Andhra HC (Pre-Telangana)
Klj Plastics Limited, Jedimetla, Ranga ... vs Labour Court-Iii, Hyderabad And Ors. on 31 January, 2002
Equivalent citations: 2002(4)ALD469, 2002(5)ALT135, [2002(95)FLR966], (2002)IIILLJ619AP
ORDER P.S. Narayana, J.
1. Heard Sri S. Ravindranath, the learned Counsel representing the writ petitioner and Sri Hariharan, the learned Counsel representing the second respondent.
2. The writ petition is filed for a writ of certiorari calling for the records in MP No. 5 of 1994 on the file of Labour Court-Ill, Hyderabad, and quash the order dated 23-1-1995 passed therein in respect of the claim of bonus awarded to the second respondent and for other appropriate reliefs.
3. The brief facts of the case, for the purpose of the disposal of the writ petition, in nutshell, are as follows:
"The second respondent was the erstwhile workman of the petitioner company employed as a supervisor and was dismissed from service for proved misconduct of riotous and disorderly behaviour of assaulting and gheroing 4 Managers of the petitioner company by virtue of an order of dismissal dated 2-4-1993. The second respondent workman had filed a petition under Section 33(c) (2) of the Industrial Disputes Act, 1947, before the first respondent claiming certain monetary benefits. It is also stated that the second respondent also filed an application under Section 2(A)(2) of the Industrial Disputes Act, 1947 impugning the dismissal order dated 2-4-1993 and the same was numbered as ID No. 144/94 pending disposal on the file of the Labour Court-Ill. Hyderabad. While disposing of MP No. 5 of 1994, vide the impugned order dated 23-1-1995, the Labour Court-Ill, Hyderabad, dismissed the claim of the 2nd respondent in respect of back wages, arrears etc., but had granted the relief in respect of bonus payable and subsistence allowances payable. It was specifically averred that it is an established fact and as can be borne from the record that the second respondent has been dismissed from service for the charge of misconduct being riotous disorderly and violent behaviour i.e., gheroing and manhandling of four managers of the petitioner company and thus by virtue of Section 9 of the Payment of bonus Act, 1965, hereinafter referred to as 'Act' in short for the purpose of convenient, was disentitled from claiming bonus under the aforesaid Act. The first respondent had examined MW1 and also MW.1 and MW2 and had also marked Ex.W1 to Ex.W5 and Ex.M1 to Ex.M 18 and had ultimately allowed MP No. 594 in part ordering payment of subsistence allowance, leave wages and bonus and the respondents in MP No. 5 of 1994, the Management aggrieved by the same, had preferred the present writ petition."
4. Sri S. Ravindranath, the learned Counsel representing the writ petitioner had submitted that the impugned order of the first respondent, so far as it relates to the direction for payment of bonus is concerned, alone is being questioned by the writ petitioner. The learned Counsel, while making elaborate submissions, had drawn my attention to the scheme of the Act and also different provisions of the Act and had contended that in the case of such a proved misconduct, which is not in dispute at all, Section 9(b) of the Act operates as a bar for the claim of bonus by the workman. The learned Counsel incidentally also had drawn my attention to Sections 8 and 18 of the Act and had contended that if the provisions of Section 9 of the Act are carefully read along with Section 18 of the Act, it is clear that the clear bar imposed under Section 9 of the Act is applicable to the payment of bonus not only for the subsequent period after the order of termination, but also for the prior period. The learned Counsel also had submitted that Section 9 of the Act is a provision dealing with disqualification for bonus and the same cannot be treated on par with the wages. The leaned Counsel further contended that in the light of the specific provisions of the Act and the scheme of the Act, the provisions as such are to be interpreted. The learned Counsel also had placed reliance on Pandian Roadways Corporation Limited Madurai-16 v. The Presiding Officer, Principal Labour Court, Madurai and Anr., (1996) 2 LLJ, 606, and Management of Bharat Motors and N.R. Private Limited v. Presiding Officer, labour Court, Tirunelveli and Ors. (1998) 1 LLJ 907, in this regard.
5. Sri Hariharan, the learned Counsel representing the second respondent, had contended that the term or expression of the bonus are not defined in the Act, but in the light of the certain judicial pronouncements 'Bonus' may have to be treated as a deferred wage and hence, it will be un-reasonable and unjustified in giving a strict interpretation to Section 9 of the Act. The learned Counsel also had drawn my attention to Section 18 of the Act in this regard. The learned Counsel also contended that it is not the case of the management that because of the behaviour of the second respondent, any loss has been occasioned as such and in such a case, it will be unjust to deny the second respondent workman the payment of bonus for the prior period of order of termination. The learned Counsel also had placed reliance on Himalaya Drug Co. Makali v. II Additional Labour Court, Bangalore, (1986) 2 LLJ, 45, Sriram Bearings Limited v. The Presiding Officer, Labour Court, Ranchi and Ors., (1986)2 LLJ 459, and also Ida Narasimha Rao v. Akula Mahalakshmayya, (1970) 1 LLJ 697.
6. Heard both the Counsel. The question involved in the present writ petition, in short and simple, is "whether the second respondent is entitled to the payment of any bonus at all in the light of the disqualification for bonus imposed under Section 9 of the Act". It may be relevant to examine certain provisions of the Act for the purpose of disposing of the present writ petition. 'The Payment of Bonus Act, 1965', referred to as 'Act', is an Act to provide for the payment of bonus to persons in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith. Section 2 of the said Act deals with 'definitions' and however, the term or expression. 'Bonus' is not defined under the Act. Section 2(22) of the Act says 'words and expressions used but not defined in this Act and defined in the Industrial Disputes Act, 1947 (14 of 1947), shall have the meanings respectively assigned to them in that Act'. It is needless to point out that the ID Act also does not define the expression 'Bonus'. In Kohinoor Tobacco Products (Private) v. Labour Court, (1986) 2 LLN, 490 (Bom) (FB), it was held that the Act is a complete code in respect of right to bonus but is not so in respect of remedies. Section 9 of the Act dealing with 'disqualification for bonus' reads as follows:
"Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for--
(a) fraud; or
(b) riotous or violent behaviour while on the premises of the establishment; or
(c) theft, misappropriation or sabotage of any property of the establishment.
Clause (b) of Section 9 deals with the disqualification, if a workman is dismissed from service for riotous or violent behaviour while on the premises of the establishment. Section 18 of the Act deals with 'deduction of certain amounts from bonus payable under the Act' and the provision reads as follows:
"Wherein any accounting year, an employee is found guilty of misconduct causing financial loss to the employer, then, it shall be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Act in respect of that accounting year only and the employee shall be entitled to receive the balance, if any."
Section 8 of the Act deals with 'eligibility for bonus'. In Itta Narasimha Rao's case (supra) it was held that the bonus declared under the Act being the result of a statute acquires permanence and periodicity and is a part of wages within the meaning of the Code of Civil Procedure and the bonus payable for an employee under the Act is "wages" under Section 60(1) (h) of the Code of Civil Procedure and is not liable for attachment. In Himalaya Drug Company., Makali's case (supra) it was held that right of employer to forfeit bonus has to be confined only to accounting year in which act of misconduct was committed and not earlier or succeeding accounting years. In M/s. Sriram Bearings Limited's case (supra) it was held that the provisions of Section 9 of the Act cannot be given a restricted meaning and the words "an employee shall be disqualified from receiving bonus under the Act" cannot be read so as to mean that the employee shall be disqualified from receiving the bonus of the accounting year only in which he is dismissed because such disqualification is dependent only upon the order of dismissal from service and no such restriction in Section 9 of the Act has been put by the Legislature and the words "employee shall be disqualified from receiving bonus under this Act" are wide in its import and must be construed as receiving any bonus under this Act. In Management of Bharat Motors N.R.Pvt. Limited's case (supra) it was held that if the workman is dismissed from service for riotous or violent behaviour while on the premises of the establishment as per Section 9 of the Act, he is not entitled to bonus. In Pandian Roadways Corporation Limited Madurai-16's case (supra) at page No. 6t 1, the Division Bench of Madras High Court while dealing with Sections 9 and 18 of the Act had explained the position as follows:
"An analysis of these two sections viz., Sections 9 and 18 of the Act, would reveal the differing scopes of each section as follows:
(a) Section 9 contains a total disqualification for bonus whereas Section 18 enables the employer to deduct the amount of loss from the amount of bonus payable.
(b) Section 9 can be invoked only if an employee is dismissed on the grounds specified therein, whereas, Section 18 deals with an employee found guilty of misconduct causing financial loss to the employer and the penalty can be any penalty short of dismissal.
(c) Section 9 specifies the misconduct whereas Section 18 does not specify the misconduct but at the same time the misconduct must result in causing financial loss to the employer.
(d) Section 9 does not limit the disqualification to the accounting year but Section 18 does.
(e) Section 9 opens with non obstante clause "notwithstanding anything contained in this Act." Thereby, it has overriding effect on all the provisions of the Act including Section 18. Whereas, it is not so in the case of Section 18."
The view expressed in Itta Narasimha Rao's case (supra) is, the aspect of bonus in relation to the provisions of the Code of Civil Procedure i.e., the liability of attachment under Section 60 of the Code of Civil Procedure. No doubt, learned Counsel for the second respondent made a serious attempt to convince the Court that even as per the language of the Section 18 of the Act, since there is no misconduct causing financial loss to the employer as such, the impugned order is just and legal and hence, the said order need not be interfered with under Article 226 of the Constitution of India. The learned Counsel representing the writ petitioner had seriously contended that if such interpretation is given, it will be opposed to the very object and spirit of the Act and in fact, will promote industrial unrest by giving a gift to such workmen who will be involving in such activities. Hence, the provision of the Act are to be interpreted in letter and spirit, as they are available on the statute book and not otherwise. After thoroughly going through the different provisions of the Act and also taking into consideration the scheme and the object of the Act also, in my considered opinion, the bar of disqualification for bonus imposed under Section 9 of the Act is a clear and unequivocal bar and if the wording of the provisions also is carefully gone through, a distinction cannot be drawn between the bonus payable subsequent to the order of termination or prior to the order of termination and the bar is applicable to the bonus as such payable under the Act. Hence, I have no hesitation in holding that the impugned order of the first respondent, so far as it relates to the awarding of bonus is concerned, is illegal and unsustainable in law. Hence, for the foregoing reasons, the writ petitioner is bound to succeed, so far as it relates to the issue of bonus is concerned. No other points had been urged by the Counsel on record.
7. In the light of the foregoing discussion, the writ petition is allowed. No order as to costs.