Case: Poona Electric Supply Company Limited, Poona Vs. S Industrial Tribunal (S. Taki Bilgrami)

every year heretofore. The unions were demanding an enhanced rate in view of the financial prosperity of the company, Instead of three months bonus, they were now demanding six months bonus. There might have been some substance in the argument of Sri Ramaswami if the claim for interim relief had been made on the customary basis, that is to say, bonus payable at a uniform rate at certain festivals, as, for example, the Pooja or Diwali bonus. In such a case, the basic for the claim in the reference would have been inconsistent with the basis for the interim claim, because on the customary basis, the workers could never have asked for more than three months wage which they were receiving as bonus in past years.( 13 ) THE distinction between the various types of bonus has now been well-established. In New Maneck Chowk Spinning and Weaving Company, Ltd. v. Textile Labour Association [1961 - I l. L. J. 521 at 526] it has been pointed out that so far there are only four types of bonus which have been evolved under the industrial law as laid down by the Supreme Court. It is observed as follows :"firstly, there is what is called a production bonus or incentive wage [see Titaghar Paper Mills v. Their workmen (1959 - II L. L. J. 9); the second is bonus as an implied term of contract between the parties [see Ispahani, Ltd. v. Ispahani Employees Union (1959 - II L. L. J)]; the third is customary bonus in connexion with some festival [see Grahams Trading Company v. Their workman (1959 - II L. L. J. 393)]; and the fourth is profit-bonus which was evolved by the Labour appellate Tribunal in Millowners Association, Bombay v. Rashtriya Mill Mazdoor Sangh, bombay [1950 L. L. J. 1247], and which has been considered by this Court fully in two cases. "( 14 ) AT one stage there was some confusion about the "customary" bonus. That term was promiscuously used for what is now really customary bonus paid in connexion with a festival as also for what is paid as an implied term of contract of service. The difference between the two forms of bonus has been brought out in Grahams Trading Company v. Their workmen [1959 - II l. L. J. 393] (vide supra ). One of the four circumstances which went to show whether a bonus was a customary bonus or not was to see whether the payment has been made at a uniform rate throughout. In the case of bonus paid as a term of implied contract, the bonus is not uniform; it can be variable [see also Ispahani, Ltd. v. Ispahani Employees Union (1959 - II L. L. J. 4) (vide supra)]. Therefore, when a claim for bonus is made on the basis that it was an implied term of contract, it was always open for the respondent-unions to contend that though till now they were paid bonus equivalent to three months wages, they were entitled to be paid a higher bonus in view of the increased financial prosperity of the company. Sri Ramaswami wants to construe the demand as a demand based entirely on the Full Bench formula. We do not think that there is any justification for such a restricted construction upon the demand actually made and referred to above. Sri Ramaswami referred to a decision of the Supreme Court in Bridge and Roof Company (India), Ltd. v. Union of India [1962 - II L. L. J. 490] for supporting his contention that as soon as you demand bonus for a particular year, it must reference to the individual year, it must necessarily imply the application of the Full Bench formula. We do not think there is anything in this report to justify this conclusion. That case deals with the word "bonus" found in the definition of the expression basic wages" in S. 2 (b) (ii) of the Employees Provident Fund Act, 1952. We cannot read this decision as an authority for the proposition that when a demand is made by a party for bonus being paid for any given year, that is equivalent to demanding it on the basis of the Full Bench formula. In these circumstances, therefore, when on 6 February 1963 the respondents made a claim for an interim award of bonus for three months as a term of service contract, that cannot be regarded as in any way inconsistent with the demand made in the reference itself. The demand in the reference is reference as much to the full Bench formula as to the term of service contract. In the application dated 6 February 1963 respondent 2 union stated as follows :-" (2) That payment of three months bonus is a term of service contract of all the workmen. (3) That there is an implied contract of service that the workers are entitled to payment of three months bonus per year. (4) It is therefore prayed that three moths bonus should be awarded as interim bonus immediately. "( 15 ) WHAT follows is important, viz.-" (5) The union reserves its right to submit the bonus calculations and the justification of the same at a later date. "( 16 ) IN other words, the demand made in the reference is referable both to the terms of contract and the Full Bench formula. Since the company had paid bonus for a number of years prior to 1961-62, the respondent unions, apparently, made an application for the award of an interim bonus at least at that rate pending the adjudication with regard to the demand already made. In our view, the tribunal was perfectly justified in considering that though the claim for bonus was one, it was claimed on two different grounds, and it was open to the tribunal to consider both the grounds without feeling it necessary to exclude one by the other. In our opinion, there is no good reason for interfering with the order passed by the tribunal.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]( 14 ) AT one stage there was some confusion about the "customary" bonus. That term was promiscuously used for what is now really customary bonus paid in connexion with a festival as also for what is paid as an implied term of contract of service. The difference between the two forms of bonus has been brought out in Grahams Trading Company v. Their workmen [1959II l. L. J. 393] (vide supra ). One of the four circumstances which went to show whether a bonus was a customary bonus or not was to see whether the payment has been made at a uniform rate throughout. In the case of bonus paid as a term of implied contract, the bonus is not uniform; it can be variable [see also Ispahani, Ltd. v. Ispahani Employees Union (1959II L. L. J. 4) (vide supra)]. Therefore, when a claim for bonus is made on the basis that it was an implied term of contract, it was always open for theto contend that though till now they were paid bonus equivalent to three months wages, they were entitled to be paid a higher bonus in view of the increased financial prosperity of the company. Sri Ramaswami wants to construe the demand as a demand based entirely on the Full Bench formula. We do not think that there is any justification for such a restricted construction upon the demand actually made and referred to above. Sri Ramaswami referred to a decision of the Supreme Court in Bridge and Roof Company (India), Ltd. v. Union of India [1962II L. L. J. 490] for supporting his contention that as soon as you demand bonus for a particular year, it must reference to the individual year, it must necessarily imply the application of the Full Bench formula. We do not think there is anything in this report to justify this conclusion. That case deals with the word "bonus" found in the definition of the expression basic wages" in S. 2 (b) (ii) of the Employees Provident Fund Act, 1952. We cannot read this decision as an authority for the proposition that when a demand is made by a party for bonus being paid for any given year, that is equivalent to demanding it on the basis of the Full Bench formula. In these circumstances, therefore, when on 6 February 1963 the respondents made a claim for an interim award of bonus for three months as a term of service contract, that cannot be regarded as in any way inconsistent with the demand made in the reference itself. The demand in the reference is reference as much to the full Bench formula as to the term of service contract. In the application dated 6 February 1963 respondent 2 union stated as follows(2) That payment of three months bonus is a term of service contract of all the workmen. (3) That there is an implied contract of service that the workers are entitled to payment of three months bonus per year. (4) It is therefore prayed that three moths bonus should be awarded as interim bonus immediately. "( 15 ) WHAT follows is important,(5) The union reserves its right to submit the bonus calculations and the justification of the same at a later date. "( 16 ) IN other words, the demand made in the reference is referable both to the terms of contract and the Full Bench formula. Since the company had paid bonus for a number of years prior tothe respondent unions, apparently, made an application for the award of an interim bonus at least at that rate pending the adjudication with regard to the demand already made. In our view, the tribunal was perfectly justified in considering that though the claim for bonus was one, it was claimed on two different grounds, and it was open to the tribunal to consider both the grounds without feeling it necessary to exclude one by the other. In our opinion, there is no good reason for interfering with the order passed by the tribunal.