ivil Appeal No 4042 of 1988
From the Judgment and Order dated 1712
1987 of the Bombay High Court in WP No 1048 of 1982
SC Gupta and MN Shroff for the Appellant
Anil Dev Singh Ms Nayana Buch MJ Paul Kailash Vasdev Ms Subhashini and Mrs Kitty Kumarmangalam for the Respondents
The Judgment of the Court was delivered by THOMMEN J
This civil appeal by special leave is di rected against judgment dated 17121987 of the High Court of Bombay in Writ Petition No 1048 of 1982 instituted by the appellant which is a Co operative Credit Society
The 1st respondent is a Federation representing the employees of the appellant amongst others
Setting aside the award of the Industrial Tribunal the High Court held that the appellant was liable to pay its employees bonus at the rate of 20 per cent of its total annual earnings for the years 1975 76 1976 77 and 1977 78
The principal contention urged at the Bar against the impugned judgment is that the High Court went wrong in directing the appellant to pay bonus without regard to various amounts invested by it as permitted under the rele vant provisions of the Maharashtra Cooperative Societies Act 1960 the Co operative Societies Act and other amounts carried forward to its reserve fund
The appellant s counsel contends that the High Court did not correctly read the provisions of Section 6d of the The Bonus Act and item 4 of the Third Schedule to the said Act
Counsel further contends that the High Court was not justified in
placing reliance on the Explanation to the Third Schedule to the Bonus Act as 268 it has no relevance to co operative societies
The Explana tion he says is relevant only to items 1 2 and 3 of the Third Schedule to the Bonus Act
We shall now read the relevant provisions
Section 6 of the Bonus Act refers to various sums which are deductible from gross profits
It reads 6
Sums deductible from gross profits
The following sums shall be deducted from the gross profits as prior charges namely d such further sums as are specified in respect of the employer in the Third Sched ule
 The employer in question being a co operative society it is item 4 of the Third Schedule to the Bonus Act that is applicable
That reads Item Category of employer Further sums to be deducted NO
2 3 4
Co operative Society i 85 per cent of the capital invested by such society in its establishment as evidenced from its books of accounts at the commencement of the accounting year ii such sums as has been carried forward in res pect of the accounting year to a reserve fund under any law relating to co operative societies for the time being in force
269 In column 3 of item 4 two types of amounts are deductible from the gross profits as prior charges
Firstly 85 per cent of the capital invested by a co operative society in its establishment is deductible
Secondly amounts carried forward to a reserve fund in compliance with any provisions of law relating to co operative societies are also deductible
The expression capital  is not defined under the Bonus Act
It must therefore be understood in the sense in which that expression is generally understood
That means all amounts which are classified as capital in contrast to revenue must qualify for deduction subject to the limit of 85 per cent provided such capital is invested by the society in its establishment as evidenced by its books of accounts at the commencement of the accounting year
Any such capital upto 85 per cent is thus deductible
Furthermore all sums which have been carried forward in respect of the relevant accounting year to a reserve fund as required under any law applicable to co operative societies for the time being in force are also deductible from gross profits This means that reserve fund created in terms of Section 66of the Co operative Societies Act is deductible under item 4 of the Third Schedule to the Bonus Act
Section 66 reads
1 Every society which does or can derive a profit from its transactions shall maintain a reserve fund
2 Every society shall carry at least one fourth of the net profits each year to the reserve fund and such reserve fund may sub ject to the rules made in this behalf if any be used in the business of the society or may subject to the provisions of section 70 be invested as the State Government may by general or special order direct or may with the previous sanction of the State Government be used in part for some public purpose likely to promote the objects of this Act or for some such purpose of the State or of local interest Provided that the Registrar may having regard to the financial position of any socie ty or class of societies fix the contribution to be made to the reserve fund under this sub section at a lower rate but not lower than one tenth of the net profits of the society or societies concerned Accordingly all such amounts held by the society as reserve fund in terms of Section 66 of the Co operative Societies Act must qualify for deduction
The minimum re serve fund that is required to be 270 maintained by Section 66 of the Co operative Societies Act is one fourth of the net profits of each year
If larger amounts are carried forward to the reserve fund in terms of Section 66 all such amounts will come within the ambit of item 4 of the Third Schedule to the Bonus Act and qualify for deduction Accordingly we hold that 85 per cent of the capital invested by the society in its establishment as disclosed by its books of accounts together with amounts carried forward to a reserve fund in compliance with Section 66 and other provisions of the Co operative Societies Act read with the rules made thereunder See Rule 54 of the Maharashtra Co operative Societies Act 1954 will be de ductible in terms of Section 6 of the Bonus Act
We must however point out that the High Court was not justified in placing any reliance on the Explanation to the Third Schedule to the Bonus Act for that has as tightly pointed out by the appellant s counsel no relevance to a co operative society
In this connection we place on record that counsel on both sides agree that reference to 20 per cent in paragraph 11 of the judgment was wrong in respect of the year 1975 76
They agree that for that year the correct figure is 1878 per cent
Accordingly we hold that reference to 20 per cent in paragraph 11 of the impugned judgment must be read as 1878 per cent for the year 1975 76 and 20 per cent for the succeeding two years
Subject to what we have stated above we hold that the High Court was right in directing the appellant society to pay bonus to its employees
The society is liable to pay bonus at the rate of 20 per cent for the years 1976 77 and 1977 78 and 1878 per cent for the year 1975 76
In the circumstances the appeal must fail and is ac cordingly dismissed
The parties shall bear their respective costs


Summary:
Chapter III B of the Rajasthan Tenancy Act 1955 pr e scribing a ceiling on holdings of agricultural lands a nd cl6A of section 5 defining ceiling area  were introduc ed into the Act by the Rajasthan Tenancy Amendment Act 196 0
The notified date under the 1955 Act was 153 141966
Subsequentiy on 111973 by the Rajasthan Imp o sition of Ceiling on Agricultural Holdings Ordinance 197 3 these provisions were repealed except to the extent ind i cated in the second proviso to section 41 and section 152 of t he Ordinance
Certain transfers made by the landholders ev en during the operation of the old law were recognised as valid transfers for the purpose of computation of ceili ng area under the new dispensation brought about by the Ord i nance
The Ordinance was replaced by the 1973 Act wi th retrospective effect from 111973
Section 40 of the A ct repealed both the old law in Chapter III B of the 1955 A ct and the earlier Ordinance
After the 1973 Act came into force on 111973 cases f or determination of ceiling areas  under Chapter III B of t he 1955 Act came to be initiated and were sought to be conti n ued under the repealed Chapter III B against the appellan ts including the appellants in CA No 1003N of 1977 w ho claimed to have entered into possession and cultivation of certain parcels of land pursuant to agreements to se ll dated 2841957 said to have been executed in their favo ur by the then land holder
The sale deeds in this case we re passed on 2281966 after the notified date
Proceedin gs for the fixation of ceiling area in the hands of the th en land holder were commenced under the repealed Chapter II IB of the 1955 Act and the purchases in question were held to be hit by section 3ODD of the repealed Chapter III B as appe l lants did not possess the residential qualifications pr e scribed by the section for the eligibility for recogniti on of such transfers
The appellants approached the High Court contendi ng that after the coming into force of the 1973 Act which by section 40 repealed Chapter III B of the 1955 Act recourse cou ld not be had to the repealed law for purposes of commencemen t conduct and conclusion of any proceedings for fixation of ceiling as prescribed under the old law
Rejecting the contention of the appellants the Hi gh Court held that the new Act of 1973 did not have the swee p ing effect of destroying all the rights accrued and liabil i ties incurred under the old Act
The correctness of the view of the High Court w as challenged in the appeals before this Court
Some other wr it petitions were also filed directly in this Court
On the questions whether a the scheme contemplated by the 1973 Act and the different criteria and standards f or the determination of ceiling area envisaged in it and in particular having regard to the 154 limited scope of the saving provision of section 40 which qui te significantly omitted to invoke and attract section 6 of t he Rajasthan General Clauses Act 1955 to he repeal of section 56 A and Chapter III B of the 1955 Act  must be construed a nd held to manifest an intention contrary  to and inconsiste nt with the keeping alive or saving of the repealed law so as to be invoked in relation to and applied for the pendi ng cases which had not been concluded under the old law befo re the repeal and b even if section 6 of the Rajasthan Gener al Clauses Act 1955 was attracted and the old law was saved f or the purpose provisions of the old law could not be invok ed as no right had been accrued in favour of the State in relation to the surplus area determinable under the old l aw nor any liability incurred by the land holders under the o ld law so as to support the initiation of the proceedings f or fixation of ceiling area under the old law after its repea l Dismissing the appeals Special Leave Petitions and Wr it Petitions this Court HELD 11 When there is a repeal of a statute accomp a nied by re enactment of a law on the same subject t he provisions of the new enactment would have to be looked in to not for the purpose of ascertaining whether the consequenc es envisaged by section 6 of the General Clauses Act ensued or n ot but only for the purpose of determining whether the prov i sions in the new statute indicate a different intentio n 164F G State of Punjab vs Mohan Singh referr ed to
12 Mere absence of an express reference to section 6 of t he General Clauses Act is not conclusive unless such omissi on is attended with the circumstance that the provisions of t he new law evince and make manifest and intention contrary to what would otherwise follow by the operation of the Se c tion the incidents and consequences of section 6 would follo w 163A B B Bansgopal vs Emperor AIR 1933 All 669 referred to
13 The scheme of the Rajasthan Imposition of Ceiling on Agricultural Holdings Act 1973 does not manifest an inte n tion contrary to and inconsistent with the saving of t he repealed provisions of section 56A and Chapter III B of t he Rajasthan Tenancy Act 1955 so far as pending cases a re concerned and the rights accrued and liabilities incurr ed under the old law are not effaced
The indicia that the o ld law was not effaced are in section 152 and section 401 read wi th second proviso to section 41 of the new Act
167G 165E 155 14 The High Court was right in holding that the openi ng words of section 152 without prejudice to any other reme dy that may be available to it under the Rajasthan Tenancy Ac t 1955 clearly showed that the pending cases had to be go v erned by the old law and if transactions past and clos ed had to be reopened and decided afresh under the provisio ns of the repealed law and the ceiling area under Chapter I II of the 1955 Act had to be fixed under its repealed prov i sions then it must follow as a necessary corollary th at the pending cases must be decided under the old law a nd that the expression law for the time being in force d id not take within its sweep a law deemed to be in force an d therefore the opening words of section 3 of 1973 Act would n ot have an overriding effect so as to exclude the old la w 167A D Rao Shiv Bahadur Singh and Anr
vs The State of Vindh ya Pradesh  and Chief Inspector of Mines vs KC Thapar  referred to
A saving provision in a repealing statute is n ot exhaustive of the rights and obligations so saved or t he rights that survive the repeal
167D E 1
T Commissioner UP vs Shah Sadiq and Sons AIR 19 87 SC 1217  1221 referred to
31 For purpose of clauses c and e of the Rajasth an General Clauses Act 1955 the right must be accrued a nd not merely an inchoate one
the distinction between what is and what is not a right preserved by section 6 of the Gener al Clauses Act is often one of great fineness
What is una f fected by the repeal is a right acquired  or accrue d  under the repealed statute and not a mere hope or expect a tion of acquiring a right or liberty to apply for a righ t 168E 32 The right of the State to the excess land was n ot merely an inchoate right under the Rajasthan Tenancy Ac t 1955 but a right accrued within the meaning of section 6c of the Rajasthan General Clauses Act 1955
172D The rights and obligations under section 30E of the 1955 A ct had had to be determined with reference to the notified da te ie 141966
The right of the State to take over exce ss land vested in It as on the appointed date and only t he quantification remained to be worked out
The liability of the land owner to surrender the excess land as on 156 141966 was a liability incurred also within the meani ng of the said provision
170E171H 172D Lalji Raja vs Firm Hansraj   Raghuna th vs Maharashtra  at 57 Bhikoba Shank ar Dhumal dead by LRs  Ors
vs Mohan Lal Punchand Tathed Ors
  at 228 State of Maharashtra vs Annapurnabai and Ors 1985 Supp
SCC 273 at 275 Direct or of Public Works vs Ho Po Sany  a nd MS Shivananda vs KSR Corpn  at 81 r e ferred to