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PETITIONER: MUMBAI KAMGAR SABHA, BOMBAY

       Vs.

RESPONDENT: M/S ABDULBHAI FAIZULLABHAI & ORS.

DATE OF JUDGMENT10/03/1976

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. UNTWALIA, N.L.

CITATION:  1976 AIR 1455            1976 SCR  (3) 591  1976 SCC  (3) 832  CITATOR INFO :  RF         1979 SC 876  (5)  RF         1982 SC 149  (971)  R          1984 SC 457  (3)  R          1986 SC1486  (4)

ACT:      Payment of  Bonus Act,  1965-Workers’ Union-Not being a party to  dispute had  locus standi-Bonus  Act-If a complete code-Bonus based on custom, usage or a condition of service- If excluded by the Act.      Res judicata-if applicable to industrial disputes.

HEADNOTE:      A considerable  number of  workmen were  employed by  a large number of small businessmen in a locality in the city. Prior to  1965, the  employers made ex-gratia payment to the workers by way of bonus which they stopped from that year. A Board  of   Arbitrators  appointed   under  s.  10A  of  the Industrial Disputes  Act, to  which the  bonus  dispute  was referred, rejected the workers demand for bonus. The dispute was eventually  referred to  an Industrial Tribunal which in limine dismissed  the workers’ demand as being barred by res judicata, in  view of the decision of the Arbitration Board. The Tribunal in addition. held that bonus so far paid having been founded  on tradition  and custom,  did not fall within the four-corners  of the  Bonus Act which is a complete code and came  to  the  conclusion  that  the  workers  were  not entitled bonus.      On appeal  to this  Court it was contended that (i) the appellant-Union not  being a  party to  the dispute  had  no locus standi,  (ii) the  claim  of  the  workmen  not  being profit-based bonus,  which is what the Bonus Act deals with, the Act  has no application to this case; and (iii) since no case of  customary or  contract bonus  was urged  before the Arbitration Board  such a  ground was  barred by the general principles of res judicata.      Dismissing the appeal. ^      HELD: 1(a)  In an  industrial dispute  the  process  of conflict resolution is informal, rough and ready and invites a liberal  approach. Technically  the union  cannot  be  the appellant, the  workmen being  the real  parties. There is a

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terminological lapse  in the  cause title,  but a reading of the petition,  the description  of the  parties, the grounds urged and grievances aired, show that the battle was between the workers  and the employers and the Union represented the workers. The  substance of  the matter being obvious, formal defects fade away. [596H]      (b)  Procedural   prescriptions  are   handmaids,   not mistresses of justice and failure of fair play is the spirit in which  Courts  must  view  processual  deviances.  Public interest is  promoted by  a spacious  construction of  locus standi  in   our  socio-economic  circumstances,  conceptual latitudinarianism    permits     taking    liberties    with individualisation of  the right  to invoke the higher courts where  the  remedy  is  shared  by  a  considerable  number, particularly when they are weaker. [597B; D]      Dhabolkar [1976] 1 S.C.R. 306 and Nawabganj Sugar Mills [1976] 1 S.C.C. 120 held inapplicable.      (e) In  industrial  law  collective  bargaining,  union representation at conciliations, arbitrations, adjudications and appellate and other proceedings is a welcome development and an enlightened advance in industrial life. [597G]      In the  instant case  the union  is an abbreviation for the totality  of workmen involved in the dispute. The appeal is,  therefore,  an  appeal  by  the  workmen  compendiously projected and impleaded through the union. [598D] 592      2(a) The  demands referred  by the State Govt. under s. 10(1) (d) of the Industrial Disputes Act, specifically speak of payment of bonus by the employers which had become custom or usage  or a  condition of  service in the establishments. The subject  matter of  the dispute  referred by  the  Govt. dealt with  bonus based  on custom  or condition of service. The Tribunal  was bound  to investigate  this question.  The workers in  their statements  urged that  the demand was not based on  profits or  financial results  of the employer but was based on custom. [599 D-E]      (b) The  pleadings, the  terms  of  reference  and  the surrounding circumstances  support the  only conclusion that the core  of the  cause of  action is  custom and/or term of service, not  sounding in  or conditioned  by  profits.  The omission to  mention the  name of  a festival as a matter of pleading did  not detract from the claim of customary bonus. An examination  of the  totality of  materials leads  to the inevitable result  that what had been claimed by the workmen was bonus  based on  custom and  service condition,  not one based on profit. [600E; 601B]      Messrs. Ispahani  Ltd.  v.  Ispahani  Employees’  Union [1960] 1  S.C.R. 24, Bombay Co. [1964] 7 S.C.R. 477, Jardine Henderson [1962]  Supp.3 S.C.R.382,  Howrah-Amta Light  Rly. [1966] II LLJ 294, 302, Tulsidas Khimji [1962] I LLJ 435 and Tilak Co. A.I.R. 1959 Cal. 797 referred to.      (c) When  industrial jurisprudence  speaks of  bonus it enters the  area of  right and  claim to  what is due beyond strict wages.  Viewed from this angle prima facie one is led to the  conclusion that  if the  Bonus Act  deals wholly and solely with  profit bonus  it cannot  operate as  a bar to a different species  of claim  merely because the word ’bonus’ is common to both. [604G]      (d) The  welfare of  the working  classes is not only a human problem  but a  case where the success of the nation’s economic  adventures  depends  on  the  cooperation  of  the working classes  to make  a better  India.  Against  such  a perspective of developmental jurisprudence there is not much difficulty in  recognising customary  bonus and  contractual bonus as permissible in industrial law. [605B]

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    Churakulam Tea Estate [1969] 1 SCR 931, Ispahani [1960] 1 S.C.R.  24,  Bombay  Co.  [1964]  1  S.C.R.  477,  Jardine Henderson [1962]  Supp. 3 S.C.R. 382, Howrah-Amta Light Rly. [1966] II  LLJ 294, 302 and Tulsidas Khimji [1962] I LLJ 435 referred to.      3(a) It  is true  that if  the Bonus  Act is a complete code and  is exhaustive  of the subject whatever the species of bonus,  there may  be a bar to grant of bonus not covered by its  provisions. But  it is  quite conceivable  that  the codification may  be of  everything relating to profit bonus in which  case other  types of  bonus  are  left  untouched. Merely calling  a statute  a code  is  not  to  silence  the claimant for bonus under heads which have nothing to do with the subject matter of the code. [605D]      (b) The history of the Act, the Full Bench formula, the Bonus Commission Report and the statutory milieu as also the majuscule  pattern   of  bonus   prevalent  in   the  Indian industrial world,  converge to  the point that the paramount purpose of  the Act was to regulate profit bonus. If such be the design of the statute, its scheme cannot be stretched to supersede what it never meant to touch or tackle. [607C-D]      (c) The  objects and  reasons of the Bonus Act indicate that the  subject matter  of the statute was the question of payment of  bonus based  on profit  to employees employed in establishments. Schematically  speaking, statutory  bonus is profit  bonus.   To  avoid  an  unduly  heavy  burden  under different heads  of bonus it is provided in s. 17 that where an employer  has paid  any puja  bonus  or  other  customary bonus, he would be entitled to deduct the amount of bonus so paid from  the amount of bonus payable by him under the Act. If the  customary bonus  is thus recognised statutorily and, if in  any instance  it happened  to be much higher than the bonus payable  under the  Act, there is no provision totally cutting off the customary bonus. The provision for deduction 593 in s.  17 on  the  other  hand,  indicates  the  independent existence of  customary bonus  although, to some extent, its quantum is  adjustable towards  statutory bonus.  Section 34 does not  mean that  there cannot  be contractual  bonus  or other species  of bonus.  This provision only emphasises the importance of the obligation of the employer, in every case, to pay  the statutory bonus. The other sub-sections of s. 34 also do  not destroy  the survival  of other  types of bonus than provided  by the  Bonus Act.  The heart of the statute, plainly read,  from its  object and provisions, reveals that the Act  has no  sweep wider than profit bonus. [607E-G; 608 B-D]      (d) The  fact that  certain types  of bonus  which  are attended with  peculiarities deserving all special treatment have been  expressly saved  from the  bonus Act did not mean that whatever  had not been expressly saved was by necessary implication included in the Bonus Act. [608D]      (e) The  long title  of the  Bonus Act seeks to provide for bonus  to persons  employed "in  certain establishments" not in  all establishments.  Moreover, customary  bonus does not  require  calculation  of  profits,  available  surplus, because it  is a  payment founded  on long usage and the Act gives no  guidance to  fix the quantum of festival bonus. It is, therefore,  clear that  the Bonus  Act deals  with  only profit bonus  and matters  connected therewith  and does not govern customary, traditional or contractual bonus. [608G-H]      (f) The  Bonus Act speaks and speaks as a whole code on the sole  subject of profit-based bonus but is silent on and cannot therefore  annihilate by  implication, other distinct and different  kinds of  bonus such  as the  one oriented on

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custom. [609D]      Ghewar Chand’s  case [1969]  1 S.C.R. 366 distinguished and held inapplicable.      (g) The  principle that a ruling of a superior court is binding law  is not  of scriptural sanctity but is of ratio- wise luminosity  within  the  edifice  of  facts  where  the judicial  lamp  plays  the  legal  flame.  So  there  is  no impediment in  reading Ghewar  Chand’s case  as confined  to profit-bonus,  leaving   room  for   non-statutory  play  of customary bonus. That case relates to profit bonus under the Industrial Disputes  Act. The  major inarticulate premise of the statute is that it deals with-and only with-profit-based bonus. There  is no  categorical provision  in the Bonus Act nullifying all  other  kinds  of  bonus,  nor  does  such  a conclusion arise by necessary implication. The core question about the policy of the Parliament that was agitated in that case turned  on the  availability of the Industrial Disputes Act as  an independent  method of  claiming profit  bonus de hors the Bonus Act and the Court took the view that it would be subversive  of the scheme of the Act to allow an invasion from the  flank in  that manner.  A discerning  and concrete analysis of  the scheme  of the Act and the reasoning of the Court  leaves   no  doubt  that  the  Act  leaves  untouched customary bonus. [609E-H; 611D-E]      (4) So  long as  Pandurang stands industrial litigation is no  exception to  the general  principle  underlying  the doctrine of  res judicata.  But the  case  of  Pandurang  is distinguishable. In  that case  there was a binding award of the Industrial  Tribunal relating to the claim which had not been put  an end  to and so this Court took the view that so long as  that award  stood the  same claim under a different guise could  be subversive  of the  rule of res judicata. In the present  case  the  Arbitration  Board  dealt  with  one dispute; the  Industrial Tribunal  with a fresh dispute. The Board enquired  into one  cause of  action based  on  profit bonus; the  Tribunal was  called upon to go into a different claim. [612D-F]      [The court expressed a doubt about the extension of the sophisticated  doctrine  of  constructive  res  judicata  to industrial law  which is  governed by special methodology of conciliation, adjudication  and considerations  of  peaceful industrial  relations   where  collective   bargaining   and pragmatic justice  claim precedence over formalised rules of decision based  on individual  contests, specific  causes of action and findings on particular issues.] 594

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No.  61 of 1971.      Appeal by Special Leave from the Award dated 14-7-71 of the Industrial  Tribunal  Maharashtra  Bombay  in  Reference (I.T.) No. 116 of 1970.      V. M.  Tarkunde, P.  H. Parekh,  H. K. Sowani and Manju Jetley for the Appellant.      G. B.  Pai,  Shri  Narain,  O.  C.  Mathur  and  J.  B. Dandachanji for  Respondent Nos. 27, 68, 160, 182, 226, 265, 312, 403, 522, 722 and 903.      The Judgment of the Court was delivered by      KRISHNA IYER,  J.-A narration  of the  skeletal  facts, sufficient to get a hang of the four legal issues debated at the bar  in this  appeal, by special leave, will help direct the discussion  along a  disciplined  course,  although  the

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broader social  arguments addressed  have spilled  over  the banks of the jural stream.      Nag Devi,  a locality in the city of Bombay, is studded with small  hardware businesses  where pipes  and  fittings, nuts and  bolts, tools  and other  small products,  are made and/or sold.  These establishments,  well over  a  thousand, employ a considerable number of workmen in the neighbourhood of 5,000,  although each  unit has (barring four), less than the statutory  minimum of  20 workmen. This heavy density of undertakings and  workers naturally  produced an association of employers  and a  Union of  workmen, each recognising the other,  for   the  necessary   convenience   of   collective bargaining. Apparently,  these  hardware  merchants  huddled together in  the small  area, were  getting on well in their business and in their relations with their workmen, and this goodwill manifested  itself in ex-gratia payments to them of small amounts  for a  number of  years prior  to 1965,  when trouble began.      Although rooted  in  goodness  and  grace,  the  annual repetition of  these payments  ripened, in the consciousness of the workers, into a sort of right-nothing surprising when we see  in our  towns and  temples a trek of charity-seekers claiming benevolence  as  of  right  from  shop-keepers  and pilgrims, especially  when this  kindly disposition has been kept  up  over  long  years.  The  compassion  of  yesterday crystallises as  the claim  of today, and legal right begins as that  which is humanistically right. Anyway, the hardware merchants of  Nag Devi,  made of  sterner stuff, in the year 1965, abruptly  declined to  pay the  goodwill sums  of  the spread-out past  and the  frustrated workmen frowned on this stoppage  by   setting  up   a  right   to  bonus   averring considerable  profits   for  the   Industry  (if   one   may conveniently use  that expression  for a collective coverage of  the  conglomeration  of  hardware  establishments).  The defiant denial  and the  consequent dispute  resulted in the appointment of  a Board  of Arbitrators  under s. 10A of the Industrial Disputes Act to arbitrate upon twelve demands put forward by  the Mumbai Kamgar Sabha, Bombay (the Union which represents the  bulk of  workers employed  in the  tiny, but numerous, establishments).  The charter of demands included, inter alia, claim for 4 595 months’ wages  as bonus  for the  year  1965.  The  arbitral board,  however,   rejected  the   demand  for   bonus.  The respondents-establishments   discontinued   these   payments thereafter and  the  Union’s  insistence  on  bonus  led  to conciliation efforts.  The  Deputy  Commissioner  of  Labour mediated  but  since  his  intervention  did  not  melt  the hardened mood  of the employers, formal demands for payments of bonus were made by the Union and government was persuaded to refer  the dispute  for  adjudication  to  an  Industrial Tribunal. The Tribunal formulated two issues as arising from the  statements  of  the  parties  and  rendered  his  award dismissing the reference.      At this stage, it may be useful to set out the terms of reference made  under s. 10(1)(d) of the Industrial Disputes Act, 1947  (for short,  the ID Act), for adjudication by the Tribunal:           "1.  Whether the  establishments (mentioned in the                annexure) have  been giving  bonus  to  their                workers till  1965 ?  If so,  how long before                1965 have  the employers been giving bonus to                their workmen ? And at what rate ?           2.   Whether payment  of bonus by the employers to                their workmen  has become  custom or usage or

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              condition of  service in these establishments                ? If  so, what  should be  the basis on which                employers should  make payment  of  bonus  to                their workmen  for the  years ending  on  any                date in 1966, 1967 1968 and 1969 ? Following upon  the  statements  of  parties,  the  Tribunal framed two issues which ran thus:           "1.  Whether Award  of the  Arbitration Board made                in Reference (VA) No. 1 of 1967 and published                in M.G.G.  Part I-1  dated 31st October 1968,                pages 4259-4286,  operates as res judicata to                the demands of the workmen.           2.   Whether  the  reference  in  respect  of  the                demands is tenable and legal." He answered  the first  in the affirmative and the second in the negative.      The Union,  representing the  workers in  the mass, has assailed the findings of the Tribunal, the reasonings he has adopted and the misdirection he has allegedly committed. The Tribunal did not enter the merits of the claim but dismissed it in  limine on  the score  that the  demand for  bonus was barred  by   res  judicata  the  arbitral  board’s  decision negativing the  bonus for  1965  being  the  basis  of  this holding. The  second ground for reaching the same conclusion was that  the Bonus  Act was  a comprehensive and exhaustive law dealing  with  the  entire  subject  of  bonus  and  its beneficiaries. In  short, in  his view,  the Bonus Act was a complete Code  and no species of bonus could survive outside the contours of that statute. Admittedly, here the claim for bonus for  the relevant  four years was founded on tradition or custom or 596 condition of  service and  in that  light, the Tribunal made short shrift of the workmen’s plea in these words:           "In my  opinion,  the  demand  pertaining  to  the      practice or  custom prevailing  in  the  establishments      before  1965  is  not  such  a  matter  as  has  to  be      adjudicated  and  it  also  does  not  fall  under  the      provisions of  Bonus Act.  I, therefore,  find that the      reference in  that respect  also  is  not  tenable  and      legal."      The submissions  of counsel  may be  itemised into four contentions which may be considered seriatim. They are:      (a)  Was the Industrial Tribunal competent to entertain           the dispute at all ?      (b)  Was the  claim for  bonus for  the  years  1966-69           barred by res judicata ?      (c)  Was  there,   apart   from   profit-based   bonus,           customary bonus or bonus as a condition of service           ?      (d)  If answer to (c) is in favour of the workmen, does           the Bonus  Act interdict  such a  demand since  it           does not provide for those categories of bonus and           confines itself to profit-based bonus, or does the           Bonus Act  speak on  the topic  of  bonus  of  all           species and, therefore, stands four square between           a claim  for bonus  and its grant, unless it finds           statutory expression in the provisions of that Act           ? The first  contention which,  curiously enough, has appealed to the  Industrial Tribunal,  need not be investigated as it is devoid  of merit and has rightly been given up by counsel for the  respondent. A  casual  perusal  of  the  provisions bearing on  the jurisdiction  of the  Labour Court  and  the Industrial Tribunal  as well  as the relevant schedules will

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convince anyone  that this  industrial dispute  comes within the wider  ambit of  the Industrial Tribunal’s powers. It is unfortunate that  the Tribunal has made this palpable error. It is  right to give plausible reasons for one’s verdict and not mar it by bad, perfunctory supplementaries.      Fairness  to  respondent’s  counsel  constrains  us  to consider in  limine a  flawsome plea forcibly urged that the Union figured  as the appellant before us but being no party to the  dispute (which  was between  the workers  on the one hand and  the establishments  on the  other)  had  no  locus standi. No right of the Union qua Union was involved and the real  disputants   were  the   workers.  Surely,   there  is terminological lapse  in the  cause-title because,  in fact, the aggrieved  appellants are  the workers collectively, not the  Union.   But  a  bare  reading  of  the  petition,  the description of  parties, the  grounds urged  and  grievances aired, leave  us in  no doubt that the battle is between the workers  and  employers  and  the  Union  represents,  as  a collective noun,  as it  were,  the  numerous  humans  whose presence is  indubitable in  the  contest,  though  formally invisible on the party array. The substance of the 597 matter is obvious and formal defects, in such circumstances, fade away.  We are  not  dealing  with  a  civil  litigation governed by  the Civil Procedure Code but with an industrial dispute  where   the  process   of  conflict  resolution  is informal, rough-and-ready  and invites  a liberal  approach. Procedural prescriptions  are handmaids,  not mistresses  of justice and  failure of  fair play  is the  spirit in  which Courts must view processual deviances. Our adjectival branch of jurisprudence, by and large, deals not with sophisticated litigants but  the rural  poor, the urban lay and the weaker societal segments  for whom  law will  be an added terror if technical  mis-descriptions  and  deficiencies  in  drafting pleadings and  setting out  the cause-title  create a secret weapon to  non-suit a  party. Where foul play is absent, and fairness is  not faulted,  latitude is a grace of processual justice. Test  litigations, representative actions, pro bono publico and like broadened forms of legal proceedings are in keeping with the current accent on justice to the common man and a necessary disincentive to those who wish to bypass the real issues  on the merits by suspect reliance on peripheral procedural short-comings.  Even Art.  226, viewed  in  wider perspective, may be amenable to ventilation of collective or common  grievances,   as  distinguished  from  assertion  of individual rights,  although the traditional view, backed by precedents, has  opted for  the narrower alternative. Public interest is  promoted by  a spacious  construction of  locus standi in  our socio  economic circumstances  and conceptual latitudinarianism    permits     taking    liberties    with individualisation of  the right  to invoke the higher courts where  the  remedy  is  shared  by  a  considerable  number, particularly  when   they  are   weaker.  Less   litigation, consistent with  fair process, is the aim of adjectival law. Therefore, the  decisions cited  before us  founded  on  the jurisdiction  under   Art.  226  are  inept  and  themselves somewhat  out  of  tune  with  the  modern  requirements  of jurisprudence  calculated  to  benefit  the  community.  Two rulings of  this Court  more or  less endorse  this  general approach: Dhabolkar and Newabganj Sugar Mills.      All this  apart, we  are  dealing  with  an  industrial dispute which,  in  some  respects,  lends  itself  to  more informality   especially    in   the    matter   of    Union representation.  Technically,   the  Union   cannot  be  the appellant, the  workmen being  the  real  parties.  But  the

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infelicity of  drafting notwithstanding, the Union’s role as merely  representing  the  workers  is  made  clear  in  the description of  the parties. Learned counsel took us through s. 36(1)  and (4)  of the  Act, rr. 29 and 36 of the Central Rules under  that Act,  s. 15(2) of the Payment of Wages Act and some  rulings throwing  dim light  on the rule regarding representation in industrial litigation. We deem it needless to go  deeper into  this question,  for in  industrial  law, collective    bargaining,     union    representation     at conciliations, arbitrations, adjudications and appellate and other  proceedings   is  a   welcome  development   and   an enlightened advance in industrial life.      Organised  labour,  inevitably  involves  unionisation. Welfare  of   workers  being   a  primary   concern  of  our Constitution (Part IV), we 598 have to  understand and interpret the new norms of procedure at the  pre-litigative and  litigative stages,  conceptually recognising the representative capacity of labour unions. Of course, complications  may arise where inter-union rivalries and  kilkenny   cat  competitions   impair  the   peace  and solidarity of  the working  class. It  is admitted,  in this case, that  there is only one union and so we are not called upon to  visualize the  difficult situations counsel for the respondents invited  us to  do, where  a plurality of unions pollute workers’  unity and  create situations  calling  for investigation into  the representative  credentials  of  the party appearing  before the Tribunal or court. It is enough, on the  facts of  this case,  for us to take the Union as an abbreviation for  the totality  of workmen  involved in  the dispute,  a   convenient  label   which,  for   reasons   of expediency, converts  a lengthy party array into a short and meaningful one,  group representation  through unions  being familiar in  collective bargaining  and later litigation. We do not expect the rigid insistence on each workman having to be a  party eo  nomine. The  whole body  of workers, without their names  being set  out, is,  in any  case,  sufficient, according to  the  counsel  for  the  respondents,  although strictly speaking, even there an amount of vagueness exists. For these  reasons, we  decline to  frustrate this appeal by acceptance of  a subversive  technicality.  We  regard  this appeal as  one by  the workmen  compendiously projected  and impleaded through the Union.      Next we  come upon  the plea  of  res  judicata,  as  a roadblock in the way of the appellant. But we will deal with it last,  as was  done by  counsel, and  so straight  to the piece de  resistance of this lis. Points (b) and (c) bearing on bonus  therefore claim  our first  attention  and,  in  a sense, are integrated and amenable to common discussion.      Shri  G.   B.  Pai,   appearing  for  the  respondents, contended that the claim put forward by the appellant before the Tribunal  was, on  the face  of it, unsustainable on the short ground  that what  was pleaded  was profit-based bonus only and,  therefore, fell  squarely within  the Bonus  Act. That Act  being a complete Code, it expressly excluded by s. 1(3) all  establishments employing  less than 20 workmen and all but  four of  the respondents were admittedly such small undertakings, with  the result  that the  death knell to the plea of  bonus was  tolled by the Act itself. Therefore, the conclusion  was   irresistible,  argued   counsel  for   the respondents, that  the plea  for a profit-based bonus, being negatived by the statute, stands self-condemned.      This argument  drives us  into an enquiry as to whether the claim  before the  Tribunal was  for profit-based bonus. "Yes", was  his holding  and so he said ’no’ to the workmen.

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The answer is the same, if the claim is founded on a similar basis.      Shri  Tarkunde,   for  the  appellant,  countered  this seemingly fatal  submission by  urging that  whatever  might have been the species of bonus demanded in 1965, the present dispute referred  by  the  State  Government  related  to  a totally different  type of bonus, namely, customary bonus or one which was a term of the employment itself. Even 599 if this  be true, Shri G. B. Pai has his case that the Bonus Act is all comprehensive and no kind of bonus can gain legal recognition if  it falls  outside the sweep and scope of the Bonus Act itself. No brand of bonus has life left if it does not find  a place  in the  oxygen tent  of the complete Code called the Bonus Act.      What thus  first  falls  for  our  examination  is  the reference by  the State  Government  to  the  Tribunal,  the pleading of  the workmen before the Tribunal and the counter statement by  the employers  before the Tribunal with a view to ascertain  the character  of the  bonus demanded  by  the workers and  covered by  the dispute.  It must be remembered that the  award has rejected the claim not substantively but on the  ground of  two legal bars and care must be taken not to mix  up maintainability  with merits.  A short  cut is  a wrong cut  often times  and the  Tribunal’s easy recourse to dismissal on  preliminary grounds  may well lead-and it has, as will  be presently  perceived-to a re-opening of the case many years  later if  the higher  Court reverses  the  legal findings. Be that as it may, let us test the validity of the plea that  only a profit based bonus has been claimed by the workers.      The demands  referred by  the State Government under s. 10(1)(d) specifically  speak of  payment  of  bonus  by  the employers which  ’has become  custom or usage or a condition of service  in the establishments’. The subsidiary or rather consequential point covered by the reference is ’if so, what should be  the basis  on which employers should make payment of bonus  to their  workmen for the years. . .’. It is plain that the  subject matter  of the dispute, as referred by the Government, deals with bonus based on custom or condition of service. The Tribunal is therefore bound to investigate this question, the terms of reference being the operational basis of its jurisdiction.      The workmen,  in their  statement, have  asserted  that bonus had been paid for several years and what transpired at the conciliation  stages is  clear from  the letter  of  the Commissioner of Labour who adverts to the ’usual’ custom and practice of  payment of  bonus’. The  colour of the workers’ claim has  been clarified  further in paragraphs 10 to 12 of their statement  before the  Tribunal. While they do mention that the  hardware merchants  of Nag  Devi have  been making large profits  during the  years in question and, therefore, can afford  to pay  bonus according  to  the  standards  and criteria  applicable  to  large  and  prosperous  industrial establishments, the  real foundation  of their  claim is set out in  indubitable language  as  attributable  to  ’custom, usage and  condition of  service’. Surely, they have no case of bonus  dependent upon  the  quantum  of  profits  of  the establishments nor  uniformity  region-wise.  On  the  other hand, the  amount of  bonus, the time of payment, etc., vary from establishment  to establishment.  The constant  factor, however,  is   allegedly   that   there   is   ’consistency, predictability  and   uniformity’,  continuity  and  payment ’without reference  to the  fluctuations  in  the  financial performance and  profits of  each firm’.  The Sabha does not

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mince words  when, in praying for relief, it states that the Tribunal ’be  pleased  to  restore  the  custom,  usage  and conditions of service represented by the payment of bonus in these firms. In short, the bedrock of the bonus claim of the workers is custom and 600 usage bad/or  implied condition  of service.  Nor  have  the establishments, who  are the respondents before the Tribunal and before  us, made  any mistake  about the  nature of  the demand. In  their statement  before the  Tribunal they  have urged that  a scrutiny  of the  accounts  of  the  firms  is unnecessary ’since the demand is not based on the profits or the financial  results of  the employers  but  is  based  on custom’:           "The contentions  of the Sabha that the conditions      of service under all these employers should be governed      by one standard and one criteria is, not tenable. Since      all the  shops are  not owned  by one  person and since      every shop  is a  different entity there is no question      of uniformity of service conditions. Moreover, there is      no law  which lays  down that the service conditions of      the employees  under  all  these  employers  should  be      uniform. It  is submitted  that the  reference  to  the      capital-turnover ratio in this paragraph is irrelevant.      It is  also submitted  that the  Sabha’s demand  that a      sample scrutiny  of the Accounts of the firms should be      made by  the Tribunal  is irrelevant  in  this  respect      since the  demand is  not based  on the  profits or the      financial results  of the  employers but  is  based  on      custom." More over  the ex  gratia payments  for  the  pre-Bonus  Act period are  admitted by the respondents. They seek sanctuary on  the  counterplea  that  free  acts  of  grace,  even  if repeated, can neither amount to a custom, usage or condition of service.  In sum,  a study of the pleadings, the terms of reference and  the surrounding  circumstances  supports  the only conclusion that, peripheral reference to the profits of the establishments notwithstanding, the core of the cause of action or the kernel of the claim for bonus is custom and/or term of service, not sounding in or conditioned by profits.      Shri G.  B. Pai  did urge  that the  precedents of this Court have  linked custom-based  bonus with some festival or other and that bonus founded on custom de hors some festival is virtually unknown to case  law on the point. From this he argues  that  since  the  bonus  has  not  been  related  by reference to  any festival by the workmen in their pleadings (reference  to  Diwali  as  the  relevant  festival  in  the statement  of  the  case  in  this  Court  is  an  ingenious innovation to  fit into the judge-made law according to Shri Pai) the  claim must  fail.  Legal  life  is  breathed  into customary bonus  only by  nexus with Puja or other festival. We  are  unable  to  agree  with  this  rather  meretricious submission. Surely,  communal  festivals  are  occasions  of rejoicing and  spending and employers make bonus payments to employees  to  help  them  meet  the  extra  expenses  their families have  to incur.  Ours is  a festival-ridden society with many religions contributing to their plurality. That is why our  primitive practice of linking payment of bonus with some distinctive  festival has  sprouted. As  we progress on the secular road, maybe the Republic Day or the Independence Day or  the Founder’s  Day may  well become the occasion for customary bonus.  The crucial  question is not whether there is a  festival which  buckles the bonus and the custom. What is legally telling is whether by an unbroken flow 601

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of annual payments a custom or usage has flowered, so that a right to  bonus based  thereon can be predicated. The custom itself precipitates  from and  is  proved  by  the  periodic payments induced  by the sentiment of the pleasing occasion, creating a mutual consciousness, after a ripening passage of time, of  an obligation  to pay and a legitimate expectation to receive.  We are,  therefore, satisfied that the omission to mention  the name of a festival, as a matter of pleading, does not  detract from  the claim  of customary  bonus.  The impact of  this omission  on  proof  of  such  custom  is  a different matter  with which  we are  not concerned  at this stage since  the Tribunal  has not  yet  enquired  into  the merits.      Shri Pai  urged that  the custom,  even if  true, stood broken in  1965 and, therefore, during the post-1965 period, customary  bonus  stood  extinguished.  The  effect  of  the arbitral board’s negation of the profit-based bonus claim in 1965 on  custom-based bonus  for the  subsequent  period  is again relevant,  if at all, as evidence, which falls outside our consideration  at present.  In the event of the Tribunal having to  adjudicate upon  the question,  maybe this rather anaemic circumstance  will be  urged  by  the  employer  and explained by the employees.      There  is   hardly  any  doubt  that  custom  has  been recognised in  the past as a source of the right to bonus as the several  decisions cited before us by Shri Tarkunde make out and s. 17(a) of the Bonus Act, in a way, recognizes such a root  of title.  In Churakulam  Tea Estate(1)  this  Court surveyed the  relevant case  law at some length. Ispahani(2) implied as  a term of the contract the payment of bonus from an unbroken,  long spell.  Vaidialingam J., in Churakulam(1) referring to some of the precedents, observed:           "In Ispahani’s  case(2) this Court had to consider      a claim  for Puja  bonus, in  Bengal, and the essential      ingredients, for  sustaining such  a claim  when it  is      based on  an implied  agreement. After stating that the      claim, for  Puja Bonus, can be based either as a matter      of  implied   agreement  between   the  employers   and      employees, creating a term of employment for payment of      Puja bonus, or that even where no implied agreement can      be inferred,  it may  be payable  as a customary bonus,      this Court,  in the  said decision,  specifically dealt      with a  claim  for  payment  of  bonus  as  an  implied      condition of  services. This  Court further accepted as      correct the  tests laid  down by the Appellate Tribunal      in Mahalaxmi  Cotton Mills  Ltd., Calcutta v. Mahalaxmi      Cotton Mills  Workers’  Union  (1952  L.A.C.  370)  for      inferring that  there is an implied agreement for grant      of such  bonus. The  three circumstances,  laid down by      the Appellate Tribunal, were: (1) that the payment must      be unbroken;  (2) that  it must  be for  a sufficiently      long period;  and (3)  that the circumstances, in which      payment was  made should  be such as to exclude that it      was paid out of bounty....... 602      This  Court,  again,  had  to  consider  the  essential ingredients to  be established  when payment  of  bonus,  as customary or  traditional, is  claimed-again  related  to  a festival-in The  Graham Trading  Co.  (India)  Ltd.  v.  Its Workmen (1960 1 SCR 107, 111) and dealt with the question as follows:           "In dealing  with puja  bonus based  on an implied      term of employment, it was pointed out by us in Messrs.      Ispahani Ltd.  v. Ispahani Employees’ Union that a term      may be  implied, even  though the  payment may not have

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    been at  a uniform  rate throughout  and the Industrial      Tribunal would  be justified in deciding what should be      the quantum of payment in a particular year taking into      account the  varying payments  made in  previous years.      But when  the question  of  customary  and  traditional      bonus arises  for adjudication,  the considerations may      be some  what different.  In such  a case, the Tribunal      will have to consider: (i) whether the payment has been      over an  unbroken series  of years; (ii) whether it has      been for  a sufficiently  long period though the length      of the period might depend on the circumstances of each      case; even so the period may normally have to be longer      to justify  an inference  of traditional  and customary      puja bonus  than may  be the case with puja bonus based      on  an   implied  term   of   employment;   (iii)   the      circumstance that the payment depended upon the earning      of profits  would have  to be excluded and therefore it      must be  shown that  payment was made in years of loss.      In dealing  with the  question of custom, the fact that      the payment  was called  ex gratia by the employer when      it was made, would, however, make no difference in this      regard because  the proof  of custom  depends upon  the      effect of the relevant factors enumerated by us; and it      would  not   be  materially   affected  by   unilateral      declarations of  one party  when the  said declarations      are inconsistent  with the course of conduct adopted by      it; and  (iv) the  payment must  have been at a uniform      rate  throughout  to  justify  an  inference  that  the      payment at  such and such rate had become customary and      traditional in  the particular concern. It will be seen      that these  tests are  in substance more stringent than      the tests applied for proof of puja bonus as an implied      term of employment. It will  be seen  from the  above extract that an additional circumstance has  also been  insisted upon,  in the  case of customary or  traditional bonus,  that the payment must have been at  a uniform  rate throughout  to justify an inference that the  payment  at  such  and  such  a  rate  had  become customary and traditional in the particular concern." 603      In Bombay  Co.(1) this  Court, after  pointing out  the distinction in  the ingredients of customary and contractual bonus, affirmed  the existence  of categories like customary bonus which  are different from and unconnected with profit- based bonus.  The learned  Judge discussed Jardine Henderson and other  rulings,  but  the  judicial  chorus  of  legally claimable customary  or contractual  bonus is  not marred by and discordant note.      It may  be otiose  to refer  to holdings of High Courts when this  Court  has  laid  down  the  law.  Even  so,  two decisions, one  of Patna  and the other of Calcutta, deserve mention. One  of us,  (Untwalia J., as he then was) speaking for the  Division Bench,  observed in Howrah-Amta Light Rly. thus:           "Apart from  the profit bonus, the sense of social      justice has  led to the recognition in law of the right      of the workmen to get other kinds of bonus which do not      depend upon  nor are  necessarily  connected  with  the      earnings of profits by the industrial concern. One such      kind of  bonus is that which is paid on the occasion of      special festival well celebrated in particular parts of      India, as  for example, puja bonus in Bengal and Diwali      bonus in Western India." The Court,  referring to Tulsidas Khimji, restated the tests for the claim of customary bonus and rightly held that these

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tests are  but circumstances  and not  conditions precedent, that it  is not  necessary to  show that such bonus has been paid even  in years  of loss. The grounds to be made out for customary, as  distinguished from contractual, bonus overlap in many respects but differ in some aspects.      P. B.  Mukherji,  J  as  he  then  was,  in  Tilak  Co. observed:           "Akin to this conception of bonus is the case of a      bonus annexed  to the  employment by  custom or  social      practices such as Customary bonus and Puja or Festivity      bonus. In case of such customary and traditional bonus,      the question  of profit may or may not arise at all and      such customary and traditional bonus will depend on the      content and  terms of  that custom  or the tradition on      which the claim for bonus is made.           "Each claim  for bonus must depend on the facts of      such claim. No doctrinaire view about bonus is possible      or desirable.  This much  however is judicially settled      that bonus  is not  deferred wages.  It is a narrow and      static view that considers bonus as always an ex gratia      payment or a glorified tip or ’Bakshish’ or a mere cash      patronage payable  at the  pleasure of the employer. In      the  industrial  jurisprudence  of  a  modern  economic      society, it  is a  legal claim  and a  legal  category,      whose potentialities  are not  as yet  fully conceived,      but whose types and boundaries the Courts in 604      India are  struggling  to  formulate.  It  is  a  vital      instrument of industrial peace and progress, dynamic in      its implication and operation." Since we  are not called upon to investigate the veracity of the claim we stop with stating that the employers’ awareness of  social  justice,  which  fertilises  the  right  of  his employees for  bonus, blooms  in many ways of which, profit- based bonus  is but  one-not the  only one.  All this is the indirect bonanza  of  Part  IV  of  the  Constitution  which bespeaks  the   conscience  of  the  nation,  including  the community of  employers. Law  is not  petrified by the past, but responds  to the  call of the changing times. So too the social consciousness of employers. Of course, Labour has its legal-moral  duty   to  the   community  of   a  disciplined contribution to  the health  and wealth of the Industry. Law is not always an organiser of one-way traffic.      This general  survey of the case-law conclusively makes out that  Labour’s claim  for bonus  is not  inflexibly  and solely pegged  to profit as the one and only right. Bonus is a word  of many  generous connotations  and, in  the  Lord’s mansion there  are many  houses. There is profit-based bonus which is  one specific  kind of  claim and  perhaps the most common. There  is customary  or traditional  bonus which has its emergence  from long,  continued,  usage  leading  to  a promissory-and-exceptancy  situation   materialising  in   a right. There  is attendance bonus, production bonus and what not. An  examination of  the totality of pertinent materials drives us  to the  inevitable  result  that  what  has  been claimed by the workmen in the present case is bonus based on custom and  service condition-not  one based  on profit. But the critical  question pops up: Is the Bonus Act a killer of every other kind of bonus not provided for by it ?      We have thus to move on to a study of the scheme of the Bonus Act  in order  to ascertain  whether  it  extinguishes claims founded  on customary  bonus or contractual bonus. In one sense,  a bonus  may be  a mere  gift or  gratuity as  a gesture of goodwill or it may be something which an employee is entitled to on the happening of a condition precedent and

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is enforceable  when the  condition is  fulfilled. Any extra consideration given for what is received, or something given in addition  to what  is ordinarily received by, or strictly due to  the recipient is a bonus (Black’s Legal Dictionary). But when  industrial jurisprudence  speaks  of  ’bonus’,  it enters the  area of  right and  claim to  what is due beyond strict wages. Viewed from this angle, prima facie one is led to the  conclusion that  if the  Bonus Act  deals wholly and solely with  profit bonus,  it cannot  operate as a bar to a different species  of claim merely because the word bonus is common to  both. Of  course, if  the statute  has spoken  so comprehensively, as it can, effect must be given to it.      The cosmos  of bonus  is  expanding  as  working  class contentment and  prosperity become  integral  components  of industrial  peace  and  progress.  The  bone  of  contention between the parties before us is as to whether the Bonus Act is the  alpha and  omega of  all extra claims, outside wages and salaries, labelled bonus with separate adjectives 605 demarcating the identity of each species. But this issue has to be  sized up not in vacuo but against the backdrop of the progressive change around us.      Today it  is  accepted  doctrine  that  Labour  is  the backbone of the nation, particularly in the area of economic self-reliance. This means the welfare of the working classes is not  only a human problem but a case where the success of the nation’s  economic adventures depends on the cooperation of the  working classes  to make  a better India. Indeed, on the national  agenda is the question of Labour participation in Management.  Against such  a perspective of developmental jurisprudence there  is not  much difficulty  in recognising customary bonus  and contractual  bonus  as  permissible  in Industrial Law, given proper averments and sufficient proof.      Shri G.  B. Pai  has raised what he regards as a lethal infirmity in  the claim  of the Sabha. In his submission the Bonus Act  is a complete Code and what is not covered by its provisions cannot  be awarded  by the  Tribunal. It  is true that if  the Bonus  Act is a complete Code and is exhaustive of the  subject, whatever the species of bonus, there may be a bar, but it is quite conceivable that the codification may be of  everything relating  to profit  bonus in  which  case other types  of bonus  are left  untouched. Merely calling a statute a  Code is  not to  silence the  claimant for  bonus under heads which have nothing to do with the subject matter of the  Code. On  listening to  the intricate argument about implicit codification  of the  law of bonus by this Act, one is reminded  of Professor  Gilmore who  put the case against codification thus :           "The law,  codified, has  proved to  be  quite  as      unstable,   unpredictable,   and   uncertain-quite   as      mulishly unruly-as the common law, uncodified, had ever      been. The  rules of  law, purified,  have remained  the      exclusive preserve of the lawyers; the people are still      very much  in our toils and clutches as they ever were-      if not more so."      The argument  of the  Bonus Act  being an all-inclusive Code is  based on  the anatomy  of the Act and the ruling in Ghewar Chand.  So the  judicial task  is  to  ascertain  the history and  object of  the Act,  the  relevant  surrounding circumstances  leading   up  to   it,  its  scheme  and  the prohibitions,  exclusions,   exemptions  and  savings  which reveal the  intent and  ambit of  the enactment.  Long  ago, Plowden, with  sibylline instinct, pointed out that the best way to  construe the scope of an Act of Parliament is not to stop with  the words of the sections. ’Every law consists of

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two parts  viz., of  body and soul. The letter of the law is the body  of the law, and the sense and reason of the law is the soul  of the  law’. The ’social conscience’ of the judge hesitates to  deprive the working class, for whom Part IV of the Constitution  has shown  concern, of such rights as they currently enjoy  by mere  implication from  a statute unless there are  compulsive provisions  constraining the  court to the conclusion. From this perspective, let us 606 examine exclusionary  contention based  on the body and soul of the  Bonus Act. If the Bonus Act is a complete Code, on a true decoding of its scheme and spirit, the industrial Court cannot take  off the  ground with  any other forms of bonus- yes, that is the implication of ’a complete Code’.      Bonus has  varying  conceptual  contents  in  different branches of  law and  life. We  are here  concerned with its range of  meanings in  industrial  law  but,  as  expatiated earlier, there  is enough  legal room for plural patterns of bonus, going  by  lexicographic  or  judicial  learning.  It implies no  disrespect to  legal dictionaries if we say that precedents notwithstanding,  the critical word ’bonus’ is so multiform that  the judges  have further  to refine  it  and contextually define  it. Humpty  Dumpty’s  famous  words  in ’Through the  Looking Glass’-’When  I use  a  word......  it means just  what I  choose it to mean ..... neither more nor less’-is an  exaggerated cynicism.  We have to bring in some legal  philosophy   into  this   linguistic  problem  as  it incidentally   involves    doctrinal   issues    where   the Constitution  is   not  altogether   non-aligned.  Statutory interpretation, in the creative Indian context, may look for light to  the lodestar  of Part IV of the Constitution e.g., Arts. 39(a)  and (c) and Art. 43. Where two judicial choices are available,  the  construction  in  conformity  with  the social philosophy of Part IV has preference.      In Jalan  Trading Co.  Shah J.  (as he then was) gave a synopsis of  the development of the branch of industrial law relating to  bonus from  the days  of the First World War to the Report  of the Bonus Commission culminating in the Bonus Act, 1965.  The story of ’war bonus’, the Full Bench formula and this  Court’s view  that  ’bonus  is  not  a  gratuitous payment made  by the employer to his workmen, nor a deferred wage, and that where wages fall short of the living standard and the  industry makes  profit part  of which is due to the contribution  of   labour,  a   claim  for   bonus  may   be legitimately made  by the  workmen’  are  set  out  in  that decision. The  Full Bench  formula was  based on profits and the terms  of reference  to the Commission put profit in the forefront as  the foundation  of the  Scheme-’to define  the concept of  bonus, to  consider in  relation  to  industrial employments the  question  of  payment  of  bonus  based  on profits and  to recommend principles for computation of such bonus and  methods of  payment .....’A glance at the various Chapters of  the Report  brings home  the point  that  bonus based on  profits is  its central theme. The conclusions and recommendations revolve  round the  concept of profit bonus. Little argument  is needed  to hold  that the  bonus formula suggested by  the Commission  was  profit-oriented.  Indeed, that was  its only  concern. The Act, substantially modelled on these  proposals, has  adopted  a  blueprint  essentially worked out  on profit. The presiding idea being a simplified version of  bonus linked  to profits over a period, shedding the complex  calculations in  the Full  Bench  Formula,  the statute  did   not  cover  other  independent  species  like customary or  contractual bonus which had become an economic reality  and   received  judicial  recognition.  There  were

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marginal references to and accommodation 607 of  other   brands  of   bonus  but  they  were  for  better effectuating the spirit and substance of profit-based bonus.      The question  then is: Was the Bonus Act only a simpler reincarnation of  the Full  Bench formula,  as argued by Sri Tarkunde, or was it, going by the provisions and precedents, a full  codification of  multiform bonuses,  thus  giving  a knock-down blow to any customary but illegitimate demand for bonus falling outside the statute, as contended by Sri Pai ? Indeed, we  were taken  through the well-known categories of bonus vis a vis the statutory provisions with impressive and knowledgeable thoroughness  by  Shri  Pai  with  a  view  to strengthen his  perspective that  the  Act  encompassed  the whole law and left nothing outside its scope.      "To begin  with, the history of the Act, the Full Bench formula which  was its  judicial  ancestor,  the  Commission Report which  was its immediate progenitor and the statutory milieu as  also the  majuscule pattern of bonus prevalent in the Indian  industrial world, converge to the point that the paramount purpose  of  the  Payment  of  Bonus  Act  was  to regulate profit bonus, with incidental incursions into other allied claims like customary or attendance bonus. If such be the design of the statute, its scheme cannot be stretched to supersede what it never meant to touch or tackle.      The objects  and reasons of the Bonus Act indicate that the subject  matter of  the  statute  is  ’the  question  of payment of  bonus based  on profit  to employees employed in establishments’.  The  Report  of  the  Commission  is  also referred to  in the objects and reasons and the tenor is the same. The  long title  of the  Act is non-committal, but the concept of ’profit’ as the basis for bonus oozes through the various provisions.  For instance,  the idea  of  accounting year,  gross   profit  and   the  computation  thereof,  the methodology of  arriving at  the available  surplus and  the items deductible from gross profits, have intimate relevance to profit  bonus-and may  even be irrelevant to customary or traditional  bonus  or  contractual  bonus.  Similarly,  the provision for  set on  and set  off of allocable surplus and the like  are pertinent to profit-based bonus. Schematically speaking, statutory  bonus is  profit  bonus.  Nevertheless, there is  provision for  avoidance of  unduly  heavy  burden under different  heads of  bonus.  For  this  reason  it  is provided in  s. 17  that where an employer has paid any puja bonus or  other customary  bonus, he  will  be  entitled  to deduct the  amount of bonus so paid from the amount of bonus payable by  him under  the Act.  Of course, if the customary bonus is thus recognised statutorily and, if in any instance it happens  to be  much higher  than the bonus payable under the Act,  there is  no provision  totally  cutting  off  the customary bonus.  The provision  for deduction  in s. 17, on the other  hand,  indicates  the  independent  existence  of customary bonus  although, to  some extent,  its quantum  is adjustable towards  statutory bonus.  Again, s.  34 provides for giving affect to the Bonus Act thus:           "Notwithstanding anything  inconsistent  therewith      contained in  any other law .... or in the terms of any      award, 608      agreement,  settlement  or  contract  of  service  made      before 29th May, 1965". This does not mean that there cannot be contractual bonus or other species  of bonus.  This provision only emphasises the importance of the obligation of the employer, in every case, to pay  the statutory bonus. The other sub-sections of s. 34

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also do  not destroy  the survival  of other  types of bonus than provided  by the  Bonus Act.  Shri G.  B. Pai  used the provisions of the Coal Mines Provident Fund and Bonus Scheme Act, 1948,  referred to  in s.  35 of the Bonus Act, for the purpose of  making good  his thesis  that the  Bonus Act has comprehensive coverage  except where  it expressly saves any other scheme  of  bonus.  Our  understanding  of  s.  35  is different. Coal  mines are  extremely hazardous undertakings and they  are largely  located in  agrarian areas  where the agricultural workers  absent themselves  for long periods to attend to agricultural work and do not report themselves for mining work.  Coal mines  have many  peculiarities  and  the workmen employed  there have  to be  treated separately from the point  of view  of incentive  for attendance. Therefore, attendance bonus  for a miner is a separate subject attended with peculiarities  deserving of  special treatment  and has been expressly  saved from the Bonus Act. This does not mean that whatever  has not been expressly saved is, by necessary implication, included in the Bonus Act. Of course, there are provisions for  exemptions and  exclusions in  the Bonus Act itself, particularly,  vis-a-vis  small  establishments  and public sector undertakings. There is also marginal reference in s.  2(21) to  s. 2(21)  (iv) to  other  kinds  of  bonus, including incentive,  production and  attendance bonus.  The heart of  the statute,  painly  read  from  its  object  and provisions, reveals  that Act has no sweep wider than profit bonus.      There was reference to the payment of Bonus (Amendment) Ordinance, 1975  by counsel  on both sides. We find that the long title has been expanded and now covers bonus.           "on the  basis  of  profit  or  on  the  basis  of      production or productivity". This amendment  itself  implies  that  formerly  a  narrower species of  bonus, namely,  that based  on profit  had alone been dealt  with. The limits on contractual bonus also tends to feed our conclusions. The implications of the ceiling set by the  recent amendment  to the law falls outside our scope and we  keep away  from determining  it. Sufficient unto the day is the evil thereof.      It is  clear further  from the  long title of the Bonus Act of  1965 that  it seeks  to provide for bonus to persons employed   ’in    certain   establishments’-not    in    all establishments. Moreover,  customary bonus  does not require calculation of  profits, available  surplus, because it is a payment  founded  on  long  usage  and  justified  often  by spending on  festivals and  the Act gives no guidance to fix the quantum  of festival  bonus; nor  does it expressly wish such a  usage. The  conclusion seems  to  be  fairly  clear, unless we  strain judicial  sympathy contrarywise,  that the Bonus Act dealt with only profit bonus and matters connected therewith and  did  not  govern  customary,  traditional  or contractual bonus. 609      The end  product of  our study of the anatomy and other related factors  is that  the Bonus  Act spreads  the canvas wide to  exhaust profit-based bonus but beyond its frontiers is not  void but  other cousin claims bearing the caste name ’bonus’ flourish-miniatures  of other  colours! The  Act  is neither proscriptive nor predicative of other existences.      The trump card of Sri G. B. Pai is the ruling in Ghewar Chand. If  the ratio  there is  understood the  way Shri Pai would have  it the  workmen have  no case  to present.  For, establishments employing  less than  20 workers are excluded from the benignant campus of the Act and the appellants fall outside the grace of the statute for that reason alone. Does

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the decision  exhaust the  branch of  jurisprudence on every kind of  bonus or  merely lays down that profit-based bonus- the most  common one  and complicated  in working out on the mathematics of  the full  Bench Formula-has  been picked out for total  statutory treatment and for that pattern of bonus the Act operates as a complete Code? The Tribunal understood the former  way and  followed it up with a rejection, on the ground of  a legal  bar, of  the admittedly non-profit-based claim for  bonus. Shri Tarkunde argues the reasoning to be a misunderstanding of  the meaning of the ruling. We hold that the Bonus  Act speaks,  and speaks  as a  whole Code, on the sole subject  of profit-based  bonus but  is silent  on, and cannot therefore  annihilate by  implication, other distinct and different  kinds of  bonus such  as the  one oriented on custom. We  confess that  the gravitational pull on judicial construction of  Part IV  of the  Constitution has,  to some extent influenced our choice.      It is  trite, going  by Anglophonic  principles, that a ruling of  a superior  court is  binding law.  It is  not of scriptural sanctity  but  is  an  of  ratio-wise  luminosity within the  edifice of  facts where  the judicial lamp plays the legal  flame. Beyond  those walls and de hors the milieu we cannot  impart eternal  vernal  value  to  the  decision, exalting the  doctrine of  precedents into a prison-house of bigotry; regardless  of  varying  circumstances  and  myriad developments. Realism  dictates that  a judgment  has to  be read,  subject   to  the   facts  directly   presented   for consideration and not affecting those matters which may lurk in the  record. Whatever  be  the  position  of  subordinate courts’  casual   observations,  generalisations   and   sub silentio determinations  must be  judiciously read by courts of coordinate  jurisdiction and,  so viewed,  we are able to discern no impediment in reading Ghewar Chand as confined to profit-bonus,  leaving   room  for   non-statutory  play  of customary bonus.  The case  dealt with  a bonus claim by two sets of  workmen, based  on profit  of the  business but the workmen fell outside the ambit of the legislation by express exclusion or  exemption. Nothing  relating to any other type of bonus  arose and  cannot be  impliedly held  to have been decided. The  governing principle we have to appreciate as a key to  the understanding of Ghewar Chand is that it relates to a  case  of  profit  bonus  urged  under  the  Industrial Disputes  Act   by  two   sets  of   workmen,  employed   by establishments which  are either  excluded or  exempted from the Bonus Act. The major inarticulate premise of the statute is that it deals with-and only 610 with-profit-based bonus as has been explained at some length earlier. There  is no categorical provision in the Bonus Act nullifying all  other  kinds  of  bonus,  nor  does  such  a conclusion  arise   by  necessary  implication.  The  ruling undoubtedly lays down the law thus:           "Considering the  history of  the legislation, the      back ground  and the circumstances in which the Act was      enacted, the  object of  the Act  and its scheme, it is      not possible  to accept  the construction  suggested on      behalf of  the respondents  that  the  Act  is  not  an      exhaustive  Act   dealing  comprehensively   with   the      subject-matter of  bonus in  all its  aspects  or  that      Parliament still  left it open to those to whom the Act      does not apply by reason of its provisions either as to      exclusion or  exemption to  raise a dispute with regard      to bonus  through  industrial  adjudication  under  the      Industrial Disputes Act or other corresponding law." But  this  statement,  contextually  construed,  means  that

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profit-bonus not  founded on the provisions of the Bonus Act and by  resort to  an adventure  in industrial dispute under the Industrial  Disputes Act  is no longer permissible. When Parliament  has   expressly  excluded  or  exempted  certain categories from the Bonus Act, they are bowled out so far as profit-based  bonus   is  concerned.  You  cannot  resurrect profit-bonus by  a back-door  method,  viz.  resort  to  the machinery of  the industrial Disputes Act. The pertinence of the following  observations  of  Shelat  J.,  becomes  self- evident, understood in this setting:           "We  are   not  impressed  by  the  argument  that      Parliament in excluding such petty establishments could      not have  intended  that  employees  therein  who  were      getting bonus  under the full Bench formula should lose      that benefit. As aforesaid, Parliament was evolving for      the first  time a  statutory formula in regard to bonus      and laying  down a legislative policy in regard thereto      as to  the classes  of persons who would be entitled to      bonus thereunder.  It laid  down the  definition of  an      ’employee’ far  more wider  than the  definition of  an      ’workman’ in  the Industrial Disputes Act and the other      corresponding Acts.  If, while  doing so,  it expressly      excluded  as   a  matter   of  policy   certain   petty      establishments in  view of  the recommendation  of  the      Commission in  that regard,  viz., that the application      of  the   Act  would   lead  to   harassment  of  petty      proprietors  and  disharmony  between  them  and  their      employees, it  cannot be  said that  Parliament did not      intend or  was not  aware of the result of exclusion of      employees of such petty establishments." Likewise, reference  to agreements and settlements providing for bonus  being exempted  from the applicability of the Act does not  militate against the survival of contractual bonus (we are  not referring to the impact of the latest amendment by Ordinance  of 1975).  Viewed thus and in the light of the observations earlier  extracted, the  following passage fits into the perspective we have outlined:           "Section 32(vii) exempts from the applicability of      the Act  (the  Bonus  Act)  those  employees  who  have      entered 611      before May  29, 1965  into an  agreement or  settlement      with their  employers for  payment of bonus linked with      production or  productivity in  lieu of  bonus based on      profits and  who may  enter after  that date  into such      agreement or  settlement for  the period for which such      agreement or settlement is in operation. Can it be said      that in  cases where  there is  such  an  agreement  or      settlement in  operation, though  this clause expressly      excludes such  employees from  claiming bonus under the      Act during such period, the employees in such cases can      still resort  to the Industrial Disputes Act, and claim      bonus on  the basis  of the  Full  Bench  Formula?  The      answer is  obviously in  the negative for the object in      enacting cl.  (vii) is to let the parties work out such      an agreement  or settlement.  It cannot be that despite      this position, Parliament intended that those employees      had  still   the  option  of  throwing  aside  such  an      agreement or  settlement, raise  a  dispute  under  the      Industrial Disputes  Act and claim bonus under the Full      Bench Formula.  The  contention,  therefore,  that  the      exemption under  s. 32  excludes those  employees  from      claiming bonus under the Act only and not from claiming      bonus under  the Industrial  Disputes Act or such other      Act is not correct."

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    The core  question about  the policy  of the Parliament that was agitated in that case turned on the availability of the Industrial  Disputes Act  as an  independent  method  of claiming profit  bonus de  hors the  Bonus Act and the Court took the  view that  it would be subversive of the scheme of the Act  to allow an invasion from the flank in that manner. The following observations strengthen this approach:           "Surely, Parliament  could not  have  intended  to      exempt these  establishments from  the burden  of bonus      payable under  the Act  and yet have left the door open      for their  employees to  raise industrial  disputes and      get bonus  under the  Full Bench  formula which  it has      rejected by  laying down  a different statutory formula      in the Act. For instance, is it to be contemplated that      though the  Act by  s. 32  exempts institutions such as      the Universities  or the  Indian Red  Cross Society  or      hospitals, or  any of the establishments set out in cl.      (ix) of that section, they would still be liable to pay      bonus if  the employees  of those  institutions were to      raise a  dispute under  the Industrial Disputes Act and      claim bonus  in accordance with the Full Bench Formula.      The legislature  would in that case be giving exemption      by one  hand and  taking it  away by  the  other,  thus      frustrating the  very object  of s.  32. Where,  on the      other hand,,  Parliament intended  to retain a previous      provision of  law under which bonus was payable, or was      being paid it has expressly saved such provision. Thus,      under s.  35 the  Coal Mines  Provident Fund  and Bonus      Schemes Act,  1946 and  any scheme  made thereunder are      saved. If,  therefore, Parliament  wanted to retain the      right to  claim bonus by way of industrial adjudication      for those  who are either excluded or exempted from the      Act, it would have made an express 612      saving provision  to that  effect as  it has  done  for      employees in Coal Mines." A discerning  and concrete analysis of the scheme of the Act and the reasoning of the Court leaves us in no doubt that it leaves untouched customary bonus.      The plea  of constructive  res judicata is based on the ’might and  ought’ doctrine.  Shri Pai’s  argument  is  that before  the  Arbitration  Board  no  case  of  customary  or contract bonus  was urged for the year 1965 and so, in later years, such  a ground is barred by the general principles of res judicata.  Sections 10A,  18 and 19(3) of the Industrial Disputes Act were pressed before us to demonstrate the prior award was binding on the workers and reading it in the light of Pandurang the bar was spelt out. It is clear law, so long as the above ruling stands, that industrial litigation is no exception to  the general  principle underlying the doctrine of res  judicata. We  do entertain doubt about the extension of the  sophisticated doctrine  of constructive res judicata to industrial  law which  is governed by special methodology of conciliation, adjudication and considerations of peaceful industrial  relations,   where  collective   bargaining  and pragmatic justice  claim precedence over formalised rules of decision based  on individual  contests, specific  causes of action  and  findings  on  particular  issues,  but  we  are convinced that  Pandurang(1) does  not apply  at all  to our case. There  overtime wages  were claimed  earlier under the Factories Act  and the  case was  rejected by  the Tribunal. After this  rebuff, a like claim was repeated but sustaining it on  the Bombay  Shops and  Establishments Act.  This  new ground to  support the  same claim  was held  to  be  barred because the workmen could and ought to have raised the issue

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that the  Factories Act failing, the Shops Act was available to them  to back  up their  demand. The  fallacy in invoking this decision  lies in  the fact that as early as 1950 there was a   binding award of the Industrial Tribunal relating to the claim,  which had  not been  put an  end to, and so this Court took  the view  that so  long as that award stood, the same claim  under a different guise (the Shops Act) could be subversive  of  the  rule  of  res  judicata.  The  decisive circumstance which  distinguishes that  case is contained in the observation:           "If the  workers are  dissatisfied with any of the      items in respect of which their claim has been rejected      it  is  open  to  them  to  raise  a  fresh  industrial      dispute." That is  to say,  if a  fresh dispute had been raised, after terminating the  prior award,  no bar  of res judicata could have been  urged. Here, the Arbitration Board dealt with one dispute; the  Industrial Tribunal, with a fresh dispute. The Board enquired  into one  cause of  action based  on  profit bonus;  the  Tribunal  was  called  upon  by  the  terms  of reference,  to   go  into  a  different  claim.  This  basic difference was  lost sight  of by  the Tribunal  and  so  he slipped into  an error.  The  dangers  of  constructive  res judicata in the area of suits vis a vis writ petitions under Art. 226  and as between proceedings under Art. 226 and Art. 32 are such as to warrant a closer study. To an extent the 613 Law Commission of India in its Report(1) has touched on this topic. Industrial disputes are an a fortiori case.      Dispute-processing is  not by  Court litigation  alone. Industrial  peace   best  flourishes   where  non-litigative mechanisms come  into cheerful  play before tensions develop or disputes  brew. Speaking  generally, alternatives  to the longish litigative  process is  a joyous  challenge  to  the Indian activist  jurist and  no field is in need of the role of avoidance as a means of ending or pre-empting disputes as industrial life. Litigation, whoever wins or loses, is often the funeral  of both.  We are  a developing country and need techniques of  maximising mediatory  methodology  as  potent processes even  where litigation  has erupted. This socially compulsive impulse  prompted the  setting  in  motion  of  a statesman-like effort  by the  senior counsel on both sides, with helpful  promptings from  the Bench,  to  advise  their clients into  a conciliatory  mood. Should  we have  at  all hinted to  the advocates  to resolve by negotiation or stick to our  traditional function  of litigative adjudication? In certain spheres,  ’judicious  irreverence’  to  judicialised argumentation is  a better  homage to justice ! Regrettably, the exercise  proved futile  and we  have to  follow up  our conclusions with necessary directions.      The findings  we have  reached may  now be formally set down. We  hold that the Bonus Act (as it stood in 1965) does not  bar  claims  to  customary  bonus  or  those  based  on conditions of  service. Secondly  we repel  the plea  of res judicata. There  is no merit in the view that the Industrial Tribunal has  no jurisdiction to try the dispute referred to it. We set aside the award and direct the Tribunal to decide on the  merits the subject-matter of the dispute referred to it by  the State  Government. The  appeal is  hereby allowed but,  having  regard  to  the  over-all  circumstances,  the parties will bear their costs. P.B.R.                                       Appeal allowed. 614

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