MAHALAKSHMI TEXTILE MILLS PASUMALAI Vs. GOVERNMENT OF MADRAS

JUDGEMENT

(1.) W. P. No. 892 of 1968 is filed by Mahalakshmi Textiles Mills, Pasumalai, madurai, for the issue of a writ of certiorari calling for the records relating to the order of Government of Madras in 152935/lab. A. 2/67-2 I. L. H. dated 8-2-1968, declining to exempt the petitioner-mills from payment of minimum bonus for the year 1965-66 and quashing the said order. W. P. No. 893 of 1968 is by the same petitioner for the issue of Writ of Mandamus directing the Government of Madras represented by the Secretary, Department of Industries, Labour and Housing to grant the exemption as prayed for by the petitioner in its application dated 24-111967 for a partial exemption under Section 36 of the Payment of Bonus Act, 1965. As the two writ petitions raise the same question, they will be dealt with together. According to the petitioner-mills the mills incurred a loss of Rs. 13,58,788. 68 for the year 1965. On 26-9-1966, the petitioner applied under Section 36 of the payment of Bonus Act for exemption under Section 10 of the Act. On 30-11-1966 the company's liability according to the petitioner was Rs. 56,52. 000. The government refused the exemption prayed for on 2-12-1966. On 23-12-1966, the government referred the question of bonus for the year 1965-66 to the Industrial tribunal. Against the order of reference, the petitioner has filed W. P. No. 625 of 1967 which is pending in this Court. On 9-1-1967, the petitioner applied for exemption and the Government refused to review its order dated 2-12-1966 by its order dated 9-2-1967. The petitioner again applied for exemption for 1966 on 29-8-1967 and the Government by its order dated 3-9-1967 refused to grant exemption. On 9-10-1967, 1142 out of 1173 workmen agreed by settlement to receive 3 per cent bonus subject to exemption being given by the Government. The petitioner mills paid 2 per cent bonus for 1965 and 1966 on 18-10-1967 and 19-10-1967, subject to the Government exempting the petitioner from the operation of the provisions of Section 10 of the Act On 24-11-1967, the petitioner applied to the Government for partial exemption to enable it to pay 3 per cent bonus for each year. On 31-121967. according to the petitioner the total liability of the mills was Rs. 60,85,000/. In January 1967 the petitioner paid further one per cent bonus. On 8-2-1968, the government rejected the application without stating the reasons and the writ petition No. 892 of 1968 was filed on 29-2-1968 against that order. The order dated 8-2-1968 runs as follows-"the management of the Mahalakshmi Textiles Mills Ltd. , Pasumalal is informed that its request for partial exemption under Section 36 of the payment of Bonus Act 1965 from payment of minimum bonus for the years 1965 and 1966 under the above Act, cannot be complied with". The attack against this order is that the Government has failed to give reasons for not complying with the request of the petitioner.

(2.) SECTION 10 of the Payment of Bonus Act, 1965, provides that every employer shall be bound to pay to every employee in an accounting year a minimum bonus which shall be four per cent of the salary or wage earned by the employee during the accounting year whether there are profits in the accounting year or not. Section 36 of the Act enables the Government to exempt certain establishments from the operation of all or any of the provisions of the Act. The section reads thus:

(3.) THE learned Government Pleader submitted that Section 36 is analogous to section 29 of the Madras Buildings (Lease and Rent Control) Act of 1960 which enables the Government to exempt any building or class of buildings from the operation of all or any provisions of the Act. The Supreme Court in construing the provisions of Section 13 of the Madras Buildings (Lease and Rent Control) Act 1949 which are in pari materia with Section 29 of the 1960 Act, held in P. J. Irani v. State of Madras, AIR 1981 SG 1731, that any individual order of exemption passed by the Government could be the subject of judicial review by the courts for finding out whether it was discriminatory so as to offend Art 14 of the Constitution, whether the order was made on grounds which were germane or relevant to the policy and purpose of the Act and whether it was not otherwise mala fide. The provision granting power to exempt any building or class of buildings from all or any other provisions of the Act, under the Madras Buildings (Lease and Rent control) Act is different and is of a general nature. But Section 36 of the Payment of Bonus Act makes it necessary for the Government to exercise its power having regard to the financial position and other relevant circumstances of the concerned establishment. In the circumstances the contention that the Government has got an absolute discretion to refuse to grant exemption cannot be accepted. It has to exercise its mind, come to its conclusion and pass an order giving reasons therefor. The plea of the Government that the agreement entered into by the labourers accepting three per cent bonus is contrary to Section 34 (3) of the Act would not help the Government in declining to give its reasons for its order. It may be that the agreement which is contrary to the provisions of the section will not be binding on the employers. In this case, what the petitioner applied for was that subject to the Government granting exemption of the operation of Section 10 of the Act, the employees would be willing to accept three per cent as bonus. Whether this is contrary to the provisions of Section 34 (3) of the Act or not, the decision of the government in deciding the question as to whether exemption under Section 36 should be granted or not is affected. On a consideration of all the facts in this case. I am satisfied that the Government is bound to exercise its powers conferred under Section 36 and pass such order as it thinks fit giving reasons for the same.