Back
2023 Supreme(Pat) 809
IN THE HIGH COURT OF JUDICATURE AT PATNA
K. VINOD CHANDRAN, CJ. and PARTHA SARTHY, J.
CWJC No.15379 of 2017
(25.9.2023)
M/s Magadh Sugar and Cenergy Ltd. ... Petitioner
vs.
Union of India & Ors. ... Respondents
For the Petitioner: Mr. Ashish Giri.
For the Respondents: A.C. to A.A.G. 6.
Headnote:
Payment of Bonus Act, 1965 – Sections 2(13), 12 and 38 – Retrospective applicability of Payment of Bonus (Amendment) Act, 2015 – Payment of Bonus Act provides for payment of bonus on the basis of profit or on the basis of production or productivity and matters connected therewith – Amending Act only seeks to bring in more employees under its ambit by raising the quantum of salary or wage to Rs.21,000/- from Rs.10,00/- and also to enhance limit of salary or wage on which bonus would be payable – In a challenge to constitutional validity of provisions of a statute, Court exercising power of judicial review must be conscious of limitation of judicial intervention, particularly, in matters relating to legitimacy of economic and fiscal legislation – There is no dispute with respect to legislative competence of Union of India in bringing about amendment nor can same be said to be unreasonable or violative of any of provisions of Constitution – Though instant amendment was brought into effect by publication of same in gazette on 1.1.2016 and deemed to have come into force with effect from 1.04.2014, period for which difference of bonus is to be calculated with respect to certain employees in view of Amending Act, 2015 relates to financial year 2014-15 – Retrospective operation is only for one financial year and beneficial, welfare legislation cannot be termed to be unduly oppressive or confiscatory – Provisions of Amending Act, 2015 cannot be said to be either unreasonable nor such that it creates an unforeseeable financial burden for past period. (Paras 11 and 12)
Partha Sarthy, J. – Heard learned counsel for the petitioner, learned counsel for the Union of India and learned counsel for the State of Bihar.
2. The petitioner, a Company registered under the Indian Companies Act, 1956 has challenged the validity and especially the retrospective applicability of the Payment of Bonus (Amendment) Act, 2015, which was published in the Gazette of India (Extraordinary) on 1.01.2016 and was made retrospectively applicable with effect from 1.04.2014.
3. The Payment of Bonus (Amendment) Act, 2015 (‘Amending Act, 2015’ in short) by which sections 2(13), 12 and 38 of the Payment of Bonus Act, 1965 were amended is reproduced hereinbelow for ready reference.
“New Delhi, the 1st January 2016/Pausha 11, 1937 (Saka) The following Act of Parliament received the assent of the President on the 31st December, 2015, and is hereby published for general information: –
THE PAYMENT OF BONUS (AMENDMENT) ACT, 2015
No. 6 of 2016
[31st December, 2015]
An Act further to amend the Payment of Bonus Act, 1965.
Be it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows –
1. (I) This Act may be called the Payment of Bonus (Amendment) Act, 2015.
(2) It shall be deemed to have come into force on the 1st day of April, 2014.
2. In section 2 of the Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act), in clause (13), for the words "ten thousand rupees", the words "twenty-one thousand rupees" shall be substituted.
3. In section 12 of the principal Act, –
(i) for the words "three thousand and five hundred rupees" at both the places where they occur, the words "seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher" shall respectively be substituted;
(ii) the following Explanation shall be inserted at the end, namely: –
‘Explanation. – For the purposes of this section, the expression “scheduled employment" shall have the same meaning as assigned to it in clause (g) of section 2 of the Minimum Wages Act. 1948"
4. In section 38 of the principal Act, for sub-section (1), the following sub-section shall be submitted namely: –
"(I) The Central Government may, subject to the condition of previous publication, by notification in the Official Gazette, make rules to carry out the provisions of this Act"
4. It is submitted by learned counsel for the petitioner that the petitioner, which is a Company registered under the Indian Companies Act, having its sugar factory in the district of Gopalganj (Bihar) is engaged in the business of manufacture and sale of sugar. The Payment of Bonus Act, 1965 (hereinafter referred to as ‘the Act’), is applicable on the petitioner and accordingly for the period 2014-15 the petitioner paid to its employees bonus in terms of the provisions of the Act. Learned counsel submitted that the profit, production and productivity of sugar for the period 2014-15 having already been calculated and payment made, the enactment creates an additional financial liability which has retrospective application. The same being confiscatory in nature and imposing enforceable financial burden is ultra-vires Article 14 of the Constitution. It also takes away vested right accrued in favour of the dealers and the petitioner is thus entitled for refund. Learned counsel in support of his contention places reliance on the judgment of the Hon’ble Supreme Court in the case of Jayam and Company vs. Assistant Commissioner and another; (2016) 15 SCC 125.
5. Learned counsel for the Respondent-Union of India referring to the counter affidavit filed by the Assistant Labour Commissioner submits that reading of Articles 245 and 246 along with Article 43 of the Constitution, it would be evident that the Parliament has the power to make laws ensuring living wages adequate to maintain a decent standard of life; which includes power to enact law having retrospective effect. The instant Amending Act, 2015 has been enacted to protect the inter
