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IN THE HIGH COURT OF DELHI AT NEW DELHI
NAJMI WAZIRI, SUDHIR KUMAR JAIN, JJ.
Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust – Appellant
Versus
Batra Hospital Employees Union – Respondent
L.P.A. No. 99 of 2018, C.M. No. 49958 of 2022
Decided On : 26-05-2023
PAYMENT OF BONUS ACT, 1965 - SUBJECT - APPLICABILITY OF ACT TO CHARITABLE HOSPITAL - ACT SECTION LIST - SECTION 32(V)(C) - SUMMARY - THE TRIBUNAL HELD THAT THE HOSPITAL WAS EXEMPT FROM PAYMENT OF BONUS UNDER SECTION 32(V)(C) OF THE ACT BEING AN INSTITUTION ESTABLISHED NOT FOR THE PURPOSES OF PROFIT. THE SINGLE JUDGE HELD THAT THE HOSPITAL WAS NOT EXEMPT FROM THE APPLICABILITY OF THE ACT AND WAS LIABLE TO PAY BONUS TO ITS EMPLOYEES. THE COURT HELD THAT THE HOSPITAL WAS NOT ENTITLED TO EXEMPTION UNDER SECTION 32(V)(C) OF THE ACT AND WAS LIABLE TO PAY BONUS TO ITS EMPLOYEES.
Fact of the Case:
THE APPELLANT HOSPITAL WAS A CHARITABLE HOSPITAL WHICH WAS EXEMPT FROM PAYMENT OF BONUS UNDER SECTION 32(V)(C) OF THE PAYMENT OF BONUS ACT, 1965. THE RESPONDENT UNION FILED A CLAIM FOR BONUS BEFORE THE INDUSTRIAL TRIBUNAL, WHICH WAS REJECTED. THE UNION THEN FILED A WRIT PETITION IN THE HIGH COURT, WHICH HELD THAT THE HOSPITAL WAS NOT EXEMPT FROM THE APPLICABILITY OF THE ACT AND WAS LIABLE TO PAY BONUS TO ITS EMPLOYEES. THE HOSPITAL APPEALED TO THE DIVISION BENCH.
Finding of the Court:
THE COURT HELD THAT THE HOSPITAL WAS NOT ENTITLED TO EXEMPTION UNDER SECTION 32(V)(C) OF THE ACT AND WAS LIABLE TO PAY BONUS TO ITS EMPLOYEES. THE COURT OBSERVED THAT THE DOMINANT PURPOSE OF THE HOSPITAL WAS TO EARN PROFIT AND THAT THE PLOUGHING BACK OF THE EARNED PROFITS FOR BETTERMENT WOULD NOT IMMUNIZE THE INSTITUTION FROM THE RIGOURS OF THE ACT. THE COURT ALSO HELD THAT THE EXEMPTION UNDER SECTION 80G OF THE INCOME TAX ACT WOULD NOT AUTOMATICALLY EXEMPT THE INSTITUTION FROM THE APPLICATION OF THE ACT.
Issues: WHETHER THE HOSPITAL WAS EXEMPT FROM THE APPLICABILITY OF THE PAYMENT OF BONUS ACT, 1965.
Ratio Decidendi: THE COURT HELD THAT THE HOSPITAL WAS NOT ENTITLED TO EXEMPTION UNDER SECTION 32(V)(C) OF THE ACT AND WAS LIABLE TO PAY BONUS TO ITS EMPLOYEES. THE COURT OBSERVED THAT THE DOMINANT PURPOSE OF THE HOSPITAL WAS TO EARN PROFIT AND THAT THE PLOUGHING BACK OF THE EARNED PROFITS FOR BETTERMENT WOULD NOT IMMUNIZE THE INSTITUTION FROM THE RIGOURS OF THE ACT. THE COURT ALSO HELD THAT THE EXEMPTION UNDER SECTION 80G OF THE INCOME TAX ACT WOULD NOT AUTOMATICALLY EXEMPT THE INSTITUTION FROM THE APPLICATION OF THE ACT.
Final Decision: THE APPEAL WAS DISMISSED AND THE HOSPITAL WAS DIRECTED TO COMPLY WITH THE DIRECTIONS OF THE SINGLE JUDGE.
JUDGMENT :
SUDHIR KUMAR JAIN, J.
1. The present judgment shall decide Letters Patents Appeal filed by Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust (hereinafter referred to as “the appellant”) against Batra Hospital Employees Union (hereinafter referred to as “the respondent”) to impugn the judgment dated 22.01.2018 (hereinafter referred to as “the impugned judgment”) passed in W.P. (C) bearing no. 5349/2004 passed by the learned Single Judge whereby Award dated 03.11.2003 (hereinafter referred to as “the impugned Award”) passed by the Industrial Tribunal-I, Delhi (hereinafter referred to as “the Tribunal”) in ID No. 20/2002 titled as The Management of Batra Hospital V Workmen as represented by Ch. Aishi Ram Batra Charitable Trust Employees Union was set aside.
2. The factual position as emerging is that the Secretary (Labour), Government of National Capital Territory of Delhi has referred a dispute arising between the management of M/s Batra Hospital and its workmen represented by Ch. Aishi Ram Batra Charitable Trust Employees Union vide notification no. F.24 (66)/2002-Lab./2586-90 dated 01.02.2002 with the following terms of reference:
3. The workmen of M/s Batra Hospital as represented by Ch. Aishi Ram Batra Charitable Trust Employees Union (hereinafter referred to as “the workmen”) in the statement of claim have stated that the management of M/s Batra Hospital (hereinafter referred to as “the management”) is engaged in the business of running of hospital and has grown from a small hospital in 1996 to a 300-bedded Hospital and the patients coming to the hospital are asked to pay medical charges and not a single patient is given free treatment except a few VIPs and highly connected people to fulfil the formalities of charity. The management does not have non-profitable character and has denied bonus to its workers. The hospital named itself as Research Centre which is merely a camouflage and the hospital is being run purely on commercial basis as reflected from its balance sheet. The trust which owns the hospital is founded and controlled by the members of one family and the resources and profits are used by these family members. The workmen are entitled to bonus. The Payment of Bonus Act, 1965 (hereinafter referred to as “the Act”) is applicable to the management and the hospital does not fall under the exemption of section 32(v)(c) of the Act.
4. The management filed written statement to contest the statement of claim preferred by the workmen. The management in preliminary objections stated that actual name and the description of the management is Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust and not Batra Hospital as referred in the reference. Ch. Aishi Ram Batra Charitable Trust Employees Union is not in existence and as such the union which has raised the dispute does not have any locus standi to file the claim and Vijay Singh does not have locus-standi to sign the statement of claim. The dispute is not espoused and appreciable numbers of employees of the management are not members of the union which has raised the dispute.
4.1 The reference is bad in law and exemption under section 32(v)(c) of the Act is applicable to the management. The management is a society registered under Societies Registration Act, 1998. The management being a charitable hospital is not established for the purpose of profit. The management is entitled for exemption under section 32(v)(c) of the Act and has already been exempted under section 80G of the Income Tax Act, 1961 being a charitable hospital. The labour authorities on three earlier occasions also came to the conclusion that the Act is not applicable to the management. The management in reply on merits denied other pleas as mentioned in the statement of claim.
5. The Tribunal
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