Judgment

WANCHOO, J. : This is an appeal by special leave from the award of the Industrial Tribunal Ernakulam. A dispute arose between the appellant and its workmen as to payment for bonus for the years 1957-58 and 1958-59, and was referred for adjudication to the tribunal. The respondents claimed bonus on two grounds : (i) on the basis of profits earned by the appellant, and (ii) on the basis that payment of some bonus at Christmas had become an implied condition of service between the appellant and its workmen. It may be mentioned that the claim was for four months wages for each year on the basis of profit bonus. The alternative claim was for 1 1/2 months wages for each year on the basis of an implied term of service. We may also mention that the appellant had paid two months basic salary as bonus for the year 1957-58, and one Month s basic salary as bonus for the year 1958-59. The appellant contended that there was no surplus available on the basis of the Full Bench formula applied in such cases and therefore no profit bonus could be paid. It also contended that no bonus was payable as an implied term of service.

2. The tribunal found on an application of the Full Bench formula that there was no available surplus in either of the two years and therefore no bonus was payable as profit bonus. It then went into the question whether any bonus was payable as an implied condition of service and relying on the decision of this Court in M/s. Ispahani Ltd. v. Ispahani Employees Union, (1960) 1 SCR 24 : held that, payment of bonus at the rate of 11/2 months salary as an implied condition of service had been established. It therefore ordered the appellant to pay that amount after taking into account one month s salary already paid by it. It is this award of the tribunal which has been brought before us by special leave.

3. The main contentions on behalf of the appellant are two-fold :

1. It is urged that the tribunal erred in holding that payment of bonus as an implied condition of service need not be attached to any festival;

2. On the undisputed facts of this case, the tribunal was not right in holding that a case had been made out for payment of some bonus as an implied condition of service, and in any case, even if a case had been made out for payment of some bonus, it could not be at the rate of 11/2 months salary.

4. Turning to the first contention raised on behalf of the appellant, we are of opinion that the tribunal was not right in holding that there could be an implied condition of service as to payment of bonus unconnected with any festival. In Ispahani s case, (1960) 1 SCR 24 : the question raised was whether there was an implied condition of service for payment of some bonus at the time of puja festival in Bengal. In that connection this Court laid down the tests for holding when it could be said that there was an implied condition of service for payment of some bonus in connection with some festival. This Court also pointed out that it was not necessary in order to established an implied condition of service as to payment of some bonus at the time of a festival like puja in Bengal that the amount paid in connection with the festival should be uniform, and that in the absence of a uniform rate, an implied agreement to pay something could be inferred. Now where the payment is connected with a festival it is possible to infer that there is an implied condition to pay something at the time of the festival, even though the evidence discloses that in previous years payment has not been made at a uniform rate. But it is difficult to see how the principle which applies to a case of payment at the time of a festival can be extended to infer an implied term of payment where the payment has been made entirely unconnected with any festival and at rates which have varied from year to year. We are therefore of opinion that when this Court laid down that there was an implied condition of service to pay something about the time of p