Production bonus is excluded from the definition of "basic wages" under Section 2(b) of the Employees Provident Funds Act, 1952, because the unqualified term "bonus" in the statutory exception encompasses all varieties of industrial bonuses, including incentive-based production bonuses.

WANCHOO, J. : The short question raised in this writ petition under Art. 32 of the Constitution is whether production bonus is included within the term "basic wages" as define in S. 2 (b) of the Employees Provident funds Act, No l9 of 1952 (hereinafter referred to as the Act.). Write petition 64 of 1962 (The Jay Engineering Works Limited v. The Union of India) was heard along with this petition. In that writ petition a further question arose as to the nature of the production bonus scheme in force in that company and parties have been given time to file additional affidavits in that connection. What we say therefore in the present case as to production bonus generally may not be taken necessarily to apply to the particular scheme in the case of writ petition No 64 of 1962.

2. The brief facts necessary for present purpose are these. Petitioner No. 1 (hereinafter referred to as the Company) is a public limited company engaged in the manufacture of engineering goods, structural fabrication and rolling stock, and the Act applies to the Company. The Company has a production bonus scheme in force which provides for payment of production bonus over and above the wages fixed by the major engineering award of 1958, published in the Calcutta gazette dated November 5, 1958, which governor 74 major engineering concerns in that region including the Company that award is still in force and has fixed basic wages and dearness allowance on time rate basis for the entire major engineering industry. In addition to basic wages and dearness allowance payable under the award the Company has two production bonus schemes, one for the hourly rated workers and the other for the rest. It is unnecessary to go into the details of the two schemes: but the main feature of the two schemes is that production bonus begins to be paid on certain rates specified in the two schemes when the output reaches 5,000 tons per year and that no production bonus is paid when the output is less than 5,000 ton per year. It may be added that the scheme relating to the hourly rated workers has been revised from January 1, 1962 and the main feature of this revision is that the scheme is now applicable to these workers on a quarterly basis. Accounting to this revised scheme, production bonus begins when the output for the quarter reaches 1,300 tons, and there is no production bonus if the output is below 1,300 tons. In the case of other staff, the old scheme is still in force though it is stated for the Company that negotiations are going on for revising the old scheme, presumably to bring it into line with the new scheme introduced for hourly rated workers since January 1, 1962.

3. We may now briefly refer to the relevant provision of the Act which require consideration. The Act provides by S. 5 for the introduction of the Employees Provident Fund Schemes for certain industries included in Sch. I to the Act, In consequence a Provident Fund Scheme was framed in September 1952 known as the Employees Provident Fund Schemes, 1952, and it is applicable to the Company. Section 6 of the Act provides for contribution by the Employer and Employee to the Provident Fund and that contribution is 6 1/4 percentum of the basic wages, dearness allowance and retaining allowance (if any) for the time being payable in the case of the both. Section 6 further provides for certain increased contribution; but we are not concerned with that in the present case. "Basic wages" have been defined in S.2 (b) of the Act thus :

"Basic wages" means all emoluments which are earned by an employee while on duty or on leave with wages in accordance with the term of the contract of employment and which are paid or payable in cash to him, but does not include

(i) the cash value of any food concession;

(ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living)-house rent allowances, overtime alliances, bonus, commission or