Kerala High Court
K.S. Balan And Ors. vs State Of Kerala And Anr. on 12 October, 1987
Equivalent citations: (1988)IILLJ111KER
JUDGMENT K. Sreedharan, J.
1. Petitioners, three in number, are the employees of the second respondent company, the Travancore Titanium Products Ltd. They are persons drawing higher salary than the maximum prescribed under the Payment of Bonus Act, 1965, disentitling them from claiming bonus. The learned Counsel appearing for the petitioners submits that the petitioners are not employees coming within the definition of that term under the Payment of Bonus Act. They were being paid ex-gratia and goodwill payments at different percentages of the total emoluments on the basis of resolutions passed by the Board of Directors of the company. During 1979, they received 12½ per cent, of the total emoluments as ex-gratia payments. By exhibit P-3 dated 7th January, 1981, the Government informed the Managing Director of the second respondent company that the payments of 12V2 per cent of the total emoluments which is termed as ex-gratia or goodwill, is clearly an attempt on the part of the company to get around the restrictions imposed by the Bonus Act. Therefore, the company was requested to recover the payments already made. In pursuance of that direction, the company rescinded its old resolution and resolved to recover the amounts paid to-officers who were drawing a monthly salary of more than Rs. 1,600. Petitioners challenge exhibit P-3 direction of the Government and P-4 decision of the company.
2. A detailed counter-affidavit has been filed on behalf of the State. It is averred therein that in the case of officers whose pay exceeded Rs. 1,600 per mensem, the question of extending payment of ex-gratia was usually placed before the Board and on approval, the payment was effected, that the said payment effected in 1979 was examined by Government, that it was decided not to give such payments as ex-gratia, or goodwill allowance or any other payment by whatever name it is called to officers drawing more than Rs. 1,600, that a circular was issued to all public sector undertakings prohibiting such payments, that in pursuance of the circular the Board of Directors reviewed the entire matter, that the Board took a decision to stop the payment and recover the amounts already paid and that the petitioners have no right to retain the amount received by them which they were not legally entitled to. Accordingly, it was averred that the petitioners cannot challenge the order directing the recovery of the amounts.
3. The second respondent has filed a separate counter-affidavit contending that officers drawing a monthly salary of Rs. 1,600 and above are not entitled to bonus as a matter of right, that the payment has never been a customary payment at all and that the decision taken by the Board to pay 12½ per cent of the salary as a special case had been reviewed in the light of the Government circulars and that the petitioners are to refund the amount illegally collected by them.
4. Learned Counsel appearing for the petitioners rightly and fairly conceded the position that the petitioners are not entitled to any bonus, customary or contractual. Nor are the petitioners entitled to bonus under the Bonus Act. In paragraph 4 of the original petition, what is stated by the petitioners is "In relation to the officers who do not come within the definition of workmen under the Industrial Disputes Act, ex-gratia and goodwill payments at different percentages of total emoluments were made on the basis of resolutions of the Board of Directors of the company as approved by the Government ever since 1970. Simultaneous with the agreements with the workmen relating to the amendments of the conditions of service, separate provisions were being made for payment of ex-gratia payment to the officers of the company. Such payments were sanctioned by resolutions of the Board of Directors in the years 1978-79, 1979-80, 1980-81, etc." From this, it is clear that the petitioners were being given ex-gratia or goodwill payments. It was at different percentages of the total emoluments in different years. This means that no set pattern was in existence regarding the ex-gratia or goodwill payments over the years during which they were paid. The petitioners have no case that the claim was linked with profit or production or connected with any festival or celebration. Their case is that the payments made to them have become traditional and customary or at any rate it had become an implied condition of service. On this basis they challenge the order directing the recovery of the amount. In Churakulam Tea Estate (Private) Ltd. v. Its Workmen 1969 II LLJ 407, after referring to all previous decisions on the point, their Lordships stated (at 414) that no inference could be drawn for payment of bonus as an implied condition of service when the payment was not uniform and was not connected with any festival. It is thus impossible to find an implied condition of service where payment has not been uniform in the past. The claim of the petitioners cannot be sustained even as customary or traditional bonus, because apart from the fact that it is not connected with any festival, one of the essential ingredients, viz., that the payment should have been at a uniform rate throughout is admittedly lacking in this case. Thus, the payment made ex-gratia cannot be supported.
5. The Government examined the legality of the payments made by the company in pursuance to the decision taken by the Board of Directors. When it was found that those decisions were against the principles underlying the Payment of Bonus Act, they gave direction to desist from the said practice. On account of that direction, the Board of Directors reviewed their earlier decision and decided to stop the payment and to recover the amount wrongfully paid. I do not find any ground to interfere with the said order.
6. The second respondent is a limited company coming within the purview of the Indian Companies Act. It is wholly controlled by the Government. Therefore, it is an 'other authority' under Article 12 of the Constitution. If that authority acts in violation of the fundamental rights of the petitioners, then those actions can be challenged before this Court under Article 226 of the Constitution. Petitioners have no case that the second respondent violated or interfered with any of their fundamental rights guaranteed under Part III of the Constitution. Exhibits P-3 and P-4 orders challenged in this case do not in any way interfere with any of the fundamental rights of the petitioners. Therefore, the approach made to this Court challenging exhibits P-3 and P-4 is ill-conceived. The petitioners are not entitled to any relief in this proceeding under Article 226 of the Constitution.
7. The original petition fails. It is accordingly dismissed. No costs.