Judgment

VAIDIALINGAM, J.: In this appeal, by special leave, Mr. H. R. Gokhale, learned Counsel for the management-appellant, challenges the Award, dated September 21, 1964, of the Industrial Tribunal, Alleppey, in I. D. No. 10 of 1962.

2. We may briefly refer to the circumstances, leading up to the passing of the award in question. The appellant owns the Churakulam Tea Estate, in Kottayam, Kerala State. From 1946 onwards, the Planters Association of Kerala (South India) used to enter into agreements, with the representatives of the workmen, from time to time, for the payment of bonus. The first agreement, in 1946, related to the payment of bonus for the years 1947, 1948 and 1949; and by Exhibit W-5, the said agreement was extended for the years 1950 and 1951. A fresh agreement, Exhibit W-15, was entered into in 1955, for payment of bonus for the years 1952,1953 and 1954 and there appear to have been subsequent agreements also. There is no controversy that the appellant paid bonus for nine years, i. e., from 1947 to 1951 and 1953 to 1956. There is also no controversy that the payment of bonus, for these years, was not at a uniform rate. For instances, from 1946 to 1949 bonus was paid at 4% of the total earnings whereas, for the year 1950, it was increased to 8 1/2 % of the total earnings. From that year onwards an initial payment of 4% was fixed, leaving the balance to be determined by industry-wise agreements. Again, in 1955 and 1956, the initial payment was raised to 6 1/4 % of the total earnings. So far as the year 1952 was concerned, the appellant s case was that it had not paid any bonus, as such, but, on the other hand, it had made an ex gratia payment of Rs. 3/- to each worker; but the Tribunal has not accepted this plea and it has held that the said payment must be treated as one having been made towards bonus. According to the appellant, it paid bonus for the years, mentioned above, because it was earning profits.

3. For the years 1960 and 1961 also, the appellant paid bonus to its workers in accordance with the industry-wise agreements. In respect of the years 1957-1958 and 1959, there was a memorandum of settlement, Exhibit M-4, dated January 25, 1960, between the managements of the various plantations and their workers, relating to payment of bonus. So far as tea estates are concerned, the agreement provides for payment of bonus, at a particular percentage of the annual total earnings of a worker, for the three years in question, depending upon the total extent of the estates concerned. There is no controversy that, under Cl. 7 of this agreement, it was provided that the agreement will not apply to the appellant s estate. Therefore, so far as the payment of bonus for these three years is concerned, the appellant was not a party to any agreement.

4. The appellant, on the ground that it had not earned any profit during these years and, on the further ground that it was not bound by the agreement, Exhibit M-4, declined to pay any bonus for these three years. The workmen started an agitation claiming bonus at the rates mentioned in Exhibit M-4, and conciliation proceedings in that regard failed. Twentyseven workers, in the factory of the appellant, struck work on the afternoon of November 30, 1961. The management declined to pay wages, for that day, to these factory workers. The management also laid off, without compensation, all the workmen of the estate, from December 1, 1961 to December 8, 1961.

5. The State Government, by its order dated May 24, 1962, referred three questions, for adjudication, to the Industrial Tribunal, Alleppey:

"1. Bonus for years 1957, 1958 and 1959.

2. Wages for days of lay off from 1-l2-1961.

3. Wages for 30-11-1961 for factory workers."

6. Before the Tribunal, both the management and the workmen were agreed that the bonus, which was the subject of adjudication, was not to be on the basis of available surplus and the said aspect need not be considered by the Tribunal. The respondents also accepted