Civil Appeals Nos
56 to 62 of 1957
Appeals by special leave from the judgment and order dated April 28
1954 of the Labour Appellate Tribunal of India Special Bench Banks Bombayin Appeals Nos 122 129 130 142 144 145 152 153 154 155 162 169 217  218 of 1953
N A Palkhiwala J B Dadachanji and section N Andley for the appellants in C
As Nos
56  60 of 1957
M C Setalvad Attorney General for India J B Dadachanji and section N Andley for the appellants in C As
57 58 59  61 of 1957 6 202 M C Setalvad Attorney General for India and Naunit Lal for the appellant Punjab National Bank in C A No 62 of 1957
N V Phadke T section Venkataraman K R Sharma and K R Choudhury for respondent No 1 in C A No  56 of 1957
N C Chatterjee Sadhan Chandra Gupta Janardan Sharma M K Ramamurthi and M R K Pillai for respondents in C As
Nos 57 to 61 of 1957 Represented by All India Bank Employees Association B P Maheshwari for respondent No 3 Association of the Punjab National Bank Employees in C A No 62 of 1957
BP Maheshwari for Surat Bank Employees Union
B C Ghose and I section Sawhney for All India Central Bank Employees  Association
May 12
The Judgment of the Court was delivered by section K DAS J
These are seven appeals on behalf of different Banks working in this country some incorporated in India and some outside India
It is necessary that we should very briefly state the background of the industrial dispute which has given rise to these appeals
It is now well known that there was a sharp rise in the prices of commodities during and after World War No 11
This rise in prices very seriously affected salaried employees belonging to the middle class including such employees in the banking industry
In or about the year 1946 trade unions of bank em ployees presented demands for higher salaries and allowances and better conditions of service
In some cases notices of threatened strike were also served on the employers
The unrest became particularly acute in the provinces of Bombay the United Provinces and Bengal as they were then known
The local Governments of those provinces referred these industrial disputes for adjudication this resulted in some regional awards which came to be known in Bombay as the Divatia Award in the United I Provinces as the B B Singh 203 Award and in Bengal as the Gupta Chakravarty and Sen Awards
Notwithstanding these awards the general unrest amongst Bank employees continued and there was a clamor for control of the banking industry by the Central Government
On April 30 1949 was passed the Industrial Disputes Banking and Insurance Companies Ordinance Ordinance VI of 1949 under the provisions of which all banking companies having branches or other establishments in more than one province came under the jurisdiction of the Central Government for the purposes of the XIV of 1947
By a notification dated June 13 1949 the Central Government constituted an ad hoc Tribunal consisting of Shri K C Sen a retired Judge of the Bombay High Court as Chairman with two other persons as members to adjudicate upon an industrial dispute between several banking companies and their workmen
On the same day the industrial dispute was referred to the Tribunal by a separate order
The dispute covered several items and some more were added from time to time
For the sake of convenience we shall hereafter refer to this Tribunal as the Sen Tribunal and its award as the Sen Award
After a very exhaustive enquiry the Sen Tribunal made its award which was published on August 12 1950
Some of the leading Banks being dissatisfied with the award applied to Supreme Court and obtained special leave to appeal against the said award as it had been specially exempted from the jurisdiction of the Labour Appellate Tribunal constituted under the Industrial Disputes Appellate Tribunal Act 1950 XLVIII of 1950
This Court ultimately held that the award of the Sen Tribunal was void in to for want of jurisdiction but did not go into the merits of the award With regard to any of the matters dealt with therein
The consequence of this decision was that the dispute in the banking industry remained unresolved
Soon after there were some strikes consequent on certain action taken by some of the Banks
The result was that the Central Government had to take steps afresh to settle this long standing dispute
Attempts were at first made through the machinery of 204 conciliation to settle the dispute but these attempts failed
On June 26 1951 was enacted the XL of 1951 which had the effect of temporarily freezing some of the gains of labour under the Sen Award
In July 1951 the Central Government made a fresh reference to an Industrial Tribunal consisting of Shri H V Divatia a retired Judge as
Chairman and two other members but the Chairman and the members resigned within a short time
On January 5 1952 two notifications were made
By one notification a new Tribunal was constituted to be called the All India Industrial Tribunal Bank Disputes
The Chairman of this Tribunal was Shri Panchapagesa Sastry another retired Judge
The other two members were Shri M L Tannan and Shri V L D Souza
Hereafter we shall refer to this Tribunal as the Sastry Tribunal
By another notification of the same date the Central Government referred the matters specified in such
II of the notification which  were the matters in dispute between the employers and workmen of the banking companies specified in sch
1 to the Tribunal for adjudication
We need not set out here the matters specified in sch
11 but shall presently refer to those items only with which we are concerned in these appeals
The Sastry Tribunal made its award which was published on April 20 1953
This award came up for consideration of a Special Bench of the Labour Appellate Tribunal on appeals preferred by the employees of banks all over India and of the Banks themselves
The decision of the Labour Appellate Tribunal was given on April 28 1954
Some of the Banks moved this Court for special leave to appeal from the decision dated April 28 1954 of the Labour Appellate Tribunal and such leave was granted on October 41954
The same order which granted special leave also directed that the appeals be consolidated
These seven appeals on behalf of different Banks against their workmen have been filed in pursuance of the aforesaid leave granted by this Court
In Civil Appeal No 56 of 1957 in which the Imperial Bank now substituted as the State Bank of India is 205 the appellant a preliminary objection has been taken on behalf of the respondent workmen of the Bank to the effect that the appeal is incompetent
We shall presently consider this preliminary objection but before we do so it will be convenient to indicate the principal questions which arise for consideration in these seven appeals
These questions have been formulated under four heads  1 what is the scope of item 5 of schedule II of the notification dated January 5 1952 the item being expressed in the following words  Bonus including the qualifications for eligibility and method of payment  2 does section 10 of the Banking Companies Act 1949 prior to its amendment by Act 95 of 1956 prohibit the grant of bonus to Bank employees 3 whether an industrial tribunal is entitled in law to compel Banks to disclose  secret reserves  and  other necessary provisions made by them for the purpose of adjudication 4 whether the Full Bench formula laid down by the Labour Appellate Tribunal in Mill Owners  Association Bombay vs Rashtriya Mill Mazdoor Sangh Bombay 1 for the payment of bonus to employees in the textile industry is applicable to Banks
Of the aforesaid four questions the first two directly fall for decision in the appeals before us
For reasons which we shall presently give we consider that questions 3 and 4 do not call for any decision at the present stage
We shall now state how the Sastry Tribunal and the Labour Appellate Tribunal dealt with the first two questions
We have stated that item 5 of sch
II of the notification dated January 5 1952 referred to the claim of bonus by Bank employees
We have also quoted earlier the words in which item 5 was expressed
The Banks contended before the Sastry Tribunal that the dispute referred to in item 5 did not contemplate the determination of the quantum of bonus payable by 1 206 any of the Banks for any particular year but the item merely referred to the question of bonus in general with special reference to qualifications for eligibility and method of payment
This contention of the Banks was upheld by the Sastry Tribunal which said  The primary duty is on the Government to be satisfied subjectively whether a reference should be made or not
In the circumstances aforesaid we hesitate to hold that we are concerned with the question of quantum of benefits for particular banks and for particular years in the past in the light of profits of such banks durina those periods
We ruled out a request that evidence should be taken for determination of the question
It may yet be open to the concerned parties where there is a real grievance to approach the Government to get a suitable reference for the future as well as for the account years 1949 1950 and 1951
 What the Sastry Tribunal did was to consider the question whether there could be a bonus scheme for future years and whether it should be made to apply retrospectively to all Banks and for all years and as to the guiding principles for the ascertainment of bonus the Sastry Tribunal suggested certain lines of approach and recommended them for the earnest consideration of both the parties
The Labour Appellate Tribunal however came to a different conclusion with regard to the scope of item 5 and held that it embraced the claims to bonus for the relevant years
Accordingly it said   It follows therefore that the claims to bonus made for the relevent years have not yet been adjudicated upon and that the terms of the reference have not been exhausted
The ad hoe Tribunal to which this reference was made is no longer in existence and some other Tribunal will have to decide what bonus if any is payable by the Banks to its employees for the relevant years
 The correctness of this part of the judgment of the Labour Appellate Tribunal has been seriously contested before us on behalf of the appellants and this is the first question which we have to decide
207 On the second question namely as to the interpretation of section 10 of the Banking Companies Act 1949 prior to its amendment in 1950 there was again a difference between the Sastry Tribunal and the Labour Appellate Tribunal
The Chairman of the Sastry Tribunal was of the view that section 10 of the Banking Companies Act 1949 did not stand in the way of a grant of bonus to Bank employees but the other members of the Sastry Tribunal apparently felt that the matter was not free from doubt and the Tribunal as a whole recommended to Government that the alleged legal difficulty by reason of section 10 of the Banking Companies Act 1949 should be removed by suitable legislation
Perhaps it was as a result of this recommendation that section 10 of the Banking Companies Act 1949 was amended in 1956
The Labour Appellate Tribunal however by a majority of 2 to I came to the conclusion that section 10 was no bar to a claim for bonus by Bank employees
One member of the Appellate Tribunal Shri DE Reuben recorded a note of dissent in which he held that by reason of section 10 of the Banking Companies Act 1949 as it stood at the relevant time the Industrial Courts could not grant bonus to the workmen of a Bank
On behalf of the appellants it has been contended that the view of the majority of the Labour Appellate Tribunal with regard to section 10 of the Banking Companies Act 1949 is not correct
This is the second question for our decision
As we are not deciding the other two questions no useful purpose will be served by setting out the findings of the Tribunals below with regard to them
We now proceed to consider the preliminary objection taken on behalf of the respondent workmen in Civil Appeal No 56 of 1957
Some more facts must be stated with reference to this preliminary objection
After the decision of the Labour Appellate Tribunal and before it could be implemented several Banks appealed to Government to set aside the decision of the Labour Appellate Tribunal as they felt that the total burden imposed by it was entirely beyond their capacity to bear
Therefore the Reserve Bank of India under directions of the Central Government 208 carried out a rapid survey of the possible effect of the decision of the Labour Appellate Tribunal on the working of a few typical banks which were parties to the dispute
On a study of the evidence so collected the Central Government concluded that it was inexpedient on public grounds to give effect to parts of the decision
Consequently the Labour Appellate Tribunal s decision was modified by them by an order dated August 24 1954
This decision was debated in Parliament and ultimately Government announced their decision to appoint a Commission known as Bank Award Commission to help them assess more fully the effect of the award
The Commission submitted its report on July 25 1955 and with regard to the claim for bonus it said  In regard to the claim for bonus no general principles can be invoked and the case of each individual bank would have to be considered on its merits
Since this dispute has not been resolved so far it is likely that it may have to be dealt with in the near future
The claim for bonus is not within the terms of my reference and I do not wish to trespass in the area of this dispute
I am however referring incidentally to this aspect of the matter because the fixation of a wage structure is likely to have an effect on employees  claim for bonus see paragraph 51 at page 34 of the Commission s report
Thereafter the XLI of 1955 was passed to provide for the modification of the decision of the Labour Appellate Tribunal in accordance with the recommendations of the Commission
This Act in so far as it is relevant for our purpose said in section 3 thereof that the decision of the Labour Appellate Tribunal shall have effect as if the modifications recommended in Ch
XI of the report of the Commission dated July 25 1955 had actually been made therein and the appel late decision as so modified shall be the decision of the Appellate Tribunal within the meaning of the Industrial Disputes Appellate Tribunal Act 1950 and the award shall have effect accordingly
It is clear that the Commission did not make any recommendation in 209 respect of the bonus claim and the  does not affect the present appeals that Act merely gave effect to the modifications recommended by the Commission but did not give the decision of the Labour Appellate Tribunal any higher sanctity as a statutory enactment
Now the preliminary objection taken on behalf of the respondent workmen is that the decision of the Labour Appellate Tribunal merely says that the claims to bonus for the relevant years have not been adjudicated and therefore the terms of the reference have not been fully worked out it is contended that this means that some other Tribunal  ill have to decide what bonus if any is payable by the Banks to their employees and no sucr Tribunal having been so long appointed there is at the present stage no enforceable award within the meaning of the  and the appeal accordingly is premature and incompetent
We are unable to accept this contention as correct
On behalf of the appellant Banks it has been submitted that the Labour Appellate Tribunal misconceived the scope of item 5 of sch
11 of the relevant notification and on that misconception it came to the conclusion that the terms of reference had not been exhausted a conclusion the correctness of which the appellants are entitled to challenge by way of appeal or else they will be bound by the decision that the reference is still pending and can be worked out by another Tribunal
This submission we think is correct
In the  an award  means an interim or final determination by an Industrial Tribunal of any industrial dispute or of any question relating thereto
The dispute between the parties in the present case related to bonus on behalf of the banks it was contended a that item 5 of sch
11 did not include claims of bonus for particular years in respect of particular banks but related to a general scheme of bonus including qualifications for eligibility and method of payment and b that even a general scheme cf bonus could not be made by reason of the provisions of section 10 of the Banking 27 210 Companies Act 1949 on behalf of the Bank employees it was contended that a item 5 included claims for bonus for particular years in respect of particular banks and b section 10 of the Banking Companies Act 1949 did not stand in the way of such claims
These rival contentions led to an industrial dispute which the Labour Appellate Tribunal determined by its decision dated April 28 1954
We do not see why that decision is not an award  within the meaning of the 
In our opinion in no sense can the appeals be said to be premature or incompetent
It is worthy of note that these appeals have been filed in pursuance of special leave granted by this Court tinder article 136 of the Constitution
That Article enables this Court to grant in its discretion special leave to appeal from any judgment decree determination sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India
The powers of this Court under the said Article are wide and are subject to such considerations only as this Court has laid down for itself for the exercise of its discretion
The argument before us is not that these appeals do not come within those considerations and special leave should not have been granted but the argument is that they are incompetent for other reasons
Even those reasons we think are not sound
Learned counsel for the respondent workmen has cited before us some decisions one Australian In re the Judiciary Acts etc
1 and another American David Muskrat vs United States 2 in support of his contention
We consider however that the point is so clear and beyond doubt that it is unnecessary to embark on an examination of decisions which relate to entirely different facts
There is in our opinion no substance in the preliminary objection which must be overruled
Now we proceed to consider the true scope of item 5 of sch
11 of the notification dated January 5 1952
Schedule 11 of the notification dated June 13 1949 by which a reference was made to the Sen Tribunal contained an identical item which was item 6
That 1  2   211 item was expressed exactly in the samewords as item 5 of sch
11 of the notification underour consideration
The Sen Tribunal dealt with thescope of that item and said that a large number ofdemands had been made by the unions for bonus for particular years in respect of particular banks
The Sen Tribunal then said  We have been unable to deal with such individual demands except such matters as were pending in the different States at the time of our appointment and have been specifically referred to us under the provisions of section 5 of Ordinance VI of 1949 or Act LIV of 1949
Apart from the great deal of time that we should have to spend on such questions had we to hear and dispose of every application for a particular year in respect of a particular bank we believe that the kind of disputes regarding bonus that have been referred to us are disputes of a general nature eg questions regarding qualifications for eligibility and method of payment 
 Thus it is clear that the Sen Tribunal also understood the item as a reference of a dispute of a general nature which did not include demands for bonus for particular years in respect of particular banks
The Central Government which made the reference to the Sastry Tribunal by the notification dated January 5 1952 had before it the interpretation which the Sen Tribunal had made in respect of the self same item
Having that interpretation before it the Central Government used identical language to express the dispute which it referred to the Sastry Tribunal in item 5 of sch
This in our opinion clearly shows that item 5 of sch
11 of the notification relating to the Sastry Tribunal has the same meaning as item 6 of sch
11 of the notification relating to the Sen Tribunal as interpreted by that Tribunal
The various items in sch
11 of the relevant notification are not items in legislative lists but are items in an administrative order and it would not be right to apply the same canon of interpretation to the items in an administrative order as is applied to items in a legislative list
It is worthy of note that some of the items in 212 the Sen reference were modified when the subsequent reference was made to Sastry Tribunal
Item 38 of the Sen reference read as follows In what manner and to what extent do the decisions of the Tribunal require modification in the case of employees of banks in liquidation or moratorium  This item was dealt with by the Sen Tribunal at pp 157 to 160 of its award and it pointed out certain defects in the wording of the item
When a similar item was referred to the Sastry Tribunal necessary changes were made in the wording of the item to remove the defects pointed out by the Sen Tribunal see item 11 of sch
11 of the notification relating to the Sastry Tribunal
Another example of a similar character is item 5 of sch
11 of the Sen reference an item which related to  other allowances  payable to bank employees including conveyance allowance for clerks for journeys to and from the clearing house
A point taken before the Sen Tribunal was that by conveyance allowance was meant an allowance for journeys to and from the place of work
The Sen Tribunal confined conveyance allowance to expenditure incurred for going out on the Bank s work while the Bank employee was on duty
The scope of the reference was made clearer by changing the phraseology of the item when the subsequent reference to the Sastry Tribunal was made see in this connection the phraseology of item 28 of sch
11 of the notification relating to the Sastry Tribunal
It would thus appear that we have two kinds of examples 1 in some cases the phraseology of the items is changed when the subsequent reference is made taking into consideration the criticisms made by the Seti Tribunal and 2 there are other cases where no change in phraseology is made even though the Sen Tribunal has understood a particular item in a particular sense
Judged in the light of these examples it seen is to us that the true scope of item 5 of ch 11 is what the Sastry Tribunal understood it to be namely whether bonus was payable to Bank employees and if so what were the qualifications for eligibility and method of 213 payment
The reference in item 5 of schedule 11 did not include within itself claims of bonus for particular years in respect of particular banks
The Sastry Tribunal further pointed out that there were specific references with regard to the claims for bonus in respect of some Banks
Those reference did not however come within item 5 of sch
If they did it was completely unnecessary to make separate and specific references with regard to such claims
Item 5 was not the only item which raised a general question
There were many other items of a similar nature such as items 3 6 9 etc
The Labour Appellate Tribunul itself realised the difficulty of deciding under item 5 of sch
11 the particular claims for bonus for particular years
The Sastry Tribunal pointed out that there were 129 banks before it and no evidence was given to substantiate the claims for bonus for particular years in respect of particular banks
The Sastry Tribunal said We cannot assume that for all these 129 banks before us and for all these years there were live disputes about this matter which the Government had considered fit and proper to be referred to us after applying their minds to the problem whether such a reference should be made to an industrial tribunal
There is also this additional circumstance that there had been two special and specific references by the Govern cut in relation to the payment of bonus by the central bank of India the Allahabad Bank and the Unitted commercial Bank for the years 1951 and 1951
Moreover even apart from the general character of the various heads of of disputes in the reference to us individual cases pertaining only to Some banks Wherever the Government wanted to make such a reference have been particularised and set out eg absorption of Bharat Bank employees itein 31 in schedule It of the notification
It may be mentioned that the claim before us in connection with the bonus payable Iv the Imperial Bank of India for the years 1948 lb49 1950 and 1951 would involve a payment of very nearly a crore of rupees over and above the 214 payments already made for these years
It is not possible for us to affirm what the attitude of the Government would have been on the question of referring a dispute of this character to us under section 10 of the 
 Faced with the difficulty referred to by the Sastry Tribunal the Labour Appellate Tribunal also said that it could not deal with individual claims for bonus in the present proceedings
The Labour Appellate Tribunal said that it would be acting in vacuo if it attempted to decide individual claims for bonus without having before it specific cases of bonus particularly when there were no materials on the record on which the Tribunal could make a decision as to the quantum of bonus payable by a particular bank for a particular year
This difficulty instead of leading the Labour Appellate Tribunal to give a proper interpretation to the true scope of item 5 of sch
11 led it to the conclusion that item 5 of sch
11 embraced within itself individual claims for bonus for particular years and those claims must be dealt with by another tribunal on the footing that the reference had not been completely worked out
We consider this to be a complete non sequitur
Item 5 of sch
IL must be interpreted as an item in an order of reference in the context in which the item has been used the words in which it has been expressed and against the background in which the dispute has arisen
The practical difficulty which may arise in deciding individual claims for bonus in respect of particular banks is merely a circumstance to be taken into consideration
It cannot be decisive on the question of determinination the true scope and effect of item 5 of sch
On a consideration of all relevant circumstances and having regard to the context and the words in which item 5 of sch
11 has been expressed we are of the view that the Labour Appellate Tribunal was wrong in its conclusion that the reference had not been worked out and that individual claims for bonus in respect of particular banks must be determined by another tribunal on the basis of the reference made in 1952
215 We now proceed to a consideration of the more important question as to the effect of section 10 of the Banking Companies Act 1949
We have stated earlier that section 10 of the Banking Companies Act 1949 hereinafter called the Banking Act was amended in 1956
We shall first read the unamended section the provisions whereof were in force at the time relevant to these appeals
We shall later read also the amended section in connection with an arguement presented on behalf of the Bank employees that the XCV of 1956 was not remedial in nature but was declaratory of the law as it always was
Section 10 of the Banking Act prior to its amendment in 1956 was in these terms  section 10
1 No banking Companya shall employ or be managed by a managing agent or b shall employ any person iwho is or at any time has been adjudicated insolvent or has suspended payment or has compounded with his creditors or who is or has been convicted by a criminal court of an offence involving moral turpitude or iiwhose remuneration or part of whose remuneration takes the form of commission or of a share in the profits of the company or iiiwhose remuneration is according to the normal standards prevailing in banking business on a scale disproportionate to the resources of the Company or c shall be managed by any person 1who is a director of any other company not being a subsidiary company of the banking company or iiwho is engaged in any other business or vocation  or iiiwho has a contract with the company for its management for a period exceeding five years at any one time 216 Provided that the said period of five years shall in relation to contracts subsisting on the 1st day of July 1944 be computed from that date Provided further that any contract with the company for its management may be renewed or extended for a further period not exceeding five years at a time if and so often as the directors so decide
2If any question arises in any particular case whether the remuneration is according to the normal standards prevailing in banking business on a sctle disproportionate to the resources of the company for the purpose of sub clause iii of clause b of subsection 1 the decision of the Reserve Bank thereon shall be final for all purposes
 Before we proceed to a consideration of the construction of the section a little history may not be out of place
The Companies Amendment Act 1936 introduced a new Ptrt XA in the Indian Companies Act 1913 VIl of 1913
Part XA contained certain special provisions applicable to banking companies only
The section with which we are concerned was section 277HH and that section was introduced by an amending Act of 1944
It was the precursor of section 10 of the Banking Act and it may perhaps be advisable to read section 277HH in so far as it is relevant for our purpose  277HH
No banking company shall after the expiry of two years from the commencement of the Indian Companies Amendment Act 1944 employ or be managed by a managing agent or any person whose remuneration or part of whose remuneration takes the form of commission or a share in the profits of the company or any person having a contract with the company for its management for a period exceeding five years at any one time  Provided that the period of five years shall for the purposes of this section be computed from the date on which this section comes into force 217 Provided further that any such contract may be be renewed or extended for a further period not exceeding five years at a time if and so often as the directors think fit
 Obviously the most undesirable feature in the structure and management of banking companies which the section tried to remedy was the appointment of managing directors or managers on long term contracts on payment of remuneration by commission or a share in the profits
However the section was not confined to a managing agent or manager only though by a reference to the statement of objects and reasons in relation to the amendment of 1944 it was suggested on behalf of the respondents that the section was so confined
The statement of objects and reasons is not admissible however for construing the section far less can it control the actual words used
The section in express terms said that no banking company 
shall employ any person whose remuneration or part of whose remuneration takes the form of 
a share in the profits of the company 
Then in 1949 came the Banking Act
As its long title and preamble indicate it is an Act to consolidate and amend the law relating to banking companies
It repealed the whole of Part XA of the Indian Companies Act 1913 including section 277HH referred to above but section 2 said  section 2
The provisions of this Act shall be in addition to and riot save as hereinafter expressly provided in derogation of the Indian Companies Act 1913 and any other law for the time being in force
 The Indian Companies Act 1913 itself stood repealed by the Indian I of 1956
We now come back to section 10 the proper interpretation of which is the immediate problem before us
Shorn of all such details as are unnecessary for our purpose the section says that no banking company shall employ any person whose remuneration or part of whose remuneration takes the form of a share in the profits of the company
The section opens with a negative 218 and says that no banking company shall employ any person the expression any person  is followed by the adjectival clause descriptive of the person who shall not be employed
The adjectival clause says that the person who shall not be employed is one whose remuneration or part of whose remuneration takes  the form of a share in the profits of the company
Two questions at once confront us 1 is I bonus remuneration and 2 is it a share in the profits of the company
The argument on behalf of the appellant Banks is that I bonus  as awarded by Industrial Courts is remuneration within the meaning of section 10 and it is also a share in profits therefore
the express provisions of section 10 read with section 2 of the Banking Act override the provisions of the so far as banking companies are concerned and prohibit the award of bonus to employees of Banks
On behalf of the Bank employees the argument is that bonus as awarded by Industrial Courts is not remuneration  within the meaning of section 10 of the Banking Act nor is it a share in profits in its true nature
The argument on both sides hinges on the two key expressions I remuneration  and  share in profits 
The meaning of these expressions we shall consider in some detail
But it is convenient at this stage to get rid of some minor points
Section 10 in its operative part says that no banking company shall employ any person etc  The amendment of 1956 says that I no banking company shall employ or continue the employment of any person 
The question has been mooted before us if the expression shall employ  means and includes prior to the amendment of 1956 shall continue the employment of 
We think it does otherwise the very purpose of the section is defeated
Take for example the case of an insolvent
The section says that no banking com pany shall employ any person who is or at any time has been adjudicated insolvent
Suppose that at the time the bank employs a person he has not incurred any of the disqualifications mentioned in section 10 but subsequently there is an order of adjudication against him and he is adjudicated an insolvent The section 219 obviously means that such a person can no longer be employed by the bank
If subsequent disqualification is not within the mischief of the section then the very purpose of the section which must be the safety and well being of the bank will be rendered nugatory
We must therefore hold that the expression shall employ a person  in section 10 means and includes shall have in employment  and in this respect the amendment of 1956 merely makes clear what was already meant by the section
We may also dispose of here an argument based on section 2
When an industrial dispute as to bonus between an employer and his workmen is referred to a tribunal for adjudication the tribunal has the power to resolve the dispute by an award
Such an award may grant bonus to workmen if certain conditions are fulfilled
The argument before us is that the provisions of the Banking Act are not to be interpreted in derogation of the provisions of the  but in addition thereto
This argument however ignores an essential qualification embodied in section 2 namely the qualification in the clause save as hereinafter ex pressly provided 
If section 10 expressly provides that no banking company shall employ a person whose remuneration or part of whose remuneration takes the form of a share in profits and I bonus  is both remuneration and a share in profits then section 2 can be of no assistance to the respondents
The express provisions of section 10 must then override any other law for the time being in force so far as banking companies are concerned
This brings us back to the two key expressions remuneration  and share in profits 
We take the expression remuneration  first
The dictionary meaning of the word is reward recompense pay for service rendered see the Concise Oxford Dictionary  and that is the ordinary meaning of the word
The word was judicially noticed in a very early decision R vs Postmaster General 1 and on appeal 2 Blackburn J said  I think the word  remuneration  means a quid pro quo
If a man gives his services
whatever consideration lie gets for giving his services seems to 1 2 220 me a remuneration for them
Consequently I think if a person was in receipt of a payment or in receipt of a percentage or any kind of payment which would not be an actual money payment the amount he would receive annually in respect of this would be remuneration
 The word was again noticed in several English decisions in connection with section 13 of the Workmen s Compensation Act 1906 which enacted that a workman did not include a person employed otherwise than by way of manual labour whose  remuneration  exceeded pound 50  and in Skiles vs Blue Anchon Line Ltd  it was observed that remuneration was not the same thing as salary or cash payment by the employer but involved the same considerations as earnings
This was a case in which the purser of a ship received in addition to his regular wages at the end of each voyage at a fixed rate per month a bonus or extra wages he also made a profit by the sale on board ship of whisky in nips
The majority of Judges held that both the bonus and the profit on the whisky ought to be taken into account in estimating the purser s remuneration
In an earlier decision Penn vs Spiers and Pond Limited 2 the gratuities and tips which the deceased workmen employed as a waiter on a restaurant car received from passengers using the restaurant car were held to be I earnings in the employment of the same employer 
The decision in Penn vs Spiers and Pond Limited supra 2 was approved by the House of Lords in Great Western Railway vs Helps a
In his speech Lord Dunedin repelled the argument addressed for the appellants of that case that the meaning of the expression  earnings  should be limited to what the workman gets from direct contract from his employer by saying that the simple answer to the argument was that the statute did not say so it used the general term I earnings  in our case the general term remuneration instead of the term  wages or the expression  what he gets from his employer 
It is we think unnecessary to multiply decisions
In a recent Australian decision Conally vs Victorian Railways 1 1911 1 KB 36o
2 31918 AC 141
221 Commissioners 1 the matter has been tersely put as follows  It the word remuneration should be given its natural meaning unless there is reason to do otherwise
 This is a salutary rule of construction and should we think be adopted in the present case
Is there anything in the Banking Act to give the word remuneration  a restricted meaning Three meanings have been canvassed before us
The widest meaning for which the learned Attorney General appearing for some of the banks has contended is the natural meaning of the word remuneration  in the sense of any recompense for services rendered whether the payment is voluntary or under a legal obligation
The second meaning which is intermediate between the widest and the narrowest is that it means what is payable under any legal obligation whether under a contract statute or an award
The narrowest meaning for which Shri NC Chatterjee learned counsel for the respondent workmen has canvassed is that remuneration in section 10 of the Banking Act means contractual wages viz what is payable under the terms of the contract of employment only
He has put his argument in the following way section 10 when it says that I no banking company shall employ a person etc  refers to the contractual relationship of employer and employee created by an act of parties and its purpose is to put a ban on one kind of employment of a person who is to be paid a particular remuneration under the terms of his employment
It is stated that the prohibition is against any remuneration in the nature of profit sharing being fixed under a contract of service between the bank and its employees and it is contended that the legislature made the prohibition dependent on the terms of employment
It is submitted that the adjudication of an industrial tribunal in awarding bonus does not create any obligation by act of parties and even if it imports some kind of implied term it is de hors the contract of employment and is the result of a judicial verdict under the industrial law
The argument is attractive but does not in our opinion stand the test of close scrutiny
Lot us look a 1  also 1957 Australian Law Reports 1097
222 little more closely to section 10 of the Banking Act
It says inter alia that no banking company shall employ or be managed by a managing agent or shall employ a person who is or has been convicted by a criminal court of an offence involving moral turpitude etc see el
b1
It is obvious that when the section says shall employ  it means shall have in the employment of
It is not suggested that the disqualifications mentioned in cl
b 1 refer only to the contract of employment
If that were so the section would hardly serve the purpose for which it must have been meant
We may take another example which brings out the meaning of the section even more clearly
Let us suppose that the Bank employs a manager on a contract of service which makes no mention of bonus or commission
On the argument of learned counsel for the respondents section 10 does not stand in the way of the bank to pay voluntarily and ex gratia any amount to the manager by way of commission or bonus as long as the contract of service does not contain any term as to such payment
This in our opinion makes nonsense of the section
Learned counsel for the respondents had himself suggested in the course of his arguments that having regard to the legislative history of the enactment the section was intended to prevent banks from having managers by whatever name they might be called who were paid by commission or a share in the profits and yet the Bank can make such payment if it adopts the subterfuge of not saying anything about such payment in the contract of service
There are in our view clear indications in the section itself that the word remuneration  has been used in the widest sense
Firstly cl
b iii also uses the word remuneration
It says  whose remuneration is according to normal standards prevailing in banking business on a scale disproportionate to the resources of the company 
Sub section 2 unamended states inter alia that if any question arises in any particular case whether the remuneration is according to the normal standards prevailing in banking business on a scale disproportionate to the resources of the company etc the decision of the Reserve Bank 223 shall be final
It is clear that in cl
b iii of sub section
1 and also in sub section
2 the wordremuneration has been used in the widest sense
We may invite attention in this connection to r 5 of the Banking Companies Rules 1949 which are statutory rules which requires a banking company to send periodically to the principal office of the Reserve Bank a statement in Form I showing the remuneration paid during the previous calendar year to officers of the company etc
Form I has a footnote which says  Remuneration includes salary house allowance dearness allowance 
bonus 
 fees and allowances to directors etc We do not say that a statutory rule can enlarge the meaning of section 10 if a rule goes beyond what the section contemplates the rule must yield to the statute
We have however pointed out earlier that section 10 itself uses the word remuneration  in the widest sense and r 5 and Form I are to that extent in consonance with the section
Shri Phadke appearing for some of the respondents has urged a somewhat different contention
He has argued that assuming that the word remuneration  has been used in the widest sense in section 10 and therefore includes bonus r 5 and Form 1 show that payment of bonus is permissible this is intelligible only on the footing that the provisions of section 10 are restricted in their application to such employees of a banking company as are employed in a managerial or admini strative capacity they do not apply to workmen  as defined in the 
We find it difficult to accept this argument
The section says that no banking company shall employ any person  and we do not see how the expression any person  can be restricted to those on the managerial or administrative staff only
We cannot arbitrarily cut down the amplitude of an expression used by the legislature
It is necessary to refer here to the decision in Wrottesley vs Regent Street Florida Restaurant 1 on which learned counsel for the respondent workmen has placed great reliance
It is necessary to refer to the 1 224 facts of the case which are stated in the headnote
The waiters employed at an unlicensed restaurant by an oral agreement amongst themselves and between them and their employers paid into a pool all the tips received by them during the course of their employment
The tips were placed in a locked box and the contents were distributed weekly in shares calculated in accordance with the agreement
The total weekly sum received by each waiter including the share of the tips exceeded but the weekly wage paid by the employers was itself less than the minimum wage prescribed by the Wages Regulations Unlicensed Place of Refreshment Order 1949
The proprietors of the restaurant were prosecuted for failing to pay the minimum wage
It was held that the sums paid from the pool were riot remuneration and the earlier decisions relating to the calculation of the earnings of a waiter in connection with the Workmen s Compensation Acts were distinguished
Lord Goddard CJ thus explained the distinction  The amount of a man s earnings in an employment and the amount of remuneration which his employer pays to him are not necessarily the same thing
The section creating the offence and under which the proceedings are taken is section 9 sub section 2 of the Catering Wages Act 1943
That section provides that if an employer fails to pay to a worker to whom a wages regulation order applies remuneration not less than the statutory minimum remuneration clear of all deductions he shall be guilty of an offence
Section 10 contains somewhat elaborate provisions for the computation of remuneration
Not only the short title but the structure of the Act setting up a wages commission permitting the establishment of wages boards and providing for wage regulation orders clearly indicates that it is with wages that the Act is intended to deal
The use of the word  remuneration  in both section 9 and section 10 and indeed in other sections is probably because there are certain deductions from wages which are authorized by section 10 so that remuneration is an apt word to indicate the net payment 225 What we have to decide is whether when a waiter receives a payment from the tronc in the manner found in the case that sum can be regarded as remuneration paid to him by or as remuneration obtained by him in cash from his employer
In our opinion when a customer gives a tip to a waiter the money becomes the property of the latter
 We think that the decision itself shows that the word remuneration  must be given its meaning with reference to the context in which the word occurs in the statute
In the context of the Catering Wages Act 1943 it meant the net payment after certain deductions from wages paid by the employer and in the Workmen s Compensation Acts it meant the amount of a man s earnings in an employment
We have pointed out that in the Banking Act with which we are con cerned the word I remuneration  has been used in the widest sense
In that
sense it undoubtedly includes bonus
We proceed now to a consideration of the second key expression for our purpose viz takes the form of a share in the profits of the company 
The conception of industrial bonus that is profit bonus claimed by employees and granted amicably through conciliation or as a result of an industrial award has had a chequered development
In some of the earlier Bombay decisions of Industrial Adjudicators it was held that the grant of bonus was entirely a matter of grace and not of right some decisions characterized bonus as a gift a sort of bakshis or pourboire see D G Damle s Labour Adjudications in India
p 408
By 1948 however the conception had crystallised and it was judicially recognised that the claim of profit bonus could not any longer be regarded as an ex gratia payment
In Millowner s Association Bombay vs Rashtriya Mill Mazdoor Sangh Bombay 1 the Full Bench of the Labour Appellate Tribunal evolved the formula for determining the quantum of bonus and the general principles governing the claim of bonus were also laid down
These are 1 as both capital 1 29 226 and labour contribute to the earnings of the industrial concern it is fair that labour should derive some benefit if there is a surplus after meeting prior or necessary charges 2 the claim of bonus would only arise if there should be a residue after making provision for a prior charges and b a fair return on paid up capital and on reserves employed as working capital and 3 bonus is a temporary satisfaction wholly or in part of the needs of the employee where the capacity of the industry varies or is expected to vary from year to year so that the industry cannot afford to pay living wages 
The Labour Appellate Tribunal recognised that where the goal of living wages had been attained bonus like profit sharing in the technical narrow sense would represent more the cash incentive to greater efficiency and production
The conception of the living wage itself is a growing conception and the goal has been reached in very few industries if any in this country
The general principles laid down by the aforesaid Full Bench decision of the Labour Appellate Tribunal were generally approved by this Court in Muir Mills Co Ltd vs Suti Mills Mazdoor Union Kanpur 1 and have been fully considered again and approved in Civil Appeals Nos 459 and 460 of 1957 Associated Cements in which judgment was delivered on May 5 1959
We have to consider the expression I takes the form of a share in the profits of the company  in the context of the meaning of the word bonus  as explained above
It is necessary to state that we are not considering here the question of production bonus or Puja bonus which may not necessarily come out of profits and these stand on a different footing
There can be now no doubt however that profit bonus in the industrial sense in which we now understand it is a share in the profits of the company it is labour s share of the contribution which it has made in the earning of the profits
The two grounds on which it has been contended that bonus is not a share in the profits are 1 that it is not a fixed or certain percentage of the available surplus of profits and 2 it partakes of the 1  227 nature of a contingent supplementary wage
These two grounds weighed considerably with the majority of members of the Labour Appellate Tribunal who expressed the view that section 10 of the Banking Act did not stand in the way of granting bonus to bank employees because bonus according to them was not a share in the profits of the company
We do not think that either of these two grounds is valid
The first ground arises out of a confusion between the expression takes the form of a share in profits  and the expression profit sharing  used in a narrow technical sense
It is undoubtedly true that the bonus formula does not lay down any fixed percentage which should go to labour out of the available surplus
The share of labour will depend on a number of circumstances but once the amount which should go to labour has been determined it is easy enough to calculate what proportion it bears to the whole amount of available surplus of profits
There is thus no difficulty in identifying bonus as a share in the profits of the company
It is true that the International Congress on Profit sharing held in Paris in 1889 adopted the definition of profit sharing  in the technical narrow sense
That definition said that profit sharing was an agreement formal or informal freely entered into by which the employees receive a share fixed in advance of the profits  see Encyclopaedia of the Social Sciences Seligman and Johnson Vol
XII p487
But that is not the sense in which bonus has been understood in our industrial law and it is worthy of note that section 10 of the Banking Act does not use the technical expression profit sharing  but the more general expression I takes the form of a share in the profits etc 
We are unable to hold that this general expression has a technical meaning in the sense that the share in profits must be fixed in advance as in technical profit sharing such a meaning would without sufficient reason exclude from its purview schemes under which the workers are granted regularly a share in the net profits of industry but in which the share to be distributed among the workers is not fixed in advance but is decided from time to time on ad hoc 228 basis by an independent authority such as an industrial court or tribunal
The second ground also appears to us to be equally untenable
Bonus in the  industrial sense as understood in our country does come out of the available surplus of profits and when paid it fills the gap wholly or in part between the living wage and the actual wage
It is an addition to the wage in that sense whether it be called Contingent and supplementary
None the less it is labour s share  in the profits and as it is a remuneration which takes the form of a share in profits it come s within the mischief of section 10 of the Banking Act
It may be asked why should the legislature seek to deprive bank employees who are not on the managerial or administrative staff of their industrial claim to bonus when they contribute to the prosperity of the banks This really is a question of policy on which we are not permitted to speculate
On the one side there is the necessity for safeguarding the integrity and stability of the banking industry and on the other side there is the claim of employees for a share in the profits
Which claim has a greater urgency at a particular time is really a matter for the legislature to say
We may refer here by way of contrast to section 31A of the 
That section  is in terms similar to section 10 of the Banking Act but has some marked differences
Firstly it specifically mentions bonus along with a share in profits in cls
b and c of sub section 1 secondly it has a proviso which says inter alia that nothing in subS 1 shall prohibit the payment of bonus in any year on a uniform basis to all salaried employees I etc or such bonus which in the opinion of the Central Government is reasonable having regard to the circumstances of the case
This merely shows that it is for the legislature to decide how to adjust the claim of employees with the safety and security of the business in which the employees are in employment
The learned Attorney General has relied on a number of decisions in support of his contention that bonus comes within the expression takes the form of a share in profits 
In re Young Ex Parte Jones 1 it was held 1 18962QB484 229 that a contract that a person shall receive a fixed sum  out of the profits of a business was equivalent to a contract that he shall receive a share of the profits within the meaning of sub section 3d of section 2 of the Partnership Act 1890
A similar question arose in Admiral Fishing Company vs Robinson 1 in connection with section 7 sub section 2 of the Workmen s Compensation Act 1906 which said  This Act shall not apply to such members of the crew as are remunerated by shares in the profits or gross earnings of the working of such vessel
 The claimant who was the engineer of a fishing smack was entitled to one share of the net profits of the working of the vessel on the particular voyage
The question was was he remunerated by shares in the profits  The answer given was that he clearly was so remunerated
In Costello vs Owners of Ship Pigeon 2 the claimant was employed as a boatswain on a steam fishing trawler and was remunerated by wages maintenance and poundage dependent on the profits of the fishing expedition
The House of Lords decided by a majority that the claimant was remunerated by a share in profits within the meaning of section 7 sub section 2 of the Workmen s Compensation Act 1906
Shri N C Chatterjee has invited our attention to Newstead vs Owners of Steam Trawler Labrador 3
That was a case of a claim for compensation by the widow of a member of the crew of a fishing vessel which was lost with all hands
The claim was resisted by the owners on the ground that the deceased was remunerated by a share in the profits or gross earnings of the vessel within section 7 sub section 2 of the Workmen s Compensation Act 1906 and therefore that the Act did not apply to him
He was employed as chief engineer on board a steam trawler at a fixed weekly wage of pound 2
It was the custom of the owners when the gross earnings of the boat exceeded pound 100 for any one trip each trip being usually of about a week s duration to allow a sum of pound 2 by way of bonus of which pound I went to the captain and 2s
to each of the remaining eight members of the crew
If the gross earnings of the 1 2 3 230 boat exceeded pound 125 the bonus was proportionately increased and so on but it was not further increased if the gross earnings realised more than pound 175
The decision proceeded on the footing that the bonus in that case was not a share in profits but an additional sum for wages determined by the amount of the gross earnings
Lord Cozens Hardy M R expounded the ratio of the decision in the following words   The question is whether having regard to the circumstances that can be said in the present case
It seems that by the custom of this firm and by the understanding and arrangement between the parties if the vessel made pound 100 the skipper was entitled to pound 1 and in that particular case each member of the crew was entitled to half a crown
If the vessel made more the skipper and crew were entitled to larger sums
Now what was the effect of that The bonus was not as it seems to me any part of the profits nor was it a share in the gross earnings of the vessel
There was an obligation on the part of the owners of the trawler to pay the half a crown to take that as one instance in a certain event which event was to be determined by the gross earnings of the vessel
I see no ground for holding that it was in any sense of the word a share of the gross earnings of the working of the vessel any more than the actual wages which were payable to the seamen could be treated as being a share of the gross earnings of the vessel although the bonus as well as the wages would figure in the ship s accounts as against the receipts on the other side
 It seems clear to us that the ratio of the decision does not apply here
The bonus we are dealing with here is not additional wage determined by the amount of profits it is really part of the availiable surplus of profits distributed to labour for its contribution to the earnings
It does not arise out of any contract to pay though the claim is recognised as one based on social justice
Shri Phadke has relied on the decision In re The Spanish Prospecting Company Limited That 1 231 decision proceeded on the meaning of the word profits  of which a classic definition was given by Fletcher MOUITON L J
In view of the decisions of this Court referred to earlier it is now beyond dispute that bonus in the industrial Sense comes out of profits
If it does we do not see how it can be held that it is not a share in profits
Shri Phadke suggested that the concept of a share in profits pre supposes the idea of either a definite amount or a definite proportion determined in advance
This submission we have dealt with at an earlier stage and no useful purpose will be served by repeating what we have said already
We must now notice two other arguments advanced on behalf of the respondent workmen
These arguments are based on the amendments made in 1956
Section 10 as amended by the XCV of 1956 reads in so far as it is relevent for our purpose section 10
No Banking Company ashall employ or be managed by a managing agent  or b shall employ or continue the employment of any person i who is or at any time has been adjudicated insolvent or has suspended payment or has compounded with his creditors or who is or has been convicted by a criminal Court of an offence Involving iiwhose remuneration or part of whose remuneration takes the form of commission or of a share in the profits of the company Provided that nothing contained in this clause shall apply to the payment of any bonus by any banking company in pursuance of a settlement or award arrived at or made under any law relating to industrial disputes or in accordance with any scheme framed by such banking company or in accordance with the usual practice prevailing in banking business  or iiiwhose remuneration is in the opinion of the Reserve Bank excessive or  c           232 Explanation
For the purpose of sub clause iii of clause b the expression remuneration in relation to a person employed or continued in employment shall include salary fees and perquisites but shall not include any allowances or other amounts paid to him for the purpose of reimbursing him in respect of the expenses actually incurred by him in the performance of his duties
2      3If any question arises in any particular case wither the remuneration is excessive within the meaning of sub clause iii of clause b of subsection 1 the decision of the Reserve Bank thereon shall be final for all purposes
 It will be noticed that the amended section has a proviso which makes it clear that nothing in the relevent clause in subs section
1 shall apply to the payment of any bonus by any banking company in pursuance of a settlement or award arrived at or made under any law relating to industrial disputes or in accordance with any scheme framed by such banking company or in accordance with the usual practice prevailing in banking business
It is clear that the amended section does not stand in the way of the grant of industrial bonus
It was however not in force at the time relevent in these appeals and there is nothing in the  which would make it retrospective in operation
Shri N C Chatterjee has however contended that the amending Act is declaratory of the law as it always was and Shri Phadke has contended that the amending Act is parliamentary exposition of the true meaning of section 10 of the Banking Act
We are unable to accept any of these two contentions
The amending Act states in its long title that it is an Act to amend the Banking Companies Act 1949
Section 2 states For section 10 of the Banking Companies Act 1949 the following section shall be substituted
 There is nothing in the amending Act to indicate that it was enacted to remove any doubt explain any former statute or correct any omission or error What is a declaratory Act The 233 following observations in Craies on Statute Law Fifth
edition pp
56 57 are apposite  For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law or the meaning or effect of any statute
Such Acts are usually held to be retrospective
The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error whether in the statement of the common law or in the interpretation of statutes
Usually if not invariably such an Act contains a preamble and also the word declared as well as the word enacted 
A remedial Act on the contrary is not necessarily retrospective it may be either enlarging or restraining and it takes effect prospectively unless it has retrospective affect by express terms or necessary intendment
We are of the view that the amending Act of 1956 is not a declaratory Act and except in the small matter of the expression shall continue to employ  in sub section
1 it does not purport to explain any former law or declare what the law has always been
It is an ordinary remedial piece of legislation which came into effect from January 14 1957
For the period relating to the appeals before us the amended section was not in force
This brings us to ail end of the two questions 1 and 2 which directly fall for decision in these seven appeals
Contrary to the findings of the Labour Appellate Tribunal we have come to the conclusion that 1 the scope of item 5 of sch
II of the relevant notification is not what the Labour Appellate Tribunal thought it to be and the reference of 1952 is not pending for determining the quantum of bonus for the relevant years in respect of particular banks and 2 in any event section 10 of the Banking Act prior to the amendment of 1956 prohibited the grant of industrial bonus to bank employees inasmuch as such bonus is remuneration which takes the form of a share in the profits of the banking company
We do not think that the other two questions 3 and 4 require any decision at this stage
It is to be remembered that we are exercising our appellate 234 jurisdiction in these seven appeals and not our advisory jurisdiction
These seven appeals stand completely disposed of on the findings which we have given on the two questions already discussed
On our findings the dispute as to bonus referred to the Industrial Tribunal in 1952 has come to an end
The reference is no longer pending and in the view which we have expressed as respects the interpretation of unamended section 10 of the Banking Act no claim for bonus can be adjudicated on for the past relevant years
It is therefore not necessary for us to decide hypothetical questions which may arise in any future reference that may be made under the amended section
In the exercise of its appellate powers this Court does not give speculative opinions on hypothetical questions
It would be contrary to principle inconvenient and inexpedient that opinion should be given on such questions
If and when they arise they must arise in concrete cases and to use the words of the Earl of Halsbury L C in Attorney General of Ontario vs Hamilton Street Railway 1  It would be extremely unwise for any judicial Tribunal to attempt beforehand to exhaust all possible cases and facts which might occur to qualify cut down and override the operation of the particular words when the concrete case is not before it
 It is also to be remembered that no evidence was allowed to be given either by the banks or the bank employees as to the claims for bonus for particular years in respect of particular banks
The dispute was treated rightly in our opinion as a dispute relating to the general question of bonus
That general question is now disposed of on the findings which we have already given
We are aware that if and when a future reference as to an industrial dispute relating to bonus is made by the appropriate Government and the amended section falls for consideration questions 3 and 4 may fall for decision
It would be time enough to decide those questions when they actually arise in concrete cases and we consider that it is not only unwise but inexpedient that we should forestall questions which may arise in future cases and decide 1 1903 AC524 529 235 them more or less in vacuo and in the absence of necessary materials for the decision of those questions
These are our reasons for holding that questions 3 and 4 should not now be decided
It is necessary to state however that any observations which the Tribunals below may have made with regard to questions 3 and 4 would be in the nature of obiter dicta and it would be open to both parties to canvass those questions if and when they arise in any concrete case in future
Therefore we have not considered it necessary to state in detail the contentions raised before us on behalf of the parties concerned with regard to questions 3 and 4
A few words regarding Civil Appeal No 62 of 1957 before we conclude
Besides the question of bonus two other questions were raised in this appeal 1 whether the Labour Appellate Tribunal had jurisdiction to order cancellation and refund of cash deposits and 2 whether the Tribunals below were wrong in holding that the taking of cash deposits etc should be restricted to workmen of three categories only
When it was pointed out that the cash deposits had already been refunded in accordance with the decision of the Labour Appellate Tribunal the learned Attorney General who appeared for the appellant in Civil Appeal No 62 of 1957 The Punjab National Bank Limited did not press those points
Therefore in Civil Appeal No 62 of 1957 also the only surviving question is the question of bonus on which we have already given our decision
Shri Sadhan Chandra Gupta appeared on behalf of the respondents in Civil Appeal No 62 of 1957 and made his submissions on the question of bonus
He has taken a stand on section 2 of the Banking Act and has contended that even if bonus is remuneration which takes the form of a share in profits section 2 saves the power of industrial tribunals to award such bonus under the  and such award if made will impose an obligation on banks to pay the bonus awarded and would not make them liable to penalty under section 46 of the Banking Act
We have dealt with this argument at an earlier stage and have pointed out that section 2 is a saving provision with regard 236 to any other law for the time being in force provided there is no express provision to the contrary in the Banking Act
If as we hold unamended section 10
of the Banking Act expressly prohibits the employment of any person by a bank whose remuneration takes the form of a share in the profits of the company then section 2 of the Banking Act is of no help and cannot permit something which is expressly prohibited by section 10
For the reasons given above we allow these seven appeals to the extent already indicated namely 1 the reference of 1952 is not now pending for determining the question of bonus for the relevant years in respect of particular banks and 2 section 10 of the Banking Act prior to the amendment of 1956 prohibits the grant of industrial bonus to bank employees when such bonus is remuneration which takes the form of a share in the profits of the banking company
In the circumstances of these cases and in view of the long drawn out nature of the dispute we make no direction as to costs
Appeals allowed in part


Summary:
With a view to provide a pension to H who was the managing director of the appellant company after his retirement at the age Of 55 years on September 20 1955 the company executed a trust deed on September 16 1948 in favour of three trustees to whom the company paid a sum of Rs 109643 and further undertook to pay annually Rs 4364 for six consecutive years
The trustees undertook to hold the said sums upon trust to spend the same in taking out a Deferred Annuity Policy with an Insurance Society in the name of the trustees but on the life of H under which a certain sum of money was payable annually to H for life from the date of his superannuation
It was also provided in the deed that notwithstanding the main clause the trustees would if so desired by the company take out instead a different kind of policy for the benefit of both H and his wife with a further provision for His wife should H die before he attained the age Of 55
On January 12 1949 the trustees took out a policy wherein the amount of Deferred Annuity to be paid per annum was fixed according as whether both H and his wife were living on September 20 1955 or one of them died earlier
The policy also contained inter alia two clauses  i Provided the contract is in force and unseduced the Grantees i e the trustees shall be entitled to surrender the Annuity on the Option Anniversary ie Sept 20 1955 for the Capital sum of pound 10169 subject to written notice of the intention to surrender being received by the Directors of the Society within the thirty days preceding the Option Anniversary
2 If both the Nominees shall die whilst the Contract remains in force and unreduced and before the Option Anniversary the said funds and Property of the Society shall be liable to make repayment to the Grantees of a sum equal to a return of all the premiums which shall have been paid under this Contract without interest after proof thereof and subject as hereinbefore provided
 The appellant company paid the initial sum and the yearly premia for some years before H died
For the assessment years 194950 195051 1951 52 and 1952 53 the appellant claimed a deduction of these sums from its profits or gains under section 102XV 965 of the Indian Income tax Act 1922 but the Income tax authorities disallowed the claim on the ground that the sums claimed did not amount to expenditure within the meaning of the section
The appellant s contention was that payment of pension was an expenditure of a revenue character and so also the payment of a lump sum to get rid of a recurring liability to pay such pension and that expenditure on insurance was not contingent because though the contingency related to life and depended on it the probabilities were estimated on actuarial calculations and that the expenditure was therefore real
Held that expenditure which is deductible for the purposes of income tax under section 102xv of the Indian Income tax Act 1922 is one which must be towards a liability actually existing at the time but the putting aside of money which may become expenditure on the happening of an event is not expenditure
In the present case on the terms of the deed of trust money was placed in the hands of trustees for the purchase of annuities of different kinds if required but to be returned if the annuities were not bought and the clauses in the policy taken out by the trustees showed that till September 20 1955 the appellant had dominion through the trustees over the premia paid
The payment to the trustees was therefore towards a liability depending on a contingency
Consequently the amount claimed was not liable to be deducted as an expenditure under section IO2XV Of the Act
Cases on English Income tax law reviewed