Holding

A claim for bonus under the Payment of Bonus Act is not within the jurisdiction of a Labour Court under Section 33‑C(2) of the Industrial Disputes Act, as bonus is covered by the Third Schedule, and the High Court must reconsider the applicability of the provisions and the Bonus Act to daily wagers.

Summary

The appellant, H.P. State Electricity Board, appealed against the Labour Court and Himachal Pradesh High Court decisions that had granted daily‑wage workers (respondents) a minimum bonus under the Payment of Bonus Act, 1965. The respondents had filed applications under Section 33‑C(2) of the Industrial Disputes Act, 1947 claiming the bonus. The Supreme Court examined whether Section 33‑C(2) was applicable, whether the Labour Court had jurisdiction to decide the bonus claim, and whether the Bonus Act applied to daily wagers who receive no monthly salary. It held that bonus matters are listed in the Third Schedule of the Industrial Disputes Act and therefore lie outside the Labour Court’s jurisdiction under Section 33‑C(2). Consequently, the High Court had erred in deciding the issues and the matter was remitted to it for fresh consideration of the applicability of Section 33‑C(2), the Labour Court’s jurisdiction, and the Bonus Act’s applicability to daily wagers. The appeals were allowed.

Issues considered

Whether Section 33-C(2) of the Industrial Disputes Act, 1947 is applicable to a claim for bonus by daily‑wage workers.
Whether the Labour Court has jurisdiction to adjudicate entitlement to bonus under the Payment of Bonus Act, 1965.
Whether the Payment of Bonus Act, 1965 applies to workers who are paid on a daily‑wage basis.

Legislation cited

Industrial Disputes Act, 1947s. 10, s. 33-C(2), s. Second Schedule, s. Third Schedule
Payment of Bonus Act, 1965s. 10, s. 11, s. 2(11), s. 22

Subjects

Industrial Disputes ActPayment of Bonus Actdaily wagerslabour court jurisdictionpre‑existing rightbonus entitlementSection 33-C(2)execution proceeding

Judgment

[2008] 3 S.C.R. 1115

... !-
H.P: STATE ELECTRICITY BOARD AND ANR.
II.
A

RANJEET SINGH AND ORS.
(Civil Appeal No. 7056-7065 of 2001)
MARCH 5, 2008
B
(DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.)
~

/' Industrial Disputes Act, 1947:
s. 33-C(2) - Application by daily wagers claiming
minimum bonus under Payment of Bonus Act- HELD: In case c
of pre-existing right there must be agreement by both sides
. about existence of such rights - If there is dis-agreement this
has to be decided by the competent authority - The question
of entitlement to bonus could not have been decided by the
Labour Court - Since High Court has not decided primary D
+ issues of (i) applicability of s.33-C(2), (ii) jurisdiction of Labour
" Court to decide such a matter and (iii) applicability of Bonus
Act to daily wagers, matter remitted to it for decision afresh.
The respondent-daily wagers filed applications u/s
33-C (2) of the Industrial Disputes Act, 1947 claiming E
minimum bonus under the Payment of Bonus Act, 1965.
The Labour Court as also the High Court held in favour of
the claimants. Aggrieved, the employer H.P. State
Electricity Board filed the instant appeals.
--< F
Allowing the appeals, the Court
HELD: 1.1 The instant case belongs to claimant's
right to relief which falls in category (i) as elaborated in
Central lnland's case* . Further, the High Court seems to
have lost sight of the fact that the Labour Court under the G
Industrial Disputes Act, 1947 can decide only the matters
specified in Second Schedule thereto. "Bonus" appears
-} as Item 5 in the Third Schedule. Therefore, the question
of entitlement to bonus could not have been decided by
1115 H
1116 SUPREME COURT REPORTS [2008] 3 S.C.R.

.,..
A . the Labour Court. In case of pre-existing rights there must ~

be agreement ,by both sides about existence of such
rights. If there is dis-agreement this has to be decided by
the competent authority. The stand that the expression
'bonus payable' rel~tes to the quantum· and not payability
B is also not correct. [para 14-15] [1122-E, IF, G; 1123-A]
-1.
Central Inland Water Transport Corporation Ltd. vs. The
Workmen and Anr. AIR 1974 SC 1604 - relied on.
1.2 The primary issues before the High Court, besides
c applicability of s.33-C(2) of the_lndustrial Disputes Act,
1947, were that daily wagers could not get bonus, and
the Labour Court had no jurisdiction to adjudicate such a
matter. Stand of the appellants that Section 2(11) of the
Bonus Act is applicable only to persons who receive
monthly salary, has also not been dealt with. Besides, the +-
D
claim was made for the period from 1977 to 1986, but the '(

application was filed long after in 1991. The High Court
has not considered these i~sues. The grievance is also
that in some of the cases there was no claim for any
interest, but the Labour Court and the High Court wrongly
E decided the entitlement of interest@ 12%. [para 3,6-8 and
16] [1117-G, H; 1118-A, B, E, F, G]
1.3 The matter is remitted to the High Cou~t for
considering (i) applicability of Section 33-C(2) of the Act, t.-
F (ii) the jurisdiction of the Labour Court to decide the matter;
and (iii) the applicability of the Bonus Act to daily wagers.
[para 16] [1123-A, BJ
U. P State Road Transport Corporation vs. Birendra ·
Bhandari 2006(10) SCC 211; State Bank of India vs. Ram
G Chandra Dubey & Ors. [2001] 1 SCC 73; and Vijay Kumar
vs. Whirlpool of India Ltd. 2007(13) SCALE 379 - referred
to. t ~

.CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7056-7065 of 2001.
H
H.P. STATE ELECTRICITY BOARD AND ANR. v. 1117
RANJEET SINGH AND ORS. [DR. ARIJIT PASAYAT, J.]

"' I- From the final Judgment and Order dated 30.12.1998 A
of the High Court of Himachal Pradesh at Shimla in C.W.P.
Nos. 4, 5, 6of1992, 541, 542, 545, 546, 547, 548 and 549 of
1993.
WITH
B
)' Civil Appeal Nos. 8490 of 2001, 87 of 2002, 331 of 2002
•, and 2802 of 2007.
/

Naresh K. Sharma, Sanjay Sarin, Manjusha Wadhwa,
Gagandeep, Ashok Mathur and Y Prabhakara Rao for the
Appellants. c
Ashwini Gupta, Gaurav Dhingra and M.C. Dhingra for the
Respondents.
The Judgment of the Court was delivered by
--+ D
Dr. ARIJIT PASAYAT, J. 1. These appeals involve an
'
identical question and therefore are disposed of by a comm9n
judgment.
2. The Himachal Pradesh High Court disposed of several
writ petitions by a common judgment dated 30.12.1998. The E
primary issue was whether a petition in terryis of Section 33-
C(2) of the Industrial Disputes Act, 194 7 (in short the Act) is
maintainable and whether daily wager can claim minimum
__, bonus under the Payment of Bonus Act, 1965 (in short the
'Bonus Act'). F
3. Factual position is almost undisputed and needs to be
noted in brief:
The respondents were employed on daily wages basis.
The Labour Court by order dated 6.7.1991 held that the G
respective applicants were entitled to be paid minimum statutory
bonus within the stipulated time. The decision was rendered on
a reference made.
Primary stand before the High Court was that daily wagers
cannot get bonus. Additionally, the Labour Court has no H
1118 SUPREME COURT REPORTS [2008) 3 S.C.R.

A jurisdiction to adjudicate such a matter. The High Court held
that since there was a statutory obligation to pay minimum bonus
the application under Section 33-C(2) of the Act was
maintainable.

4. In support of the appeals, learned counsel for the
B appellants submitted inter-alia as follows:
(

(i) the Labour Court has no jurisdiction to decide the
issue.
(ii) the Bonus Act was not applicable.
c
5. The Act has application only when the concerned
employees get salaries or wages per mensum. Dearness
allowance is not payable to daily wagers. The reference to
Section 8 of the Bonus Act to decide eligibility was not correct.
Merely because a person is working for 30 days in a year, that .._
D
does not entitle him to bonus. (

6. Stand of the appellants that Section 2(11) of the Bonus
Act is applicable only to persons who receive monthly salary,
has also not been dealt with.
E 7. The claim was made for the period from 1977 to 1986.
But the application was filed long after in 1991. The High Court
was wrong in saying that only the quantum and not the question
of liability can be decided in a reference under Section 22.
Section 33-C(2) is in the nature of execution application. Section
F 33-C(2) relates to pre existing right and the claim for bonus
cannot be included within the scope of Section 33-C(2) of the
Act.
8. In Civil Appeal No.87/2002, 8490/2001 and 331/2002
G the grievance is that there was no claim for any interest. But the
Labour Court and the High Court wrongly decided the
entitlement of interest@12%.
9. Learned counsel for the respondents submitted that
Sections 10 and 11 of Bonus Act deal with payment of minimum
H bonus. Section 22 of Bonus Act uses the expression 'bonus
H.P. STATE ELECTRICITY BOARD AND ANR. v. 1119
RANJEET SINGH AND ORS. [DR. ARIJIT PASAYAT, J.]

~ f- payable'. It relates to the quantum and varies between minimum A
and the maximum.
The High Court was right in holding that the application in
terms of Section 33-C(2) of the Act was maintainable.

10. The scope and ambit of Section 33-C(2) has been B
examined by this Court in several cases.

11. In U. P State Road Transport Corporation v. Birendra
Bhandari (2006 (10) SCC 211) it has been stated as under:
"7. The benefit which can be enforced under Section 33- c
C(2) is a pre-existing benefit or one flowing from a pre-
existing right.

8. In the case of State Bank of India v. Ram Chandra
Dubey & Ors. (2001 (1) SCC 73), this Court held as under:
D
"7. When a reference is made to an Industrial Tribunal
to adjudicate the question not only as to whether the
termination of a workman is justified or not but to
grant appropriate relief, it would consist of
examination of the question whether the
reinstatement should be with full or partial back wages E
or none. Such a question is one of fact depending
upon the evidence to be produced before the Tribunal.
If after the termination of the employment, the
workman is gainfully employed elsewhere it is one of
the factors to be considered in determining whether F
or not reinstatement should be with full back wages
or with continuity of employment. Such questions can
be appropriately examined only in a reference. When
a reference is made under Section 10 of the Act, all
incidental questions arising thereto can be G
determined by the Tribunal and in this particular case,
a specific question has been referred to the Tribunal
as to the nature of relief to be granted to the workmen.
8. The principles enunciated in the decisions referred H
1120 SUPREME COURT REPORTS [2008] 3 S.C.R.

A by either side can be summed up as follows: -\
"
Whenever a workman is entitled to receive from his
employer any money or any benefit which is capable
of being computed in terms of money and which he
is entitled to receive from his employer and is denied
B of such benefit can approach Labour Court under ~
Section 33-C(2) of the Act. The benefit sought to be ,_
enforced under Section 33-C(2) of the Act is
necessarily a pre-existing benefit or one flowing from
a pre-existing right. The difference between a pre-
c existing right or benefit on one hand and the right or
benefit, which is considered just and fair on the other
hand is vital. The former falls within jurisdiction of
Labour Court exercising powers under Section 33-
C(2) of the Act while the latter does not. It cannot be
~
D spelt out from the award in the present case that
such a right or benefit has accrued to the workman
as the specific question of the relief granted is
confined only to the reinstatement without stating
anything more as to the back wages. Hence that
E relief must be deemed to have been denied, for what
is claimed but not granted necessarily gets denied
in judicial or quasi-judicial proceeding. Further when
a question arises as to the adjudication of a claim
for back wages all relevant circumstances which will ~-

F have to be gone into, are to be considered in a
judicious manner. Therefore, the appropriate forum
wherein such question of back wages could be
decided is only in a proceeding to whom a reference
under Section 10 of the Act is made. To state that
merely upon reinstatement, a workman. would be
G
entitled, under the terms of award, to all his arrears
of pay and allowances would be incorrect because
several factors will have to be considered, as stated
earlier, to find out whether the workman is entitled to
back wages at all and to what extent. Therefore, we
H
HP STATE ELECTRICITY BOARD AND ANR. v. 1121
RANJEET SINGH AND ORS. [DR. ARIJIT PASAYAT, J.]
-~
are of the view that the High Court ought not to have A
... presumed that the award of the Labour Court for
grant of back wages is implied in the relief of
· reinstatement or that the award of reinstatement itself
conferred right for claim of back wages."
12. The above position has also been highlighted in Vijay B
)-- Kumar v. Whirlpool of India J,.td. (2007 (13) SCALE 379).

• 13. In Central Inland Water Transport Corporation Ltd. v.
The Workmen and Anr. (AIR 1974 SC 1604) it was inter-alia
held as follows: c
"13. In .a suit, a claim for relief made by the plaintiff against
the defendant involves an investigation directed to the
determination of (i) the plaintiff's right to relief; (ii) the
corresponding liability of the defendant, including, whether
~
the defendant is, at all, liable or not; and (iii) the extent of b
the defendants liability, if any. The Working out of such
' liability with a view to give relief is generally regarded as
the function of .an execution proceeding. Determination
No. (iii) referred to above, that is to say, the extent of the
defendant's liability may sometimes be left over for E
determination in execution proceedings. But that is not
the case with the determinations under heads (i) and (ii).
They are normally regarded as the functions of a suit and
not an execution. proceeding. Since a proceeding under
-+ Section 33(C)(2) is. in the nature of an execution F
proceeding it should follow that an investigation of the
nature of determinations (i) and (ii) above is, normally,
outside its scope. It .is true· that in a. proceeding under
.- .. · Section 33(C)(2), as in an execution proceeding, it may
be necessary to determine the identity of the person by
G
whom or against whom the claiin is made if there is a
challenge on that score. But that is merely 'incidental'. ro
,. t· call determinations (i) and (Ii) 'incidental' to an execution
proceeding would be a perversion, because execution
proceedings in which the extent of liability is worked out
H
,.
1122 SUPREME COURT REPORTS (2008].3 S.C.R.

A are just consequential upon the determinations (i) and (ii) f'

and represent the last stage in a process leading to final "I
relief. Therefore, when a claim is made before the Labour
Court under Section 33(C)(2) that _court must clearly
understand the limitations under which it is to function. It
B cannot arrogate to itself the functions-say of an Industrial
Tribunal which alone is entitled to make adjudications in
-(
the nature of determinations (i) and (ii) referred to above,
or proceed to compute the benefit by dubbing the former
as 'incidental' to its main business of computation. In such
•
c cases determinations (i) and (ii) are not 'incidental' to the
computation. The computation itself is consequential upon
and subsidiary to determinations (i) and (ii) as the last
stage in the process which commenced with a reference
to the Industrial Tribunal. It was, therefore, held in State
Bank of Bikaner and Jaipur v. R.L. Khandelwal (1968] 2
D
L.LJ. 589 (SC} that a workman cannot put forward a claim
in an application under Section 33(C)(2) in respect of a
"' f
matter which is not based on an existing right and which
can be appropriately the subject-matter of an industrial
dispute which requires a reference under Section 10 of
E the Act"
14. The case at hand belongs to category (i) as elaborated
in Central lnland's case (supra).
15. Further, the High Court seems to have lost sight of the +-
F fact that the Labour Court under the Act can decide only the
matters specified in Second Schedule. "Bonus" is not covered
by the Second Schedule. Item 6 of Second Schedule says that
it deals with all matters except those covered by the Third
Schedule. "Bonus" appears as Item 5 in the Third Schedule.
G Therefore, the question of entitlement to bonus could not have
been decided by the Labour Court. In case of pre existing rights
there must be agreements by both sides about existence of
such rights. If there is dis-agreement this has to be decided by ..,
the competent authority. The stand that the expression 'bonus
H
H.P. STATE ELECTRICITY BOARD AND ANR. v. 1123
RANJEET SINGH AND ORS. [DR. ARIJIT PASAYAT, J.]

(,..
payable' relates to the quantum and not payability is also not A
correct.
16. Since the High Court has not considered the above
aspects, we remit the matter to it for considering (i) the
applicability of Section 33-C(2) of the Act and (ii) the jurisdiction
of the Labour Court to decide the matter; and (iii) the applicability 8
of the Bonus Act to daily wagers .
• 17. The appeals are allowed with no order as to costs.

R.P. Appeals allowed.
c