Madras High Court
State Bank Staff Union Madras Circle ... vs Union Of India, Rep. By Its Secretary, ... on 14 August, 2000
Equivalent citations: (2001)ILLJ846MAD
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu, F.M. Ibrahim Kalifulla
ORDER R. Jayasimha Babu, J.
1. Petitioner has questioned the constitutional validity of the Banking Laws Amendment Act, 1984 (Central Act 64 of 1984), by which the State Bank of India Act, 1955, State Bank of India (Subsidiary Banks) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980, were amended.
2. By that amending Act, a new Section 43A comprising of three Sub Sections (1), (2) and (3) was introduced in the State Bank of India Act, 1955. That Section reads as under:
"(1) No Officer, Adviser or other Employee (Other than an employee within the meaning of Clause (13) of Section 2 of the Payment of Bonus Act, I960 (21 of 1965) of the State Bank shall be entitled to be paid any bonus.
(2) No employee of the State Bank, being an employee within the meaning of Clause (13) of Section 2 of the Payment of Bonus Act, 1965 (21 of 1965), shall be entitled to be paid any bonus except in accordance with the provisions of that Act.
(3) The provisions of this Section shall have effect notwithstanding any judgment, decree or order of any Court, Tribunal or other authority and notwithstanding anything contained in any other provision of this Act or in the Industrial Disputes Act, 1947 (14 of 1947), or any other law for the time being in force or any practice, usage or custom or any contract agreement, settlement, award or other instrument."
3. In the State Bank of India (Subsidiary Banks) Act. 1959, a new Section 50A with the marginal heading :Bonus: was introduced in identical language. Similar provisions numbered as Section 12A were introduced in the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980.
4. The Statement of Objects and Reasons, which accompanied the Bill which later became the amending Act, reads thus:
"In an award notified on 14.1.1984, the Central Government Industrial Tribunal, Madras held that the employees of the State Bank of India covered by the award should be paid bonus at the rate of one month's substantive pay every half year on the ground that this has all along been the custom and practice. A writ petition filed against this award is pending in the Madras High Court.
2. All public sector banks including the State Bank of India come under the purview of the Payment of Bonus Act, 1965, and the intention is that no bonus other than what is required to be paid under the Payment of Bonus Act, 1965, shall be paid to the employee of the State Bank of India or of any other public sector bank. It is proposed to make express provisions in this behalf in the State Bank of India Act, 1955 and the enactments relating to the other public sector banks.
3. The Bill seeks to achieve the above objects."
5. The State Bank of India is the successor Bank to the Imperial Bank of India. By the State Bank of India Act. 1955 (Act 23 of 1955), the undertaking of the Imperial Bank of India was transferred to the State Bank of India, which was newly constituted under that enactment. Section 7 of that Act dealt with the transfer of service of existing Officers and employees of the Imperial Bank to the State Bank. Sub Section (1) of that Section being relevant, the same is set out:
"7(1) Every Officer or other employee of the Imperial Bank (excepting the Managing Director, the Deputy Managing Director and other Directors) in the employment of the Imperial Bank immediately before the appointed day shall, on and from the appointed day, become an officer or other employee, as the case may be, of the Stale Bank, and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if the undertaking of the Imperial Bank had not vested in the State Bank, and shall continue to do no unless and until his employment in the State Bank is terminated or until his remuneration, terms or conditions are duly altered by the State Bank."
6. By Section 3 of the State Bank of India Act, a Bank to be called the State Bank of India was constituted for the purpose of carrying on the business of banking and other business in accordance with the provisions of the Act, and for the purpose of taking over the undertaking of the Imperial Bank. By Section 43 of that Act, the Bank was empowered to appoint such number of Officers, Advisers and Employees as it considered necessary or desirable for the efficient performance of it's functions, and determine the terms and conditions of their appointment and service.
7. The Imperial Bank of India had, commencing some time in the year 1941, established a practice of paying bonus to it's employees. It appears to have paid bonus at the rate of one month's pay till the year 1944, from which year and till the transfer of it's undertaking to the State Bank of India, it paid bonus at the rate of one month's pay, for each half year. Such payment was continued to be made despite the prohibition contained in Section 10 of the Banking Regulation Act, 1949 against payment of any profit sharing bonus to the employees of the Bank. That prohibition was subsequently removed by an amendment made to that Act in the year 1956. Even after the constitution of the State Bank of India, bonus was paid to the Award staff at the same rate of one month's pay for each half year. The Payment of Bonus Act was enacted in 1965. The Bank continued to pay bonus at the rate of one month's pay for each half year. From 1970 to 1975, in addition to this bonus of two months' substantive pay for each year, additional bonus ranging from seven days' to 32 days' basic pay was also paid.
8. The payment of bonus was discontinued altogether from the second half of the year 1975, after the Payment of Bonus Act was amended by the Payment of Bonus Amendment Ordinance Act was amended by the Payment of Bonus Amendment Ordinance, 1975, by which, the Bank was exempted from the purview of the Payment of Bonus Act, 1965. The aggrieved employees, though their Union filed W.P.No.2491 of 1976 in this Court seeking a writ of mandamus to the State Bank of India to pay bonus to it's employees. Writ petitions were also filed in the Supreme Court in the year 1979 for the same relief. The Apex Court, having felt that it would be more appropriate to have the disputed questions examined by the Industrial Tribunal, the Central Government agreed to refer the dispute to the Industrial Tribunal.
9. On 15.6.1982, the Central Government made a reference under Section 10 of the Industrial Disputes Act to the Central Government Industrial Tribunal at Madras. The following two questions were referred:
(a) Whether the action of the Management of Stale Bank of India in stopping the payment of one month's Basic Wages drawn on 30th June and 31st December respectively by way of Bonus annually with effect from 2nd half of 1975 is justified. If not, to what relief the workmen are entitled (Award Staff)?
(b) Are the members of the Award Staff of State Bank of India entitled to receive Annual Bonus of two months' basic wages (as drawn on 30th June and 31st December respectively) irrespective of the salary, as a customary Bonus. If so, to what relief the workman concerned are entitled?"
10. The Industrial Tribunal made it's award on the 10th of December, 1983, which was notified on 14.1.1984. The Tribunal held that the Award staff, were receiving bonus as a matter of right irrespective of the salary that they were drawing, and that the eligibility criteria for bonus under the Payment of Bonus Act was not applied to the Award staff. It rejected the Bank's contention that what had been paid was only profit sharing bonus, and held that the payment of bonus of two months' basic pay each year was customary bonus and was outside the pale of the Payment of Bonus Act, 1965. The Tribunal then proceeded to make an Award directing the management to continue to pay atleast one month's basic pay as customary bonus, for every half year ended 30th June and 31st December from the second half of 1975 onwards to Award staff; less what had been paid as ex gratia payments.
11. That Award of the Tribunal was challenged by the Management in a writ petition filed in this Court being W.P.No. 1273 of 1984. It was during the pendency of that petition in this Court, that the State Bank of India Act came to be amended by introducing Section 43A in that Act. On 24.11.1986, the writ petition filed by the Bank was dismissed. The matter was not further agitated, and the award attained finality.
12. This writ petition was filed on the 2nd of May, 1986. The writ petition came up for final hearing only twelve years later on 23.7.1998 before a learned single Judge, who, having regard to the fact that the validity of the amending Act has been questioned, thought it appropriate to have the matter placed before a Division Bench.
13. The State Bank of India, we have been informed by it's counsel, employed as on 31.3.2000 1,15,424 persons in the clerical cadre, and 58,535 persons in the subordinate cadre. The basic pay payable as per the Award settlement dated 27.3.2000 to the clerical staff varies from a minimum of Rs.3,020 to the maximum of Rs.8,980. For the subordinate staff, the minimum is Rs.2,750, and the maximum is Rs.5,000. The wage bill per annum taking into account the basic pay alone is about Rs.1200 cores per year for the clerical staff, and Rs.290 cores per year for the subordinate staff. The basic wages of the workmen in these categories increased by 100% from 1984 to 1987. It increased by 100% once again from the wage level of 1987 when wages were revised in 1992. Wages were further revised by about seventy per cent under a subsequent bipartite settlement. If the contention of the workmen that the amendment effected to the State Bank of India Act in the year 1984 is unconstitutional were to upheld. Award of the Industrial Tribunal in I.D.No.32 of 1982 would hold the field and Bank will have to pay about Rs.1510 cores.
14. We have heard Mr.A.L. Somayaji, learned Senior counsel for the petitioner, Mr.V.T. Gopalan, learned Additional Solicitor General for the Union Government, and Mr.R. Krishnamurthy, learned Senior Counsel for the State Bank of India.
15. The principal contention of the petitioner is that the Bank Laws Amendment Act, 1984 is unconstitutional as it merely nullified a judicial decision, which Parliament had no competence to do. The other contentions advanced on behalf of the petitioner were that an Award passed under the Industrial Disputes Act is entitled to greater recognition, as the Industrial Disputes Act is a special law in relation to industrial disputes, and in the event of any conflict between the provisions of the general law viz., the State Bank of India Act and the Industrial Disputes Act, the latter Act must prevail. It is also the contention of the petitioner that the bonus, which the Tribunal had directed the management to pay was in the nature of deferred wages, that impugned legislation had the effect of freezing wages, and that Parliament not being vested with the power to reduce the wages, the legislation is invalid on that account as well. It was further submitted that an Award made under the Industrial Disputes Act can be put an end to only in the manner contemplated under that Act, and that not having been done, the Award continues to bind the parties. It was also contended that Parliament has no right to amend the law so as to deprive the workmen of the right to claim bonus on the basis of custom. The legislation impugned also does not establish an uniform standard, but has adopted a selective method of nullifying benefit given to the employees of the Public Sector Banks. The amendments effected to other enactments, it was submitted, is intended to give an appearance of uniformity when in actual fact the other Public Sector Banks were not of paying customary bonus and are, therefore, wholly unaffected by the amendment effected to the statutes governing them.
16. The thrust of the petitioner's argument is that Parliament had encroached on the judicial power by nullifying the result of an adjudication which had taken place under a special law which had been enacted for the purpose of resolving industrial disputes, and that Parliament has no power to encroach into the judicial domain.
17. Counsel placed strong reliance on the decision of the Supreme Court in the case of Madan Mohan Pathak v. Union of India, 1978 (1) L.L.J. 406, wherein, it was held that a law which merely sought to bring to an end the terms of a settlement which had properly been entered into under the Industrial Disputes Act, ignoring altogether a mandamus which had been issued by the High Court for enforcing the terms of that settlement, was unconstitutional, as by merely ignoring the mandamus, the mandamus did not lose it's efficacy, and a declaration of the rights of one of the parties to the settlement which was contrary to the terms of the settlement did not bind, and was not enforceable as against the workman who had been given the benefits under the settlement. It was also held that the legislation impugned therein was violative of Article 31(2) of the Constitution, as it had the effect of depriving the workmen of a cash bonus under the settlement without any compensation whatsoever. The legislation, which was under challenge, in that case was the Life Insurance Corporation (Modification of Settlement) Act, 1976. The operative Section in that Act had provided that notwithstanding anything contained in the Industrial Disputes Act and the provisions of the settlement in so far as they relate to the payment of an annual cash bonus to every Class III of Class IV employee of the Corporation at the rate of 15% of a normal salary shall not have any force or any effect and shall not be deemed to have been in force or effect on and from 1st April, 1995.
18. The case of L.I.C. of India v. D.J. Bahadur, was also strongly relied upon by counsel for the petitioner. In that case, it was held that a settlement entered into under the provisions of the Industrial Disputes Act remains operative till it is replaced by a fresh settlement, and that the Industrial Disputes Act, in relation to the Life Insurance Corporation Act, is a special law. The Court held that the amendments made to the Staff Regulations by the Life insurance Corporation were made for the purpose of nullifying any further claim to annual cash bonus under a binding settlement entered into under the Industrial Disputes Act, and that such modification by a statutory order under the provisions of the Life Insurance Corporation Act could not bring to an end a settlement validly entered into under the provisions of the Industrial Disputes Act.
19. Counsel also pressed into service the decision of the Constitution Bench of the Supreme Court in the matter of Cauvery Water Disputes Tribunal, 1993 Supp (1) SCC 96 (II), more particularly, the observations at paragraph 76. The Court therein recorded the result of it's examination of the authorities examined by it in the course of that judgment, and held that:
"The principle which emerges from these authorities is that the legislature can change the basis on which a decision is given by the Court and thus change the law in general, which will affect a class of persons and events at large. It cannot, however, set aside an individual decision inter parties and affect their rights and liabilities alone. Such an act on the part of the legislature amounts to exercising the judicial power of the State and to functioning as an appellate Court or Tribunal."
We may also notice the further observations made by the Court in that case at paragraph 79 of the judgment:
"The Ordinance is also against the basic tenets of the rule of law inasmuch as the State of Karnataka by issuing the Ordinance has sought to take law in its own hand and to be above the law. Such an act is an invitation to lawlessness and anarchy, inasmuch as the Ordinance is a manifestation of a desire on the part of me State to be a judge in its own cause and to defy the decisions of the judicial authorities. The action forebodes evil consequences to the federal structure under the Constitution and opens doors for each State to act in the way it desires disregarding not only the rights of the other States, the orders passed by instrumentalities constituted under an Act of Parliament but also the provisions of the Constitution. If the power of a State to issue such an Ordinance is upheld it will lead to the breakdown of the constitutional mechanism and affect the unity and integrity of the nation".
20. Reliance was also placed on the minority judgment of Ramaswamy, J. in the decision of the three Judge Bench in the case of S.S. Bola v. B.D. Sardana, . The majority, however, rejected the arguments that had been advanced on the basis of the Statement of Objects and Reasons that the plain intention in enacting the law under challenge was to declare the decision of the Supreme Court as invalid and as such judicial power had been usurped by the legislature. The Court at paragraph 178 of the judgment observed:
"But it is a cardinal rule of interpretation that Objects and Reasons of a statute is to be looked into as an extrinsic aid to find out legislative intent only when the meaning of the statute by its ordinary language is obscure or ambiguous. But if the words used in a statute are clear and unambiguous then the statute itself declares the intention of the legislature and in such a case, it would not be permissible for a Court to interpret the Statute by examining the Objects and Reasons for the Statute in question."
21. The majority judgment held that the case before it was not a case of legislature by mere declaration, without anything more, overriding a judicial decision but a case of rendering a judicial decision ineffective by enacting a valid law within the legislative field of the legislature. The Court quoted with approval the following passage from the decision of the Apex Court in the case of Indian Aluminium Co. v. State of Kerala, :
"......The smooth balance built with delicacy must always be maintained, and in the anxiety to safeguard judicial power, it is unnecessary to be overzealous and conjure up incursion into the judicial preserve to invalidate the valid law competently made."
22. Mr.V.T. Gopalan, learned Additional Solicitor General appearing for the Union of India, submitted that the power of legislation is plenary and it is open to the law maker to amend or repeal existing legislation so long as it acts within it's field of legislative competence, and that such power extends to taking away vested rights. It was submitted that in matters of economic policy, the State has wide latitude and is to be allowed play at the joints' as emphasised by the Apex Court in more than one decision. It was also his submission that while Parliament may not encroach on the judicial power and may not set aside the judgments of Courts and Tribunals, it can nevertheless act to remove the basis on which the judgment rests, and if it performs that exercise successfully, then no case of conflict between the legislative power and the judicial power would arise.
23. Counsel for the Union of India in this context referred to the decisions of the Supreme Court in the case of I.N. Saksena v. State of M.P., AIR 1976 S.C. 2250, Jilubhai Manbhai Khachar v. State of Gujarat, , and R.K. Garg v. Union of India, AIR 1982 S.C. 2138. The Apex Court in the aforementioned cases held that in matters of economic policy, the State must have a larger area in which to make it's decisions without the supervision of the Court, as the State is the better Judge of what the policy should be in relation to matters economic.
24. Mr.R.Krishnamoorthy, learned senior counsel for the Bank submitted that Parliament's power to legislate in relation to bonus cannot be doubled, and invited reference to the decision of the Apex Court in the case of Jalan Trading Co. v. Mill Mazdoor Sabha, . The Court observed at paragraph 15 of that judgment thus:
" It is true that by the impugned legislation, certain principles declared by this Court e.g. in Express Newspapers Private Ltd. v. Union of India,. in respect of grant of bonus were modified, but on that account it cannot be said that the legislation operates as fraud on the Constitution or is a colourable exercise of legislative power. Parliament has normally power within the frame-work of the Constitution to enact legislation which modifies principles enunciated by this Court as applicable to the determination of any dispute, and by exercising that power, the Parliament doss not perpetrate fraud on the Constitution. An enactment may be charged as colourable, and on that account void, only if it be found that the legislature has by enacting it trespassed upon a field outside its competence."
25. Attention was also invited by counsel to the case of G.C. Kanungo v. State of Orissa, , wherein, the Court reiterated the observations of the Court in the case of K.Nagaraj v. State of Andhra Pradesh, that, "The legislature, as a body, cannot be accused of having passed a law for an extraneous purpose. If no reasons are stated as appear from the provisions enacted by it, its reasons for passing a law are those that are stated in the Objects and Reasons. Even assuming that the executive, in a given case, has an ulterior motive in moving a legislation, that motive cannot render the passing of the law mala fide. This kind of transferred malice is unknown in the field of legislation".
26. Attention was also invited to the case of Indian Aluminium Co. v. State of Kerala, . The Court in that case, after review of the earlier decisions of the Court on the extent of the jurisdiction of legislature vis-a-vis judicial decisions, extracted certain principles which have been set out at paragraph 56 of the judgment. Those principles inter alia, include the principles that the Court in it's anxiety to safeguard judicial power must not be overzealous and conjure up incursion into the judicial preserve invalidating the valid law competently made; the Court should scan the law to find out: (a) whether the vice pointed out by the Court and invalidity suffered by previous law is cured after complying with the legal and constitutional requirements; (b) whether the Legislature has competence to validate the law; (c) whether such validation is consistent with the rights guaranteed in Part III of the Constitution. So far as the legislature is concerned, the legislature cannot by mere declaration without anything more overrule, revise, or override a judicial decision. It may, however, render judicial decision ineffective by enacting valid law on the topic within it's legislative field fundamentally altering or changing its character retrospectively. The changed or altered conditions should be such that the previous decision would not have been rendered by the Court, if those altered or changed conditions had existed at the time of declaring the law as invalid.
27. Counsel also relied on the case of State of Tamil Nadu v. Arooran Sugars Ltd., . At paragraph 16 of the judgment, the scope of non obstante clause in a Validating Act was referred to. The Court after observing that such examination had been done by the Court from time to time, approved the following observations of Hidayatullah, C.J., in the case of Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, :
"A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances."
28. The legislation with which we are concerned in this case has already been set out. The amendment made by the impugned enactment is to the State Bank of India Act and other enactments concerning other public sector Banks. By Section 7(1) of the State Bank of India Act, the Bank was vested with the power to change the conditions of service of those of it's employees, who had earlier served in the Imperial Bank. Those employees cannot assert that they have a vested unalterable right in their terms and conditions of the employment. So far as other employees are concerned, by Section 43 of the Act, the Bank is empowered to determine the terms and conditions of service. The State Bank of India Act, as also the other Acts amended by this amending Act, are not beyond the pale of the legislative power of the Parliament. Parliament has undoubted power to legislate on the topic of bonus and Parliament is not precluded from legislating on that topic in enactments other than the Payment of Bonus Act. The principles, including custom, on basis of which bonus is payable, are capable of being altered by legislation.
29. The award of the Industrial Tribunal dated 10th December, 1983 had upheld the claim made by the employees that they have a customary right to receive bonus at the rate of one month's wages for every half year of service. As the Payment of Bonus Act, 1965 had not abrogated, the right of employees to claim bonus on the basis of custom, that Award which was in accordance with law the then in force, had not been interfered with by this Court. The fact that such an award had been made, however, does not by itself without anything more have the effect of preventing parliament for all time to come from amending the law on basis of which that award was made, subject to the amendment being within the legislative competence of Parliament, and not being inconsistent with the provisions of Part III of the Constitution.
30. The right of the Bank's employees to receive bonus on the basis of custom is a right available to them only so long as past custom affords a legal basis for grant of bonus. The fact that an Award had been made under the Industrial Disputes Act, declaring that right in the employees, does not preclude Parliament from legislating that no bonus on basis of custom shall be payable to the employees of public sector Banks, and that only the bonus payable in accordance with the Payment of Bonus Act shall be payable only to those eligible under that Act. Had the law at the time the award was made, been what it is after the impugned amendment, the Tribunal could not have been made that award.
31. The impugned Act is not one which merely declares that the judicial verdict of the Industrial Tribunal invalid. The Act does not show that Parliament was seeking to exercise appellate powers over the Tribunal or this Court by enacting the amending Act, What this Act does, is to prohibit the grant of bonus to the employees of public sector Banks except in accordance with the Payment of Bonus Act, and to limit that payment only to those eligible under that Act. The law so enacted is to have effect notwithstanding anything contained in any other law including the Industrial Disputes Act, and notwithstanding anything contained in any judgment, decree or order of any Court or Tribunal. The award of the Tribunal has become unenforceable, not because of a fiat of Parliament that it shall not be enforced, but because the law on basis of which the award was made has been altered and the enforcement of the award would be inconsistent with the amended law.
31.A. The power to enact law, which includes the power to amend the laws in force, and to modify or abrogate law based on custom is a plenary power of Parliament within the fields allotted to it under the Constitution, subject to the limitations contained in Part III, and subject to such law being consistent with the basic structure of the Constitution.
32. Courts and Tribunals are not rival centres for enacting legislation. Their primary task is to give effect to the laws in force as Interpreted by the superior Courts in relation to the causes brought before them. It is also the function of the Apex Court, and the High Courts to strike down legislation when it is inconsistent with Part III of the Constitution or the basic structure of the Constitution or is beyond the legislative competence of the concerned legislative body. Legislation which merely invalidates judicial verdicts is beyond the competence of the legislature as the legislature cannot take on the role of the appellate forum and exercise Judicial supervision over the Courts and Tribunals. In the Constitutional Scheme, the exercise of judicial power of the Court is not subject to supervision by the legislature.
33. Though the superior Courts on occasions step in and issue directions in public interest litigation which may appear to amount to law making, such directions do not come in the way of the appropriate legislature enacting a law on that subject. The directions given by the Court are given to fill gaps in existing legislation. Legislation subsequently enacted which is otherwise valid cannot be struck down on the ground that they do not embody, or are inconsistent with the directions given by the Court at a time when there was no enacted law on that topic.
34. Adjudication by Courts and Tribunals result in the recognition of the rights of the parties in accordance with existing law as interpreted by the superior Courts and enables the parties to enforce those rights. Such adjudication cannot and does not freeze the law on basis of which the adjudication was made, and such adjudication by itself does not result in an embargo being placed on the power of the legislature to amend, repeal or validate legislation.
35. It was open to Parliament to legislate on the subject of payment of bonus based on custom, notwithstanding the award that had been made by Tribunal holding that there was a custom in the Bank to pay one month's wages every half year, to all it's employees. Parliament having legislated that bonus to the employee of public sector Banks shall be payable only in accordance with and to those eligible under the Payment of Bonus Act, it is no longer open to the employees to claim bonus on basis of custom. The award directing payment of bonus on that basis cannot be regarded as having resulted in a special law which overrides the law to be enacted by Parliament.
36. The impugned enactment has not interfered with the judicial function and Parliament by enacting that law has not encroached into the judicial domain. It has acted within the field of it's legislative competence.
37. For making a determination on the validity of duly enacted legislation, the intention of the lawmakers is not in any way relevant. Legislation which is otherwise valid cannot be struck down on ground of mala fides or malice in law. The content of the legislation cannot be determined by resorting to the statement of objects and reasons as an aid to construction. Such statements may throw light on the prior state of affairs and the change therein that was sought to be brought about. But nothing said in the statement can constitute the basis for striking down the law, or for giving a meaning to the provisions of the statute which they do not otherwise bear.
38. The fact that in the statement of Objects and Reasons for the Bill the award is mentioned, and the desire to make express the intention of Parliament that bonus should be payable only in accordance with the Bonus Act, is also set out, does not in that score render the law into one which merely declares the award invalid. The provisions of the Act do not support such a construction.
39. The argument that the impugned legislation is invalid on the ground that it has expropriated the wages of the workmen bonus, according to petitioner being deferred wages, is wholly untenable. Bonus, after the enactment of the Payment of Bonus Act is a statutory right. The bonus though calculated on basis of wages, can no longer be termed as a deferred wage, though that description had been given to it by the Courts prior to the enactment of the Bonus Act. While bonus may form part of wages for purpose of some of the other enactments governing employees, the right to receive bonus and the extent is as regulated or permitted under the Bonus Act. The Payment of Bonus Act did not prohibit bonus being paid on basis of custom. However, by the impugned Act, custom as a basis for payment of bonus is no longer permissible so far as employees of public sector Banks are concerned. No question of expropriation arise when the basis on which customary bonus could have been claimed is by a valid law, declared to be no longer affording a legal basis for claiming bonus.
40. The figures furnished at the time of hearing show that the wage levels in the State Bank has increased manifold over the years. Wage scales were doubled over previous levels under several settlements, and further increased by seventy per cent over the previous level by the most recent settlement. The submission made by counsel that by the impugned Act wages have been frozen, has no force. The impugned Act does not deal with any matter other than bonus.
41. The submission that the impugned legislation suffers from the vice of discrimination against employees of State Bank cannot be accepted. The fact that other public Sector Banks did not have the same custom as State Bank had does not by itself establish discrimination. The employees of all public sector Banks form an identifiable class and the impugned law accords equal treatment to all members of that class.
42. It was submitted by counsel that the Industrial Disputes Act is a special law vis-a-vis the State Bank of India Act and, therefore, the award made under the Industrial Disputes Act would prevail even after the enactment of the impugned amending Act. This argument is misconceived. The Industrial Disputes Act is not a Charter under which the Tribunal is entitled to frame a law. Despite the width of the discretion in the Tribunal is prescribing the terms of employment when disputes are brought before it, the Tribunal has no power to make an award contrary to existing applicable legislation. The award made by the Tribunal does not result in a fetter on Parliament's power to legislate with regard to the law on basis of which the award was made.
43. There is no requirement in the Constitution that a topic dealt with in a law made by Parliament should not be dealt with in any other legislation. The fact that the extent of right of employees of public sector Banks to receive bonus was dealt with in the enactment governing those Banks and not in the Payment of Bonus Act has no impact in it's constitutionality or enforceability.
44. The right of public sector Banks to receive bonus is now regulated by the provisions of the Act under which those Banks are constituted, and the provisions of the Payment of Bonus Act, and they constitutes the limit of their right to bonus. There is no scope for claiming bonus de hors these enactments. The impugned Act makes that abundantly clear by declaring that it will have effect notwithstanding anything contained in any other law, and notwithstanding anything contained in any judgment decree, or order of any Court or Tribunal.
45. As the basis on which the Award was made has been altered, and the Award could not have been made had the law been as it now exists, at the time of making the award, the termination of the award in the manner provided in the Industrial Disputes Act is unnecessary. The award has ceased to be effective on and from the date the amending Act came into force. It is admitted that all amounts payable under the award for the prior period has been paid.
46. We cannot also lose sight of the enormous financial impact that the claim now made by the workmen would have on the employer. If bonus were to be held payable as claimed by the workmen, the impact would be of the order of over Rs. 1,500 crores for the period from the date of amending Act till date, and recurring annual liability of Rs.248 crores. We cannot visualise a situation where parliament should for ever be prevented from enacting a legislation, particularly in the field of economic policy and be compelled to allow the statutory bodies created by it to suffer for all time to come a financial burden which may turn out to be a crippling one in the years in which there may not be any profit or there may be inadequacy of profits to sustain such a burden. This is yet another reason which, in our view, is not ungermane while considering the tenability of the challenge mounted by the petitioner against the constitutional validity of the amendment.
47. For the reasons set out in the foregoing paragraphs, we do not see any merit in the writ petition and the same is dismissed. Consequently, all W.M.Ps. If any are pending, dismissed.