# Benara Udyog Ltd v. Union of India & Ors

- **Citation:** (2026) 2 ILRA 651
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-02-27
- **Bench:** Saral Srivastava, Sudhanshu Chauhan
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/benara-udyog-ltd-v-union-of-india-ors-54267
- **Pages:** 31

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2 All. Benara Udyog Ltd. Vs. Union of India & Ors.
651

22. It has been held by this Court as well as Hon'ble Apex Court that exercise of extraordinary
jurisdiction under Article 226 of the Constitution of India, has to be made only in circumstances
where there is apparent injustice being caused to the petitioner and thus violation of the principles
of nature justice, which leads to some prejudice to the petitioner. In the present case, we do not find
any prejudice being caused to the petitioner; and on the contrary by unilaterally dividing
petitioner's parking into two parking spaces, it has been to the detriment of the allottee, the same
cannot be sustained; and in view of the aforesaid admitted position and documents, no infirmity or
perversity can be found in the impugned order or any prejudice being caused to the petitioner or
there being any violation of the procedure prescribed, under the Act.

23. In view of the aforesaid and nature of the proceedings, we decline to exercise our
extraordinary jurisdiction under Article 226 of the Constitution of India.

24. However, we find it appropriate in the facts of the case to issue directions, as follows:-

(i) That, the Development Authorities in the State of Uttar Pradesh to incorporate necessary
guidelines, which may be necessary to ensure that persons with disability are not put to a
inequitable position and the maps which is being sanctioned for such community living, it may be
necessary that proper parking spaces may be made for persons with disability, from where there is a
clear access to a common facility like lift; and also provisions for convenience of "persons with
disabilities" to have access to other common facilities like pavement, playgrounds, community
centres, gymnasium etc.

(ii) It is expected from the Government to ensure mandatory observance of the Accessibility
Rules applicable, at the stage of granting permission to build any structure and issuance of
certificate of completion; and it may also be verified that there has been a mandatory adherence to
the Accessibility Rules as envisaged.

25. With the above, the present writ petition is disposed off.
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(2026) 2 ILRA 651
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 27.02.2026

BEFORE

THE HON'BLE SARAL SRIVASTAVA, J.
THE HON'BLE SUDHANSHU CHAUHAN, J.

Writ A No. 6098 of 2016 and other connected cases

Benara Udyog Ltd. ...Petitioner
Versus
Union of India & Ors. ...Respondents

Issue(s) for consideration
652 INDIAN LAW REPORTS ALLAHABAD SERIES
 (a) Whether the Payment of Bonus (Amendment) Act, 2015 (herein-after referred to as 'Amendment Act,
2015') published in the Gazette of India dated 01.01.2016, can be declared as ultra-vires?
(b) Whether the impugned recovery issued in pursuance of Amendment Act, 2015 can be quashed?
(c) Whether before amending the Act, 1965 retrospectively, opportunity of hearing was required?

Headnotes
A. Labour Law - Payment of Bonus Act 1965: Section 2(4), 2(6), 2(13), 12; Government of India
(Transaction of Business) Rules, 1961: Rule 12; Punjab Service of Engineers, Class-I, Public
Works Department (Irrigation Branch) Rules, 1964: Rule 6(b) - The pre-decisional hearing for
making the Act retrospective is not required, inasmuch as retrospective application of the
Amendment Act has not prejudiced the rights of the petitioners. (Para 54)

According to the petitioners, pre-decisional hearing to the petitioners was necessary inasmuch
as retrospective operation of the Act has seriously prejudiced the vested rights of the petitioners
and has created fiscal liability upon the petitioners. It is submitted that the petitioners as per Section
19 of the Act, 1965 have paid the bonus to their employees within the time frame provided under the said
section, and the implementation of the Act with retrospective effect has resulted in financial liability for the
petitioner and has further created accounting complexities. (Para 50)

The facts w.r.t. consultation with various organizations by State Machinery establishes that predecisional hearing was given to the recognised organizations by the State Machinery before introduction
of the Amendment Bill in the Parliament, which is in compliance of the principles of natural justice. (Para 51 to
53)

In the present case, the petitioner has not disclosed any fact in the writ petition indicating that on account of
the retrospective amendment, the liability is such, which would result in creating a huge financial liability
which is detrimental to the interest of the employer. (Para 59)

B. There is a presumption of constitutionality in favour of the statute and the onus of proving it
unconstitutional lies upon the person who challenges it. (Para 76)

"Vested right" is a right independent of any contingency. Such a right can arise from a contract,
statute or by operation of law. A vested right can be taken away only if the law specifically or by
necessary implication provides for such a course. (Para 72)

A right is considered vested, absolute, when it is not dependent on any future event; it is
generally immune from subsequent changes in law that would impair it. (Para 73)

The payment of bonus is a statutory liability upon the employer i.e. he is statutorily bound to pay the bonus to
the employees in compliance of statutory obligations posed upon it by the Act, 1965, therefore, to say that
the petitioners' vested right by implementing Amendment Act, 2015 retrospectively has been infringed is not
justified for the reason that the vested right is a right independent of any contingency whereas the petitioners
are obligated to pay bonus by virtue of Section 10 of the Act, 2015. (Para 74)

The petitioners in the instant case have failed to demonstrate that petitioners cannot be asked
to pay bonus with retrospective effect since such an amendment infringes their vested right.
(Para 75)

C. All statutes other than those which are merely declaratory or which relate only to matters of
procedure or of evidence are prima facie prospective and retrospective operation should not be
given to a statute so as to affect, alter or destroy an existing right or create a new liability or
obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If
2 All. Benara Udyog Ltd. Vs. Union of India & Ors.
653
the enactment is expressed in language which is fairly capable either interpretation, it ought to be construed
as prospective only. (Para 88)

As per the petitioners the amendment in Principal Act i.e. Act, 1965 is not a declaratory Act because
it does not clarify anything embodied in the parent Act i.e. Act, 1965 rather retrospective enactment of the
Amendment Act, creates new rights and obligations upon the parties which is not permissible in law. (Para 79)

Further it is submitted that the Act, 1965 is substantive law because it creates rights and liabilities
upon the employers and the employees and any amendment in the Principal Act, i.e. Act, 1965 which
creates new rights and obligations upon the employers is not a declaratory law. (Para 80)

The law does not permit the legislature to take away or impair any existing right or create a new
obligation or impose a new liability retrospectively. At this stage, it is pertinent to note that the
payment of bonus is a statutory right given to the employees. The liability to pay the bonus lies upon the
employer which emanates from the Act, 1965. So by introducing the Amendment Act with retrospective effect,
it neither impairs any existing right of the employer nor creates any new obligation upon the employer. The
employer at the most can say that by retrospective operation of Amendment Act, 2015, additional liability to
pay bonus upon the employer has been created. Thus, by Amendment Act, 2015, no new liability has been
imposed upon the employer. (Para 94, 95)

D. A liability cannot be declared to be unreasonable because it merely operates retrospectively.
(Para 77)

In order to succeed in challenging the Act on the ground of retrospective enactment, the petitioner has to
establish that by enacting the Amendment Act, 2015 retrospectively, the legislature has conferred benefit of
bonus to the employees, which inflicts a corresponding detriment on the employer, which is not permissible as
the legislature can confer the benefit on employees retrospectively without inflicting a corresponding
detriment on the employer. (Para 93)

E. The amendment, which has been implemented retrospectively has been made in a social
welfare legislation. In order to appreciate the controversy in the light of facts, detailed by the petitioner in
the writ petition in implementing the Amendment Act, 2015 retrospectively, the Court must remember that
Act, 1965 is a social welfare legislation enacted with an object to achieve the principles enshrined in Articles
39 and 43 of the Constitution of India. (Para 98)

The Bombay High Court has dismissed the petitions challenging the vires of Section 10 of the
Act, 1965 on the ground that it is violative of Article 19(1)(g) and Article 302 of the Constitution
of India. (Para 99)

A benevolent provision should be interpreted liberally to achieve the purpose for which it has
been enacted. In other words, the interpretation of beneficial legislation involves liberal and purposive
construction to achieve the statute's underlying aim to ensure the welfare of the intended beneficiaries. (Para
100)

F. The legislature keeping in view the difficulty of the employer in providing the benefit of bonus
to the employees has incorporated Section 15 of the Act, 1965 with a view to ease the employer
in paying the bonus in case of non-availability of available surplus and shortfall of allocable
surplus. Therefore, the difficulty posed by the petitioner, i.e. a serious financial threat to the establishment
so as to close down the establishment because of such financial liability, is not found to be bonafide and
genuine and a beneficial legislation can't be rendered unconstitutional on the said grounds. (Para 108, 109)

Section 15 of the Act, 1965 provides for 'set on' and 'set off' to ensure a consistent payment of
bonus over the years. If in a given case, allocable surplus exceeds the maximum bonus amount such
654 INDIAN LAW REPORTS ALLAHABAD SERIES
surplus, subject to ceiling of 20%, shall have to be carried forward to the succeeding year upto and inclusive
of fourth accounting year to be utilised for the purpose of payment of bonus. (Para 101, 103)

Section 15(2) of the Act, 1965 permits the employer that if, in any accounting year, there is no available
surplus or allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the
employees in the establishment u/s 10 and there is no amount or sufficient amount which is carried forward
and set on u/sub-section (1) that could be utilised for the purpose of payment of minimum bonus, then, such
minimum amount or deficiency, as the case may be, shall be carried forward for being set off in the
succeeding accounting year and so on upto and inclusive of the fourth accounting year in the manner
illustrated in the Fourth Schedule. (Para 105)

The petitioner though has posed difficulty in implementing the Act retrospectively, but has neither given any
detail as to what available surplus or allocable surplus is available with the companies, which has been set on
u/s 15(1) of the Act, 1965, nor has stated that there is no available surplus or allocable surplus in respect of
that year, which falls short of minimum bonus payable to the employees in the establishment u/s 10. In the
absence of any such detail in the writ petition, it is difficult to comprehend that by retrospective amendment
in Section 2(13) of the Act, 1965, a huge financial liability has been inflicted upon the petitioner. (Para 107,
110)

G. If the bonus is paid retrospectively by way of notification, no prosecution could be made or
launched against the petitioners for non-payment of bonus or for delayed payment of bonus.
Hence, when the Amendment Act, 2015 has not even seen the light of the day, the petitioners cannot be
prosecuted for the year 2015- 16 on the ground of delayed payment of bonus. (Para 111, 112)

H. Since the Amendment Bill was presented with proposal to amend it w.e.f. 01.04.2015 and
without there being any serious discussion, it was proposed to be made effective w.e.f. 1st day
of April, 2014. Thus, it is contended that constitutional decisions cannot be made on the whims
and desires of the Government. He further contends that while the initial Bill by which it was proposed
that the Bill to be made effective w.e.f. 01.04.2015, the discussions had taken place w.r.t. the financial aspect
of the matter, but the proposed amendment makes it's applicability retrospectively and does not consider the
economic viability. Thus, it is evident that the Amendment Act has been made effective retrospectively on the
whims of the Government, without any proper discussion, which cannot be permitted in law, therefore,
retrospective implementation of the Amendment Act, 2015 is bad in law and against the spirit of the
Constitution of India. (Para 115, 116)

The respondent has filed a supplementary counter affidavit annexing therewith the proposal relating to
seeking approval of Hon'ble Prime Minister u/Rule 12 of the GOI (Transaction of Business) Rules, 1961 for
moving an official amendment to the Payment of Bonus (Amendment ) Bill, 2015. In paragraph nos.5 & 8 of
the said proposal, the justification for making the Bill retrospective has been stated. (Para 117)

From perusal of Rule 12 of the Rules, 1961, it is evident that the Prime Minister may, in any case or classes or
cases, permit or condone a departure from these rules to the extent he deems necessary. The proposal to
make the Rules, 1961 applicable has been duly approved by the Prime Minister u/Rule 12 of the Rules, 1961.
(Para 119)

I. Rationale and reasonable classification - There may be several tests to decide whether a classification
or differentiation is reasonable or not. One test which we are laying down and which will be useful in deciding
this case, is: Is it conducive to the functioning of modern society? If it is then it is certainly reasonable and
rational.

The equality code in Article 14 of the Indian Constitution prescribes substantive and not formal
equality. It is now a settled position that classification per se is not discriminatory and violative
2 All. Benara Udyog Ltd. Vs. Union of India & Ors.
655
of Article 14. Article 14 only forbids class legislation and not reasonable classification. A
classification is reasonable, when the twin tests as laid down by Apex Court are fulfilled:
(1) The classification must be based on an intelligible differentia which distinguishes persons or
things that are grouped, from others left out of the group; and
(2) The differentia must have a rational relationship to the object sought to be achieved by the
statute. (Para 120, 123)

The capacity of employer is not to be considered as the welfare State assumes every employer
must pay the minimum wages to its labour before employing them so as to prevent the
exploitation of labours. (Para 121, 122)

It is true that a law should satisfy the twin test as laid down by the Apex Court in order to pass the test of
reasonable classification. However, the Madras High Court has categorically repelled the contention
of employer that amendment in Section 12 of the Act, 1965 amounts to class legislation and is
discriminatory. (Pars 124)

Writ petitions dismissed. (E-4)

Case Law Cited
1. Remington Rand of India Ltd. Vs. The Workmen, AIR 1970 SC 1421 (Para 27)
2. State of Gujarat & Another Vs. Raman Lal Keshav Lal Soni & Others, 1983 (2) SCC 33 (Para 27)
3. T.R. Kapur & Others Vs. State of Haryana & Others, 1986 (Supp.) SCC 584 (Para 27)
4. Union of India & Others Vs. Tushar Ranjan Mohanty & Others, (1994) 5 SCC 450 (Para 27)
5. Punjab State Co-operative Milk Producers Federation Ltd. & Another Vs. Balbir Kumar Walia & Others, 2021
(171) FLR 397 (Para 28)
6. Indra Sawhney Vs. Union of India & Others, 2000 (1) SCC 168 (Para 30)
7. State of Punjab & Others Vs. Bhajan Kaur & Others, 2008 (12) SCC 112 (Para 30)
8. Commissioner of Income Tax (Central)-I, New Delhi Vs. Vatika Township Private Limited, 2015 (1) SCC 1
(Para 30)
9. Jayam and Company Vs. Assistant Commissioner & Another, 2016(15) SCC 125 (Para 32)
10. Sukanya Shantha Vs. Union of India and Others, 2024 SCC OnLine SC 2694 (Para 36)
11. Bhikusa Yamasa Kshatriya & Another Vs. Sangamner Akola Taluka Bidi Kamgar Union & Others, AIR 1963
SC 806 (Para 36)
12. U. Unichoyi & Others Vs. State of Kerala, AIR 1962 SC 12 (Para 36)
13. J.S.Yadav Vs. State of Uttar Pradesh & Another, 2011 (6) SCC 570 (Para 72)
14. M/S. Jalan Trading Company Private Ltd. Vs. Mill Mazdoor Sabha, AIR 1967 SC 691 (Para 76)
15. R.C. Tobacco Pvt. Ltd. and Another Vs. Union of India and Another, AIR 2005 SC 4203 (Para 77)
16. The Employers' Federation of Southern India and Others Vs. The Government of India & Others, Madras
High Court, WP No.6958 of 2016 (Para 120)

List of Acts
 Payment of Bonus (Amendment) Act, 2015; Payment of Bonus Act 1965; Government of India (Transaction
of Business) Rules, 1961; Punjab Service of Engineers, Class-I, Public Works Department (Irrigation Branch)
Rules, 1964.

List of Keywords
 bonus, payment, vested right, allocable surplus, available surplus, employee, declaratory, substantive.

Appearances for Parties
For Petitioner(s): Anshul Kumar Singhal, Vinod Kumar Agarwal
For Respondent(s): A.S.G.I., Arvind Kumar Goswami, C.S.C., Santosh Kumar Shukla
656 INDIAN LAW REPORTS ALLAHABAD SERIES
(Delivered by Hon'ble Saral Srivastava, J.)

1. Heard learned counsel for the petitioners, Sri Shashi Prakash Singh, learned Additional
Solicitor General of India assisted by Sri Arvind Kumar Goswami, Sri Purnendu Kumar Singh, Sri
Ved Mani Tiwari, Ms. Sujata Choudhary & Sri Ravi Prakash Singh, learned counsels for
respondent-Union of India and Sri Rajeshwar Tripathi, learned Chief Standing Counsel-II for the
State-respondent.

2. The petitioners in this bunch of writ petitions have prayed for a writ of mandamus declaring
the Payment of Bonus (Amendment) Act, 2015 (herein-after referred to as 'Amendment Act, 2015')
published in the Gazette of India dated 01.01.2016 as ultra-vires, and have further prayed for
quashing of the impugned recovery issued in pursuance of Amendment Act, 2015.

3. For convenience, the facts have been delineated from Writ-C No.6098 of 2016 (Benara
Udyog Ltd. Vs. Union of India and Others)

4. The petitioner is an Engineering Industrial Unit established in the vicinity of District Agra
and is involved in manufacturing of products like disc-brake pads, bushing, pistons of motorcycle.
The petitioner states that since the establishment of petitioner's unit, due care has been taken of
welfare and rights and benefits of the employees employed in the petitioner's company. The
petitioner's company has paid wages, bonus, increments and other statutory emoluments to its
employees from time to time.

5. It is stated that Payment of Bonus Act, 1965 (hereinafter referred to as 'Act, 1965') was
enacted with a view to provide for payment of bonus to persons employed in certain establishments
on the basis of profits or on the basis of production or productivity.

6. The President of India was informed about the subject matter of Amendment Act, 2015. The
President of India recommended the introduction and consideration of Bill, 2015 in the House
under Clause (1) & (3) of Article 117 of the Constitution of India.

7. The Bill, 2015 was introduced in Lok Sabha on 07.12.2015 and was passed on 22.12.2015.
The Bill, 2015 (Bill No.265-C of 2015) was passed by Rajya Sabha on 23.12.2015 and thereafter,
the Bill, 2015 received assent of President of India.

8. The Act, 1965 is applicable to all business establishments which has employed 20
employees or more. As per Section 2(13) of Act, 1965, an 'employee' who was employed on a
salary or wages not exceeding Rs.10,000/- per mensem in any industry to do any skilled or
unskilled manual, supervisory, managerial, administrative, technical or clerical work or for hire or
reward and has worked for not less than thirty days in an accounting year was eligible for bonus
with a ceiling limit of minimum 8.33% of salary payable to him and a maximum cap of 20% of the
salary. The Amendment Act, 2015 by amending Section 2(13) which defines 'employee' has
brought the eligibility limit from Rs.10,000/- to Rs.21,000/-.
2 All. Benara Udyog Ltd. Vs. Union of India & Ors.
657

9. The Amendment Act, 2015 has further raised the ceiling provided under Section 12 of the
Act, 1965 for payment of bonus from Rs.3500/- to Rs.7,000/- or the minimum wage for scheduled
employment as fixed by the Government, whichever is higher.

10. It is stated that inclusion of minimum wage component in Section 12 of the Act, 1965 in
calculating bonus will hinder the accounting policy of companies. The petitioner states that by the
Amendment Act, 2015, the employers have not been provided with any specified time frame to
factor the increased cost in their accounts in order to comply with retrospective applicability of the
Amendment Act, 2015.

11. According to pleadings in the writ petition, further grievance of the petitioner by the
Amendment Act, 2015 is that significant financial burden on the establishment ought to have been
taken into consideration by the respondents while amending the Act, 1965. The petitioner states
that Bill No.265 of 2015 has been introduced in the Lok Sabha vide Clause 1(2) to enforce the Bill
from 1st day of April, 2015, which has not been done, and the Amendment Act, 2015 has been
made effective retrospectively w.e.f. 1st day of April, 2014.

12. It is stated that by enforcement of Amendment Act, 2015 retrospectively, the petitioner
would face difficulties inasmuch as allocable surplus would required to be re-assessed to account in
the increased pool for eligible employees and the bonus eligibility based upon the Amendment Act,
2015. According to petitioner, the price fixation of the product has already been done, and the
books of accounts have already been closed, and the product has been launched in the market,
therefore, it is impossible to re-fix it's price or to recover the enhanced price.

13. Further difficulty, which is faced by the establishment is that fiscal deficit incurred by
virtue of Amendment Act, 2015 cannot be extracted under any of the heads of the account except
adding it to the liabilities of the establishment resulting into decrease in profits or by variation of
price in the commodity market.

14. It is stated that by the Amendment Act, 2015 there would be an increase in the financial
burden and greater accounting complexities for employers.

15. It is further stated that insertion of 'minimum wage' under the Minimum Wages Act, 1948
by amendment in Section 12 to calculate bonus has created an additional challenge for the
petitioner's company. It is stated that appropriate Government (State Government) and in different
cases, Central Government fixed different minimum wages for various scheduled employment
(skilled, unskilled and semi skilled) because of this fact, the petitioner would have to carry out
separate assessment of applicable wage rate for different categories of employees to calculate
statutory bonus payable. The petitioner has alleged that respondent has acted arbitrarily in
enforcing the Amendment Act, 2015 retrospectively w.e.f. 01.04.2014.

16. Counter affidavit has been filed by the respondent-Union of India contending inter-alia
that issues relating to amendment in the Act, 1965 was discussed before number of forums
including tripartite consultation meetings with the representatives of various Departments of
Central Government, State Labour Secretaries, Employers' Associations and Central Trade Union
658 INDIAN LAW REPORTS ALLAHABAD SERIES
Organization. It is further stated that under the Chairmanship of the Minister for Labour and
Employment, a tripartite consultation meeting was held on 20.10.2014 at New Delhi in which
Employers' Association, Central Trade Union Organization, various Central Government Ministries
and State Labour Secretaries had participated.

17. The respondents further stated that vide order dated 21.11.2014, an Inter Ministerial Group
(IMG) was also set up to decide the revision in calculating ceiling and eligibility limit under the
Act, 1965. It is stated that aforesaid Inter Managerial Group (IMG) for bonus held it's meeting on
03.12.2014 with the representatives of Employers' Associations to discuss the proposal relating to
amendment in the Act, 1965.

18. It is also stated that the issue of amendment in the Act, 1965 was also discussed in the 46th
Session of the Indian Labour Conference on 20-21 July, 2015 at New Delhi. It is further stated that
there has been 111.67% increase in All India Consumer Price Index fixed for industrial workers
(Base 2001=100) from 120 in April, 2006 to 254 in March, 2015. Further it is the case of the
respondent-Union of India that rise in Consumer Price Index for industrial workers has been taken
into consideration in calculating ceiling which came to Rs.7408/- per month till March, 2015 which
is higher than the ceiling of Rs.7,000/- per month under the Amendment Act, 2015.

19. It is stated that the object, which is sought to be achieved by the amendment is fulfilled by
making the law which increases the eligibility limit to Rs.7000/- or minimum wage for the
scheduled employment whichever is higher, and plea of invalidity of retrospectivity of amendment
on the ground that it infringes Article 14 of the Constitution of India is misconceived.

20. It is further stated that since bonus has to be paid after determining profits and calculation
of allocable surplus for that particular year, therefore, retrospective implementation of Amendment
Act, 2015 is just and proper.

21. Respondents have also stated that necessary debit and credit is a routine in an
establishement, which implies that there should be no difficulty as far as practical aspects in
calculating bonus is concerned, therefore, problems indicated by the petitioner are not justified and
there is no statutory bar in adjustment of the account books.

22. It is further stated that any provision, which has the effect of promoting or effectuating
directive principles is presumed to be reasonable. Such provisions are to be construed in favour of
beneficiary for achieving the purpose of enactment being a social benefit oriented legislation.

23. It is also stated that enforcement of Amendment Act, 2015 retrospectively does not violate
any vested right of petitioner, which has accrued to him nor retrospective enforcement of
Amendment Act, 2015 has taken away any vested right of the petitioner. According to the
respondents, the legislature has power to enact an amendment with retrospective effect. It is stated
that the legislature possesses the right to make retrospective legislation, which creates new
obligation in respect to the transactions already over and requires reopening of past, closed and
completed transactions.
2 All. Benara Udyog Ltd. Vs. Union of India & Ors.
659

24. Respondents contend that no hurdle is faced by the establishment under the provisions of
income tax, and other relevant statutes to ensure compliance of statutory liability. It is also stated
that Section 15(2) of the Act, 1965 deals with a contingency where for any accounting year, if there
is no available surplus or allocable surplus in respect of that year and falls short of the amount of
minimum bonus payable to the employees in the establishment under Section 10 of the Act, 1965
and there is no amount or sufficient amount carried forward and set on in sub-section (1) of that
section, which could be utilised for payment of minimum bonus, then such minimum amount or
deficiency shall be carried forward for being set off in the succeeding accounting year and so on
upto and inclusive of fourth accounting year.

25. The petitioner has filed rejoinder affidavit denying the averments made in the counter
affidavit. The petitioner has confined the challenge to the Amendment Act, 2015 only to the extent
it has been implemented with retrospective effect i.e. 01.04.2014 and also enhancement of ceiling
for payment of bonus under Section 12 from Rs.3500/- to Rs.7000/- and insertion of minimum
wages under the Minimum Wages Act, 1948 to calculate bonus under Section 12 of the Act, 1965.

26. Challenging the amendment, Sri Anshul Kumar Singhal, learned counsel for the petitioner
has contended that if, the amendment in the Act, 1965 creates financial burden on a class of persons
without offending the rights of other persons, such amendment is permissible, but if it offends the
rights of other persons, the amendment cannot be enforced with retrospective effect.

27. Supporting the aforesaid contention, Sri Shakti Swaroop Nigam, learned Senior Counsel
appearing in some petitions has contended that any amendment in Act, 1965 can be implemented
prospectively and not retrospectively as it violates Article 14 of the Constitution of India. He has
relied upon the following judgements in support of his contention:-

(i). Remington Rand of India Ltd. Vs. The Workmen, AIR 1970 SC 1421;

(ii). State of Gujarat & Another Vs. Raman Lal Keshav Lal Soni & Others 1983 (2)
SCC 33;

(iii). T.R. Kapur & Others Vs. State of Haryana & Others1986 (Supp.) SCC 584;

(iv). Union of India & Others Vs. Tushar Ranjan Mohanty & Others (1994) 5 SCC
450.

28. He further submits that since Amendment Act, 2015 created a financial liability, therefore,
pre-decisional hearing before amending the Act, 1965 is mandatory. Accordingly, it is contended
that since no pre-decisional hearing was given, therefore, Amendment Act is invalid. In support of
the said contention, he has relied upon judgement of Apex Court in the case of Punjab State Cooperative Milk Producers Federation Ltd. & Another Vs. Balbir Kumar Walia & Others,
2021 (171) FLR 397.

29. He submits that legislative declaration cannot be contrary to the judicial declaration. He
submits that for the following two reasons, the said principle of law is attracted in the present case:-
660 INDIAN LAW REPORTS ALLAHABAD SERIES

(a). According to him, amendment in Act, 1965 is not a declaratory Act because it does not
clarify anything embodied in the parent Act rather the amendment creates a new right and
obligation upon the establishment;

(b). Act, 1965 is substantive law because it creates rights and liabilities upon the employer and
the employees and any amendment in the parent Act i.e. Act, 1965 would create new rights and
obligations.

30. Thus, for the aforesaid two reasons, he submits that Amendment Act, 2015 is not a
declaratory law. In support of the said contention, he has placed reliance upon following
judgements of the Apex Court:-

(i). Indra Sawhney Vs. Union of India & Others, 2000(1) SCC 168;

(ii). State of Punjab & Others Vs. Bhajan Kaur & Others 2008 (12) SCC 112;

(iii). Commissioner of Income Tax (Central)-I, New Delhi Vs. Vatika Township
Private Limited, 2015 (1) SCC 1.

31. He has further contended that financial burden cannot be applied retrospectively unless the
legislature has expressly and unambiguously stated such an intent in the amendment

32. Sri Diptiman Singh, learned counsel appearing in some of the petitions submitted that the
Bill No.265 of 2015 was introduced w.e.f 01.04.2015, the statement of object and reasons do not
mention that it would be made effective retrospectively. He submits that financial memorandum
mentions that the Bill does not involve, 'any other recurring or non-recurring expenditure'. He has
referred to certain discussions on the Bill, which shall be considered at the appropriate stage, to
contend that constitutional decisions cannot be taken on the whims and desires of the Government.
He further submits that original bill was to be made effective from 01.04.2015 and no explanation
or reason has been given in changing the date of implementation of the Bill and making it
retrospective. He has placed reliance upon the judgement of Apex Court in the case of Jayam and
Company Vs. Assistant Commissioner & Another 2016(15) SCC 125.

33. Sri Sunil Kumar Tripathi, Advocate has addressed on the Amendment in Section 12 of the
Act, 1965. He submits that amendment in Section 12 of the Act, 1965 in respect to increase in
ceiling limit is based upon unreasonable classification. Therefore, it is violative of Article 14 of the
Constitution of India.

34. Elaborating the said argument, he submits that industries notified as scheduled
employment under Minimum Wages Act, 1948, monthly ceiling limit for calculation of bonus for
this class of industry is the minimum wages under the Minimum Wages Act, 1948. He submits that
at present minimum wages for unskilled workers is Rs.10,701/-, semi-skilled workers is
Rs.11,772/- and skilled workers is Rs.13,186/- and bonus is to be calculated on the aforesaid
notified wages with respect to different classes of workers.
2 All. Benara Udyog Ltd. Vs. Union of India & Ors.
661

35. He submits that for industries, which have not been notified as scheduled employment
under the Minimum Wages Act, 1948, monthly ceiling limit for this class of industries is Rs.7000/-
per month for calculation of bonus. He submits that classification is unreasonable and
discriminatory.

36. He further submits that the classification of industries in two categories is arbitrary as the
classification is not based on intelligible differentia. He contends that object sought to be achieved
by classifying the industries in two categories is irrational because unorganised industries covered
by scheduled employment have to pay higher bonus than the organised industries not covered by
scheduled employment. He has placed reliance upon following judgements of Apex Court:-

(i) Sukanya Shantha Vs. Union of India and Others, 2024 SCC OnLine SC 2694;

(ii) Bhikusa Yamasa Kshatriya & Another Vs. Sangamner Akola Taluka Bidi
Kamgar Union & Others,AIR 1963 SC 806;

(iii) U. Unichoyi & Others Vs. State of Kerala AIR 1962 SC 12.

37. Rebutting the aforesaid contention, learned Additional Solicitor General submits that the
Act, 1965 being a welfare legislation should be interpreted in a manner so as to achieve the object
of the Act. He submits that power and competence of the Parliament to amend the statutory
provision cannot be doubted, however, the only rider in amending the Act, 1965 retrospectively is
that the Act, 1965 must be reasonable and not arbitrary and must not be violative of any of the
fundamental rights guaranteed under the Constitution of India. He submits that Amendment Act,
2015 amending the Act, 1965 with retrospective effect is reasonable and has been introduced to
achieve the object for which it has been introduced. Therefore, the Amendment Act, 2015 is neither
arbitrary nor is violative of any fundamental rights of the petitioner guaranteed under the
Constitution of India.

38. It is contended that the Amendment Act, 2015 does not violate any vested right of the
petitioner. He submits that Amendment Act, 2015 has been introduced for promoting and
effectuating the Directive Principles of State Policy enshrined in the Constitution of India,
therefore, the Amendment Act, 2015 cannot be said to be arbitrary and violative of any of the
provisions of Constitution of India.

39. He further contends that Section 15(2) of the Act, 1965 provides for a situation where for
any accounting year, if there is no available surplus or allocable surplus in respect to that year falls
short of the amount of minimum bonus payable to the employees in the establishment under
Section 10 of the Act, 1965, and there is no amount or sufficient amount carried forward and set on
under sub-section (1) of that Section, which could be utilised for payment of minimum bonus, then
such minimum amount or deficiency shall be carried forward for being set off in the succeeding
accounting year and so on upto and inclusive of the fourth succeeding year. Therefore, the
difficulty as pointed out by the petitioner in the writ petition in implementing the Amendment Act
is non-existent in view of Section 15(2) of the Act, 1965.
662 INDIAN LAW REPORTS ALLAHABAD SERIES

40. He contends that proviso (b) to Section 19 of the Act, 1965 provides that time for payment
can be extended. He submits that validity of Amendment Act has been upheld by Patna High Court
in Civil Writ Jurisdiction Case No.15379 of 2017 and by Madras High Court in Writ Petition
No.6958 of 2016.

41. He has further contended that there is no arbitrariness in including the concept of
calculation on the basis of minimum wages under the Minimum Wages Act, 1948 for the purpose
of payment of bonus. Accordingly, he submits that the contention advanced in this regard by the
learned counsel for the petitioners is misconceived.

42. He further urges that the contention of learned counsel for the petitioner that statement of
object of the Bill indicates that the Bill was to be implemented w.e.f. 01.04.2015 and its
applicability cannot be made retrospectively on the whims and desires of the Government is not
sustainable inasmuch as the Prime Minister of India has approved the proposal of the Ministry for
moving official amendments through Amendment Act, 2015 as contained in para 8 of the proposal
dated 22.12.2015 under Rule 12 of the Government of India (Transaction of Business) Rules, 1961.

43. Accordingly, he submits that petitioners have failed to make out any case calling for any
interference by this Court in exercise of power under Article 226 of the Constitution of India and
declaring the Amendment Act, 2015 as ultra-vires to the Constitution of India.

44. We have considered the rival submissions advanced by the learned counsel for the parties
and perused the record.

45. Section 2(13) of the Act, 1965 which defines 'employee' as it stood prior to the
Amendment Act, 2015 reads as under:

"2. Definitions-

(13) "employee" means any person (other than an apprentice) employed on a salary or
wage not exceeding [ten thousand rupees] per mensem in any industry to do any skilled or
unskilled manual, supervisory, managerial, administrative, technical or clerical work for higher or
reward, whether the terms of employment be express or implied."

46. Section 12 of the Act, 1965 as it prior to amendment provides for bonus payable to certain
employees which reads as follows:-

"12. Calculation of bonus with respect to certain employees.-Where the salary or wage
of an employee exceeds [three thousand and five hundred rupees] per mensem, the bonus payable
to such employee under section 10 or, as the case may be under section 11, shall be calculated as if
his salary or wage were [three thousand and five hundred rupees] per mensem."

47. By the Amendment Act, 2015 in Section 2(13) which defines expression "employee", the
ceiling on salary or wages has been enhanced from Rs.10,000/- per month to Rs.21,000/- per
month.
2 All. Benara Udyog Ltd. Vs. Union of India & Ors.
663

48.