2009(3) ALL MR 180
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.J. VAZIFDAR, J.
Municipal Corporation Of Gr. Mumbai Vs. Mohanrao Buwasaheb Shinde
Writ Petition No.2762 of 2008
11th February, 2009
Petitioner Counsel: Mr. S. K. TALSANIA
Respondent Counsel: Ms. RITA JOSHI
Industrial Disputes Act (1947), S.33(C)(2) - Bombay Industrial Relations Act (1946), S.2(39)(i) - Incentive bonus - Entitlement to - Employee whose services are illegally terminated ought to be entitled to incentive bonus - Where there is a fixed amount of bonus or reward or additional remuneration payable that is the amount which must be paid - Where the amount is not fixed, it ought to be determined on basis of a fair and reasonable estimate of what employee would have earned in this respect had his services not been illegally terminated.
On a finding that the termination of an employee's service is illegal in the absence of anything else, must follow a presumption that the employee was willing to work but was prevented from doing so as a result of his services having been terminated and his not having been permitted to work till he is reinstated. It would be incorrect to reject the claim for incentive bonus in its entirety merely on the ground that the Respondent did not in fact work at the relevant time. Having succeeded in his application for reinstatement, it should follow that as he was willing to work at the relevant time, but was wrongly prevented from doing so, he is entitled to the incentive bonus. It is on this basis that back wages are payable despite the fact that the employee had not worked during this period. For the same reason, an employee whose services are illegally terminated ought to be entitled to the incentive bonus. Where there is a fixed amount of bonus or reward or additional remuneration payable that is the amount which must be paid. Where the amount is not fixed, it ought to be determined on the basis of a fair and reasonable estimate of what the employee would have earned in this respect had his services not been illegally terminated. The quantification would depend upon the facts and circumstances of each case. For instance, the Court or Tribunal may assess the quantum on the basis of the past performance during the previous year or the average of the past performance for a certain number of years prior to the relevant period. There can be no fixed rule or formula in this regard. [Para 15,16]
Cases Cited:
Maruti Gangaram Gaikwad Vs. The Municipal Corporation of Gr. Bombay, W.P. No.6417/1995, Dt.:-19.1.1997 [Para 7]
JUDGMENT
JUDGMENT :- Rule. By consent rule is made returnable forthwith and heard finally.
2. The Petitioner challenges the judgment of the Labour Court allowing the Respondent's application under Section 33(C)(2) of the Industrial Disputes Act by which various monetary reliefs were granted in favour of the Respondent.
3. The Respondent was employed by the Petitioner as a BEST Conductor on 6.10.1981. He was dismissed on 11.4.1985. The Respondent challenged the dismissal by filing Application (BIR) No.239 of 1986. The Labour Court allowed that application directing the Respondent to be reinstated with continuity of service and full back wages from the period of dismissal upto the date of reinstatement. In an appeal filed by the Petitioner, the matter was remanded. Thereafter, the Labour Court decided the matter and passed a fresh order granting the Respondent reinstatement with continuity of service and full back wages. This order was confirmed by an order dated 19.1.1998 of the Industrial Court.
4. The Petitioner filed a Writ Petition challenging the order. By an interim order dated 2.4.1998, this Court directed the Petitioner to pay 50% back wages. Accordingly a sum of Rs.2,28,000/- was paid to the Respondent. By an order dated 15.2.2001, this Court confirmed the order of the Labour Court. Thereafter a further amount of Rs.2,31,000/- was paid towards the back wages.
5. The present application under Section 33(C)(2) was for certain additional monetary benefits aggregating to Rs.2,58,264/-. By the impugned order the Labour Court granted the Respondent the following reliefs :-
Rs.66,924/- towards incentive bonus
Rs.19,500/- towards L.T. allowance
Rs.1,740/- towards washing allowance
Rs.1,10,000/- towards leave encashment, and
Rs.60,000/- towards exgratia.
6. Ms. Joshi, the learned counsel appearing on behalf of the Respondent submitted that the above amounts are payable under the provisions of Section 2(39) of the Bombay Industrial Relations Act.
7. In view of the judgment of this Court dated 19.1.1997 in Writ Petition No.6417 of 1995 in Maruti Gangaram Gaikwad Vs. The Municipal Corporation of Greater Bombay and another, it is necessary to consider only the validity of the claim in respect of the incentive bonus. The remaining claims have been dealt with by the said judgment which is binding on me.
8. (A) In view of paragraph 7 of the judgment, the claim of Rs.19,500/- towards leave travel allowance cannot be sustained. In view of paragraph 8 of the judgment, the claim of Rs.1,740/- towards washing allowance cannot be sustained.
(B) In view of paragraph 3 of the judgment, the Respondent is entitled to a claim of Rs.60,000/- towards exgratia.
(C) Further in view of paragraphs 4 and 5 of the judgment, the claim of Rs.1,10,000/- towards leave encashment can be allowed only to the extent the same is permissible as per the rules. Paragraphs 4 and 5 of the judgment read as under :-
"4. So far as the next demand made by the petitioner is concerned, viz. the claim for priviledged leave with effect from October, 1982 to January, 1989, it is urged by the learned counsel for the respondent that according to the rules, the maximum priviledged leave that can be accumulated is 125 days and payment for that amount has already been made. Now, the payment under section 33-C(2) are to be worked out on the basis of the rules. If the rules do not permit an employee to accumulate priviledged leave in excess of 125 days, then in my opinion no fault can be found with the order of the Labour Court refusing to pay 61 days' wages to the petitioner on account of privilege leave.
5. The next claim of the petitioner is for encashment of 60 days' casual leave. The learned counsel for the petitioner could not point out to me any rule which permits encashment of casual leave. As the rules do not permit encashment of casual leave, Labour, Court, under section 33-C(2), would not be entitled to grant such a benefit to the petitioner. Therefore, in my opinion, the order passed by the Labour Court in this regard cannot be interfered with."
9. There is no dispute between the counsel regarding the quantum calculated on this basis. It is Rs.67,446.49.
10. This leaves for consideration the grant of a sum of Rs.66,924/- towards the incentive bonus.
11. In the application, the said sum was claimed under the caption of "incentive bonus". In paragraph 5 of the written statement, it was contended that the incentive bonus scheme is framed by the Petitioner from time to time in respect of various categories. In the category applicable to the Respondent, who was a bus conductor, the basic criteria for eligibility of incentive bonus under the scheme was the amount of tickets sale deposited by the employee. This statement is reiterated in the oral evidence on behalf of the Petitioner.
12. Section 2(39)(i) of the B.I.R. Act, 1946 reads as under :-
"(i) any bonus, allowances (including dearness allowances), reward or additional remuneration;"
The Respondent's claim for incentive bonus certainly falls within the ambit of the above provision. Mr. Talsania was unable to demonstrate that incentive bonus as such is not payable under Section 2(39).
13. Mr. Talsania however submitted that incentive bonus is not a fixed sum. It depends on the quantum of proceeds towards the sale of tickets deposited by the employee. Moreover, he submitted, the incentive bonus is payable only for work done. The Respondent not having worked during the relevant period, is not entitled to the incentive bonus and the same being dependent on the value of the sale of tickets deposited by the employee cannot even be computed.
14. The terms of the scheme are not on record. It cannot be ascertained therefore whether under the scheme as applicable at the relevant time there was a fixed amount payable or any upper limit to the incentive bonus which could be claimed by the employees covered thereunder.
Mr. Talsania relied upon a scheme in this Court which admittedly was not in force at the relevant time. I will however for the purpose of this order presume that at the relevant time the incentive bonus scheme for bus conductors did not provide for any fixed amount payable thereunder and that the incentive bonus payable was only in proportion to the amount deposited towards the sale of tickets by the employee.
15. That by itself however would not disentitle an employee to the incentive bonus in the event of it being held that the termination of his service was illegal. That would be a travesty of justice. On a finding that the termination of an employee's service is illegal in the absence of anything else, must follow a presumption that the employee was willing to work but was prevented from doing so as a result of his services having been terminated and his not having been permitted to work till he is reinstated. It would be incorrect to reject the claim for incentive bonus in its entirety merely on the ground that the Respondent did not in fact work at the relevant time. Having succeeded in his application for reinstatement, it should follow that as he was willing to work at the relevant time, but was wrongly prevented from doing so, he is entitled to the incentive bonus. It is on this basis that back wages are payable despite the fact that the employee had not worked during this period. For the same reason, an employee whose services are illegally terminated ought to be entitled to the incentive bonus.
16. Where there is a fixed amount of bonus or reward or additional remuneration payable that is the amount which must be paid. Where the amount is not fixed, it ought to be determined on the basis of a fair and reasonable estimate of what the employee would have earned in this respect had his services not been illegally terminated. The quantification would depend upon the facts and circumstances of each case. For instance, the Court or Tribunal may assess the quantum on the basis of the past performance during the previous year or the average of the past performance for a certain number of years prior to the relevant period. There can be no fixed rule or formula in this regard.
17. In the present case as noted earlier, the quantum has not been denied. Had it been denied, the Respondent would have had an opportunity of leading evidence to establish his claim.
18. The Respondent was dismissed on 11.4.1985. He was reinstated by an order of the Industrial Court dated 19.1.1998 which was confirmed by an order of this Court dated 2.4.1998. In the present case in any event the claim does not therefore appear to be absurd and totally unsustainable.
19. No interference with the impugned order on this ground is therefore warranted.
20. In the circumstances, the Writ Petition is disposed of by the following order :-
i) The impugned order in so far as it awards a sum of Rs.66,924/- towards the incentive bonus and Rs.60,000/- towards exgratia is upheld.
ii) The impugned order in so far as it grants leave encashment is upheld by quantifying the amount in accordance with the rules and paragraphs 4 and 5 of the judgment in the case of Maruti Gangaram Gaikwad Vs. The Municipal Corporation of Greater Bombay and another in Writ Petition No.6417 of 1995 dated 19.11.1997. Accordingly and as per the calculation agreed to between the counsel the impugned order in this respect is upheld to the extent of an aggregate amount of Rs.67,446.49 ps..
iii) The impugned order in so far as it awards payments in respect of leave travel allowance and washing allowance is quashed and set-aside.