Delhi High Court
T. & R. Industries vs Central Board Of Trustees on 11 December, 1987
Equivalent citations: 34(1988)DLT266
JUDGMENT P.K. Bahri, J.
(1) In this writ petition the challenge has been made to an order dated October 12, 1983 of Shri K.L. Sehgal, Regional Provident Fund Commissioner, Delhi, by which he had given the finding that certain amounts paid to the workers of the petitioner under the so-called "production incentive scheme" are covered by the definition, of wages given in the Act and the petitioner was liable to pay his contribution regarding provident fund in accordance with the provisions of Employees Provident Funds and Miscellaneous Provisions Act, 1952.
(2) The case of the petitioner, in brief, is that he had introduced the grant of bonus as an incentive for more production and this payment of bonus to the workers being not covered by the difinition of wages given in Section 2(b) of the Act the authorities under the Act had no power to call for contribution of the provident fond from the petitioner in respect of the said amounts paid as bonus to the workers. In the counter filed by the respondent it has been pleaded that whether particular amount is paid as bonus or wages is a question of fact and in writ jurisdiction such a question cannot be gone into. It was also pleaded that payments which have been proved by the petitioner to have been made to the workers are not shown to have been made in accordance with the scheme. It was also mentioned that where some norms have been fixed i.e. minimum production which must be given by a particular worker, the payment of amount in respect of such norm is 'basic wage' and thus provident fund contributions have to be made by the employer in respect of such wages. It is not disputed before me by the learned counsel for the respondent even that the bonus is not covered by the definition of 'basic wages' given in Section 2(b) of the said Act. He also concedes that even any payment as overtime is also not covered by the difinition of 'basic wages'. The point is well settled by the authoritative pronouncement of the Supreme Court in M/s. Bridge and Roofs Co. Ltd. v. Union of India & Others, . It has has been held that the bonus of all kinds including the production bonus stand excluded under Section 2(b)(ii) of the Employees' provident Hands & Misc. Provisions Act, 1952. In the impugned order itself it is mentioned that the petitioner had filed a copy of the scheme in which it was mentioned that if the worker was to give production over and above the standard fixed, which is also laid down in the scheme, the worker is to be paid certain amount as per piece of additional production. So, it is contended by the petitioner that this scheme involves payment of bonus for incentive for more production and hence is not part of the 'basic wages'. In the impugned order it was recorded that the petitioner had furnished certain details showing the payments made to the workers for the relevant period. He also made reference to the report of Shri Megha Ram, Provident Fund Inspector, wherein the Inspector reported that the payment is not made in accordance with the scheme. It was mentioned in the impugned order that the Provident Fund Inspector in his report submitted that the payment to the workers on account of so-called 'prod action bonus' is made on the basis of extra work done by the individual and so it should form part of the wages Obviously this opinion of the Provident Fund Inspector is not in consonance with the law. If the employer has decided to give extra payment to a worker who exceeds certain standards of production, the same is to be treated as a bonus for extra production. Hence, it cannot be part of the 'basic wages'. In the impugned order respondent No. 1 has mentioned that peculiar feature of the production bonus is that it has got two basis, namely, (i) the quota and (ii) the norm, the quota 268 being much lower than the norm and that the workmen are expected to give the norm as the minimum productions and if there is any deliberate deviation the worker can be charge-sheeted for misconduct. Does the respondent No. 1 mean to say that the standards fixed for production of a particular number of pieces per day have been fixed at a low figure than the norm? I do not see how any such finding could be arrived at by respondent No. 1 ? No employer would fix the production level at a low figure so that the workers could achieve that figure easily and in a much shorter period of working hours. The order of the respondent No. I does appear to be legally sound inasmuch as he has not given any reasons for treating the payments made to the workers over and above the normal wages as not falling under the category of 'bonus'.
(3) Counsel for the respondent has argued that the petitioner has been taking contradictory pleas with regard to such payments to I he workers inasmuch as in para 5 of the petition it was pleaded that the workers had given extra production during the normal working hours and they have been made payment as incentive for more production whereas in the additional arguments filed by the petitioner it has been mentioned that the workers had given extra production by working beyond the normal working hours and payment has been given as extra bonus. He has argued that no worker can be asked to work beyond normal working hours unless the worker is paid double the amount of the normal wages. However, he also pointed out to a letter appearing in the original record of respondent No. I issued on behalf of the petitioner wherein it was mentioned that the extra amount has not been paid to each worker calculating his production, rather the amount has been paid by calculating the production level achieved by each department and then amounts have been distributed amongst the employees. I have perused the said letter appearing in the original record. So, it is true that the petitioner has been taking different position in respect of the said payment but the fact remains that the nature of the said payment has to be determined before it could be held that the same is outside the scope of the 'basic wage' as defined in Section 2(b) or whether it falls within that scope. It must be held that if the said payment is to be held to be bonus of any kind then it is not part of the 'basic wage' and if it is to be held that the said amount has been paid for over-time work, even then the same would not be part of the 'basic wage'. At any rate, even counsel for the respondent does not support the impugned order because it does not give any clearcut finding as to the nature of the amount paid to the workers by the. petitioner. So, the only safe course would be to set aside this order and remand the case back to the respondent for re-determining the nature of the payment made to the workers by the petitioner. If on evidence to be led before the respondent it comes to the conclusion that the payment so made is covered by the word 'bonus' or the payment has been made as compensation for over-time work, then the finding must be returned that it is not part of the 'basic wage' as defined in Section 2(b).
(4) I allow the writ petition and make the rule absolute and set aside the impugned order and remand the case back to the respondent for redetermining the point in issue in the light of the observations made by me above after affording an opportunity for leading more evidence and advancing arguments by the parties concerned. The subsequent order made by respondent No. 1 on November 25,1986, during the pendency of this writ petition also automatically becomes infructuous in view of the impugned order being set aside.