H M AWASTHY Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners are employees of Ordnance Factory, Katni. They were posted as Examiners in the Electric Maintenance Section. They were paid incentive bonus as were paid to the maintenance workers. Subsequently, the respondents stopped payment of incentive bonus on the ground that they are not entitled for the same. The respondents also ordered recovery of the amount wrongly paid. Feeling aggrieved, the petitioners approached the Central Administrative Tribunal, Jabalpur Bench in O. A. No. 635/2002 for quashing the order of recovery and for a direction to respondents to continue to pay the incentive bonus. The Tribunal by order dated 3-4-2003 dismissed the application on the ground that a claim relating to incentive bonus can not be said to be a dispute relating to 'service matter' and, therefore, it can not be the subject matter of a dispute before the Tribunal. The said order is challenged in this petition.

(2.) SECTION 14 of the Administrative Tribunals Act, 1985 ('act' for short) provides that Central Administrative Tribunal constituted under the Act will have the jurisdiction over matters relating to recruitment and all service matters (save as otherwise expressly provided in the Act) of the classes of persons mentioned therein. "service matters" is defined under Section 2 (q) of the Act in relation to a person as meaning all matters relating to condition of service in respect of remuneration (including allowances), Pension and other retiral benefits, leave, disciplinary matters or any other matter whatsoever. The expression 'service matter' is thus of very wide amplitude.

(3.) IT was contended by the respondents that any Bonus, being in the nature of a gift or gratuity, is an 'ex gratia payment' and therefore, will not fall under "remuneration", referred to in Section 2 (q) of the Act. 'remuneration' is the consideration paid or payable to an employee for the services rendered by him. It will not only include the monthly emoluments (pay and allowances), but all monetary benefits given in recognition and in consideration of the services rendered by him. In that sense, an 'incentive Bonus' which is nothing but an extra emolument for the extra effort put in by the employees, will be a 'remuneration'. This is evident from a series of decision of the Supreme Court. 3. 1. In Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union ,, AIR1955 SC 170 , (1955 )I LLJ1 SC , [1955 ]1 SCR991 , the Supreme Court defined "bonus" as a cash payment made in addition to wages as a stimulus to extra work and efficiency by the labour. 3. 2. In Titaghur Paper Mills Co. Ltd. v. Its Workmen , AIR1959 SC 1095 , (1959 )II LLJ9 SC , [1959 ]supp (2 )SCR1012 and in National Iron and Steel Co. Ltd. v. Their Workmen (AIR 1962 SC 325), the Supreme Court held that incentive and production bonus are nothing but further emoluments to the employees, depending upon production, as an incentive or encouragement to the employees to put in more than the standard performance. It was further held that once a scheme of incentive bonus was introduced, the right to claim such bonus became a condition of service of the employees. In fact the Supreme Court in Burn and Co. (Howrah Iron Works) v. Their Employees, 1960 (2) LLJ 261 and Hindustan Steel Ltd. v. State of Orissa (CA No. 1969 of 1969, decided on 4-4-1975) held that the employees in non-production departments like clerical and sub-ordinate staff in an industry are deemed to contribute towards the production and therefore any scheme for incentive and production bonus would cover them also.