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IN THE HIGH COURT OF BOMBAY
B.C. Gadgil, J.
Bankeshwardhan K. Dubey... Petitioner.
Versus
New Standard Engineering Co. Ltd.... Respondents.
Writ Petition No. 452 of 1984, decided on 14-6-1984.
Advocates appeared :
R.J. Kochar, for petitioner.
A.M. Vernekar, for respondent No. 1.
R.M. Agarwal with K.C. Sidhwa, for respondent No. 3.
PAYMENT OF BONUS ACT - BONUS - DISQUALIFICATION - SECTION 9 - RIGHT TO BONUS ACCRUES IN THE ACCOUNTING YEAR - SUBSEQUENT DISMISSAL IN THE SUCCEEDING YEAR DOES NOT AFFECT THE ACCRUED RIGHT - SECTION 9 APPLIES WHEN THE RIGHT OF BONUS IN A PARTICULAR YEAR IS IN THE PROCESS OF BEING ACCRUED.
Fact of the Case:
The petitioner, an employee of respondent No. 1, was dismissed from service on 9-10-1982 for misconduct committed on 18/19-4-1982. The petitioner claimed bonus from respondent No. 1 for the year 1981-82 (i.e. from 1-4-1981 to 31-3-1982) in accordance with the provisions of the Payment of Bonus Act, 1965. The Labour Court rejected the application on the ground that the petitioner was disqualified from receiving the bonus as laid down by section 9 of the Bonus Act.
Finding of the Court:
The court held that the right to bonus accrues to an employee in the concerned accounting year itself and the question is as to whether this accrued right can be set at nought on account of the subsequent dismissal of the employee in the succeeding year. The court found that section 9 of the Bonus Act applies when the right of bonus in a particular year is in the process of being accrued.
Issues: Whether the petitioner is entitled to bonus for the year 1981-82 despite being dismissed from service on 9-10-1982.
Ratio Decidendi: The court interpreted section 8 and section 9 of the Bonus Act harmoniously and held that section 9 does not take away the right of an employee which had been accrued in all the previous years. The court also held that the Payment of Bonus Act is meant to ameliorate the position of the employees and while construing that enactment it would be necessary that a rule of beneficial interpretation should be adopted so as to achieve the object of the Act.
Final Decision: The court quashed the impugned order of the Labour Court and remitted the matter to the 6th Labour Court for further inquiry to determine the quantum of bonus payable to the petitioner.
2. The facts are not in dispute in the present case. The petitioner was in service of respondent No. 1 and has rendered such service during the year 1981-82. However, the petitioner is said to have committed a misconduct in the night between 18/19 4-1982. That misconduct is in the shape of an assault on the other employee of respondent No. 1. An inquiry was held for this misconduct. A charge-sheet was prepared on 20-4-1982. After the above inquiry the petitioner was dismissed from service on 9-10-1982. Respondent No. 1 did not dispute the position that the petitioner was entitled to have a bonus for the year 1981-82 and the only contention of respondent No. 1 is that on account of the above mentioned dismissal the petitioner is disqualified from getting a bonus. This contention is raised on the basis of section 9 of the Bonus Act. That section reads as follows :
"Disqualification for Bonus.---Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for---
(a) ...............
(b) riotous or violent behaviour while on the premises of the establishment, or
(c) ............... "
The above contention of respondent No. 1 has been accepted by the Labour Court. Shri Kochar, appearing for the petitioner, as also Shri Agarwal who appears for respondent No. 3 (Union of India) submitted that the impugned order is erroneous and that Labour Court should have ordered payment of bonus to the petitioner. As against this Shri Vernekar, for respondent No. 1 urged that the order in question is in consonance with the provisions of section 9 and consequently this petition deserves to be dismissed.
3. Shri Kochar and Shri Agarwal contended that what is material in the present case is that till the expiry of the accounting year 1981-82 there was neither any misconduct nor dismissal therefore, and consequently the petitioner secured a vested right for getting bonus and that such a vested right cannot be disturbed on account of an event that took place in the subsequent accounting year i.e. the event of dismissal as mentioned above. It will be necessary to note the various provisions of the Act for the purpose of finding out as to whether section 9 contemplates an embargo on the right of bonus which had already been vested in the petitioner. Section 2(1) defines the term 'accounting year'. It is not necessary to reproduce it but in the present case the said accounting year is the one which commences from 1st April. Section 4 contemplates computation of gross profits derived by an employer in respect of the accounting year. Section 5 has made a provision for computation of the available surplus in respect of the accounting year. Then comes section 8 and it read as follows :
"Eligibility for Bonus.---Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year."
I have already reproduced the section 9 in para 2 above. As to how much bonus should be paid to an employee is dealt with by sections 10 and 11. Section 10 provides that every employer shall be bound to pay to every employee in respect of the accounting year a minimum bonus which shall be 8.33% of the earnings of
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