CO Vs. STATE OF U.P. AND OTHERS

JUDGEMENT

(1.) On 4th August, 1970, the State Government acting under Section 4-K of the U. P. Industrial Disputes Act referred to the Industrial Tribunal, Allahabad a dispute between the petitioner and its workmen with regard to the payment of bonus for the year 1968-69. The Industrial Tribunal held that the petitioner company had suffered losses during the relevant year. There was no allocable surplus. But having regard to Section 10 of the Payment of Bonus Act the management was liable to pay the minimum bonus prescribed thereunder. On this view it held the company liable to pay to their employees bonus for the accounting year 1968-69 at the rate of 4 per cent of the salary or wage earned by each employee during the year or forty rupees, whichever is higher, subject to the proviso to Section 10 of the Payment of Bonus Act. The validity of the award has been challenged by the petitioner. The sole question relates to the interpretation, of Section 10 of the Act. This section provides:

(2.) A learned Single Judge of this Court in Kumaon Motor Owners Union V/s. State of U. P., 1969 1 LLJ 809(All) held that Section 10 applied only when there are either profits or nil profit but does not apply when the company has suffered loss and there was no allocable surplus.

(3.) In Jalan Trading Co. V/s. Mill Mazdoor Sabha, 1967 AIR(SC) 691 the Supreme Court construed Section 10 to provide that even if there has resulted a trading loss in the accounting year the employer is bound to pay to every employee a minimum bonus which shall be four per cent, of the salary or wage earned by the employee during the accounting year or forty rupees, whichever is higher. It held that the section so construed was not violative of Article 14 of the Constitution. In my opinion the decision of the Supreme Court is an authority as to the proper construction of Section 10 of the Payment of Bonus Act. In view of the Supreme Court decision the contrary decision of the learned Single Judge of this Court cannot hold the field. The Industrial Tribunal was justified in awarding payment of minimum bonus according to Section 10 of the Act.