Chemical Enterprises Private Ltd. vs K.P. Krishnan

Nainar Sundaram, J.—The Defendant in Suit No. 6825 of 1973 on the file of the Third Judge Court of Small Causes. Madras is the

Petitioner in this revision. The Respondent herein is the Plaintiff in that suit. The Plaintiff laid the suit for the recovery of a sum of Rs. 340 as bonus

due from the Defendant, stating that he was employee under the Defendant during 1972-73 and the Defendant paid one month''s salary as bonus

every year and for 1972-73 also the Defendant paid bonus to other employees and the Plaintiff having resigned from the Defendant only on 30th

August 1973, the Plaintiff is also entitled to the bonus for the year 1972-73. The suit was contested by the Defendant mainly, on the ground that a

either under any contract nor under any law bonus is payable and the claim of the Plaintiff is not sustainable. The trial Court accepted the case of

the Plaintiff and decreed the suit. The Defendant preferred the New Trial Application No. 175 of 1974 to the New Trial Bench of the Small

Causes, Court, Madras and the said Bench confirmed the judgment and decree of the first Court. The present revision is directed against the

judgment and decree of the New Trial Bench of the Small Causes Court, Madras. I find that the Courts below have not a all appreciated the

position in law with reference to payment of bonus. Until the payment of Bonus Act XX of 1965 was enacted there was no obligation on the part

of the employer to pay bonus daring any particular period and an employee cannot as of right make a claim for the payment of bonus. Merely

because the employer voluntarily paid bonus to some of the employees will not entitle any other employee to make a claim for such a bonus. After

the enactment of the payment of Bonus Act, herein after referred to as the Act, the employees of establishments to which the said Act does not

apply cannot claim bonus de hors the Act. The Act was intended to be a comprehensive and exhaustive law dealing with the entire subject of

bonus and the persons to whom it should apply. It will be relevant to consider Section 1(3) of the Act.

Section 1(1). This Act may be called the payment of Bonus Act, 1965.

(2) ...

(3) Save as otherwise provided in this Act, It shall apply to:

(a) Every factory; and

(b) every other establishment in which twenty or more persons are employed on any during an accounting year.

The Exclusions of establishments, where less than 20 persons are employed in Section 1(3) of the Act is not criterion suggesting that the Parliament

has not dealt with the Subject-Matter of bonus comprehensively in the Act. Considering the history of the legislation, the background and the

circumstances in which the Act was enacted. The object of the Act and its scheme it is not possible to accept the contend an that the Act is sot

exhaustive one dealing comprehensively was the subject matter of bonus in all its aspects or that Parliament still left it open to those to whom the

Act does not apply by reason of its Provision either as to exclusion or exemption to make a claim for bonus. Such in the opinion pronounced by

the Supreme Court in S.J.G. Chand v. Secy. M.C.G. and K. Merchants Workers Union (1969) 2 S.C.J. 181.

In the present case, it is not the case of the Plaintiff that has claim for bonus is under the payment of Bonus Act, XX of 1966. A perusal of the

plaint discloses that such was not the case put forth by the Plaintiff. In answer to my question, the learned Counsel appearing for the Respondent-

Plaintiff states that the claim of the Plaintiff is not based on the provisions of the payment of Bonus Act XX of 1965. In the said circumstances it

would be not possible to sustain, the claim of the Plaintiff. May be, the elate foe bonus could be based upon an award, or settlement or agreement.

Such is not the case here.

Even, if we take that the claim of the Plaintiff is based on the provisions of the payment of Bonus Act XX of 1965, the remedy of the Plaintiff

would not lie before the Civil Court. In the present case, the Defendant (employer) disputed his liability to pay bonus. When such a dispute is

raised it becomes an Industrial dispute. Section 22 of the payment of Bonus Act reads as follows:

Section 22. Where any dispute arises between as employer and his employees with respect to the bonus payable under this Act or with respect to

the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute with the meaning of

the industrial Disputes Act, 1947 (XIV of 1947), or if any corresponding law relating to investigation and settlement of industrial disputes in force

in a State and the provisions of that Act, or, as the case may be, such law, shall save as otherwise expressly provided, apply accordingly.

If we consider Section 22, it is obvious that where any dispute arises between an employer and his employees with respect to the bonus payable

under this Act, then such a dispute must be deemed to be an industrial dispute and it has to be dealt with under the industrial law as an industrial

dispute. Only after the industrial dispute results in an award or a settlement or an agreement, the employee can recover all the bonus due from an

employer as par Section 21 of the Payment of Bonus Act.

Considering the import and implications of the law discussed above, the suit of the Plaintiff cannot be held to be competent and his claims cannot

be sustained. The Courts below have omitted to take note of the principle of law applicable to the facts of the case and they have committed an

error in Saw, when they countenanced the suit of the Plaintiff and granted him reliefs. In this view, I am inclined to interfere in revision and hence,

this revision is allowed, the judgments and decrees of the Courts below are set aside and the suit of the Plaintiff will stand dismissed. But, there will

be no order as to costs throughout.