K S BALAN Vs. STATE OF KERALA

JUDGEMENT

(1.) PETITIONERS, three in number, are the employees of the second respondent company, the Travancore Titanium Products Ltd. They are persons drawing higher salary than the maximum prescribed under the Payment of Bonus Act, 1965, disentitling them from claiming bonus. The learned Counsel appearing for the petitioners submits that the petitioners are not employees coming within the definition of that term under the Payment of Bonus Act. They were being paid ex-gratia and goodwill payments at different percentages of the total emoluments on the basis of resolutions passed by the Board of Directors of the company. During 1979, they received 12? per cent, of the total emoluments as ex-gratia payments. By exhibit P-3 dated 7th January, 1981, the Government informed the Managing Director of the second respondent company that the payments of 12v2 per cent of the total emoluments which is termed as ex-gratia or goodwill, is clearly an attempt on the part of the company to get around the restrictions imposed by the Bonus Act. Therefore, the company was requested to recover the payments already made. In pursuance of that direction, the company rescinded its old resolution and resolved to recover the amounts paid to-officers who were drawing a monthly salary of more than Rs. 1,600. Petitioners challenge exhibit P-3 direction of the Government and P-4 decision of the company.

(2.) A detailed counter-affidavit has been filed on behalf of the State. It is averred therein that in the case of officers whose pay exceeded Rs. 1,600 per mensem, the question of extending payment of ex-gratia was usually placed before the Board and on approval, the payment was effected, that the said payment effected in 1979 was examined by Government, that it was decided not to give such payments as ex-gratia, or goodwill allowance or any other payment by whatever name it is called to officers drawing more than Rs. 1,600, that a circular was issued to all public sector undertakings prohibiting such payments, that in pursuance of the circular the Board of Directors reviewed the entire matter, that the Board took a decision to stop the payment and recover the amounts already paid and that the petitioners have no right to retain the amount received by them which they were not legally entitled to. Accordingly, it was averred that the petitioners cannot challenge the order directing the recovery of the amounts.

(3.) THE second respondent has filed a separate counter-affidavit contending that officers drawing a monthly salary of Rs. 1,600 and above are not entitled to bonus as a matter of right, that the payment has never been a customary payment at all and that the decision taken by the Board to pay 12? per cent of the salary as a special case had been reviewed in the light of the Government circulars and that the petitioners are to refund the amount illegally collected by them.