Maharashtra Sugar Mills Ltd. vs Ashru Jaiwant Tribhuvan

Patel, J.—The first contention that is raised by Sri Pandya is that the learned Commissioner was in error when he included bonus in the wages while calculating the amount of compensation to be paid to the workmen. He relies upon Seodutt Singh v. Ali Mahammad 1947 Bom. L.R. 791 in support of his contention. In this case the learned Judge held that as bonus is not deferred wages and is a cash payment in addition to wages as ruled by our Supreme Court, it is not a part of the wage at all. He referred to the observations of the Supreme Court in Muir Mills Co. Ltd. Vs. Suti Mills Mazdoor Union, Kanpur, and The Sree Meenakshi Mills, Ltd. Vs. Their Workmen, to which we will presently refer. It is sufficient at this stage to say that in these two cases the claim for bonus was made under the Industrial Disputes Act, 1947, which by its very definition in S. 2 excludes bonus from the definition of wages.

The question as to whether bonus should be included in the wages for this purpose depends essentially upon the definitions given in the Workmen''s Compensation Act itself. Section 4 provides the manner of determining compensation payable to workmen in the stated cases. Clause (a) deals with compensation payable in case of death and is fixed on the basis of monthly wages earned by a workman. Clause (b) relates to permanent total disablement by reason of the injury, and this also is based on the monthly wages and is to be determined in accordance with the schedule given in the Act. Clause (c) deals with permanent partial disablement and prescribes a certain percentage in case of certain specified injuries mentioned in the schedule, as being the percentage of the loss of earning capacity caused by the disablement. The second part of that clause relates to injuries not specified in Sch. I and again refers to the loss of earning capacity permanently caused by the injury. It is no doubt true that monthly wages have been referred to in Cls. (a) and (b), but there is no doubt that what was intended to be laid down was the fixing of compensation on the basis of the earning or the loss of the earning capacity of the workman. It seems that this was the reason why the word "wages" has been defined in the manner in which it has been done by S. 2, Clause (m). It says :

"wages" includes any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concession or a contribution paid by the employer of a workman towards any pension or provident fund or a sum paid to a workman to cover any special expenses entitled on him by the nature of his employment."

The first thing that must be noticed in connexion with this definition is that it does not actually purport to limit the meaning of the word "wages." It merely seeks to include what ordinarily may not be included in the concept of wages and leaves the meaning at large. What is included, however, gives a clue to what was actually intended to be conveyed by the word "wages." It is true that, in its ordinary significance, the word "bonus" would merely mean a gratuitous payment made by the employer to his employee as a matter of pleasure. And, if that were so, it is possible to argue that the bonus that is paid to an employee by his employer ought to be included in wages.

In industrial employment, however, bonus can no longer be regarded as merely a gratuitous payment by the employer. In this connexion, we may refer to the decision of the Supreme Court in the case of The Sree Meenakshi Mills, Ltd. Vs. Their Workmen, where the nature of bonus is considered by the Supreme Court. Sri Justice Gajendragadkar speaking for the Court says (p. 242) :

"The true nature and character of the workmen''s claim for bonus against their employer is now well-settled. Bonus is not, as its etymological meaning would suggest, a mere matter of bounty gratuitously made by the employer to his employees; nor is it a matter of deferred wages ... the term ''bonus'' is applied to a cash payment made in addition to wages. It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained."

The Court then lays down certain formulae for calculation of bonus payable by the employers. The observations in this case would suggest that the claim for bonus is a matter of right of the workman and it is not dependent upon the willingness or otherwise of the employer to pay the same. If it is a matter of right, then we do not see why it is not a "benefit" within Clause (m) of S. 2 of the Workmen''s Compensation Act. While Construing these words, we must bear the purpose for enacting this provision in mind. Evidently, it was intended as a provision for workmen who suffered employment injuries and who would be rendered without any means of sustenance if they could not make the same earnings as before or fell completely out of employment. Even if it was a matter of some doubt, we would have been bound to construe the words liberally in order to advance the purpose of the Act. The word "benefit" must be construed to mean all such benefits as a workman is entitled to have as of right.

That "bonus" can be included in wages is clearly demonstrated by the definition of "wages" in Clause (rr) of S. 2, of the Industrial Disputes Act, 1947. It defines "wages" to mean all remuneration capable of being expressed in terms of money ... and includes ... but does not include

(a) any bonus,

(b) any contribution paid or payable by the employer to any pension or provident fund ...

(c) any gratuity payable on the termination of his service.

In the scheme of that Act, the last three could not be included within the meaning of "wages". It only illustrates that the word "wages" can have a very wide significance and can include bonus.

Sri Pandya relied particularly on the observations in The Sree Meenakshi Mills, Ltd. Vs. Their Workmen, to the effect that "bonus" represents the cash incentive conditional on certain standards of attendance and efficiency being attained. Sri Pandya argued that after all it is a contingent payment and, therefore, never a certainty and, cannot, therefore, be regarded as a benefit available to the employee. He also contended that the payment of bonus must depend upon the profits made by the employer, and it is possible that when in a given year no profit is made there would be no bonus. It is said, therefore, that even if it can be regarded as "benefit," it yet cannot be said that it is capable of being estimated in money.

In this connexion, we must observe that bonus is paid in most cases today on the collective efficiency of the employee as a whole, and it is not dependent upon the efficiency of any individual employee. Even apart from this, merely because to some extent it may depend upon the efficiency of a particular employee and may also depend upon the employer making some profit, it is impossible to sustain the contention that it is not a benefit which is capable of being estimated in money. Even the future earnings of an individual are difficult of being estimated exactly, because his being able to work continuously would be a matter of assumption. Section 5 of the Act has provided a mention for the calculation of wages, and the principle would apply to the earning of bonus. It is well-known that in trades and industries over and above the fixed wages an employee or agent is paid commission on sales and the employer cannot suggest that the commission is not part of the earning of employee or agent.

In this connexion, Sri Nargolkar referred us to a decision in Skailes v. Blue Anchor Line, Ltd. (1911) 1 K.B. 360, where the word "remuneration" used in S. 13 of the Workmen''s Compensation Act, 1906, came to be construed. While answering the contention similar to the present on behalf of the employee in that case, Cozens-Hardy, M.R., said (p. 364) :

"... I am unable to follow this. Nothing is more common than that remuneration should vary according as the gross takings or the net profits of a business do or do not exceed a certain figure."

Lord Justice Farewell observed (p. 375) :

"... agreed additional remuneration contingent on a quick passage, or on a dividend exceeding 5 per cent, would clearly fall within the word ''remuneration'' in the Act, although the quickness or the increased dividend depend on luck and were independent of the employee''s own conduct,"

Sri Pandya relied on a decision of this Court in Godavari Sugar Mills, Ltd. v. Shakuntala 1947 Bom. L.R. 791 where he says the Court held that bonus would not be included within "wages". The question that fell for consideration in that case was whether dearness allowance formed part of wages for the purpose of computing compensation. The Court observed (p. 792) :

"... But, in out opinion, the dearness allowance must clearly be included. It is in no sense a bonus, but it is something which attaches continuously to the wages in order to enhance it, so as to be on a more comparative basis with the cost of living."

The case was decided in 1947, and it is hardly likely that the word "bonus" has been used by the learned Judges in the technical sense which it has now acquired. In any event, that question was not before the learned Judges, and, therefore, it cannot be treated as a decision on the point. On the other hand, in the decisions in Jivan Lal Kandas Vs. Ramtuji Bhaiji and Another, , Chitru Tanti Vs. Tata Iron and Steel Co. Ltd., , the learned Judges have taken the view that bonus paid to an employee must be regarded as wages. It is true that in both these cases there was an agreement to pay bonus, but inasmuch as the bonus is payable whether or not there is an agreement, its existence would not make any difference in principle.

It was also argued that when the Act of 1923 was framed, it is hardly likely - having regard to the nature of the then concept of bonus - to include bonus within the word "wages" and the Court should not now construe the word in such a way as to include bonus. In the first place, even assuming that the concept of bonus was what Sri Pandya contends it was under the old civil law, we are bound to give a reasonable meaning to the words used in the statute and include within wages every benefit which is available to the workman, to which he is entitled as a matter of right, by reason of his employment. Having regard to the decision of the Supreme Court we cannot but say that bonus must from part of the wages as defined by the Act. We are also not impressed by the argument that if we include bonus in the wages payable to the workman, it may be that some workmen may fall outside the category of workmen entitled to compensation in the case of accidents and deaths, because the remuneration would be more than the defined limits. Some inconvenience that may be caused in a rare set of circumstances cannot deter us from giving the section its proper meaning and the only meaning which is capable of being attached to it. In our view, therefore, the learned Commissioner was right in including bonus while computing the compensation payable to the workmen.

The second point arises only in First Appeal No. 297 of 1964. Sri Pandya contended that the Civil Surgeon had certified the disability as 10 per cent and in his evidence in Court he explained to mean 10 per cent, for each limb, which means the disability was 20 per cent, while the learned Commissioner held that the disability was 90 per cent. It is argued that he was not justified in taking this view. It is not necessary to consider this contention in details. In the case of Ahmed Abdul v. H. K. Sehgal AIR 1965 Bom. 33 sitting singly, I had occasion to deal with a similar question. In that case authorities were considered and the following propositions were formulated by me (pp. 33-34) :

"The words ''incapacitates a workman for all work'' in S. 2(1) of the Workmen''s Compensation Act, 1923, do not mean any and every work which he may do but means such work as is reasonably capable of being sold in the market. The words do not mean ''incapacitate to work'' and have no reference to physical disability.

15.. . . The certificate of a medical expert can only say what the injury is, its effect temporary or total on the limb and to an extent the physical incapacity of the man. It is, however, for the Court to find having regard to the evidence before it whether the workman has suffered partial or total disablement. The Court must taken into account the nature of the injury, the nature of the work which the workman was capable of undertaking and its availability to him.

Having regard to the principles involved in the determination of the relevant questions under the Act, we have no doubt that the learned Commissioner was justified in taking into account the nature of the injury suffered by the workman, the nature of the work which he was doing before his injury, and work which he was capable of doing after the injury, and then in determining his disablement at 90 per cent.

In the result, both the appeals fail and are dismissed with costs.