NDLI: Basti Sugar Mills Co. Ltd. Vs. State of U.p. & Anr.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Payment of Bonus Act 1965 Section 34
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Trade Unions Act, 1926 (16 of 1926) U.p. Industrial Disputes Act, 1947 (28 of 1947) Payment of Bonus Act, 1965 (21 of 1965)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Payment of Bonus Act 1965 - Sec. 34 - U.P. Industrial Disputes Act, 1947 - s. 3(b), 3(c) Trade Unions A.ct 1926 (S. 2h) - Whether bonus can be paid under order passed under. s. 3 of U.P. I.D. Act - Whether appointment of a Tripartite Committee amounts to agreement within meaning of s. 34 of Bonus Act - Whether an association of employers can bind individual employer.The appellant runs two Sugar Factories at two different places. There are about 71 such factories in U.P. The economy of U.P. in large measure, depends on the sugar industry. Moreover, sugar is an essential commodity. Thus, these factories and the army of workers employed therein fall within the strategic sector of the State economy. Section 3 of the U.P. lndustrial Disputes Act, 1947 provides that if in the opinion of the State Govt., it is necessary or expedient so to do for securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment it may by general or special order make provision for prohibiting strikes lock-outs and for appointing committees representative both of employers and workmen for securing amity and good relations between the employer and the workmen and for settling industrial disputes by conciliation. The Payment of Bonus Act, 1965 lays down what bonus is payable to the Workmen. Using the power under S. 3(c) of the 1947 Act and based on the suggestion of the State Labour Conference (Sugar), the State Govt appointed a tripartite committee in October 1968 consisting of 3 nominees of the Indian Sugar Mills Association and their representatives of the workmen, the Labour Commissioner being the Chairman of the Committee. The notification under s. 3 (b) who issued with a view to consider and make recommendations to Government on the question of grant of bonus for 1967-68 by the Vacuum Pan Sugar Factories of the State on the basis of the Payment of Bonus Act 1965, subject to such modifications as may be mutually agreed upon. The Association is a Trade Union registered under the Trade Unions Act, 1926. Its functions are indicated in the definition of 'trade union' in Section 2(h) of that Act, and include regulation of relations between the workmen and employers. Thus, the Association was within its competence to nominate three representatives to sit on the Committee to regulate the relations between the Member-employees and the workmen employed. The Appellant is a Member of the said Association.The Committee held several sittings and at some stages, the appellant or his representative did participate directly or indirectly in the deliberations. The workers' representatives actually accepted the formula put forward by the President of the Management's Association. On receipt of the recommendation under Section 3(c), the Govt. issued an order under s. 3(b) implementing those recommendations. Although Section 3(b) does not depend for coming into play upon any report under s. 3 ( c), the Govt. constituted the Committee under s. 3(c) before taking any step under s. 3(b) as a measure to ensure the fairness to the concerned parties. The appellant filed a writ petition in the High Court. The learned single Judge dismissed the writ petition taking a view that an agreement which is recognised by s. 34 of the Bonus Act, existed in this case and, therefore, the order which merely gave effect to that agreement was not bad in law. On appeal the two Judges of the Bench disagreed and the case went before the third learned Judge of the High Court who upheld the order of the learned single Judge on the ground that there was an agreement under s. 34 of the Bonus Act. The appellant contended :- 1. The State Govt. cannot act in the area of bonus without breach of the embargo in s. 34 of the Bonus Act, and, therefore, the impugned notification must fail for want of power. 2. Since the Bonus Act is a complete Code covering profit sharing bonus, no other law can be pressed into service to force payment of Bonus by the Management. 3. Section 3(b) of the U.P. Act is independent of any agreement between the affected parties and the notification thereunder operates on its own and not by force of consensus or contract between the workmen and the management. It was, therefore, wrong for the High Court to have salvaged the notification under s. 3 (b) as embodying the agreement to pay bonus. 4. As a matter of fact, there was no agreement between the appellant and the workmen within the meaning of section 34 since the representatives of the Association had no power to bind its members by any agreement on bonus having been appointed solely to make certain recommendations. The appellant had specifically informed the Association that it did not agree to any variation from the approved balance-sheet of the Company
Judge	Hon'ble Mr. Justice V.R. Krishna Iyer
Neutral Citation	1978 INSC 161
Petitioner	Basti Sugar Mills Co. Ltd.
Respondent	State Of U.p. & Anr.
SCR	[1979] 1 S.C.R. 590
Judgement Date	1978-09-11
Case Number	2148

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