Appeal No 161 of 1959
Appeal by special leave from the judgment and order dated the 31st January 1956 of the Labour Appellate Tribunal at Calcutta in Appeal No Cal
301 108 of 1954 arising out of the Award dated the 20th October 1954 of the Second Industrial Tribunal West Bengal
B Sen and section N Mukherjee for the appellants
D N Mukherjee for the respondents
May 7
The Judgment of the Court was delivered by WANCHOO J
This is an appeal by special leave in an industrial matter
The appellant is the Graham Trading Co India Ltd hereinafter called the company
There was a dispute between the company and its workmen about bonus which was referred by the Government of West Bengal by its order of December 17 1953 to the Second Industrial Tribunal
Though the order of reference did not specify the year for which the bonus was in dispute it is common ground between the parties that the dispute was for bonus for the year 1953
The case of the workmen who are respondents before us was that the company had been paying one month s bonus invariably from 1940 to 1950
In 1951 one month s bonus was paid in October and half a month s further bonus was paid in December
In 1952 one month s bonus was paid
The demand that the workmen made in their letter of August 27 1953 was for three month s bonus
The company replied that payments in past years had been entirely ex gratia and as there was loss in 1953 it was not possible to make any ex gratia payment that year
The workmen then contended in their letter of September 21 1953 that the sole object of bonus which had been granted upto that year was to meet puja expenses and that the payment of this bonus had become customary and a term of employment
The matter could not be settled between the parties and that is how the dispute was referred for adjudication
The company s case was that payment of bonus had all along been ex gratia depending upon profits except in a few years
But in those years it was also made clear that the payment was ex gratia and without creating any precedent for future
Therefore there was neither a term of employment nor any custom 109 which put any obligation on the company to pay any bonus in a year of loss
The question was considered by the Industrial Tribunal from three aspects
Firstly it considered whether any bonus was payable for this year as profit bonus on the basis of the Full Bench formula evolved in The Mill Owners  Association Bombay vs The Rashtriya Mill Mazdoor Sangh Bombay 1 and it came to the conclusion that there was no available surplus of profit to justify such bonus
It then considered the remaining two aspects namely whether puja bonus could be awarded either as an implied term of employment according to the decision in Mahalakshmi Cotton Mills Ltd Calcutta vs Mahalakshmi Cotton Mills Workers  Union 2 or on the basis of custom
It seems to have mixed up the discussion on these aspects and having come to the conclusion that puja bonus could not be awarded in this case on the basis of an implied term of employment it proceeded to dismiss the claim on the basis of custom also
The workmen then went up in appeal to the Labour Appellate Tribunal which allowed the appeal
The decision of the Appellate Tribunal has also mixed the two aspects of puja bonus namely whether it is based on an implied term of employment or on custom but it came to the conclusion that there was sufficient evidence to establish custom and therefore ordered payment of one month s basic wages as puja bonus
It was also inclined to the view that the company s accounts showing loss were not reliable and there might even be a case for profit bonus but eventually it granted one month s basic wages as customary puja bonus
Thereupon the company filed an application for special leave to appeal to this Court which was allowed and that is how the matter has come up before us
Puja is a special festival of particular importance in Bengal and it has become usual with many firms there to pay their employees bonus to meet special puja expenses
Disputes have arisen with respect to this bonus which were adjudicated upon by various tribunals
As 1 2 110 for back as 1949 in a dispute between The Bengal Chamber of Commerce Calcutta and Its Employees 1 the Industrial Tribunal which adjudicated upon the dispute observed that Durga Puja was a national festival in Bengal and it was customary to make presents to near and dear ones and to relatives at that time
As it was difficult for poorly paid employees to make savings out of the monthly income for this purpose it therefore had become traditional and customary in Bengal for employers to make a monetary grant at the time of the pujas
The Bengal Chamber of Commerce had not been slow in appreciating this and had been granting bonus equivalent to one month s pay and the tribunal had been assured that there was no intention to discontinue it
Later the matter was considered in Mahalaxmi Cotton Mills case 2 where certain tests were laid down which would justify the inference that there was an implied term of employment for payment of bonus at the time of the annual Durga Puja
That case however was concerned with puja bonus as an implied term of employment and not as a matter of tradition or custom in Bengal
It is however clear that puja bonus which is usually paid in Bengal is of two kinds namely 1 where it is paid as an implied term of employment as explained in Mahalaxmi Cotton Mills case 2 and 2 where it is paid as a customary and traditional payment as stated in the Industrial Tribunal s award referred to above
We have considered the tests to be applied where it is a case of payment on an implied term of employment in Messrs Ispahani Ltd vs Ispahani Employees  Union 3 and we need not repeat what we have said there
In the present case it has been pointed out by the company that payments which had been made in the past years from 1940 to 1952 could not be considered as based on an implied term of employment in the circumstances of this cash
This contention in our opinion is correct
An implied term of employment cannot be inferred in this case for right from 1 Publication of Government of West Bengal I Awards made by the Tribunals for the quarter ending March 2 3 196011 SCR 24 111 1948 to 1952 the company whenever it paid this bonus made it clear that it was an ex gratia payment and would not constitute any precedent for future years
In the face of such notice year by year it would not be possible to imply a term of employment on the basis of an implied agreement for agreement postulates a meeting of minds regarding the subjectmatter of an agreement and here one party was always making it clear that the payment was ex gratia and that it would not form a precedent for future years
In dealing with the question of an implied term of the condition of service it would be difficult to ignore the statement expressly made by the employer while making the payment from year to year
The question however whether the payment in this case was customary and traditional still remains to be considered
In dealing with puja bonus based on an implied term of employment it was pointed out by us in Messrs Ispahani Ltd vs Ispahani Employees Union 1 that a term may be implied even though the payment may not have been at a uniform rate throughout and the Industrial Tribunal would be justified in deciding what should be the quantum of payment in a particular year taking into account the varying payments made in previous years
But when the question of customary and traditional bonus arises for adjudication the considerations may be somewhat different
In such a case the Tribunal will have to consider i whether the payment has been over an unbroken series of years ii whether it has been for a sufficiently long period though the length of the period might depend on the circumstances of each case even so the period may normally have to be longer to justify an inference of traditional and customary puja bonus than may be the case with puja bonus based on an implied term of employment iii the circumstance that the payment depended upon the earning of profits would have to be excluded and therefore it must be shown that payment was made in years of loss
In dealing with the question of custom the fact that the payment was called ex gratia by the employer when it 1 19601 SCR 24 112 was made would however make no difference in this regard because the proof of custom depends upon the effect of the relevant factors enumerated by us and it would not be materially affected by unilateral declarations of one party when the said declarations are inconsistent with the course of conduct adopted by it and iv the payment must have been at a uniform rate throughout to justify an inference that the payment at such and such rate had become customary and traditional in the particular concern
It will be seen that these tests are in substance more stringent than the tests applied for proof of puja bonus as an implied term of employment
Let us now see whether these tests are satisfied in the present case
The practice in the present case began in 1940 and was unbroken upto 1950
In between there was an adjudication in 1948 to which the company was a party
At that time it was said on behalf of the company before the industrial tribunal that some bonus was being paid and that there was no intention to discontinue It and consequently the tribunal did not adjudicate upon the matter which shows that the company recognised the traditional and customary nature of the payment and it assured the tribunal that there was no intention then to discontinue the payment
The payment was continued from 1949 to 1951
In 1952 there was some dispute and originally the company paid one month s wages as advance of pay and not as bonus
Some of the workmen however accepted the payment while others did not because they were not satisfied with the amount being paid as advance of pay
The chairman of the board of directors of the company visited Calcutta in 1952 and then on the representation of the workmen the advance was converted into one month s bonus and even those workmen who had not accepted the advance were allowed to draw the bonus
It cannot therefore be said that there was any break in the payment of bonus from 1940 to 1952 for if the chairman had not converted what was advance of pay into bonus in December 1952 the workmen might have raised the dispute even in that year and then 113 there would have been no break up to 1951
So there has been unbroken payment and the period has been sufficiently long to justify an inference of customary and traditional bonus
It was pointed out that in four years during this period the payment was made in November and December and not about the time of the pujas and therefore it could not be said that this was traditional and customary puja bonus
The delay in payment is not in our opinion material in this case for one of the directors of the company who appeared as a witness stated as to this one month s bonus that it was paid by the company to help its staff during pujas
The condition that the payment should have been made in years of loss also to exclude the hypothesis that it was paid only because profits had been made has also been satisfied for the evidence is that payments were made in at least two years of loss
Lastly the condition that payment should have been at a uniform rate has also been satisfied because one month s basic wage is the quantum of bonus from 1940 right up to 1952 without any change
It is true that in December 1951 further bonus for half a month was paid but that year was a year of profit in which cloth bonus for half a month was specially paid
Thus the rate so far as the puja bonus is concerned has always remained uniform at one month s basic wage
It is true that the workmen pitched their demand too high for three month s bonus in 1953
But that doe  not in our opinion detract from the inference to be drawn from the facts proved in this case
All the conditions therefore of a customary and traditional bonus are satisfied in this case and there is no reason to interfere with the order of the Appellate Tribunal though we should like to make it clear that we do not agree with the observations of the Appellate Tribunal in connection with the profit bonus aspect of the matter
The appeal therefore fails and is hereby dismissed
As this question has arisen for the first time in this Court as a distinct issue and was not clearly considered before by the Appellate Tribunal we order the parties to bear their own costs


Summary:
The appellant was tried on a charge of murder by the Sessions judge with the aid of a jury
The evidence against him consisted of the testimony of an approver and the proof of corroborative circumstances tending to connect him with the crime
The jury found the appellant guilty and the Sessions judge accepting the verdict sentenced him to imprisonment for life
An appeal to the High Court was dismissed as that Court found no misdirections in the charge to the jury
The appellant contended that there was misdirection in the charge to the jury in that the jury was not told as laid down in Sarwan Singh vs The State of Punjab   that the approver s evidence had to satisfy a double test ie he must be a reliable witness and his evidence must receive sufficient corroboration and in that the corroborating evidence was not sufficient to connect the appellant with the crime
Held that there were no misdirections in the charge
The observations in Sarwan Singh s case that it must be shown that the approver was a reliable witness were made in the special circumstances of that case where the approver had definitely been found to be so thoroughly discrepant as to be wholly unreliable
In the present case there was nothing to show that the evidence of the approver was in any way unreliable
Saywan Singh vs The State of Punjab   dis tinguished
The Sessions judge had correctly directed the jury that the corroboration of the evidence of the approver in material particulars must relate not only to the commission of the crime but also to the evidence connecting or tending to connect the accused with the crime
The circumstances proved in the case corroborated the approver s evidence connecting the appellant with the crime
Once there was evidence of such circumstances it was for the jury to decide whether they were sufficient corroboration of the approver s evidence that the appellant murdered the deceased