# Virsa Singh v. The Stale of Punjab

- **Citation:** [1958] 1 S.C.R. 1504
- **Court:** Supreme Court of India
- **Decided:** 1958
- **Case number:** in. Misc. Applications Nos. 302 of 1951
- **Bench:** Jafer Imam, SUBBA RAo, Vivian Bose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/virsa-singh-v-the-stale-of-punjab-1437
- **Pages:** 10

## Headnote

Wages-If include bonus awarded by Industrial Court-Payment of Wages Act (/J1of1936), s. 2(vi), JJ.
The Industrial Court, Bombay, awarded bonus equal to 4!
months' wages to the operatives of the Tata Mills Ltd. and directed that those operatives who were no longer in the service of the
Mills should be paid the bonus in one lump sum by a fixed date
and in such cases claims in writing should be made to the Manager
of the Mills. The operatives who made a claim before the date
fixed were duly paid but payment was r.efused to operatives who
applied after that date. The operatives who had been refused
payment made applications to the Authority under the Payment
of Wages Act. The Mills contended that the Authority had no
jurisdiction to entertain the application, but the contention was
rejected. The Mills filed a writ petition before the Bombay High
Court which was dismissed by a Single Judge and an appeal
against that decision was also dismissed by a Division Bench:
Held, that the bonus awarded by the Industrial Court was not
wages within the meaning of s. 2 (vi) of the Payment of Wages
Act and as such the Authority had no jurisdiction to entertain
the application made to it under s. 15 of the Act. Though such
·bonus was remuneration it was not remuneration payable on the
fulfilment of the terms of the contract of employment, express or
implied, as required by s. 2 (vi).
F. W. Heilgers cl Co. v. N. C. ChalSJ·avarthi, [1949] F.C.R
356, followed.

## Text

1958
Virsa Singh
v.
The Stale of
Punjab
Bose J.
1958
March 19.
1504
SUPREME COURT REPORTS
[1958]
one' of .fact; and whether the conclusion should be one
way or .the ~the~ is a matter of pr~of, where necessary,
by ca,lling Ih aid all reasonable mferences of fact in
the absence of direct testimony. It is not one for
guess-work and fanciful conjecture.
The appeal is dismissed.
Appeal dismissed.
BALA SUBRAHMANYA RAJARAM
v.
B.C.
PATIL AND OTHERS
(JAFER IMAM, SUBBA RAo and VIVIAN BOSE JJ.)
Wages-If include bonus awarded by Industrial Court-Payment of Wages Act (/J1of1936), s. 2(vi), JJ.
The Industrial Court, Bombay, awarded bonus equal to 4!
months' wages to the operatives of the Tata Mills Ltd. and directed that those operatives who were no longer in the service of the
Mills should be paid the bonus in one lump sum by a fixed date
and in such cases claims in writing should be made to the Manager
of the Mills. The operatives who made a claim before the date
fixed were duly paid but payment was r.efused to operatives who
applied after that date. The operatives who had been refused
payment made applications to the Authority under the Payment
of Wages Act. The Mills contended that the Authority had no
jurisdiction to entertain the application, but the contention was
rejected. The Mills filed a writ petition before the Bombay High
Court which was dismissed by a Single Judge and an appeal
against that decision was also dismissed by a Division Bench:
Held, that the bonus awarded by the Industrial Court was not
wages within the meaning of s. 2 (vi) of the Payment of Wages
Act and as such the Authority had no jurisdiction to entertain
the application made to it under s. 15 of the Act. Though such
·bonus was remuneration it was not remuneration payable on the
fulfilment of the terms of the contract of employment, express or
implied, as required by s. 2 (vi).
F. W. Heilgers cl Co. v. N. C. ChalSJ·avarthi, [1949] F.C.R
356, followed.
CIVIL
APPELLATE JURISDICTION : Civil Appeals
Nos. 35 & 36 of 1954.
•
.... '
S.C.R.
SUPREME COURT REPORTS
1505
Appeals from the
judgments and order dated
August . 28, 1952, of the Bombay High Court
in
Appeals Nos. 34 and 35 of 1952,. arising out of the
orders dated January 24, 1952, of the said High Court
exercising its Civil Original Jurisdiction in. Misc.
Applications Nos. 302 of 1951 and 303, 304 and 305
of 1951 respectively.
R. J. Kolah, B. · Narayanaswami, J. B. Dadachanji,
S. N. Andley and Rameshwar Nath, for the appellant.
H. N. Sanyal, Addi. Solicitor-General
of India,
N. P. Nathwani and R. H. Dhebar, for respondent
No. 3 in C. A 35 & No. 5 in C. A. 36.
D. H. Buch and Naunit Lal, for respondent No. 2
in C. A. 35 & Nos. 2-4 in C. A. 36.
1958. March 19.
The Judgment of the Court
was delivered by
BOSE J.-These appeals arise out of petitions made
ta the Bombay High Court under Art. 226 for writs
of certiorari.
The. appellant is the Mana$er of the Tata Mills
Limited, which carries on busmess in the manufacture
and sale of textile. goods in Bombay and as such is
responsible for the payment of wages under the Payment of Wages Act, 1936.
The first respondent was the Authority under the
Payment of Wages Act at the times material to these
appeals. The sixth respondent' is the present Authority. The Authority is entrusted with the duty of
deciding cases
falling within the purview of the
Act.
The second, third, fourth and fifth respondents are
employees in the Mills.
A dispute arose about a claim made by the operatives of the Mills for a bonus for the year 1948. This
was referred to the Industrial Court at Bombay which
made an award on April 23, 1949, and awarded a
bonus equivalent to four and a half months' wages
subject to certain conditions of which only the sixth
is material here. It runs as follows :
"Persons who are eligible for bonus but who are
1958
Bala Subrahmanya Ra}arom
,,,
B. C. Patil
and Others
Bose J.
19S8
Bala Subrah~
manya Rajaram
"·
B. C. Patil
andOtherJ
BoseJ.
1506
SUPREME COURT REPORTS
[1958]
not in the service of the Mill on the date of the
payment shall be paid in one lump sum by the 30th
November, 1949. In such cases, claims in writing
should be made to the Manager of the Mill concerned."
Those operatives who made a claim before
the
date fixed above were duly paid but payment was
refused to the third respondent, who applied much
later, on the ground that the condition subject to
which the award was made was not fulfilled.
The third respondent
thereupon made an application before the first respondent, the Authority under
the Payment of Wages Act.
Similar claims were made by the second, fourth and
fifth respondents for a bonus for the year 1949. The
Industrial Court awarded a bonus
equal to
two
months' wages and in the sixth condition put the date
as December 31, 1950.
By this time Labour Appellate Tribunals came into
existence, so both sides filed appeals against the award
to the Labour Appellate Tribunal of Bombay. The
appeals failed and the award was upheld.
After that, the matter followed the same pattern.
Respondents 2, 4 and 5 applied for their bonus after
December 31, 1950. The Mills refused to pay and
these respondents applied to the first respondent, the
Authority under the Payment of Wages Act.
The two sets of claims, that is to say, the claim of
the third respondent for a bonus for the year 1948
and the claims of the second, fourth and filth respondents for bonuses for the year 1949, were heard together.
The appellant contested these applications on two
grounds. He questioned the jurisdiction of the Authority to entertain the petitions made to it. He also
contended that, in any event, as the condition subject
to which the award was made, namely, an application
on or before November 30, 1949, was not fulfilled, the
claim for a bonus did not lie.
The first respondent held that it had jurisdiction
and, after hearing the parties on the merits, decreed
the various claims.
•
•
\-.
'v
S.C.R.
SUPREME COURT REPORTS
1507
The appellant thereupon filed writ petitions in the
High Court. They were heard and dismissed
by
Coyajee J.
An appeal was then filed in the same High Court
and heard t!y the Chief Justice and Bhagwati J. They
held that the questions raised were covered by an
earlier decision of theirs in .another , case
dated
March l l, 1952, and, following that decision,
dismissed the appeals without hearing further arguments,
as counsel on both sides agreed that the matter was
covered by the earlier decision. The appellant then
applied for a certificate for leave to appeal here. This
was granted by Chagla C. J. and Dixit J. on February 2, 1953.
The first question that we have to decide is. whether
the first respondent bad jurisdiction to entertain the
petitions made to him as the Authority under the
Payment of Wages Act. This depends on whether
these bonuses are "wages" within the meaning of the·
definition in s. 2(vi) of the Act
The scope of the Authority's jurisdiction is set out
in s. 15 of the Act. It is to hear and decide.
(1) all claims arising out of deduction
from
wages, and
(2) all claims regarding delay in the payment of
wages.
Therefore, unless these bonuses are "wages" within the
meaning of the Act, the Authority will have no jurisdiction.
The definition of "wages" in s. 2(vi) of the Act is
long and complicated but leaving aside the clauses
in it that are not material for our present purpose,
it run~-
" 'Wages' means
all remuneration ........ which
would, if the terms of the contract of employment,
express or implied, were fulfilled, be payable, whether
conditionally upon regular attendance, good work or
conduct or other behaviour of the person employed,
or otherwise, to a person employed in respect of this
employment or of work done in such employment, and
includes any bonus or other additional remuneration
1958
Bala Subrah·
manya Rafaram
v.
B. C. Patil
and Others
Bose J.
1958
B•la Subrahmanya Rajaram
v.
B. C. Patil
and Others
BoseJ.
1508
SUPREME COURT REPORTS
[1958J
of the nature aforesaid which would be so payable and any sum payable to such person by reason of
the termination of his employment, but does not
include ................ "
.
and then five matters that are not included are set
out.
Now consider this clause by clause. " 'Wages'
means all remuneration."
Is bonus a remuneration ?
We think it is. Remuneration is only a more formal
version of "payment" and payment is a recompense
for service rendered.
Now it is true that bonus in the abstract need not
be for services rendered and in that sense need not be
a remuneration ; for example, there is a shan:holder's
bonus in certain companies, and there is a life insurance bonus and so forth.
But that is not the kind
of bonus contemplated here because the kind of remuneration that the definition contemplates is one that is
payable.
"in respect of his employment or of work done
in such employment."
Therefore, the kind of bonus that this definition contemplates is one that is remuneration for services
rendered or work done. Accordingly, it is a "remuneration" and as the definition includes all remuneration of a specified kind, we are of opinion that bonus
of the kind contemplated here falls within the clause
that says it must be "remuneration."
Next comes a clause that limits the kind of remuneration, for, though the
opening words . are "all
remuneration" the words that follow limit it to all
remuneration of the kind specified in the next clause,
that is, to remuneration
"which would be payable if the terms of the contract of employment, express or implied, were
fulfilled."
•
.-
Now the question is whether the kind of bonus con4...,...
templated by this definition must be a bonus that is
payable as a clause of the contract of employment. We
think it is, and for this reason.
If we equate "bonus" with "remuneration", the
..,
, ..
S.C.R.
SUPREME COURT REPORTS
1509
definition says clearly enough that the bonus must
be such that it is payable "if the terms of the contract
are fulfilled", that is to say , it will not be payable if
the terms are not fulfilled.
Now, we can understand a position where a statute
declares that whenever the terms of the contract of
employment are fulfilled the bonus shall be
payable; equally, we can envisage a situation in which
an employer engages to pay a bonus should the terms
of the contract of employment be fulfilled, by a separate and independent agreement that is not part of
the contract of employment. In either case,
the
matter could be said to fall within this part of the
definition. But we can see no way in which a bonus
can be said to be payable if and when the terms of
the contract of employment are fulfilled outside these
two cases (namely, legislation, or a separate contract
that is not part of the contract of employment), except when it is payable by reason of a term, express
or implied, in the contract of employment itself. In
any event, if there are such cases, the present is nocone of them, for the bonus here is payable under an
award of an Industrial Court and has nothing to do
with the fulfilment or otherwise of the terms of the
contract of employment, except indirectly.
It was argued that as an Industrial Court can
direct payment of bonus should an industrial dispute
arise in that behalf, the matter falls within the definition. But does it ? 0TM=. of the matters that an Industrial Court
might take into consideration
before
awarding a bonus is whether all the terms of the
contract of employment have been duly fulfilled and
it is possible that such a Court might refuse to award a
bonus in cases where the terms were not fulfilled, but
it would not be bound by such a consideration and its
right to make an award of bonus is not conditional on
the fulfilment of the terms of the contract of employment, whereas, under the definition, that is an essential irgredient. Therefore, even if due fulfilment of
the terms of the contract of employment was to be
one of the reasons for the award, the bonus so awarded
would not be payable because the terms of the contract
1958
Bala Subrahmanya Rajaram
v.
B. C. Patil
and Others
BoseJ.
1958
Bala Subrahmanya Rojaram
v.
B. C. Patil
and Others
BostJ.
1510
SUPREME COURT REPORTS
[1958]
had been fulfilled but because of an industrial
dispute and because in order to settle it, the Court
awarded the bonus.
It is not necessary to analyse the definition
any
further (except for one clause) because, even if all the
other ingredients are present, the clause we have just
considered would exclude a bonus of the kind
we
have here, that is to say, a bonus awarded by an
Industrial Court.
The clause we have yet to examine is this :
"and includes any bonus or other additional
remuneration of the nature aforesaid which would be
so payable."
It was contended that the words "and includes any
bonus" stand by themselves and that the words that
follow must be disregarded when bonus is under consideration because they relate
only to "additional
remuneration" and not to "bonus".
Now, it may be possible to say that the words "of
the nature aforesaid" only govern the words "additional remuneration" and that they do not apply to
"bonus", with the result that the inclusion clause
"and includes any bonus etc." would refer to two
separate things, namely,
(1) bonus and .
(2) other additional remuneration of the nature
aforesaid. ' In our opinion, the clause means-
(1) "bonus ................ which would be so
payable", and
(2) "other additional remuneration of the nature
aforesaid which would be so payable."
If that is correct, then the words "which would be
so payable" throw us back to the earlier part of the
definition and we reach the position that the kind of
bonus that is included by the inclusion clause is the
kind that would be payable "if the terms of the contract of employment, express or implied, are fulfilled."
There is another reason for reaching this conclusion. The opening words of the definition make it
clear that "wages" means remuneration that is payable when the terms of the contract of employment
are fulfilled. Therefore, that is something certain.
--
...
•.
- .
S.C.R.
SUPREME COURT REPORTS
l511
One knows ahead of time that if the terms of the contract are fulfilled, then the bonus is payable. It may
be that the exact amount has yet to be determined
but the fact that bonus is payable and car1 be claimed
as soon as the terms of the contract are fulfilled is a
matter that can be predicated beforehand, that is to
say, even before the terms of the contract are fulfilled,
or indeed, even btfore the work has started if the
contract is made that far ahead. But that is not the
case when bonus is awarded by an Industrial Court,
for there it is impossible to say ahead of time whether
bonus will be awarded or. not; indeed, at the time the
contract is entered into, it would be impossible to say
whether such a claim could be laid at all because a
difference of opinion between one worker and his employer about the right to bonus would not necessarily
lead to an industrial dispute. When an Industrial
Court awards a bonus, independent of any contract,
it does so only if there is an available surplus for
a distribution of bonus and the amount of the award
would depend on the extent of the surplus available
for that purpose. Therefore, the fulfilment or otherwise of the terms of the contract of employment is
not an essential ingredient of an award of an Industrial Court.
In F. W. Heilgers & Co. v. N. C. Chakravarthi (1),
the learned Judges of the Federal Court held that a
bonus not payable under a contract of employment
does not fall within the definition of ''wages" ins. 2(vi)
of the Payment of Wages Act, as it stood before the
amendment in 1957. We are concerned with the old
definition here and not the amended one, so the
present case is, in our opinion, covered by that
authority.
It is true that no bonus had been awarded in
Heilgers' case (1) and that therefore there was no ascertained sum, whereas there is one in the present case, or
rather a sum that is ascertainable, but that was only
one of the grounds on which the learned Judges proceeded. They held that in order to bring a particular
(1) (1949) F.C.R. 356, 360.
1958
Bala Subrahma11ya Rajaram
v.
B. C- Patil
and Others
Bose J.
1958
Bala Subrah·
manya Ra}aram
v.
B. C. Patil
and Olhefs
Bost I.
1512
SUPREME COURT REPORTS
[1958]
payment under the definition of "wages", two things
are necessary-
"(l) a definite sum, and
.
(2) a contract indicating when the sum becomes
payable";
and they said-
"It is obvious that unless there is an
express
provision for paying a stipulated sum, the definition
will not cover such a payment."
The bonus in the present case is not ,payable because
of a contract but because of the a.ward of an Industrial
Court. Therefore,
according to the Federal
Court, it is not "wages" within the meaning of · the
Payment of Wages Act.
.
In 1957 the definition was amended and the following was added:
"'
'
d' Id
wages means ........ an me u es
(c) any additional remuneration payable under
the terms of employment (whether called a bonus or
by any other name);
but does not include-
(l) any bonus (whether under a scheme of profit
sharing or otherwise) which does not form part of
remuneration payable under the terms of employment. ........... "
The change would have been unnecessary had the law
been otherwise under the old definition; nor is it
possible to say that the clause was added by way of
abundant caution because the Federal Court decided
otherwise in 1949. In view of this amendment, and
in view of the Federal Court's decision, we do not feel
justified in taking a different view, especially as we
think the decision was right.
The learned Judges of the Bombay High Court
tried to distinguish the Federal Court's judgment on
the ground that no bonus had been declared there and
so there was no ascertained sum, but, as we have
pointed out, the ratio of the decision covers the
present case and, in any case, that is our view quite
apart from their conclusion.
•·
S.C.R.
SUPREME COURT REPORTS
1513
On this view, it is not necessary to consider the other
points that were argued because, if the definition of
"wages", as it stood before the amendment, is not
wide enough to include a bonus of the kind we have
here, namely, one payable under u.n award of an
~
Industrial Court, then, the Authority under the
, Payment of Wages Act had no jurisdiction to entertain the petitions made to it under s. 15 of the Act.
The appeals are allowed with costs. The decisions
of the learned High Court Judges are set aside and
also the decrees of the Authority under the Payment
of Wages Act. There will be only one set of costs.
Appeals allowed .
.,
1958
Bala Subrahmanya Rajaran
v.
B. C. Patil
and Others
BoseJ.