# SAKHKT<AR MILLS MAZDOOR SANGH v. GWALIOR SUGAR CO. LTD. Feburary 22, 1985

- **Citation:** [1985] 2 S.C.R. 958
- **Court:** Supreme Court of India
- **Decided:** 1985
- **Case number:** Civil Appeal No. 338 of 1972
- **Bench:** 0. Chinnappa Rhody, E.S. Venkataramiah, R.B. Misra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sakhkt-ar-mills-mazdoor-sangh-v-gwalior-sugar-co-ltd-feburary-22-1985-8885
- **Pages:** 4

## Headnote

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The Payment of Bonus Act 1965, sections 10and13 'seasonal' employeesWhtther entitle4 to payment of minimum bonus.
Words and Phrases :
•working days in any accounting year'-Meaning of-Section 13 Pay~
ment of Bonus Act l96j.
The first respondent. a Company engaged in the manufacture of Sugar,
employed workers both on a permanent basis as weJI as on a seasonal basis.
The einployer refused to pay bonus to the seasonal employees on the
ground that they were not employed throughout the year, and the
conse~
queotial dispute that arose between the management and the appellant·union
was referred to the Industrial Court under section 49 of the Madhya
Pradesh Industrial Relations Act.
The Industrial Court decided in favour of the workers and he Id that
they were entitled to payment or the minimum bonus.
The Writ Petition filed by the company was allowed and the award
of the Industrial Court was quashed. The- High Court interpreted the words
"working days in any accounting year" in section 13 of the Payment of
Bonus Act 1965 as meaning all those days or the year except holidays, and
held that the workers were only entitled to proportionate bonus and not
the minimum bonus guaranteed under section 10 of the Act.
Allowing the Appeal of the Union to this Court,
HELD: 1. in the case of a factory which works seasonally during an
accounting year, reworking days in any accounting year" can only mean
those days of the year du.ring which the employee concerned is actually
allowed to work. Having regard to the scheme and purpose of the Payment
of Bonus Act 1965, the High Court was not justified in placing a different
MAZDOOR SANGH v. GWALIOR SUGAR co. (Chinnappa Reddy, J.) 959
construction on the meaning of the expression "working days in any
accounting year". [960H; 96IA]
2. The judgment of the High Court is set aside and the award of the
Industrial Court is restored. The bonus payable to the employees will carry
ioter~t at nine per cent per annum~ from the date bonus became due until
date of payment. [96 IB]

## Text

958
A
SAKHKT<AR MILLS MAZDOOR SANGH
B
v.
GWALIOR SUGAR CO. LTD.
Feburary 22, 1985
C
(0. CHINNAPPA RHODY, E.S. VENKATARAMIAH AND R.B. MISRA, JJ.J
D
E
F
G
H
The Payment of Bonus Act 1965, sections 10and13 'seasonal' employeesWhtther entitle4 to payment of minimum bonus.
Words and Phrases :
•working days in any accounting year'-Meaning of-Section 13 Pay~
ment of Bonus Act l96j.
The first respondent. a Company engaged in the manufacture of Sugar,
employed workers both on a permanent basis as weJI as on a seasonal basis.
The einployer refused to pay bonus to the seasonal employees on the
ground that they were not employed throughout the year, and the
conse~
queotial dispute that arose between the management and the appellant·union
was referred to the Industrial Court under section 49 of the Madhya
Pradesh Industrial Relations Act.
The Industrial Court decided in favour of the workers and he Id that
they were entitled to payment or the minimum bonus.
The Writ Petition filed by the company was allowed and the award
of the Industrial Court was quashed. The- High Court interpreted the words
"working days in any accounting year" in section 13 of the Payment of
Bonus Act 1965 as meaning all those days or the year except holidays, and
held that the workers were only entitled to proportionate bonus and not
the minimum bonus guaranteed under section 10 of the Act.
Allowing the Appeal of the Union to this Court,
HELD: 1. in the case of a factory which works seasonally during an
accounting year, reworking days in any accounting year" can only mean
those days of the year du.ring which the employee concerned is actually
allowed to work. Having regard to the scheme and purpose of the Payment
of Bonus Act 1965, the High Court was not justified in placing a different
MAZDOOR SANGH v. GWALIOR SUGAR co. (Chinnappa Reddy, J.) 959
construction on the meaning of the expression "working days in any
accounting year". [960H; 96IA]
2. The judgment of the High Court is set aside and the award of the
Industrial Court is restored. The bonus payable to the employees will carry
ioter~t at nine per cent per annum~ from the date bonus became due until
date of payment. [96 IB]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 338 of 1972.
From the Judgment and Order dated the 30th January, 1970
A
B
of the Madhya Pradesh High Court in Miscellaneous Petition No.
c
437 of 1967.
K. K. Jain, Pramod Dayal, A. D. Sangar and Ajay K. Jain for
the appellant.
B. Datta, Rishi Kesh, B. P. Singh and Ajit Puddiserry for the
D
respondent.
H. K. Puri and C. L. Sahu for the Interveners.
The Judgment of the Court was delivered by
CH!NNAPPA REDDY, J. The first respondent is a company
engaged in the manufacture of sugar and employing over 1100
workers, 300 of them on a permanent basis and 800 on a seasonal
basis. The permanent employees are those employed on the clerical
side and in the operation and maintenance of machines. The other
800 employees are seasonal employees who are so employed because
the factory itself does not work through out the year but works
during a certain season every year from December when the sugarcane crop is ready for crushing until the crushing is over. The
employer refused to pay bonus to the seasonal employees during the
year 1964-65 on the ground that they were not employed through
out the year.
A dispute arose between the management and the
Mazdoor Sangh which was referred to the Industrial Court Madhya
Pradesh, Indore for arbitration under sec. 49 of the Madhya Pradesh
Industrial Relations Act.
The Industrial Court decided in favour of
the workers, but on a writ petition filed by the company, the award
of the arbitrator was quashed and it was held that the workers were
only entitled to proportionate bonus and not the minimum bonus
E
F
G
H
A
B
c
960
SUPRBMB COURT RBORTS
[198S] ~ s.c.P..
guaranteed by sec. 10 of the Payment of Bonus Act, 1965. This
appeal has been filed by the Mazdoor Sangh under a certificate
granted by the High Court of Madhya Pradesh.
To our minds the question is a simple one and is capable of
only one answer. Sections 10 and 13 of the Payment of Bonus Act,
as they stood at the relevant time, were as follows:
•
"Section 10. PAYMENT OF MINIMUM BONUSSubject to the provisions of ss 8 and 13 every employer
shall be bound to pay to every employee in an accounting
year a minimum bonns which shall be four per cent of
the salary or wage earned by the employee during the
accounting year or forty rupees, whichever is higher,
whether there are profits in the accounting year or not;
D
Provided that where such employee has not completed
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F
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H
fifteen years of age at the beginning of the accounting year,
the provisioPs of this section shall have effect in relation to
such employee as if for the words 'forty rupees', the words
'twenty five rupees" were substituted."
"Section 13-PROPORTIONATE REDUCTION OF
BONUS IN CERTAIN
CASES-Where an employee
has uot worked for all the working days in any accounting
year, the minimum bonus of forty rupees or, as the case
may be, of twenty five rupees, per cent, of his salary or
wage for the days he has worked in that accounting year
shall be proportionately reduced."
The High Court has interpreted the words "working days in
any accounting year" as meaning all those days of the year except
holidays. While such an interpretation may be alright in the case
of a factory which works all through the year, it would be hardly
appropriate in the case of a factory which works during a particular
season every year.
In the case of a factory which works seasonally
during an accounting year, "working days in any accounting year"
can only mean those days of the year during which the employee
concerned is actually allowed to work. That was the interpretation
which was placed upon the expression by the Industrial Court and
• •
"' .
)
--~
MAZDOOR SANGH v. GWALIOR SUGAR co. (Chinnappa Reddy, J,) 961
we think it is the proper interpretation. Having regard to the
scheme and the purpose of the Act, we do not think that the High
Court was justified in placing a different construction on the meaning of the expression "working days in any accounting year".
We,
therefore, set aside the judgment of the High Court and restore the
award of the Industrial Court. The bonus payable to the employees
will carry interest at the rate of nine per cent per annum, from the
day when the bonus became due until the date of payment. The
appeal is allowed with costs.
N.V.K
Appeal allowed.
A
B