M/S. Hamdard (Wakf) Laboratories Vs. Deputy Labour Commr. & Ors  Insc 477 (27 April 2007)
S.B. Sinha & Markandey Katju
CIVIL APPEAL NO. 2204 OF 2007 [Arising out of SLP (Civil) No. 17526 of 2006]
S.B. SINHA, J :
Relationship between the parties hereto is employer and workmen.
As far back in the year 1983, the appellant terminated the services of 37
workmen allegedly on the ground that they had gone on an illegal strike. It
gave rise to an industrial dispute. The management and its 19 workmen entered
into compromise. One workman died during pendency of the said dispute. Claim of
17 workmen, therefore, survived for adjudication in the aforementioned
industrial dispute. By an award dated 26.05.1993, the industrial court, to
which reference of the dispute was made by the appropriate government,
"Accordingly, the Employers are directed to reinstate these 17 workers
on duty on the original post and payscale within one month after the date of
publication of this Award. So far as the question of back-wages is concerned,
these workmen are to be paid 50% of their wages/ allowances which they were
getting on 2-6-83, for the period 1-8-87 till the date of their joining the
duty, within 2 months of publication of this Award. As regards the deceased
Komal Singh, his Provident Fund, Insurance money and wages/ allowances upto 30-9-91 to be calculated in the same manner as was paid on 2-6-83 and 50% of the same is to be paid by the Employer to his wife Smt. Shakuntala. This is my Award in this
The said award ultimately attained finality as the writ petition preferred
thereagainst by the appellant was dismissed by an order dated 3.11.1995. A
Special Leave Petition filed thereagainst has also been dismissed.
On or about 2.08.1994, an application purported to be under Section 6-H(1)
of the U.P. Industrial Disputes Act, 1947 (for short "the Act")
claiming backwages and bonus was filed wherein the total amount of claim was
for a sum of Rs. 20,70,020.44.
The Additional Labour Commissioner, however, on an objection raised by the
appellant to the effect that the amount of bonus could not be included in the
claim application issued a recovery certificate for a sum of Rs. 17,61,755.18.
A review application, however, was filed inter alia on the premise that the
workmen were not entitled to claim any bonus. By an order dated 9.11.1994, the
said plea on the part of the appellant was accepted as a result whereof the
claim was reduced to Rs. 5,31,030.90. The said direction admittedly has been complied
The workmen, however, filed another application before the Labour
Commissioner, Ghaziabad claiming bonus for the period 1987 to 1996. In its
objection filed thereto, the appellant contended:
"It is respectfully submitted that the present claim of Bonus for the
period 1987 to 1996 have been filed on the last date of hearing on 04.7.96. The
workmen have earlier also filed a claim u/s 6-H(1) vide their application dtd.
02.8.94 and also submitted list claiming Bonus, yearly increments, leave with wages,
etc. The predecessor of the office Sh. Arjun Ram the then Addl. Labour
Commissioner heard the parties at length and passed an order dtd. 26.9.94
amounting to Rs.
17,61,755.18. The employers/ management filed an application to review the
said order on 15.10.94. The review application was heard in presence of the
parties and the earlier order dtd.
26.9.94, was reviewed, order modified to the extent of Rs. 5,31,030.00. The
then Addl. Labour Commissioner rejected the claim of Bonus, yearly increments
etc. since the claim of Bonus yearly increments etc. have already been rejected
by a competent authority the same can't be heard again.
That the claim of Bonus does not fall in the definition of 'wages' as
defined in Section 2(y) of the U.P. I.D. Act, 1947 hence the said claim cannot
be maintainable U/s 6-H(1) of the U.P. I.D. Act, 1947 and deserves to be
That the Hon'ble Labour Court (I), Ghaziabad who passed the Award in Adj.
Case No. 275/87 have not given any consequential relief. Hence the workmen are
not entitled to any relief/ benefit such as Bonus, leave etc. for the period
Sep. 87 to June 95.
That on perusal of the Award, dtd. 26.5.98 made by the Hon'ble Labour Court
(I) Ghaziabad, it is specifically mentioned in the conclusion at page No. 12
that the workmen are only entitled to 50% back wages at the rate of wages which
they were drawing on 2.6.83."
Rejecting the said contention, however, the Labour Commissioner, Ghaziabad,
by an order dated 8.08.1996 held:
"After hearing the parties, I have come to the conclusion that after
the publication of the Award, the employer has made the payment of wages to the
workmen but did not attribute them the work.
Therefore, these all workmen are completely entitled for the bonus, because
bonus is deferred wage. All workmen are entitled for the bonus at the rate on
which other workmen have been paid bonus in the organization. Therefore, the
Management shall calculate the same for the period from 6.11.93 till the year
94-95. The another issue is related to the grant of bonus for the period prior
to the publication of Award. In the Award in question, the Hon'ble Labour Court
has passed the order only for payment of the 50% of the wages to the Workmen on
the issue of back wages. In this regard, the recovery order passed by the
Previous Ld. Addl. Commissioner does not include the amount of bonus. The
Hon'ble Court has not used the word "other benefits" alongwith the
Pay and allowances. But, in my opinion, the bonus is deferred wages and the
same is included in the Pay and salary. Therefore, I do not agree with this
pleading of the employer that the matter shall be referred to the Labour Court
for interpretation of the Payment/ Wage under Section 11(B) of the U.P. Industrial
Disputes Act, 1947.
Since in the Award the order for payment of 50 per cent amount of back wages
has been passed, thus, accordingly the 50% of the bonus amount at the rate
payable to other workmen of the organization shall be payable"
A review application filed thereagainst was dismissed. A writ petition was
filed by the appellant before the Allahabad High Court aggrieved by and
dissatisfied therewith. A learned Judge of the said Court by an order dated
"Coming to the facts of the Writ Petition No.
35708 of 1996, the facts being the same, claims being only for the payment
of bonus for the disputed period. Once the employer themselves have paid the
wages upto the month of June, 1996, and since this Court has also rejected the
writ petition with regard to the payment of wages for the month of July, 1996,
needless to say for the reasons and the ground stated in this judgment with
regard to writ petition No. 41691 of 1996, this writ petition also deserves to
be dismissed and is hereby dismissed."
An intra-Court appeal preferred thereagainst was dismissed by a Division
Bench by reason of the impugned judgment holding:
"The accepted translation of these two Hindi words as amongst learned
counsel appearing is "wages and allowances". A submission is made
that the definition of the word "wages" in the U.P.
Disputes Act, 1947 specifically excludes bonus. Therefore, it is argued,
the mention of wages in the award cannot include bonus and the passing of the
Labour Commissioner's order under Section 6-H(1) including bonus is without
authority as the original award cannot be said to have included it.
In our opinion, this argument suffers from a fallacy. The definition of the
word "wages" is meant for construing the U.P. Industrial
Such definition in the Act is not meant to govern or limit the use of the word
"wages" made by any and every authority exercising jurisdiction under
the Act or passing orders under the Act. The Labour Court's award mentioning
the phrase "wages and allowance" has to be read in its proper and
normal context. The Labour Commissioner did not in any manner misconstrue the
said two words in including bonus within the term wages and allowances. Simply
put, whatever the other similarly situated workers got during the period the
seventeen workmen were kept out of employment, and whatever the seventeen
workmen would have got themselves had they not been put out of employment
improperly, they were to get 50% of all that. That is the plain and simple
reading of the Labour Court's award. The order of the Labour Commissioner has
proceeded on this basis. As such the challenge by way of the second writ
petition to payment of 50% bonus also fails."
Mr. Dinesh Dwivedi, learned senior counsel appearing on behalf of the appellant,
would submit that in view of the definition of 'wages' contained in Section
2(y) of the Act and Section 2(21) of the Payment of Bonus Act, in terms whereof
bonus is neither wages nor allowance; the Labour Commissioner committed a
manifest error in directing payment thereof on the spacious plea that it is
deferred wages. It was urged that in order to interpret a judgment, the terms
used therein, in the event of any ambiguity, must be interpreted in the light
of the statute operating in the field.
Mr. Bharat Sangal, learned counsel appearing on behalf of the respondents,
on the other hand, would submit that bonus being a part of 'remuneration', a
claim in relation thereto can also be made under the Payment of wages Act. It
was submitted that the claim petition was not filed for enforcement of the
award but as an independent claim in terms of the provisions of the Payment of
Bonus Act in regard whereto an application under Section 6-H(1) of the Act
before the Labour Commissioner was maintainable. Strong reliance in this behalf
has been placed on Sanghi Jeevaraj Ghewar Chand & Ors. v. Secretary, Madras
Chillies, Grains Kirana Merchants Workers' Union & Anr. [(1969) 1 SCR 366]
and Kohinoor Tobacco Products Pvt. Ltd., Adyal v. Presiding Officer, Second
Labour Court, Nagpur and Others [AIR 1986 Bom 340].
The term 'Wages' has been defined in Section 2(y) of the Act in the
"2(y) 'wages' means all remuneration capable of being expressed in
terms of money, which would, if the terms of employment, expressed or implied,
were fulfilled, be payable to a workman in respect of his employment, or of
work done in such employment, and includes ( i ) such allowances (including
dearness allowance) as the workman is for the time being entitled to;
( ii ) the value of any house accommodation, or of supply of light, water,
medical attendance or other amenity or of any service or of any concessional
supply of foodgrains or other articles;
( iii ) any travelling concession;
but does not include ( a ) any bonus;
( b ) any contribution paid or payable by the employer to any pension fund
or provident fund or for the benefit of the workman under any law for the time
being in force;
( c ) any gratuity payable on the termination of his service;"
[Emphasis supplied] Section 2(rr) of the Industrial
Disputes Act, 1947 defining the term 'Wages' is in pari materia with
Section 2(y) of the Act, 1947.
The term "salary or wage" has been defined under Section 2(21) of
the Payment of Bonus Act as under:
"(21) "salary or wage" means all remuneration (other than
remuneration in respect of over-time work) capable of being expressed in terms
of money, which would, if the terms of employment, express or implied, were
fulfilled, be payable to an employee in respect of his employment or of work
done in such employment and includes dearness allowance (that is to say, all
cash payments, by whatever name called, paid to an employee on account of a
rise in the cost of living), but does not include- (i) any other allowance
which the employee is for the time being entitled to;
(ii) the value of any house accommodation or of supply of light, water,
medical attendance or other amenity or of any service or of any concessional
supply of foodgrains or other articles;
(iii) any travelling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or
provident fund or for the benefit of the employee under any law for the time
being in force;
(vi) any retrenchment compensation or any gratuity or other retirement
benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee.
Explanation. -Where an employee is given in lieu of the whole or part of the
salary or wage payable to him, free food allowance or free food by his
employer, such food allowance or the value of such food shall, for the purpose
of this clause, be deemed to from part of the salary or wage of such
Section 2(vi) of the Payment of Wages
Act, 1936 defines "wages" in the following terms:
"(vi) "wages" means all remuneration (whether by way of
salary, allowances, or otherwise) expressed in terms of money or capable of
being so expressed which would, if the terms of employment, express or implied,
were fulfilled, be payable to a person employed in respect of his employment or
of work done in such employment, and includes- (a) any remuneration payable
under any award or settlement between the parties or order of a Court;
(b) any remuneration to which the person employed is entitled in respect of
overtime work or holidays or any leave period;
(c) any additional remuneration payable under the terms of employment
(whether called a bonus or by any other name);
(d) any sum which by reason of the termination of employment of the person
employed is payable under any law, contract or instrument which provides for
the payment of such sum, whether with or without deductions, but does not
provide for the time within which the payment is to be made;
(e) any sum to which the person employed is entitled under any scheme framed
under any law for the time being in force, but does not include- (1) any bonus
(whether under a scheme of profit sharing or otherwise) which does not form
part of the remuneration payable under the terms of employment or which is not
payable under any award or settlement between the parties or order of a Court;
(2) the value of any house-accommodation, or of the supply of light, water,
medical attendance or other amenity or of any service excluded from the
computation of wages by a general or special order of the State Government;
(3) any contribution paid by the employer to any pension or provident fund,
and the interest which may have accrued thereon;
(4) any travelling allowance or the value of any travelling concession;
(5) any sum paid to the employed person to defray special expenses entailed
on him by the nature of his employment; or (6) any gratuity payable on the
termination of employment in cases other than those specified in sub-clause
Different statutes, enacted by the Parliament from time to time, although
beneficial in character to the workmen, seek to achieve different purposes.
Different authorities have been prescribed for enforcing the provisions of the
respective statutes. The authority under the Payment of Wages Act is
one of them.
In view of the fact that diverse authorities exercise jurisdiction which may
be overlapping to some extent, the courts while interpreting the provisions of
the statutes must interpret them in such a manner so as to give effect thereto.
Section 6-H(1) of the Act provides for a proceeding which is in the nature
of an execution proceeding. The said provision can be invoked inter alia in the
event any money is due to a workman under an award. They cannot be invoked in a
case where ordinarily an industrial dispute can be raised and can be referred
to for adjudication by the appropriate government to an industrial court. The
authorities to determine a matter arising under Section 6-H(1) of the Act and
an industrial dispute raised by the workmen are different. Section 6-H(1) of
the Act, it will bear repetition to state, is in the nature of an execution
provision. The authority vested with the power thereunder cannot determine any
complicated question of law. It cannot determine a dispute in regard to
existence of a legal right. It cannot usurp the jurisdiction of the State
Government under Section 11-B of the Act.
A Labour Commissioner is not a judicial authority. In view of Section 11-B
of the Act, it is for the State Government to construe an award, in the event
any dispute arises in giving effect thereto.
The Labour Court in its award directed reinstatement of 17 workmen on the
original post and payscale. No increment was granted; no continuity of service
was directed. What was directed was payment of 50% of the backwages/ allowance
while considering the question of backwages.
Definition of 'wages' within the meaning of the Act does not include
"bonus". It, however, includes allowance. Payment of Bonus Act also
excludes bonus for the purpose of calculating the amount of bonus to be
determined in terms of Section 10 thereof.
Presiding Officer of the Labour Court is a judicial authority. He is
supposed to know the definition of 'wages' as contained in the Act. The rights
and obligations of the parties were being determined only under the Act and not
in terms of any other law.
An award made in favour of one party and against the other must be clear and
certain. A person keeping in view the limited relief granted in favour of one
party to the dispute may not question the correctness or otherwise thereof.
With a view to ascertain the certainty in regard to the meaning of the words
used by a competent court of law and that too by an experienced judicial
officer, they must be given the same meaning which are given in a statute.
A judgment, it is trite, must be reasonable. It must be construed in such a
manner so as not to offend the provisions of any statute. It must not be held
to be contrary to any statutory provisions.
In Gajraj Singh and Others v. State of U.P. and Others [(2001) 5 SCC 762], a
3-Judge Bench of this Court held:
"A doubt arising from reading a judgment of the Court can be resolved
by assuming that the judgment was delivered consistently with the provisions of
law and therefore a course or procedure in departure from or not in conformity
with statutory provisions cannot be said to have been intended or laid down by
the Court unless it has been so stated specifically."
Bonus either in its ordinary meaning or statutory ones would not include
What is a 'bonus' within the meaning of a provision before the coming into
force of Payment
of Bonus Act, 1965 came up for consideration before this Court on various
occasions. Although reference thereto may not be strictly necessary, as the
learned counsel appearing for the parties have referred to the same, we may
take notice thereof.
In Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur [(1955) 1 SCR
991], this Court held:
"It is therefore clear that the claim for bonus can be made by the
employees only if as a result of the joint contribution of capital and labour
the industrial concern has earned profits. If in any particular year the
working of the industrial concern has resulted in loss there is no basis nor
justification for a demand for bonus. Bonus is not a deferred wage. Because if
it were so it would necessarily rank for precedence before dividends.
The dividends can only be paid out of profits and unless and until profits
are made no occasion or question can also arise for distribution of any sum as
bonus amongst the employees. If the industrial concern has resulted in a
trading loss, there would be no profits of the particular year available for
distribution of dividends, much less could the employees claim the distribution
of bonus during that year"
Bonus may be a deferred wage but the same must be construed in a different
context. When used in the context of 'backwages' and that too 50% of it, the
same would not include backwages. It is expected that had the Labour Court
intended to include the same, he would have explicitly said so.
Even now, under the Payment of Wages
Act, bonus does not come within the purview of wages. The decision was
rendered when Payment
of Bonus Act
had not been enacted.
The question came up for consideration, yet again, in Bala Subrahmanya
Rajaram v. B.C. Patil and Others [(1958) SCR 1504] wherein bonus was equated
with remuneration but therein the question which arose for consideration was
the quantum of bonus and in that context the court went into the question as to
whether the same can be claimed under the provisions of the Payment of Wages
Act. When the bonus was considered to be a part of remuneration, what was
in the mind of this Court, was the definition of 'wages' under the Payment of Wages
Act, as it existed at the relevant time. In the factual matrix obtaining
therein, this Court held that 'bonus' would come within the purview of the term
Evidently, 'bonus' would not come within the meaning of the said term as it
stands now and in view of the controversy involved herein, particularly, in
view of the fact that 'bonus' now stands explicitly excluded by reason of the
Payment of Wages (Amendment) Act, 1957 which came into effect from 1.04.1958.
This Court therein had no occasion to consider the question with which we are
In Sanghi Jeevaraj Ghewar Chand (supra), this Court took into consideration
the history of the term "bonus" stating that a claim in regard to
bonus can be raised under the provisions of the Industrial
Having regard to Sections 22 and 39 of the Payment of Bonus
Act, it was stated:
"If a dispute, for instance, were to arise as regards the quantum of
available surplus, such a dispute not being one falling under Section 22,
Parliament had to make a provision for investigation and settlement thereof.
Though such a dispute would not be an industrial dispute as defined by the Industrial
Disputes Act or other corresponding Act in force in a State, Section 39 by
providing that the provisions of this Act shall be in addition to and not in
derogation of the Industrial
Disputes Act or such corresponding law makes available the machinery in
that Act or the corresponding Act available for investigation and settlement of
industrial disputes thereunder for deciding the disputes arising under this
Act. As already seen Section 22 artificially makes two kinds of disputes
therein referred to industrial disputes and having done so applies the
provisions of the Industrial
Disputes Act and other corresponding law in force for their investigation
and settlement. But what about the remaining disputes? As the Act does not
provide any machinery for their investigation and settlement, Parliament by
enacting Section 39 has sought to apply the provisions of those Acts for
investigation and settlement of the remaining disputes, though such disputes
are not industrial disputes as defined in those Acts. Though, the words
"in force in a State" after the words "or any corresponding law
relating to investigation and settlement of industrial disputes" appear to
qualify the words "any corresponding law" and not t he Industrial Disputes Act,
Disputes Act is primarily a law relating to investigation and settlement of
industrial disputes and provides machinery therefor. Therefore the distinction
there made between that Act and the other laws does not seem to be of much
point. It is thus clear that by providing in Section 39 that the provisions of
this Act shall be in addition to and not in derogation of those Acts,
Parliament wanted to avail of those Acts for investigation and settlement of
disputes which may arise under this Act. The distinction between Section 22 and
Section 39, therefore, is that whereas Section 22 by fiction makes the disputes
referred to therein industrial disputes and applies the provisions of the Industrial
and other corresponding laws for the investigation and settlement thereof,
Section 39 makes available for the rest of the disputes the machinery provided
in that Act and other corresponding laws for adjudication of disputes arising
under this Act. Therefore, there is no question of a right to bonus under the Industrial Disputes Act
or other corresponding Acts having been retained or saved by Section 39.
Neither the Industrial
Disputes Act nor any of the other corresponding laws provides for a right
Item 5 in Schedule 3 to the Industrial
Disputes Act deals with jurisdiction of tribunals set up under Sections 7,
7-A and 7-B of that Act, but does not provide for any right to bonus. Such a
right is statutorily provided for the first time by this Act."
The Labour Court was not determining any right under the Payment of Bonus Act.
It was while making its award determining the rights and liabilities under the
It, therefore, must have in mind the provisions of the Act alone. The
aforementioned decisions, therefore, have no application to the facts and
circumstances of the present case.
When an interpretation clause uses the word "includes", it is
prima facie extensive. When it uses the word "mean and include", it
will afford an exhaustive explanation to the meaning which for the purposes of
the Act must invariably be attached to the word or expression. [See G.P.
Singh's Principles of Statutory Interpretation, 10th Edition, Pages 173 and
175] Recently, in N.D.P. Namboodripad (Dead) by LRs. v. Union of India (UOI)
and Ors. [2007 (4) SCALE 361], this Court held:
"17. If the words 'and includes' were intended to rope in certain items
which would not be part of the meaning, but for the definition, then Rule 62
would have specified only 'dearness pay' as the item to be included but not
'pay'. If pay, dearness allowance and other allowances were already included in
'emolument' with reference to its general or normal meaning, as contended by
appellant, there was no reason to specifically again include 'pay' in Rule 62.
Inclusion of 'pay' and 'dearness pay' and non-inclusion of 'dearness allowance
or other allowances' in the definition of 'emolument' is significant. The
definition in Rule 62 is intended to clarify that only pay and dearness pay
would be considered as 'emolument' for purposes of calculating pension. The
words 'and includes' have been used in Rule 62, as meaning 'comprises' or
There is yet another aspect of the matter which cannot be lost sight of.
A claim for bonus in the context of Section 22 of the Payment of Bonus
Act can be raised only by raising an industrial dispute. It cannot be
raised by way of an execution application. If a claim had been made under an
award, the same attained finality when the amount payable thereunder had been
calculated. Bonus was a subject matter of claim in the first application filed
under Section 6-H(1) of the Act. The amount payable thereunder had been
determined. Another application under Section 6-H(1) of the Act for the purpose
of enforcement of award, therefore, was, in our opinion, not maintainable.
When the second application was filed, the same was de'hors the award. It
was an independent claim. Such an independent claim, thus, on a plain reading
of Section 22 of the Payment of Bonus
Act could have been raised as an industrial dispute in the light of the
decision of this Court in Sanghi Jeevaraj Ghewar Chand (supra). The decision of
the Full Bench of the Bombay High Court in Kohinoor Tobacco Products Pvt. Ltd
(supra), in our opinion, to that extent is not correct. When the statute
provides for a remedy in a particular manner, the same cannot be achieved by
filing an application which subserves a different purport and object.
Such an application was, thus, not maintainable under Section 6-H(1) of the
Act which corresponds to Section 33C(1) of the Industrial
Even the jurisdiction of a Labour Court in terms of Section 33C(2) of the Industrial
Disputes Act would be limited.
An application under Section 33C(1) of the Industrial
Disputes Act, 1947 must be
for enforcement of a right. If existence of right, thus, is disputed, the
provisions may not be held to have any application.
The Labour Commissioner in view of the decision of this Court in Muir Mills
Co. Ltd (supra) has evidently committed a manifest error in opining that bonus
is deferred wages. Once it is excluded from the purview of the term 'wages'
under the Act, such a view was impermissible in law, particularly, when the
appellant denied and disputed the right of the workmen to claims. Both the
learned Single Judge and the Division Bench of the High Court also fell to the
same error. The learned Judges even did not address themselves the right
questions. They, thus, misdirected themselves in law.
We, therefore, are of the opinion that the impugned judgment cannot be
sustained which is set aside accordingly. The appeal is allowed. No costs.