Judgement

MITTER, J.:- This appeal arises out of an award dated January 30, 1967 of the Industrial Court of Madhya Pradesh (hereinafter referred to as the "Tribunal ). The term of reference to the Tribunal was:

"Whether the employees of Jabalpur Electric Supply Company Ltd., have a case for payment of bonus for the year 1960-61 and what should be its quantum and terms of payment?"

The claim for bonus was made under two heads: the first was for bonus out of the profits quantified at 50 of the total earnings of the employees; and the second was for festival bonus at 10 of the said total earnings which was claimed as an implied term of the contract of employment and as an established practice, having been paid irrespective of profits or losses before Diwali every year continuously from 1940-41 without any break. The Tribunal found itself unable to hold in favour of the employees Union under either of the heads. The appeal to this Court is by special leave.

2. We propose to take the two heads under which bonus was claimed in the order in which the arguments were advanced before us. The first head of bonus canvassed for was the second mentioned above i.e. at 10 of the total earnings, So far as this claim is concerned, we are not on uncharted seas as the question cropped up in the past in numerous cases before this Court wherein certain well defined principles were formulated. But before we apply the principles, we have to take note of the relevant facts and circumstances relating to this claim.

3. It cannot be disputed that the employees had been receiving at least 10 of their earnings from the company from 1940-41 onwards. This period can be conveniently split up into several parts to mark off the claims made from time to time and the settlements by mutual agreement or payments under awards of Industrial Courts or even made voluntarily, The first period relates to the years 1940-41 to 1944-45. The Provincial Government made a reference arising out of a dispute which led to the award of the Labour Commissioner of C. P. and Berar in regard, inter alia, to (a) claim by the employees to a bonus equal to three months wages for the year ending 31st March, 1946, and (b) war bonus equal to six months wages. The adjudicator decided that

"(1) The Company should pay to each of its employees 1/10th of his total earnings including dear food allowance during the year ending 31st March 1946 by way of bonus; and (2) The Company should also pay to each of its employees as bonus 1/10th of his total earnings including dear food allowance in respect of each of the years 1940-41, 1941-42, 1942-43, 1943-44 and 1944-45 against the claim for War Bonus."

It has to be noted that there was no mention of any festival bonus at that time and so far as the years 1940-41 to 1944-45 are concerned, it was given on the footing that it was a War bonus.

4. The next period relates to the years 1946-47 to 1949-50. Admittedly, the payment for these years was made under an agreement between the parties as found by the Tribunal. The finding of the Tribunal is that a consolidated amount of Rupees 74,850/- was paid by the company on 25th January 1951. The Tribunal observed that there was

"abundant documentary evidence (Exs. D-1/A to D-1/F) wherein workers agreed to accept the bonus offered as voluntary payment of bonus as a compromise of their claim of 25 of the Company s profits for the period ending 31st March, 1951."

The claim for the years 1951 to 1956 was covered by an award conveniently described as Mujumdar Award. The opening paragraphs of the award show that the employees had claimed that payment of 10 of their total earnings by way of bonus had come to be included in their wages and had been paid for about 12 years in the past, that there had been agreement between the employees of the company to refer the dispute regarding bonus to Government and thereafter for subsequent years 10 per cent. of their total earnings of the year was accepted by the employees and finall