Ashram Karamchari Sangh Vs. Swarajya Ashram  INSC 439 (14 October 1993)
P.B. SAWANT, P.B. MOHAN, S. (J) CITATION: 1994 SCC Supl. (2) 392
appellant-Union of Workmen engaged by the respondent-Swarajya AshramSarvodaya Nagar,
Kanpur had raised an industrial dispute with regard to thepayment of bonus to
the extent of 20% of the wages for the years 1965- 66 to 1970-71. The
Industrial Tribunal negatived the claim on the ground that the respondent was
exempted under Section 32(v)(c) of the Payment of Bonus Act, 1965 being an
institution which was not established for the purposes of profit. It is to
challenge the said award that the present appeal has been preferred by the
Union of Workmen.
counsel appearing for the Union contended
that admittedly the respondent-institution has been making profit though it
might not have been established for the purposes of making profit and hence no
exemption could be claimed by the institution under Section 32(v)(c) of the
Act. The counter-affidavit filed by the institution shows that the institution
has been established with the following aims and objects:
of hand-spun and hand-woven cloth;
popularisation by sale, and helping the people in the development of cottage
industries; (emphasis supplied).
the rural people by starting cottage industries and by providing medical
facilities; and loans;
of night schools etc. for rural people; and (f) providing means for the upliftment
of the rural people etc.
counter-affidavit further states that the sales are incidental to the object.
They are generated while popularising the hand-spun and hand-woven cloth. The
institution is admittedly not established for making profit but for promoting
the above objects. It has also been pointed out that during the period of 50
years from 1921-70 the institution's turnover was about Rs 40 crores and yet
the surplus during the said period amounted only to Rs 7 lakhs which amount was
also ploughed back into the working capital of the institution. It has also
been stated there that similar situation continues from the year 1970 as well.
further pointed out there that the object of the institution is also to provide
employment and in fact there is no superannuation age for the workmen. The
employment is for life and many of the workmen are far advanced in age.
the workmen are given benefits such as provident fund on an enhanced scale,
education allowance for children etc. which benefits are not available
ordinarily anywhere else. On these facts which are not controverted, we are
more than satisfied that the Tribunal was right in its conclusion that the
respondent-institution would squarely fall within the exemption of Section 32(v)(c)
of the Act.
circumstances, we do not find any merit in the appeal. The appeal is dismissed.
There shall, however, be no order as to costs.