The validity of the ceiling under Section 2 (13) of the Payment of Bonus Act, 1965, was upheld by the court, establishing the principle of valid classification of employees based on their wages.

S.J. Mukhopadhaya, J.

The appellant, UCO Bank Employees Association (hereinafter referred to as Association), challenged the validity of ceiling imposed under Section 2 (13) of the Payment of Bonus Act, 1965 (hereinafter referred to as the Bonus Act). Dismissal of writ petition by learned single Judge had given rise to the filing of the present writ appeal.

2. The main plea taken by the appellant is that the exclusion of a class of employees for the purpose of Section 2 (13) of the Bonus Act, 1965, on the basis of a prescribed ceiling of wages is arbitrary, violative of Article 14, unreasonable, without any basis and has no nexus with the object to achieve. He also referred to Section 12 of the Bonus Act to submit that the said provision takes care of all employees even if they draw wages above the prescribed ceiling and, thereby, the ceiling prescribed u/s 2 (13) is uncalled for and imposed without application of mind. Stand of Appellant:-

3. Learned counsel for the appellant submitted that as a result of ceiling limit for the purpose of coverage of the Act, Rs.3,500/= in the year 1995 and Rs.10,000/= per month now is taken into account, many employees, who had earlier been receiving bonus when their salary was less than Rs.10,000/=, will now be deprived of bonus. Referring to amendment relating to coverage under the Payment of Gratuity Act, learned counsel for the appellant submitted that all the employees, irrespective of their status, such as supervisors, managers, workmen, etc., are covered by the Payment of Gratuity Act with effect from 22nd June, 1995. There is only a limit of the amount of gratuity, which an employee can get. According to him, similar provision should be made and all employees, irrespective of ceiling limit, should be allowed to receive bonus. For the purpose of calculation, though ceiling mentioned u/s 12 of Bonus Act could be noticed, but all the employees cannot be excluded by giving a limited unreasonable definition of "employees". It was submitted that exclusion of employees from Bonus Act for payment of bonus by keeping a ceiling limit of Rs.10,000/= per month is arbitrary and violative of Article 14 of the Constitution of India.

According to the counsel for the appellant, a Bill for payment of bonus for employees was introduced in the year 1965 as per preamble to the Act. The said Act was enacted to provide for payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production/productivity. When the purpose of the Act is for payment of bonus on the basis of productivity or production, then the question of exclusion of any employee from getting the benefit of bonus based on his salary is arbitrary. It was submitted that there should not be any ceiling for coverage, particularly when there is a ceiling for calculation of bonus u/s 12 of the Bonus Act, which will take care of the situation.

Learned counsel placed reliance on Bonus Commission report submitted before the law was enacted. The said Bonus Commission had taken note of the fact that the concern which pays bonus to the employees would ordinarily have to pay bonus also to the officers and supervisory staff, who have contributed to the profit of the concern no less than the workmen. Therefore, according to the appellant, u/s 2 (13), supervisory staff and officers have been included, prescription of ceiling limit for getting such benefit is unjust and uncalled for.

Learned counsel for the appellant summarized his argument while challenging the exclusion of certain employees from the definition of employees, which reads as follows:-

"a) The exclusion is arbitrary and is in violation of Art. 14 of the Constitution of India.

b) The Supreme Court in Kasturi Lals case reported in AIR 1980 SC 1992 at para 12 has held that the constitutional validity of a provision has got to be tested in the light of Art. 14 and the directive principles of state policy.

c) In the case of workers, the Bonu