IMPORTANT POINT
Where a dispute arises between an employer and employees with respect to bonus payable under Payment of Bonus Act or with respect to application of the Act in public sector then such dispute shall be deemed to be an industrial dispute.

Headnote:Payment of Bonus Act, 1965 — Sections 20, 22 and 32(v)(c) — Industrial Disputes Act, 1947 — Section 9-A — Constitution of India — Article 226 — Demand of payment of bonus to employees of appellant — Commissioner of Labour held that Act had no application to factory of appellant — Appellant however sanctioned ex-gratia payment but subsequently it was withdrawn in view of the guidelines issued by Government — Writ petition was filed by employees and Court allowed it holding that stand of appellant that it was working without profit motive was factually wrong — Writ appeal was dismissed — Appeal — Writ petition should not be entertained when statutory remedy was available under the Act unless exceptional circumstances were made out — Where dispute arose between employer and employees with respect to bonus payable under the Act or with respect to application of the Act in public sector then such dispute shall be deemed to be an industrial dispute — High Court should not have entertained the writ petition — In view of long passage of time, appropriate Government directed to refer the questions for adjudication by appropriate Tribunal.
       Held : In a catena of decisions it has been held that writ petition under Article 226 of the Constitution of India, 1950 (in short the Constitution) should not be entertained when the statutory remedy is available under the Act, unless exceptional circumstances are made out.(Para 6)
       A bare reading of Section 22 of the Act makes the position clear that where the dispute arises between an employer and employees with respect to the bonus payable under the Act or with respect to the application of the Act in public sector then such dispute shall be deemed to be an industrial dispute within the meaning of ID Act. As disputed questions of fact were involved, and alternative remedy is available under the ID Act, the High Court should not have entertained the writ petition, and should have directed the writ-petitioners to avail the statutory remedy. However, because of the long passage of time (the writ petition was filed in 1996), the attendant circumstances of the case in the background noted above and in view of the agreement that this is a matter which requires to be referred to the Tribunal, we direct that the appropriate Government shall refer the following question for adjudication by the appropriate Tribunal:
       (1) Whether there was violation of Section 9-A of the Industrial Disputes Act, 1947 as claimed by the employees?
       (2)Whether the withdrawal of the construction allowance amounted to the change in the conditions of service?
       Question:
       Whether the A.P. Foods was liable to pay bonus under the Act to its employees?(Paras 12 to 14)
       Normally, it is for the State Government to take a decision in the matter of reference when a dispute is raised, the direction as noted above has been given in the circumstances indicated above. In some cases, this Court after noticing that refusal by appropriate Government to refer the matter for adjudication was prima facie not proper, directed reference instead of directing reconsideration. (Paras 16 and 17)

JUDGMENT

Arijit Pasayat, J. — Appellant calls in question legality of the judgment rendered by learned Single Judge of the Andhra Pradesh High Court which was affirmed by a Division Bench in Writ Appeal by the impugned judgment.

2. Background facts in a nutshell are as follows :

Appellant is run by Andhra Pradesh Nutrition Council and is owned and controlled by the Government of Andhra Pradesh. The Nutrition Council is registered under the Andhra Pradesh (Telengana Area) Public Societies Registration Act, 1350 (Act 1 of 1350 Fasli). The principal object is to provide and supply nutritious foods to school and pre-school children, pregnant women and lactating mothers and such other categories of beneficiaries as the Government from time to time decide within the general framework of the Government social welfare programmes. It is claimed to be a non-profit motive establishment. It does not sell or distribute its product either in public or to outsiders except those selected by the Government of Andhra Pradesh under its programmes. In April, 1982 a question arose regarding demand of payment of bonus under the Payment of Bonus Act, 1965 (in short the Act) to the employees of the appellant, and it approached the Commissioner of Labour, inter alia, stating that the (a) regular production of the factory was handed over to the State Government by the CARE Organisation (b) that the factory is a non-commercial venture and (c) that, therefore, it falls outside the ambit of the Act. By order dated 21.1.1983 the Commissioner of Labour, Andhra Pradesh held that the provisions of the Act have no application to the factory of the appellant. In November 1984 appellants sanctioned ex-gratia payment to the workers as per GOMs.319 for the year 1983-84 in view of the fact that the Act is not applicable to the appellant and eligibility for the ex-gratia was on the lines being given in some other public sector undertakings. In January, 1986, the Executive Committee of the Nutrition Council decided to sanction ex-gratia of one months salary each year in lieu of bonus to the employees. On the basis of this decision, ex-gratia payment of one months salary from the year 1984-85 was given on the lines of certain other public sector undertakings. GOMs. No. 366 dated 29.10.1993 was issued by the Government of Andhra Pradesh, Finance and Planning Department, pending final decision by the Government directing its various Organisations not to pay ex-gratia until further orders. Appellant issued directions by its Circular dated 24.11.1993 that payment of ex-gratia to the employees shall stand withdrawn until further orders. Employees of the appellant-establishment sent representations to the Minister of Labour regarding stoppage of ex-gratia payment. Ministry of Labour by communication in December, 1995 indicated that employees are not entitled to ex-gratia with effect from November, 1993 onwards in view of the guidelines issued by the Government. A Writ Petition was filed by 243 employees making grievance that the stoppage of ex-gratia/bonus was unauthorized and contrary to law. Said writ Petition was allowed by a learned Single Judge. It was submitted that the question whether the employees were entitled to bonus is an industrial dispute and the writ petition should not be entertained. Learned Single Judge turned down the contentions of the present appellant that the Act does not apply to it in view of Section 20 and Section 22 of the Act. With reference to certain documents he came to the conclusion that the stand of the appellant that it was working without profit motive is factually wrong. In any event, Section 22 of the Act would not stand in the way of entertaining the writ petition. The appellant filed a writ appeal before the High Court which maintained the order of learned Single Judge by the impugned judgment.

3. Learned counsel for the appellant submitted that on a combined reading of Sections 20, 22 and 32(v)(c) of the Act, the inevitable

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2006 Supreme(SC) 565

IMPORTANT POINTWhere a dispute arises between an employer and employees with respect to bonus payable under Payment of Bonus Act or with respect to application of the Act in public sector then such dispute shall be deemed to be an industrial dispute.

Cases Referred (10)

IMPORTANT POINT
Where a dispute arises between an employer and employees with respect to bonus payable under Payment of Bonus Act or with respect to application of the Act in public sector then such dispute shall be deemed to be an industrial dispute.