Indian Oil Corporation Ltd. Vs. Presiding Officer, Central Govt. Industrial Tribunal and ors. - Court Judgment

Excerpt:
- - having come to a clear finding that there was no allocable surplus for the accounting year, the tribunal proceeded and held that even if the workmen failed to show that there was any error in the profit and loss account and no allocable surplus was available, still they are entitled to the minimum bonus at the rate of four percent (4%) of the salary/wage earned by each of them during the accounting year 1975. relevant paragraph 22 of the award is quoted hereunder: where there was no allocable surplus in any accounting year because of sub-section (2) every employer shall be bound to pay every employee in respect of the accounting year commencing on any day in the year 1974, a minimum bonus, which shall be 4 percent of the salary or wage earned by the employee during that year or rupees one hundred, whichever is higher, which further provided that when the employee had not completed 15 years of age at the beginning of that accounting year, in the place of one hundred rupees, it would be read as sixty rupees the learned tribunal thus came to a finding that even if the workmen failed to show that there was any error in the profit and loss account and that no allocable surplus was available, still they are entitled to the minimum bonus at the rate of four percent of the salary/wage earned by each of them during the accounting year 1975 and accordingly gave an award as aforesaid in favour of the workmen which shall carry an interest @6% per annum f 21. in view of the finding recorded by the tribunal that there was no allocable surplus for the accounting year 1975, as it has been proved by the employer and the workmen had miserably failed to rebut the same, the tribunal erred in law in directing the employer to pay the minimum bonus @4% with an interest at six percent per annum from the date it was due till payment, referring section 10(2) of the act which was not applicable under the act 1965 as amended in 1976. the other question raised relating to applicability of section 31a of the act, the tribunal had come to a clear finding, rightly so, in holding that the workmen are not entitled to receive bonus linked with production/ productivity and for matters connected therewith and this court is not inclined to go through the question raised in view of the provision of section 31-a of the act which is specific, clear and there is no ambiguity in the section itself, which would go to show that the section 31-a is not applicable in a. hazarika, j.1. indian oil corporation limited (assam oil division), digboi, assam, a company registered under the indian companies act, 1956 has brought in challenge the award dated january 29,1996 passed in reference case no. 59 of 1978 by the central government industrial tribunal. calcutta under article 226 of the constitution of india seeking a writ in the nature of certiorari for quashing and/or setting aside the award as aforesaid.2. a dispute was referred for adjudication under section 10(2) of the industrial disputes act, 1947 by the union of india, viz;having regard to the past practices and in view of the amended payment of bonus act, 1965, whether or not any bonus for the accounting year 1975 is payable to the workmen of assam oil company limited? in either case to what relief are these workmen entitled?3. the adjudication so referred was brought on the file of the learned central government industrial tribunal, calcutta, (hereinafter referred to as tribunal only), being reference case no. 59 of 1978. the learned tribunal issued notices to the parties and on appearance, both the parties adduced evidences and exhibited documents in support of their respective claims.4. in the written statement filed by the workmen before the learned tribunal, they claimed that the management was providing bonus beginning from 1947 onwards till 1974 and the bonus thus has assumed the character of 'customary bonus'. therefore, their entitlement for the same 'customary bonus' cannot be denied for the year 1975 irrespective of amendment made in the payment of bonus act, 1965.5. denying the claim of the workmen, the management in their written statement contended that no bonus is payable to the workmen for the accounting year ending on december 31, 1975, their being no allocable surplus within the meaning of payment of bonus act, 1975, for the said accounting year because of amended act which came into force with effect from september 25, 1975.6. the learned tribunal has dealt with the matter in extenso in regard to payment of bonus to the employees right from 1944 to 1974 by the management. the workmen had made a claim for bonus for the years 1944, 1945, 1946 and 1947 which, however, referred for adjudication to the industrial tribunal and the industrial tribunal by its award published on february 11, 1949 rejected the claim for bonus for the year 1944, 1945 and 1946, while directing the payment of bonus for the year 1947 amounting to one month basic wage as bonus. the claim for bonus for the subsequent years 1948, 1949 and 1950 were also referred for adjudication to the industrial tribunal. the learned tribunal by its award dated august 7, 1952, directed the payment of three (3) months basic wage as bonus for the year 1949 and allowed only basic wage for two (2) months as bonus for the year 1950, subject to certain conditions, which however, modified by the labour appellate tribunal at calcutta in appeal case no. cal 250/52 vide judgment dated june 8, 1954 allowing three (3) months basic wages for each of the years 1948, 1949 and 1950. consequently thereupon the management paid voluntarily for each of the three (3) years bonus at the rate of one month's basic wage for every year and paid additional bonus at the rate of two (2) months basic wage in compliance of the award as indicated above. the bonus for the years 1951, 1952 and 1953 as claimed by the workmen were referred to the industrial tribunal for adjudication. the learned tribunal by its award dated may 19, 1956 rejected the claim for bonus for the years 1952 and 1953 but awarded bonus at four (4) months basic wages for the year 1951 which was inclusive of the two (2) months basic wages already paid by the company management voluntarily for the said year.7. thereafter there was a long term settlement on the quantum of bonus for the years 1951 to 1958 in which bonus at three (3) months basic wage for each of the years from 1954 to 1958 were agreed to be paid and received. apart from the aforesaid agreement, the company as a gesture of goodwill made an ex-gratia payment of a further one month's basic wage as bonus in addition. this was followed by several other settlements signed between the parties under which the management company agreed to pay bonus at the rate of three (3) month's basic wage for each of these years from 1959 to 1967. the payment of bonus which was granted under the settlement has a reference as bonus and not profit bonus, continued till 1967.8. it may not be out of place to mention that the payment of bonus act came into force with effect from september 25, 1965. the payment of bonus act (hereinafter referred to as act only) provides for payment of bonus to persons employed in certain establishment on the basis. of profit or on the basis of production or productivity and for matters connected therewith. the act and the provisions made thereto would reflect that the parliament enacted the payment of bonus act in order to maintain sound industrial relations between the employer and the employee.9. in view of the enactment of the act and its statutory obligation, between the parties i.e. the management and the workmen, a fresh-agreement was made on march 6, 1967 in accordance with the provisions of section 34(3) of the act, which however, substituted as section 34 under the amendment act 23 of 1976 wherein the parties agreed that three (3) months basic wage be paid as bonus for the year 1968. however, for the subsequent period after 1968, a settlement was arrived at between the parties, whereunder, the management company revised the workmen's basic wage, d.a., gratuity, retirement benefits and overtime rates and agreed vide memorandum of settlement that bonus would be paid in accordance with the provisions of the act. this settlement was made effective with effect from december 1, 1969.10. thereafter, a dispute again arose in respect of bonus for the accounting year 1969 and the matter was referred to the tribunal for adjudication and the tribunal by its order dated may 5, 1973 had held that the workmen were entitled to the payment of minimum bonus of four percent (4%) of their salaries or wages earned by them during the accounting year 1969 or rs. 40/- (rupees forty), whichever is higher as provided under section 10 of the act. the workmen had again raised a dispute for payment of bonus for the accounting year 1970 which however, was withdrawn by the workmen and the award was passed on february 27, 1976 on the ground of non-prosecution.11. the payment of bonus for the years 1971, 1972 and 1973 were settled by a long term settlement and for the year 1974, the matter was settled by an agreement signed on august 25, 1975 which goes to show that the payment of bonus was linked with basic pay of the workmen and not with profit of the company and the present reference is in relation to the payment of bonus in respect of the accounting year 1975 as aforesaid.12. the learned tribunal after a detailed discussion of the evidence produced before it, recorded a clear finding that there was no allocable surplus for the accounting year 1975 and a general notification issued under the signature of general manager dated august 25, 1976 stating therein, as no allocable surplus for the accounting year was found on computation under the payment of bonus act, 1965, no bonus is payable to the employees of the company. having come to a clear finding that there was no allocable surplus for the accounting year, the tribunal proceeded and held that even if the workmen failed to show that there was any error in the profit and loss account and no allocable surplus was available, still they are entitled to the minimum bonus at the rate of four percent (4%) of the salary/wage earned by each of them during the accounting year 1975. relevant paragraph 22 of the award is quoted hereunder:the question now arises if the allocable surplus is not there, whether the workmen of the assam oil company were not entitled to any bonus for the said year of 1975. the payment of bonus (amended act), 1976, was deemed to be effective from september 25, 1975 and this superseded the ordinance which was in the field in this regard. the allocable surplus, has only special significance for the purpose of section 10(1) of the new section that was inserted by the amending act of 1976. according to sub-section (1) subject to other provisions of that act when an employer had allocable surplus in an accounting year, he was bound to pay every employee in respect of that accounting year a minimum bonus which shall not be less than 4 percent of the salary or wages earned by the employee during the accounting year or rs. 100/- whichever is higher or in a case where the allocable surplus exceeds the said amount of minimum bonus payable to the employees, an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of 20 percent of such salary or wage, be paid, provided that in case of an employee who had not completed 15 years of age at the beginning of the concerned accounting year for the works one hundred rupees as stated earlier, it would be sixty rupees. the sub-section (2) of section 10 is very specific. where there was no allocable surplus in any accounting year because of sub-section (2) every employer shall be bound to pay every employee in respect of the accounting year commencing on any day in the year 1974, a minimum bonus, which shall be 4 percent of the salary or wage earned by the employee during that year or rupees one hundred, whichever is higher, which further provided that when the employee had not completed 15 years of age at the beginning of that accounting year, in the place of one hundred rupees, it would be read as sixty rupeesthe learned tribunal thus came to a finding that even if the workmen failed to show that there was any error in the profit and loss account and that no allocable surplus was available, still they are entitled to the minimum bonus at the rate of four percent of the salary/wage earned by each of them during the accounting year 1975 and accordingly gave an award as aforesaid in favour of the workmen which shall carry an interest @ 6% per annum from the date it was due till the date of payment. the said award rendered by the tribunal calls in question by the company in exercise of power under article 226 of the constitution of india before this court.13. criticizing the award passed by the learned tribunal, mr. s.n. sarma, learned senior counsel appearing for the petitioner has taken this court to the pleadings of the parties, the evidence on record and the provisions of the act (amendment act 23 of 1976) and argued that since the tribunal has recorded a finding that there was no allocable surplus for the accounting year, 1975, there is no question to refer section 10(2) of the act, the benefit of which is not available for the workmen including the interest which is beyond the jurisdiction of the tribunal in passing the award and hence prayed for interference of this court in exercise of power under article 226 of the constitution of india.14. in the instant case, none had appeared on behalf of the workmen, in spite of service of notice, but this court, vide order dated december 14, 2005 , appointed mr. a. dasgupta, advocate as amicus curiae to defend the interest of the workmen, mr. a. dasgupta, accordingly appeared and argued the matter on behalf of the workmen.refuting the argument advanced by the counsel for the management company, mr. a. dasgupta, the learned amicus curiae, appearing for the workmen argued that on admission of the company, that they are paying bonus to its workmen from 1947 to 1974, it assumes the character of customary bonus, more so, when the act was amended in favour of the workmen by inclusion of section 31a of the payment of bonus (amendment) act, 1976, which relates to special provision in respect of payment of bonus linked with production or productivity.15. in order to appreciate the grievance made by the counsel of the parties against and in favour of the award it would be necessary to narrate a few introductory facts. the petitioner is a, registered company under the companies act, 1956 and the company has its statutory obligation to adhere to the provisions of the act since its provisions applies to the petitioner and its workmen. the trade union on behalf of the workmen of the petitioner raised an industrial dispute pertaining to non-payment of appropriate statutory bonus to their members for the accounting year 1975 and the tribunal gave its award as indicated above.16. in order to resolve the contentions raised, it would be appropriate to look into the relevant provisions of the act and its subsequent amendment made in the payment of bonus act. the payment of bonus act was promulgated by an ordinance on may 29,1965. the said ordinance became an act being the payment of bonus act (act 21 of 1965). the object of this act is to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith. the said act (21 of 1965) was amended on september 1, 1973 (act 39 of 1973) which provided for the payment of a minimum bonus in respect of the accounting year commencing an any day in the year 1972 at the rate of 8 1/3 percent of the salary or wage of an employee. the said amendment was made applicable for the accounting year commencing on any day in the year 1973 at the same rate as was made applicable for the year 1972.17. thereafter an ordinance namely the payment of bonus (amendment) ordinance, 1975 was promulgated on september 25, 1975 and on february 11,1976 the ordinance became an act (payment of bonus amendment act, 23 of 1976) and was given retrospective- effect from september 25, 1975 being the date on which the ordinance had come into force. as a result of the amendments, a number of substantial amendments were made in the payment of bonus act. section 10 of the principal act was substituted which has a relevance for deciding the case is quoted hereunder;10. amount of bonus - (1) subject to the other provisions of this act, where an employer has any allocable surplus in any accounting year, then, he shall be bound to pay to every employee in respect of that accounting year a minimum bonus which shall not be less than four percent of the salary or wage earned by the employee during the accounting year or one hundred rupees whichever is higher, or, in a case where the allocable surplus exceeds the said amount of minimum bonus payable to the employees, an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage:provided that where an employee has not completed fifteen years of age at the beginning of that accounting year, the provisions of this sub-section shall have effect in relation to such employee as if for the words 'one hundred rupees' the words 'sixty rupees' were substituted.(2) for the purposes of sub-section (1), the allocable surplus shall be computed taking into account the amount set-on or set-off in the three immediately preceding accounting years and in the accounting year in respect of which the bonus is payable, in the manner illustrated in the third schedule.(3) notwithstanding anything contained in this section, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1974, a minimum bonus which shall be four per cent of the salary or wage earned by the employee during that accounting year or one hundred rupees whichever is higher whether or not the employer has any allocable surplus in that accounting year:provided that where an employee has not completed fifteen years of age at the beginning of that accounting year, the provisions of this sub-section shall have effect in relation to such employee as if for the words 'one hundred rupees', the words 'sixty rupees' were substituted:provided further that where any employer has, before the commencement of the payment of bonus (amendment) ordinance, 1975, paid to his employees in respect of the accounting year commencing on any day in the year 1974, a minimum bonus in excess of that specified in this sub-section, not-withstanding that such employer did not have the required allocable surplus for the payment of such bonus, then such employer shall deduct the excess amount of bonus so paid from the amount of bonus payable by him to the employees under this act in respect of the three immediately succeeding accounting years and the employee shall be entitled to receive only the balance.18. another amendment which has been referred to by the counsel of the workmen at the time of hearing is relevant since the question has been raised that the workmen of assam oil company are entitled to bonus in view of section 31a linked with production or productivity, even if this court held that there was no allocable surplus for the accounting year 1975. section 31-a reads as follows:31-a. special provision with respect to payment of bonus linked with production or productivity.notwithstanding anything contained in this act-(i) where an agreement or a settlement has been entered into by the employees with their employer before the commencement of the payment of bonus (amendment) act, (23 of 1976) or(ii) where the employees enter into any agreement or settlement with their employer after such commencement, for payment of an annual bonus linked with production, or productivity in lieu of bonus based on profits payable under this act, then such employees shall be entitled to receive bonus due to them under such agreement or settlement as the case may be:provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void insofar as it purports to deprive them of such rightprovided further that such employees shall not be entitled to be paid such bonus in excess of twenty per cent of the salary or wage earned by them during the relevant accounting year.19. a close scrutiny of the entire amending act 23 of 1976. reveals that the parliament in its wisdom taking into consideration the following aspects while amending the payment of bonus act 1965, decided inter alia that,i) the act should provide for payment of bonus on the basis of profit or on the basis of production or productivity and for matters connected therewith;ii) payment of minimum bonus should be subject to the availability of allocable surplus, even if, it be a marginal amount;iii) the minimum bonus should be equal to four percent of salary or wage. however, the amount of minimum bonus in absolute terms should be raised from rs. 25 to rs. 60 in the case of persons below 15 years and from rs. 40 to rs. 100 in the case of others;iv) in respect of the accounting year commencing on any day in the year 1974, every employer should pay to every employee a minimum bonus whether or not the employer has any allocable surplus in that accounting year and that if any employer has paid a minimum bonus in excess what is specified, notwithstanding that such employer did not have the required allocable surplus for payment of such bonus, then, such employer shall deduct the excess amount of bonus, so paid from the amount of bonus payable by him to the employees in respect of the three immediately succeeding accounting year;v) banking companies is excluded from the purview of the act;vi) agreements /settlement for the payment of bonus based on production/ productivity in lieu of bonus based on profits should also be subject to a maximum of 20 percent, as in the case of bonus based on profits;vii) section 34(3) of the act should be omitted;viii) section 36 of the income -tax act shall be amended to provide that deductions in respect of bonus paid to an employee, employed in a factory or other establishment to which the provisions of the payment of bonus act, 1965 apply, shall not exceed the amount of bonus payable under that act.20. another noticeable feature in the amendment act (23 of 1976) would show that it related to the accounting year 1974 which ensured, that a minimum bonus @ 4% is liable to be paid even if there is no allocable surplus in that year. the amendment act is silent in regard to the accounting year 1975 and the intention of the legislation by way of amendment is clear that no minimum bonus is payable in respect of subsequent accounting year if there is no allocable surplus in those accounting year and the omission of payment of bonus for the accounting year 1975 even when there is no allocable surplus, the employer is not under any statutory obligation to pay the bonus @ 4% which adversely affected the workers and considering the grievances made by the workers, the payment of bonus act was amended by amending act (43 of 1977) (48 of 1978) (50 of 1980) and (66 of 1980) wherein and whereunder 8.33 percent has been provided for payment of a minimum bonus for the accounting year commencing on any day in the year 1976 irrespective of whether there was any allocable surplus or not which continues for the accounting year 1977 onwards and by the amendment act (66 6f 1980) a provision has been made for payment of a minimum bonus at 8.33 percent or rs. 100, whichever is higher.21. in view of the finding recorded by the tribunal that there was no allocable surplus for the accounting year 1975, as it has been proved by the employer and the workmen had miserably failed to rebut the same, the tribunal erred in law in directing the employer to pay the minimum bonus @ 4% with an interest at six percent per annum from the date it was due till payment, referring section 10(2) of the act which was not applicable under the act 1965 as amended in 1976. the other question raised relating to applicability of section 31a of the act, the tribunal had come to a clear finding, rightly so, in holding that the workmen are not entitled to receive bonus linked with production/ productivity and for matters connected therewith and this court is not inclined to go through the question raised in view of the provision of section 31-a of the act which is specific, clear and there is no ambiguity in the section itself, which would go to show that the section 31-a is not applicable in the case in view of the reference made for adjudication and the tribunal cannot go beyond the order of reference.22. in the result the writ petition is allowed by setting aside the award passed by the central government industrial tribunal, calcutta dated january 29, 1996 in reference case no. 59 of 1978, holding that since there was no allocable surplus for the accounting year commencing on any day of 1975, the employees are not entitled to get any payment on account of bonus under the act 1965 as amended in 1976. the parties are left to bear their own costs.

Judgment:

A. Hazarika, J.

1. Indian Oil Corporation Limited (Assam Oil Division), Digboi, Assam, a company registered under the Indian Companies Act, 1956 has brought in challenge the Award dated January 29,1996 passed in Reference Case No. 59 of 1978 by the Central Government Industrial Tribunal. Calcutta under Article 226 of the Constitution of India seeking a writ in the nature of certiorari for quashing and/or setting aside the Award as aforesaid.

2. A dispute was referred for adjudication under Section 10(2) of the Industrial Disputes Act, 1947 by the Union of India, viz;

Having regard to the past practices and in view of the amended Payment of Bonus Act, 1965, whether or not any bonus for the accounting year 1975 is payable to the workmen of Assam Oil Company Limited? In either case to what relief are these workmen entitled?

3. The adjudication so referred was brought on the file of the learned Central Government Industrial Tribunal, Calcutta, (hereinafter referred to as Tribunal only), being Reference Case No. 59 of 1978. The learned Tribunal issued notices to the parties and on appearance, both the parties adduced evidences and exhibited documents in support of their respective claims.

4. In the written statement filed by the workmen before the learned Tribunal, they claimed that the management was providing bonus beginning from 1947 onwards till 1974 and the bonus thus has assumed the character of 'Customary Bonus'. Therefore, their entitlement for the same 'Customary Bonus' cannot be denied for the year 1975 irrespective of amendment made in the Payment of Bonus Act, 1965.

5. Denying the claim of the workmen, the management in their written statement contended that no bonus is payable to the workmen for the accounting year ending on December 31, 1975, their being no Allocable Surplus within the meaning of Payment of Bonus Act, 1975, for the said accounting year because of Amended Act which came into force with effect from September 25, 1975.

6. The learned Tribunal has dealt with the matter in extenso in regard to Payment of Bonus to the employees right from 1944 to 1974 by the management. The workmen had made a claim for bonus for the years 1944, 1945, 1946 and 1947 which, however, referred for adjudication to the Industrial Tribunal and the Industrial Tribunal by its award published on February 11, 1949 rejected the claim for bonus for the year 1944, 1945 and 1946, while directing the payment of bonus for the year 1947 amounting to one month basic wage as bonus. The claim for bonus for the subsequent years 1948, 1949 and 1950 were also referred for adjudication to the Industrial Tribunal. The learned Tribunal by its Award dated August 7, 1952, directed the payment of three (3) months basic wage as bonus for the year 1949 and allowed only basic wage for two (2) months as bonus for the year 1950, subject to certain conditions, which however, modified by the Labour Appellate Tribunal at Calcutta in Appeal Case No. Cal 250/52 vide judgment dated June 8, 1954 allowing three (3) months basic wages for each of the years 1948, 1949 and 1950. Consequently thereupon the management paid voluntarily for each of the three (3) years bonus at the rate of one month's basic wage for every year and paid additional bonus at the rate of two (2) months basic wage in compliance of the Award as indicated above. The bonus for the years 1951, 1952 and 1953 as claimed by the workmen were referred to the Industrial Tribunal for adjudication. The learned Tribunal by its Award dated May 19, 1956 rejected the claim for bonus for the years 1952 and 1953 but awarded bonus at four (4) months basic wages for the year 1951 which was inclusive of the two (2) months basic wages already paid by the company management voluntarily for the said year.

7. Thereafter there was a long term settlement on the quantum of bonus for the years 1951 to 1958 in which bonus at three (3) months basic wage for each of the years from 1954 to 1958 were agreed to be paid and received. Apart from the aforesaid agreement, the company as a gesture of goodwill made an ex-gratia payment of a further one month's basic wage as bonus in addition. This was followed by several other settlements signed between the parties under which the management company agreed to pay bonus at the rate of three (3) month's basic wage for each of these years from 1959 to 1967. The payment of bonus which was granted under the settlement has a reference as bonus and not profit bonus, continued till 1967.

8. It may not be out of place to mention that the Payment of Bonus Act came into force with effect from September 25, 1965. The Payment of Bonus Act (hereinafter referred to as Act only) provides for payment of bonus to persons employed in certain establishment on the basis. of profit or on the basis of production or productivity and for matters connected therewith. The Act and the provisions made thereto would reflect that the Parliament enacted the Payment of Bonus Act in order to maintain sound industrial relations between the employer and the employee.

9. In view of the enactment of the Act and its statutory obligation, between the parties i.e. the management and the workmen, a fresh-agreement was made on March 6, 1967 in accordance with the provisions of Section 34(3) of the Act, which however, substituted as Section 34 under the Amendment Act 23 of 1976 wherein the parties agreed that three (3) months basic wage be paid as bonus for the year 1968. However, for the subsequent period after 1968, a settlement was arrived at between the parties, whereunder, the management company revised the workmen's basic wage, D.A., gratuity, retirement benefits and overtime rates and agreed vide memorandum of settlement that bonus would be paid in accordance with the provisions of the Act. This settlement was made effective with effect from December 1, 1969.

10. Thereafter, a dispute again arose in respect of bonus for the accounting year 1969 and the matter was referred to the Tribunal for adjudication and the Tribunal by its order dated May 5, 1973 had held that the Workmen were entitled to the payment of minimum bonus of four percent (4%) of their salaries or Wages earned by them during the accounting year 1969 or Rs. 40/- (Rupees Forty), whichever is higher as provided under Section 10 of the Act. The Workmen had again raised a dispute for payment of bonus for the accounting year 1970 which however, was withdrawn by the workmen and the Award was passed on February 27, 1976 on the ground of non-prosecution.

11. The payment of bonus for the years 1971, 1972 and 1973 were settled by a long term settlement and for the year 1974, the matter was settled by an agreement signed on August 25, 1975 which goes to show that the payment of bonus was linked with basic pay of the workmen and not with profit of the company and the present reference is in relation to the payment of bonus in respect of the accounting year 1975 as aforesaid.

12. The learned Tribunal after a detailed discussion of the evidence produced before it, recorded a clear finding that there was no allocable surplus for the accounting year 1975 and a general notification issued under the signature of General Manager dated August 25, 1976 stating therein, as no allocable surplus for the accounting year was found on computation under the Payment of Bonus Act, 1965, no bonus is payable to the employees of the company. Having come to a clear finding that there was no allocable surplus for the accounting year, the Tribunal proceeded and held that even if the workmen failed to show that there was any error in the profit and loss account and no allocable surplus was available, still they are entitled to the minimum bonus at the rate of four percent (4%) of the salary/wage earned by each of them during the accounting year 1975. Relevant paragraph 22 of the Award is quoted hereunder:

The question now arises if the allocable surplus is not there, whether the workmen of the Assam Oil Company were not entitled to any bonus for the said year of 1975. The Payment of Bonus (Amended Act), 1976, was deemed to be effective from September 25, 1975 and this superseded the ordinance which was in the field in this regard. The allocable surplus, has only special significance for the purpose of Section 10(1) of the new Section that was inserted by the Amending Act of 1976. According to Sub-section (1) subject to other provisions of that Act when an employer had allocable surplus in an accounting year, he was bound to pay every employee in respect of that accounting year a minimum bonus which shall not be less than 4 percent of the salary or wages earned by the employee during the accounting year or Rs. 100/- whichever is higher or in a case where the allocable surplus exceeds the said amount of minimum bonus payable to the employees, an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of 20 percent of such salary or wage, be paid, provided that in case of an employee who had not completed 15 years of age at the beginning of the concerned accounting year for the works one hundred rupees as stated earlier, it would be sixty rupees. The Sub-section (2) of Section 10 is very specific. Where there was no allocable surplus in any accounting year because of Sub-section (2) every employer shall be bound to pay every employee in respect of the accounting year commencing on any day in the year 1974, a minimum bonus, which shall be 4 percent of the salary or wage earned by the employee during that year or Rupees One hundred, whichever is higher, Which further provided that when the employee had not completed 15 years of age at the beginning of that accounting year, in the place of one hundred rupees, it would be read as sixty rupees

The learned Tribunal thus came to a finding that even if the workmen failed to show that there was any error in the profit and loss account and that no allocable surplus was available, still they are entitled to the minimum bonus at the rate of four percent of the salary/wage earned by each of them during the accounting year 1975 and accordingly gave an award as aforesaid in favour of the workmen which shall carry an interest @ 6% per annum from the date it was due till the date of payment. The said award rendered by the Tribunal calls in question by the company in exercise of power under Article 226 of the Constitution of India before this Court.

13. Criticizing the award passed by the learned Tribunal, Mr. S.N. Sarma, learned senior counsel appearing for the petitioner has taken this Court to the pleadings of the parties, the evidence on record and the provisions of the Act (Amendment Act 23 of 1976) and argued that since the Tribunal has recorded a finding that there was no allocable surplus for the accounting year, 1975, there is no question to refer Section 10(2) of the Act, the benefit of which is not available for the workmen including the interest which is beyond the jurisdiction of the Tribunal in passing the award and hence prayed for interference of this Court in exercise of power under Article 226 of the Constitution of India.

14. In the instant case, none had appeared on behalf of the workmen, in spite of service of notice, but this Court, vide order dated December 14, 2005 , appointed Mr. A. Dasgupta, advocate as Amicus Curiae to defend the interest of the workmen, Mr. A. Dasgupta, accordingly appeared and argued the matter on behalf of the workmen.

Refuting the argument advanced by the counsel for the management company, Mr. A. Dasgupta, the learned Amicus Curiae, appearing for the workmen argued that on admission of the company, that they are paying bonus to its workmen from 1947 to 1974, it assumes the character of customary bonus, more so, when the Act was amended in favour of the workmen by inclusion of Section 31A of the Payment of Bonus (Amendment) Act, 1976, which relates to special provision in respect of payment of bonus linked with production or productivity.

15. In order to appreciate the grievance made by the counsel of the parties against and in favour of the award it would be necessary to narrate a few introductory facts. The petitioner is a, registered company under the Companies Act, 1956 and the company has its statutory obligation to adhere to the provisions of the Act since its provisions applies to the petitioner and its workmen. The trade union on behalf of the workmen of the petitioner raised an industrial dispute pertaining to non-payment of appropriate statutory bonus to their members for the accounting year 1975 and the Tribunal gave its award as indicated above.

16. In order to resolve the contentions raised, it would be appropriate to look into the relevant provisions of the Act and its subsequent amendment made in the Payment of Bonus Act. The Payment of Bonus Act was promulgated by an ordinance on May 29,1965. The said ordinance became an Act being The Payment of Bonus Act (Act 21 of 1965). The object of this Act is to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith. The said Act (21 of 1965) was amended on September 1, 1973 (Act 39 of 1973) which provided for the payment of a minimum bonus in respect of the accounting year commencing an any day in the year 1972 at the rate of 8 1/3 percent of the salary or wage of an employee. The said amendment was made applicable for the accounting year commencing on any day in the year 1973 at the same rate as was made applicable for the year 1972.

17. Thereafter an ordinance namely the Payment of Bonus (Amendment) Ordinance, 1975 was promulgated on September 25, 1975 and on February 11,1976 the ordinance became an Act (Payment of Bonus Amendment Act, 23 of 1976) and was given retrospective- effect from September 25, 1975 being the date on which the ordinance had come into force. As a result of the amendments, a number of substantial amendments were made in the Payment of Bonus Act. Section 10 of the Principal Act was substituted which has a relevance for deciding the case is quoted hereunder;

10. Amount of bonus - (1) Subject to the other provisions of this Act, where an employer has any allocable surplus in any accounting year, then, he shall be bound to pay to every employee in respect of that accounting year a minimum bonus which shall not be less than four percent of the salary or wage earned by the employee during the accounting year or one hundred rupees whichever is higher, or, in a case where the allocable surplus exceeds the said amount of minimum bonus payable to the employees, an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage:

Provided that where an employee has not completed fifteen years of age at the beginning of that accounting year, the provisions of this sub-section shall have effect in relation to such employee as if for the words 'one hundred rupees' the words 'sixty rupees' were substituted.

(2) For the purposes of Sub-section (1), the allocable surplus shall be computed taking into account the amount set-on or set-off in the three immediately preceding accounting years and in the accounting year in respect of which the bonus is payable, in the manner illustrated in the Third Schedule.

(3) Notwithstanding anything contained in this Section, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1974, a minimum bonus which shall be four per cent of the salary or wage earned by the employee during that accounting year or one hundred rupees whichever is higher whether or not the employer has any allocable surplus in that accounting year:

Provided that where an employee has not completed fifteen years of age at the beginning of that accounting year, the provisions of this sub-section shall have effect in relation to such Employee as if for the words 'one hundred rupees', the words 'sixty rupees' were substituted:

Provided further that where any employer has, before the commencement of the Payment of Bonus (Amendment) Ordinance, 1975, paid to his employees in respect of the accounting year commencing on any day in the year 1974, a minimum bonus in excess of that specified in this sub-section, not-withstanding that such employer did not have the required allocable surplus for the payment of such bonus, then such employer shall deduct the excess amount of bonus so paid from the amount of bonus payable by him to the employees under this Act in respect of the three immediately succeeding accounting years and the employee shall be entitled to receive only the balance.

18. Another amendment which has been referred to by the counsel of the workmen at the time of hearing is relevant since the question has been raised that the workmen of Assam Oil Company are entitled to bonus in view of Section 31A linked with production or productivity, even if this Court held that there was no allocable surplus for the accounting year 1975. Section 31-A reads as follows:

31-A. Special provision with respect to payment of bonus linked with production or productivity.

Notwithstanding anything contained in this Act-

(i) Where an agreement or a settlement has been entered into by the employees with their employer before the commencement of the Payment of Bonus (Amendment) Act, (23 of 1976) or

(ii) Where the employees enter into any agreement or settlement with their employer after such commencement, for payment of an annual bonus linked with production, or productivity in lieu of bonus based on profits payable under this Act, then such employees shall be entitled to receive bonus due to them under such agreement or settlement as the case may be:

Provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under Section 10 shall be null and void insofar as it purports to deprive them of such right

Provided further that such employees shall not be entitled to be paid such bonus in excess of twenty per cent of the salary or wage earned by them during the relevant accounting year.

19. A close scrutiny of the entire Amending Act 23 of 1976. reveals that the Parliament in its wisdom taking into consideration the following aspects while amending the payment of Bonus Act 1965, decided inter alia that,

i) The Act should provide for payment of bonus on the basis of profit or on the basis of production or productivity and for matters connected therewith;

ii) Payment of minimum bonus should be subject to the availability of allocable surplus, even if, it be a marginal amount;

iii) the minimum bonus should be equal to four percent of salary or wage. However, the amount of minimum bonus in absolute terms should be raised from Rs. 25 to Rs. 60 in the case of persons below 15 years and from Rs. 40 to Rs. 100 in the case of others;

iv) In respect of the accounting year commencing on any day in the year 1974, every employer should pay to every employee a minimum bonus whether or not the employer has any allocable surplus in that accounting year and that if any employer has paid a minimum bonus in excess what is specified, notwithstanding that such employer did not have the required allocable surplus for payment of such bonus, then, such employer shall deduct the excess amount of bonus, so paid from the amount of bonus payable by him to the employees in respect of the three immediately succeeding accounting year;

v) banking companies is excluded from the purview of the Act;

vi) agreements /settlement for the payment of bonus based on production/ productivity in lieu of bonus based on profits should also be subject to a maximum of 20 percent, as in the case of bonus based on profits;

vii) Section 34(3) of the Act should be omitted;

viii) Section 36 of the Income -tax Act shall be amended to provide that deductions in respect of bonus paid to an employee, employed in a factory or other establishment to which the provisions of the Payment of Bonus Act, 1965 apply, shall not exceed the amount of bonus payable under that Act.

20. Another noticeable feature in the Amendment Act (23 of 1976) would show that it related to the accounting year 1974 which ensured, that a minimum bonus @ 4% is liable to be paid even if there is no allocable surplus in that year. The Amendment Act is silent in regard to the accounting year 1975 and the intention of the legislation by way of amendment is clear that no minimum bonus is payable in respect of subsequent accounting year if there is no allocable surplus in those accounting year and the omission of payment of bonus for the accounting year 1975 even when there is no allocable surplus, the employer is not under any statutory obligation to pay the bonus @ 4% which adversely affected the workers and considering the grievances made by the workers, the Payment of Bonus Act was amended by Amending Act (43 of 1977) (48 of 1978) (50 of 1980) and (66 of 1980) wherein and whereunder 8.33 percent has been provided for payment of a minimum bonus for the accounting year commencing on any day in the year 1976 irrespective of whether there was any allocable surplus or not which continues for the accounting year 1977 onwards and by the Amendment Act (66 6f 1980) a provision has been made for payment of a minimum bonus at 8.33 percent or Rs. 100, whichever is higher.

21. In view of the finding recorded by the Tribunal that there was no allocable surplus for the accounting year 1975, as it has been proved by the employer and the workmen had miserably failed to rebut the same, the Tribunal erred in law in directing the employer to pay the minimum bonus @ 4% with an interest at six percent per annum from the date it was due till payment, referring Section 10(2) of the Act which was not applicable under the Act 1965 as amended in 1976. The other question raised relating to applicability of Section 31A of the Act, the Tribunal had come to a clear finding, rightly so, in holding that the workmen are not entitled to receive bonus linked with production/ productivity and for matters connected therewith and this Court is not inclined to go through the question raised in view of the provision of Section 31-A of the Act which is specific, clear and there is no ambiguity in the Section itself, which would go to show that the Section 31-A is not applicable in the case in view of the reference made for adjudication and the Tribunal cannot go beyond the order of reference.

22. In the result the writ petition is allowed by setting aside the award passed by the Central Government Industrial Tribunal, Calcutta dated January 29, 1996 in Reference Case No. 59 of 1978, holding that since there was no allocable surplus for the accounting year Commencing on any day of 1975, the employees are not entitled to get any payment on account of bonus under the Act 1965 as amended in 1976. The parties are left to bear their own costs.