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Swaraj Ashram Karamchari Sangh Vs. Swarajya Ashram [1993] INSC 439 (14 October 1993)

SAWANT, P.B. SAWANT, P.B. MOHAN, S. (J) CITATION: 1994 SCC Supl. (2) 392




1.The 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.

2.Learned 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:

(a) production of hand-spun and hand-woven cloth;

(b) its popularisation by sale, and helping the people in the development of cottage industries; (emphasis supplied).

(c) helping the rural people by starting cottage industries and by providing medical facilities; and loans;

(e) Organisation of night schools etc. for rural people; and (f) providing means for the upliftment of the rural people etc.

3.The 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.

It is 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.

Besides 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.

In the circumstances, we do not find any merit in the appeal. The appeal is dismissed. There shall, however, be no order as to costs.


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