REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7056-7065 OF 2001

H.P. State Electricity Board and Anr.  ....Appellants

Versus

Ranjeet Singh and Ors. ....Respondents

(With  Civil  Appeal  Nos.  2802/2007,  331/2002,  8490/2001

and 87 of 2002)  

J U D G M E N T

Dr. ARIJIT PASAYAT, J.  

1. These appeals involve an identical question and therefore

are disposed of by a common judgment.

2. The  Himachal  Pradesh  High  Court  disposed  of  several

writ petitions by a common judgment dated 30.12.1998. The

primary issue was whether a petition in terms of Section 33-C

(2) of the Industrial  Disputes Act, 1947 (in short the Act) is

maintainable  and  whether  daily  wager  can  claim minimum

bonus under the Payment of Bonus Act, 1965 (in short the

‘Bonus Act’).  

3. Factual position is almost undisputed and needs to be

noted in brief:

The  respondents  were  employed  on daily  wages  basis.

The  Labour  Court  by  order  dated  6.7.1991  held  that  the

respective  applicants  were  entitled  to  be  paid  minimum

statutory bonus within the stipulated time. The decision was

rendered on a reference made.

Primary  stand  before  the  High  Court  was  that  daily

wagers cannot get bonus. Additionally, the Labour Court has

no jurisdiction to adjudicate such a matter.  The High Court

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held  that  since  there  was  a  statutory  obligation  to  pay

minimum bonus the application under Section 33-C(2) of the

Act was  maintainable.  

4. In  support  of  the  appeals,  learned  counsel  for  the

appellants submitted inter-alia as follows:

(i) the Labour Court has no jurisdiction to decide the

issue.

(ii) the Bonus Act  was not applicable.  

5. The  Act  has  application  only  when  the  concerned

employees  get  salaries  or  wages  per  mensum.  Dearness

allowance  is  not  payable  to  daily  wagers.  The  reference  to

Section 8 of the Bonus Act to decide eligibility was not correct.

Merely because a person is working for 30 days in a year, that

does not entitle him to bonus.   

6. Stand of the appellants that Section 2(11) of the Bonus

Act is applicable only to persons who receive monthly salary,

has also not been dealt with.  

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7. The claim was made for the period from 1977 to 1986.

But  the  application  was  filed  long  after  in  1991.  The  High

Court was wrong in saying that only the quantum and not the

question  of  liability  can  be  decided  in  a  reference  under

Section  22.  Section  33-C(2)  is  in  the  nature  of  execution

application. Section 33-C(2) relates to pre existing right and

the claim for bonus cannot be included within  the scope of

Section 33-C(2) of the Act.

8. In Civil  Appeal No.87/2002, 8490/2001 and 331/2002

the grievance is that there was no claim for any interest. But

the  Labour  Court  and the  High  Court  wrongly  decided  the

entitlement of interest @12%.   

9. Learned  counsel  for  the  respondents  submitted  that

Sections  10  and  11  of  Bonus  Act  deal  with  payment  of

minimum bonus. Section 22 of Bonus Act uses the expression

‘bonus payable’. It relates to the quantum and varies between

minimum and the maximum.  

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The High Court was right in holding that the application in

terms of Section 33-C(2) of the Act was maintainable.  

10. The  scope  and  ambit  of  Section  33-C(2)  has  been

examined by this Court in several cases.

11. In  U.P.  State  Road  Transport  Corporation v.  Birendra

Bhandari (2006 (10) SCC 211) it has been stated as under:

“7. The benefit  which can be enforced under Section 33-C(2) is a pre-existing benefit or one flowing from a pre-existing right.  

8. In the case of  State Bank of India v.  Ram Chandra Dubey & Ors. (2001 (1) SCC 73), this Court held as under:

"7.  When  a  reference  is  made  to  an Industrial  Tribunal  to  adjudicate  the question  not  only  as  to  whether  the termination of  a workman is justified or not but to grant appropriate relief, it would  consist  of  examination  of  the question  whether  the  reinstatement should  be  with  full  or  partial  back

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wages or none. Such a question is one of fact depending upon the evidence to be  produced  before  the  Tribunal.   If after  the  termination  of  the employment, the workman is gainfully employed  elsewhere  it  is  one  of  the factors to be considered in determining whether  or  not  reinstatement  should be  with  full  back  wages  or  with continuity  of  employment.  Such questions  can  be  appropriately examined only in a reference.  When a reference is made under Section 10 of the Act, all incidental questions arising thereto  can  be  determined  by  the Tribunal and in this particular case, a specific  question has been referred to the Tribunal as to the nature of relief to be granted to the workmen.

8. The principles enunciated in the decisions referred by either side can be summed up as follows:

Whenever  a workman is  entitled to  receive  from  his  employer  any money or any benefit which is capable of being computed in terms of money and  which  he  is  entitled  to  receive from  his  employer  and  is  denied  of such  benefit  can  approach  Labour Court under Section 33-C(2) of the Act. The  benefit  sought  to  be  enforced under  Section  33-C(2)  of  the  Act  is necessarily  a  pre-existing  benefit  or one  flowing from a pre-existing  right. The  difference  between  a  pre-existing right or benefit  on one hand and the right  or  benefit,  which  is  considered

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just and fair on the other hand is vital. The former falls  within jurisdiction of Labour Court exercising powers under Section  33-C(2)  of  the  Act  while  the latter does not. It cannot be spelt out from  the  award  in  the  present  case that  such  a  right  or  benefit  has accrued to the workman as the specific question  of  the  relief  granted  is confined  only  to  the  reinstatement without  stating  anything  more  as  to the  back  wages.   Hence  that  relief must be deemed to have been denied, for  what  is  claimed  but  not  granted necessarily  gets  denied  in  judicial  or quasi-judicial  proceeding.  Further when  a  question  arises  as  to  the adjudication of a claim for back wages all  relevant  circumstances  which  will have  to  be  gone  into,  are  to  be considered  in  a  judicious  manner. Therefore,  the  appropriate  forum wherein such question of back wages could  be  decided  is  only  in  a proceeding to whom a reference under Section 10 of the Act is made. To state that  merely  upon  reinstatement,  a workman would be entitled, under the terms  of  award,  to  all  his  arrears  of pay and allowances would be incorrect because several factors will have to be considered,  as  stated  earlier,  to  find out whether the workman is entitled to back wages at all and to what extent. Therefore, we are of the view that the High  Court  ought  not  to  have presumed  that  the  award  of  the Labour Court for grant of back wages is implied in the relief of reinstatement

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or  that  the  award  of  reinstatement itself conferred right for claim of back wages."

12. The  above  position  has  also  been  highlighted  in  Vijay

Kumar v. Whirlpool of India Ltd. (2007 (13) SCALE 379).  

13. In  Central  Inland  Water  Transport  Corporation  Ltd.  v.

The Workmen and Anr. (AIR 1974 SC 1604) it was inter-alia

held as follows:  

“13. In a suit, a claim for relief made by the plaintiff  against  the  defendant  involves  an investigation directed to the determination of (i)  the  plaintiff's  right  to  relief;  (ii)  the corresponding  liability  of  the  defendant, including,  whether  the  defendant  is,  at  all, liable  or  not;  and  (iii)  the  extent  of  the defendants liability, if any. The Working out of such  liability  with  a  view  to  give  relief  is generally  regarded  as  the  function  of  an execution  proceeding.  Determination  No.  (iii) referred to above, that is to say, the extent of the defendant's liability may sometimes be left over  for  determination  in  execution proceedings. But that is not the case with the

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determinations under heads (i)  and (ii).  They are  normally  regarded  as  the  functions  of  a suit and not an execution proceeding. Since a proceeding  under  Section  33(C)(2) is  in  the nature  of  an  execution  proceeding  it  should follow  that  an  investigation  of  the  nature  of determinations (i)  and (ii)  above is,  normally, outside  its  scope.  It  is  true  that  in  a proceeding  under  Section  33(C)(2),  as  in  an execution proceeding, it may be necessary to determine the identity of the person by whom or against whom the claim is made if there is a challenge  on  that  score.  But  that  is  merely 'incidental'.  To  call  determinations (i)  and (ii) 'incidental'  to an execution proceeding would be  a  perversion,  because  execution proceedings in which the extent of liability is worked  out  are  just  consequential  upon  the determinations  (i)  and  (ii)  and  represent  the last stage in a process leading to final relief. Therefore,  when  a  claim is  made  before  the Labour  Court  under  Section  33(C)(2) that court must clearly understand the limitations under  which  it  is  to  function.  It  cannot arrogate  to  itself  the  functions--say  of  an Industrial  Tribunal which alone is entitled to make  adjudications  in  the  nature  of determinations (i) and (ii) referred to above, or proceed to compute the benefit by dubbing the former as 'incidental'  to its main business of computation. In such cases determinations (i) and (ii) are not 'incidental' to the computation. The computation itself  is consequential  upon and subsidiary to determinations (i) and (ii) as the  last  stage  in  the  process  which commenced with a reference to the Industrial Tribunal. It was, therefore, held in State Bank of  Bikaner  and  Jaipur  v.  R.L.  Khandelwal [1968] 2 L.LJ. 589 (SC} that a workman cannot

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put  forward a claim in an application under Section 33(C)(2) in respect of a matter which is not based on an existing right and which can be  appropriately  the  subject-matter  of  an industrial  dispute which requires a reference under Section 10 of the Act.”

14. The case at hand belongs to category (i) as elaborated in

Central Inland’s case (supra).  

15. Further, the High Court seems to have lost sight of the

fact that the Labour Court under the Act can decide only the

matters specified in Second Schedule. “Bonus” is not covered

by the Second Schedule. Item 6 of Second Schedule says that

it  deals  with all  matters  except  those  covered  by  the  Third

Schedule. “Bonus” appears as Item 5 in the Third Schedule.

Therefore, the question of entitlement to bonus could not have

been  decided  by  the  Labour  Court.  In  case  of  pre  existing

rights there must be agreements by both sides about existence

of such rights. If there is dis-agreement this has to be decided

by  the  competent  authority.  The  stand that  the  expression

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‘bonus payable’ relates to the quantum and not payability is

also not correct.  

16. Since  the  High  Court  has  not  considered  the  above

aspects,  we  remit  the  matter  to  it  for  considering  (i)  the

applicability  of  Section  33-C(2)  of  the  Act  and  (ii)  the

jurisdiction of the Labour Court to decide the matter; and (iii)

the applicability of the Bonus Act to daily wagers.  

17. The appeals are allowed with no order as to costs.  

………………………….J. (Dr. ARIJIT PASAYAT)

…………….……………J. (P. SATHASIVAM)

New Delhi, March 5, 2008    

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