Workmen vs J.K. Jute Mills Co. Ltd. And Anr.

1. Leave was granted confined to the question of the validity of Section 31-A of the Payment of Bonus Act, 1965 vis-a-vis Article 14 of the Constitution on the alleged ground that as between persons who had already received bonus at the rate of 8.33 % and those who had not been paid at that rate but at the lesser rate of 4%, an arbitrary and unreasonable classification has been made. Focus is on the provisions of Sections 31-A and 34 of the Payment of Bonus Act, 1965, as amended, with effect from September 25, 1975. An agreement between the workmen and employers came about on August 26, 1975, earlier in point of time when the Act was amended. Under the said agreement 8.33% of Bonus was payable and was paid to 329 workers. The remaining 4200 workers due for payment were not paid at that rate because in the meantime Section 34 came and stood in the way providing that subject to the provisions of Section 31-A, the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service. After the introduction of Section 34, as it stands, observance of the terms of the agreement on settlement dated August 26, 1975 would have the effect of defying its mandate which the employers had to safeguard. The argument is that, had the payments been made prior to the introduction of Section 34, like it was to 329 workers, such payments were not to be refunded. That could have happened in the eventuality. But here we have barely to see the vires of Section 31-A on the touchstone of Article 14 of the constitution. The terms of Section 34 suggest streamlining the bonus at the statutory rate of 4% when there is no allocable surplus in substitution of the bonus provided in any award, agreement, settlement or contract. The combined reading of Sections 10 and 31-A makes it. clear that the legislature, for the year 1974 intended to provide statutory bonus at the rate of 4%. It is thus clear that payments made earlier to these provisions coming about were payments made under the agreement, and thereafter be made in accordance with the provisions of the Act. The group which has been paid earlier to the introduction of these provisions obviously is a class apart than the remaining who are governed and have to be paid under the introduced provisions. On the face of it, the provisions do not distinguish between one class and another similarly situated. The mere fact that the agreement did not envisage any refund of paid bonus does not by itself carry any obligation for uniform payment. So no case of discrimination is spelt out either in the act of the employer or under the provisions of Section 34 read with Section 31-A of the Act on the touchstone of Article 14 of the Constitution.

2. The appeal is thus, devoid of merit and is accordingly dismissed. No order as to costs.