the TWAD Board. If there was no surplus income for the year 1996-1997, it is not clear as to how the Tribunal can record that the balance brought forward from the previous balance sheet will contain the surplus. This Court finds that the calculation of bonus requires certain amount of technical skill and also one must know the auditing procedure.
14. Under Rule 49 of the Industrial Disputes Rules, 1959, the Tribunal has power to appoint an assessor in terms of Section 11 (5) of the Industrial Disputes Act read with Section 11-A(4) of the I.D.Act to get expert opinion on the question of calculation of bonus. Nothing prevented the Tribunal from making such appointment even if the parties have not made any such application. But, in the present case, the Tribunal without reference to the calcultion procedure set out in the Payment of Bonus Act and without reference to the accounting year, granted relief to the workmen in respect of I.D.No.30 of 2000 for the years 1996-1997 and 1997-98. This finding is not supported by the previous discussion in paragraphs 13 to 15 of the award.
15. Under the circumstances, this Court is obliged to interfere with the award in I.D.No.30 OF 2000. Though Mr.M.Muthupandian, learned counsel for the trade union states that allocable surplus was found for the year 1997-1998 and the relief should have been granted in respect of I.D.No.27 of 2001, nothing prevented the trade union from making an application before the Tribunal for making a correction if it is only a mistake that has crept in. The Tribunal has power under Rule 55 of the Tamil Nadu Industrial Disputes Rules.
16. Likewise, the discussion in the award with reference to I.D.No.27 of 2001 and I.D.No.55 of 2002 is casual and there is no discussion with reference to the calculation made in respect of the accounting years.
17. In the light of the above, all the three Writ Petitions stand allowed and the common impugned award dated 17.3.2006 stands set aside and the three Industrial Disputes are remitted back for fresh disposal by the Industrial Tribunal, Chennai. The Tribunal, if it is unfamiliar with the accounting procedure and the calculation to be made in respect of Payment of Bonus Act, more particularly under Section 11 read with Section 15 of the Act, it can also appoint an Assessor, if it so desires. No costs. The connected Miscellaneous Petition is closed.
14.02.2012 Index:Yes Internet:Yes ajr (Note to the Registry:
Registry is directed to return the original records to the Labour Court within a week) To
1. The Presiding Officer Industrial Tribunal High Court campus Chennai 104
2. The Nirvaga Izhakkunar Tamil Nadu Kudineer Vadigal Variyam 31, Kamarajar Salai Chennai 5 K.CHANDRU,J ajr W.P.Nos.24934 of 2007 and W. P. Nos.7686 and 7687 of 2008 14.02.2012