Case: Bala Subrahmanya Rajaram Vs. B.C. Patil &amp; Others

1. These appeals arise out of petitions made to the Bombay High Court under Art. 226 for writs of certiorari.The appellant is the manager of the Tata Mills Limited, which carries on business in the manufacture and sale of textile goods in Bombay and as such is responsible for the payment of wages under the Payment of Wages Act, 1936.The first respondent was the Authority under the Payment of Wages Act at the times material to these appeals. The sixth respondent is the present Authority. The Authority is entrusted with the duty of deciding cases failing within the purview of the Act.The second, third, fourth and fifth respondents are employees in the Mills.A dispute arose about a claim made by the operatives of the Mills for a bonus for the year 1948. This was referred to the Industrial Court at Bombay which made an award on 23rd April 1949, and awarded a bonus equivalent to four and a half months wages subject to certain conditions of which only the sixth is material here. It runs as followswho are eligible for bonus but who are not in the service of the Mills on the date of the payment shall be paid in one lump sum by the 30th November 1949. In such cases, claims in writing should be made to the Manager of the Mills concerned.Those operatives who made a claim before the date fixed above were duty paid but payment was refused to the third respondent, who applied much later, on the ground that the condition subject to which the award was made was not fulfilled.The third respondent thereupon made an application before the first respondent, the Authority under the Payment of Wages Act.8. Similar claims were made by the second, fourth and fifth respondents for a bonus for the year 1949. The Industrial Court awarded a bonus equal to two months wages and in the sixth condition put the date as 31st December 1950.9. By this time Labour Appellate Tribunals came into existence, so both sides filed appeals against the award to the Labour Appellate Tribunal of Bombay. The appeals failed and the award was upheld.After that, the matter followed the same pattern. Respondents 2, 4 and 5 applied for their bonus after 31st December 1950. The Mills refused to pay and these respondents applied to the first respondent the Authority under the Payment of Wages Act.The two sets of claims, that is to say, the claim of the third respondent for a bonus for the year 1948 and the claims of the second, fourth and fifth respondents for bonuses for the year 1949, were heard together.The appellant contested these applications on two grounds. He questioned the jurisdiction of the Authority to entertain the petitions made to it. He also contended that, in any event, as the condition subject to which the award was made, namely, an application on or before 30th November 1949 was not fulfilled, the claim for a bonus did not lie.The first respondent held that it had jurisdiction and, after hearing the parties on the merits, decreed the various claims.The appellant thereupon filed writ petitions in the High Court. They were heard and dismissed by Coyajaee, J.An appeal was then filed in the same High Court and heard by the Chief Justice and Bhagwati, J. They held that the questions raised were covered by an earlier decision of theirs in another case dated 11th March 1952, and, following that decision, dismissed the appeals without hearing further arguments, as counsel on both sides agreed that the matter was covered by the earlier decision.The appellant then applied for a certificate for leave to appeal here. This was granted by Chagla, C. J., and Dixit J., on 2nd February 1953.

Reasoning: The opening words of the definition made it clear that "wages" means remuneration that is payable when the terms of the contract of employment are fulfilled. Therefore, that is something certain. One knows ahead of time that if the terms of the contract are fulfilled, then the bonus is payable. It may be that the exact amount has yet to be determined but the fact that bonus is payable and can be claimed as soon as the terms of the contract are fulfilled is a matter that can be predicated before-hand, that is to say even before the terms of the contract are fulfilled, or indeed, even before the work has started if the contract is made that far ahead. But that is not the case when bonus is awarded by an Industrial Court, for there it is impossible to say ahead of time whether bonus will be awarded or not; indeed, at the time the contract is entered into, it would be impossible to say whether such a claim could be laid at all because a difference of opinion between one worker and his employer about the right to bonus would not necessarily lead to an industrial dispute. When an Industrial Court awards a bonus, independent of any contract, it does so only if there is an available surplus for a distribution of bonus and the amount of the award would depend on the extent of the surplus available for that purpose. Therefore, the fulfilment or otherwise of the terms of the contract of employment is not an essential ingredient of an award of an Industrialchange would have been unnecessary had the law been otherwise under the old definition; nor is it possible to say that the clause was added by way of abundant caution because the Federal Court decided otherwise in 1949. In view of this amendment, and in view of the Federal Courts decision, we do not feel justified in taking a different view, especially as we think the decision was right.On this view, it is not necessary to consider the other points that were argued because, if the definition of "wages" as it stood before the amendment is not wide enough to include a bonus of the kind we have here, namely, one payable under an award of an Industrial Court, then, the Authority under the Payment of Wages Act had no jurisdiction to entertain the petitions made to it under S. 15 of the Act.