# [1961] 3 S.C.R. 669

- **Citation:** [1961] 3 S.C.R. 669
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** P. B. Gajendragadkar, K. N. WANCHOo a.nd K. C. DAS Gul'TA
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1961-3-s-c-r-669-2068
- **Pages:** 8

## Headnote

Industrial Dispute-Payment of bonus to clerical stajf-Pro.ctice
prevailing in oil companies-If must be paid lower rate than labour
staff.
Payment of bonus being based on the contribution of workmen to the profits of the company, that contribution, it is well
settled, has to be taken foto consideration as a whole and it ·is not
relevant to enquire which class or section of the workmen contributed how much to the profits.
B1m• and Co., Calcutta v. Their Employees [r956] S.C.R. 78r
and Baroda Borough Municipality v. Its Workmen [r957] S.C.R.
33, referred to.
Looked at from that stand-point, it is not fair, in the absence
of any overriding consideration, to make a distinction as to the
rate of !)onus payable to different classes of workmen such as
clerks and operatives, for it is ordinarily impossible to say which
class contributed more to the prosperity of the industry than
another.
Nor can it be laid down as an inflexible rule that the. clerical
and the labour staff must always be paid at the same rate. The
Industrial Tribunals must have wide discretion in the matter,
which this Court would be reluctant to interfere with unless
arbitrarily exercised.
Consequently, where the Industrial Tribunal, on a full consideration of the difference in the wage scales of labour and the
clerical staff, came to the conclusion that it would be improper
to award lower rate of bonus to the clerical staff who belonged to
the middle class and suffered more than the labour staff from the
rise of price, and there was nothing to show that .this was not so,
the decision of the Tribunal was reasonable and must be upheld.
CIVIL .APPELL A.TE JURISDICTION : Ci vii A ppea.l No.
250/1959.
Appeal by special lea.ve from the a.ward da.ted
Ma.y 18, 1958, of the Industrial Tribunal, Bombay, in
Reference (I. T.) No. 106 of 1955. ·
M. O. Set,aJ.vad., Attorney.General for India, S. D.
Vffhadalal a.nd I. N. Shroff, for the a.ppella.nts.
Janarclan Sharma, for respondent No. I.
1961. February 1. The Judgment ofthe Court was
delivered by
February I.
670
SUPREME COURT REPORTS
[19611
1961
DAS GUPTA, J.-This appeal by special leave
Burmah-Shell
arises out of an industrial dispute between the appelRefineries Limited !ant company, and their clerical staff on the question
v.
of bonus for the year 1956.
The demand of the workTheir Workmen men was for bonus equivalent to 8 months' total
Das Gupta J.
earnings of the year. The company resisted this
demand mainly on the ground that there was in
existence an agreement between the company and its
labour employees-whereby bonus for the year 1956
had been settled at 4! months' basic wages, that the
general practice in awards in the matter of bonus had
in the past been to award or grant lesser amounts to
clerical employees than to labour, and that in any
case, to grant the same rate of bonus to clerical employees and labour employees would be "to encourage
or to invite strife and discontent." The Tribunal held
that such an agreement as regards bonus for 19fi6 had
been voluntarily entered into on behalf of the workers
and was beneficial to them ; and was of opinion that
the bonus to the clerical staff ought to be on the same
scale. On the one hand, it rejected the clerical staff's
claim for bonus at a higher rate than what the workmen were entitled to, as this "would lead to industrial
discontent and strife", and on the other held that
there was no reason to grant the clerical staff hon us
at a lower rate. Accordingly it awarded bonus at the
rate of 9/24ths of the basic wages, to the clerical staff,
for the year ending December 31, 1956.
Two contentions were raised in appeal. The first is
that the Tribunal erred in awarding bonus without
having recorded a conclusion as regards the existence
and extent of the gap between the actual wages
(
received by these workmen and the living wage. The
second contention urged on behalf of the appellant is
that the Tribunal erred in granting to the clerical
staff bonus at the same rate as was payable

## Text

3.S.C.R.
SUPREME COURT REPORTS
669
THE BURMAH-SHELL REFINERIES LIMITED
. "·
THEIR WORKMEN.
(P. B. GAJENDRAGADKAR, K. N. WANCHOo a.nd
K. C. DAS Gul'TA, JJ.)
Industrial Dispute-Payment of bonus to clerical stajf-Pro.ctice
prevailing in oil companies-If must be paid lower rate than labour
staff.
Payment of bonus being based on the contribution of workmen to the profits of the company, that contribution, it is well
settled, has to be taken foto consideration as a whole and it ·is not
relevant to enquire which class or section of the workmen contributed how much to the profits.
B1m• and Co., Calcutta v. Their Employees [r956] S.C.R. 78r
and Baroda Borough Municipality v. Its Workmen [r957] S.C.R.
33, referred to.
Looked at from that stand-point, it is not fair, in the absence
of any overriding consideration, to make a distinction as to the
rate of !)onus payable to different classes of workmen such as
clerks and operatives, for it is ordinarily impossible to say which
class contributed more to the prosperity of the industry than
another.
Nor can it be laid down as an inflexible rule that the. clerical
and the labour staff must always be paid at the same rate. The
Industrial Tribunals must have wide discretion in the matter,
which this Court would be reluctant to interfere with unless
arbitrarily exercised.
Consequently, where the Industrial Tribunal, on a full consideration of the difference in the wage scales of labour and the
clerical staff, came to the conclusion that it would be improper
to award lower rate of bonus to the clerical staff who belonged to
the middle class and suffered more than the labour staff from the
rise of price, and there was nothing to show that .this was not so,
the decision of the Tribunal was reasonable and must be upheld.
CIVIL .APPELL A.TE JURISDICTION : Ci vii A ppea.l No.
250/1959.
Appeal by special lea.ve from the a.ward da.ted
Ma.y 18, 1958, of the Industrial Tribunal, Bombay, in
Reference (I. T.) No. 106 of 1955. ·
M. O. Set,aJ.vad., Attorney.General for India, S. D.
Vffhadalal a.nd I. N. Shroff, for the a.ppella.nts.
Janarclan Sharma, for respondent No. I.
1961. February 1. The Judgment ofthe Court was
delivered by
February I.
670
SUPREME COURT REPORTS
[19611
1961
DAS GUPTA, J.-This appeal by special leave
Burmah-Shell
arises out of an industrial dispute between the appelRefineries Limited !ant company, and their clerical staff on the question
v.
of bonus for the year 1956.
The demand of the workTheir Workmen men was for bonus equivalent to 8 months' total
Das Gupta J.
earnings of the year. The company resisted this
demand mainly on the ground that there was in
existence an agreement between the company and its
labour employees-whereby bonus for the year 1956
had been settled at 4! months' basic wages, that the
general practice in awards in the matter of bonus had
in the past been to award or grant lesser amounts to
clerical employees than to labour, and that in any
case, to grant the same rate of bonus to clerical employees and labour employees would be "to encourage
or to invite strife and discontent." The Tribunal held
that such an agreement as regards bonus for 19fi6 had
been voluntarily entered into on behalf of the workers
and was beneficial to them ; and was of opinion that
the bonus to the clerical staff ought to be on the same
scale. On the one hand, it rejected the clerical staff's
claim for bonus at a higher rate than what the workmen were entitled to, as this "would lead to industrial
discontent and strife", and on the other held that
there was no reason to grant the clerical staff hon us
at a lower rate. Accordingly it awarded bonus at the
rate of 9/24ths of the basic wages, to the clerical staff,
for the year ending December 31, 1956.
Two contentions were raised in appeal. The first is
that the Tribunal erred in awarding bonus without
having recorded a conclusion as regards the existence
and extent of the gap between the actual wages
(
received by these workmen and the living wage. The
second contention urged on behalf of the appellant is
that the Tribunal erred in granting to the clerical
staff bonus at the same rate as was payable to the
labour staff, on the basis of the agreement, and should
have granted bonus to the clerical staff, at a lower
rate.
The appellant cannot however be allowed to urge
the first contention in this appeal because such a
contention does not appear to h11ove been seriously
3 S.C.R.
SUPREME COURT REPORTS
671
raised before the Tribunal. It is true that in the first
196z
parbt ohf tfhe fwritten statement filed before the Tdribuhna.tl
Burmah-Sh•ll
on e al o the company a statement was ma e t a Refineries Limieed
"the company, craves leave to refer to and rely on,
v.
a.s if incorporated herein, its written statement filed
Their Workm111
before this Hon'ble Tribunal in Ref. (LT.) 279of1957,
and repeats and adopts all the submissions a.nd averDas Gupta J.
ments made therein" and that in the written statement
filed therein a question that in view of the high wages
paid by the company no gap existed between the
actual wage a.nd the living wage, was ta.ken. Not only
wa.s no independent statement made in the separate
written statement which was filed in the present reference, i.e., Ref. No. (I.T.) 106 of 1958 on this question
but we find no reference at all in the award made by
the Tribunal which heard both the references together
to a.ny contention of this nature. No ground that the
Tribunal ha.d granted bonus without coming to a. conclusion a.s regards the existence and extent of a. gap
between the actual wage received by the workmen and
the living wage wa.s ta.ken in the petition for special
leave to a.ppea.l. Even in the statement of case filed
on beha.lf of the appellant no such question had been
raised. It is not therefore open to the appellant to
urge such a. contention now ..
In support of the other contention that the Tribunal
wa.s in error in granting to the clerical staff bonus a.t
the same rate a.s wa.s payable to the la.hour staff, on
the ha.sis of the agreement, a.nd that bonus should
have been gra.nted to the clerioa.l staff a.t a. lower ra.te,
it is urged that for ma.ny yea.rs now, the practice in the
petroleum industry has been to ma.ke a. distinction
between the clerica.l employees a.nd the operatives,
giving a. lower rate of bonus to the former, tha.n what
is given to the latter. It is unnecessary in the present
c&se, to consider, whether, if the premise tha.t there
ha.d for many years been such a practice of paying a
lesser rate of bonus to clerical staff tba.n to the labour
staff, that itself would preclude industrial adjudicators
from a.wa.rding bonus to both classes of employees a.t
the sa.me rate. For, we find that the a.hove premise
has not been established. While it is true that in some
86
672
SUPREME COURT REPORTS
[1961]
1961
years, either by &ward of Industrial Tribunal or by
B .. ..,,,.,,.54,11
agreement, clerical staff of petroleum concerns has got
Rifineries Limil•d bonus at a lower rate, than the labour employees, it is
v.
equally true that in some years at least, clerical staff
neir Work""n &nd operatives have been given bonus at the same rate.
Thus for the year 1951, we find that in disputes bet.
Das Guf>I• f. we.en the three oil companies-The Burmah Shell, the
Caltex and the Standard Vacuum, and their employees
in their Calcutta office the Labour Appellate Tribunal
discussed the matter in Burmah-Shell Oil Co. Ltd. v.
Their Workmen (1) thus:-
"In the matter for payment of bonus for 1950,
both the clerical staff and the working people got
bonus at the rate of 3 months' wages, though there
was an observation that the working class were on
calculation entitled to 4 mbnths. The effect was,
however, that both the-groups got bonus at the rate
of 3 months' basic wages. During the pendency of
the Tribunal proceedings, all the companies made
agreements with the Union of the workers that
bonus would be granted on the basis of 3l months'
wages for the year 1951. We feel that there would
be a serious repercussion if we allow·to the clerical
staff anything in excess of that amount. On the
other hand, as the effect of the previous decision
had been that both groups got equally, paying to
the clerks less than that what has been paid to the
working class would give rise to a real discontent."
We find also that when the same question, viz.,
whether the same rate of bonus should be paid to
clerical staff and operatives, was raised before the
Industrial Tribunal, Ernakulam, in a dispute between
the Burmah-SheU Co. v. Their Workmen('), learned
counsel on behalf of the company conceded that he
would not press the point for making a distinction .in
the matter of payment of bonus. We find therefore
that there is no basis for the assumption that the
uniform or nearly uniform practice in the oil c?mpanies has been to pay bonus at a lesser rate to clerical
staff than to operatives. There is no substance therefore in the argument that the award of bonus at
!•I {1955) L.A.c. 1s7. 794.
(i} (1959) (I) L.L.J. I?8•
3 S.C.R.
SUPREME COURT REPORTS
673
9/24ths of basic wages, to the clerical staff, is likely
' 96'
to cause discontent among the labour staff, which has
Burm•Jo.Sh•ll
entered into an agreement to receive bonus itt the R•fi•"'i" Limii.d
same rate.
v.
The second argument is that as the pay scale of the Th•irWorkm"'
clerical staff is higher than what the labour staff
receive as wages, the gap-between the living wage and
DasGuptaJ.
wage actually received, is less for the clerical staff,
and so, it would be wrong to pay bonus, wh:ch is primarily intended to bridge this. gap, at the same rate
to these two classes of workmen. This argument
overlooks the important principle that the payment
of bonus is based on the fact of contribution by labour
to the profits of the industry, and that it has been
held more than once by the court that the contribution
to be taken into consideration is the contribution
made by the workmen taken together as a class, and
that it would not be relevant to enquire which section
of the workmen has contributed to what share of
profits. It was observed by this Court in Burn &: Co.,
Calcutta v. Their Employees('), in setting aside an
award of the Appellate Tribunal of an additional one
month's basic wages :-
" The entire profits of the company are the result
of the labour of all the workmen and employees in all
its units. To grant a bonus to a section of them on
the basis of the total profits of the company will·
give them a share in profits to which they have not
contributed ....•. If the order of the Appellate Tribunal is to be given effect to, some of the employees of
the company would get a bonus while, others not
and as observed in Karam Chand Thaper & Bros.'
Workmen v. The Company (1953 L.A.C. 152), that
must lead to disaffection among the workers, and to
further industrial disputes. "
A similar view was expressed by this Court in
Barodn. Borough Municipality v. Ita Workmen(•).
It is true that in the cases mentioned above, the
Court was co.nsidering the question whether one class
of employees could be granted bonus, while· another
ol&88 was being granted none at all ; and was not
(1) [1956] S.C.R. 781, 793,
(t) [19'7] S.C.R. 33.
674
SUPREME COURT REPORTS
tl961]
r96'
considering the question of propriety of different rates
Burm•h-Shell
of bonus being paid to different classes. But the
Refi~ries Limited basis of the decision that all the workmen, taken as
v.
a whole contribute to the profits, is relevant also for
Their Workmen the consideration of the question whether different
rates of bonus between two different classes of workD•• Gwpla].
men are fair ; and it is necessary to remember that it
is ordinarily not possible to say that one class or workmen, say clerks, contribute more to the prosperity of
the industry than another class like operatives. In
the absence of some overriding consideration it would
not be fair to make a distinction in the rate of bonus
between different classes of workmen.
We do not wish however to lay down an inflexible
rule that clerical staff and labour staff must always
be paid the same rate of bonus. It may happen in
a particular industry that wages of labour staff are
extremely low, while the pay scale of the clerical staff
is many times higher. If a Tribunal in a case like
this, being of opinion, that payment of bonus at the
ea.me ra.te will not be fair, and may cause discontent
amongst the workers awards bonus at a lower rate to
the clerical staff, than to the labour staff, there would
be no reason for disturbing the award. The industrial tribunals must have very wide discretion in
deciding matters like this; and it is not for this Court
to interfere with their exercise of discretion, unless it
is plainly arbitrary.
In the present case, the Tribunal fully conscious
of the difference in the wage scales of labour and
clerical staff ha.a pointed out that the clerical staff
ca.me from the middle class whose standard of living
is higher, a.nd has stated that this class has suffered
perhaps more than the operative class from rise in
prices, and has in consideration of these factors,
concluded,tha.t it would be appropriate not to award
a lower rate of bonus to them. " Nothing has been
shown to us to justify any doubt about the correctness
of the premises mentioned by the learned Tribunal;
and the conclusion seems eminenty reasonable.
It was urged by the learned Attorney-Genera.I who
appeared on behalf of the appellant company that
-.
3 s.c.R.
SUPREME COURT REPORTS
675
even though it be true that the standard of living of
1961
the middle class from which the clerical staff comes is
B
II-Sh 11
higher than that of the operatives the difference bet- Reft::~;, Li~i;d
ween the higher average wage received by the clerical
v.
staff and that received by the operatives is much
Their WorAm"'
more than the difference in monetary terms between
the Ii ving wage of the clerical staff and that of the
Das Gupta J.
operatives. From the statements furnished before us
it was attempted to be shown that the starting rate of
remuneration of the middle grade for operatives
together with what is received in shapes other than
the wages was on January 1, 1958, Rs. 188·94 while
similar receipts by the middle grade for clerks is
Ks. 404·45, that is, the starting remuneration of clerks
taking the middle grade as the type is 113·91 % more
than the starting remuneration for middle grade for
labour. As against this it is suggested, the living
wage fo~ clerical staff should be taken only 80% more
than that for the operatives.
We may assume
without further investigation the correctness of the
statement
a.s regards the comparative remuneration received, by middle grade of operatives and
middle grade of clerical staff a.s submitted on behalf of
the company. We find no basis however for the
assumption that the living wage of clerical staff is only
80% more than that of operatives. It is true that in
connection with the determination of wages a. formula.
which appears to
have
been initiated first by
Mr. Justice Ra.ja.dhya.ksha. when he was enquiring
into the cost of living of the non-gazetted employees
in the Post and Telegraph Department of multiplying
the figures reached on the basis of the requirements of
the lower class employees by 180% has often been
accepted by the industrial tribunals. Assuming however without deciding that this coefficient of 180 %
may be properly adopted for arriving at the fair wage
requirements of clerical staff from the fair wage
requirements of operatives it does not by any means
follow that the same coefficient can be usefully
applied in ca.lculating the living wage of the clerical
staff from the living wage of the operatives. As has
been clearly pointed out by this Court in a recent
676
SUPREME COURT REPORTS
(1961]
' 96'
judgment in C. A. No. 416 of 1958 (Standard Vacuum
Burmalo-Shlll
Refining Co., Ltd.
versUIJ Its Workmen) the compoR•ftneri" Limil•a nents of a living wage are largely different from those
v.
of a fair wage. The difference in the living wage
TluirWorkm"' standards of the class to which operatives generally
belong and the class to which the clerical staff belongs
Das Gupta].
I96z
February :1.
may produce much greater differences in the money
value in the components of the requirement of Jiving
wage as between the two classes than the difference
in the money value of. the components of fair wage of
the two classes.
·
There is no justification therefore for thinking that
the living wage of the clerical staff is only 80% more
than the living wage of the operatives and so no
conclusion that the gap between the living wage and
the actual wage is less in the case of clerks than in
the case of operatives can be drawn from a consideration of the comparative wages received by them.
We find nothing that would justify us in interfering
with the conclusion of the Tribunal that the clerical
staff should be awarded bonus at the same rate as the
operatives.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
SATINDER SINGH AND OTHERS
v.
AMRAO SINGH AND OTHERS.
(P. B. GAJENDRA\JADKAR, K. N. WANCHOO and
K. c. DAS GUPTA, JJ.)
Land Acquisition-Cis-Sutlij Jagir-Inalienable Land-Compensation, apportionment of-Interest, when payable-East Punjab
Acquisition and Requisition of· Immovable Property (Temporary
Powers) Act, x948 (E.--P . .¢of x948), s. s~Land Acquisition Act,
x894 (I of x894), H, z3, 3z, 34-lnterest Act, x839 (3z oj.r839)
SS.I, Z.
Lands in four villages forming part of the Cis-Sutlej Jagir
were compulsorily acquired under the· East Punjab Acquisition
and Requisition of Immovable Property (Temporary Powers}
Act, 1948. At the time of the acquisition A was the holder of
the jagir. Possession over one of the villages had been given to