2003 (12) TMI 625 - SC - Indian Laws

Whether the employees working with Primary Agricultural Cooperative Banks (in short Primary Banks ) are entitled to bonus at the same rate at which it was paid to employees working in the Apex Bank (also described as State Bank ) i.e. The Haryana State Cooperative Land Development Bank Limited?

Summary

Issues:
Interpretation of provisions of the Payment of Bonus Act, 1965 regarding entitlement to bonus for employees of Primary Agricultural Cooperative Banks compared to the State Bank.

Analysis:
The pivotal issue in this appeal pertains to whether employees of Primary Agricultural Cooperative Banks are entitled to bonus at the same rate as employees of the State Bank, governed by the Haryana Cooperative Society Act, 1984. The High Court directed payment of bonus at the rate applicable to the State Bank staff, which was challenged by the appellant. The appellant argued that the High Court overlooked the provision regarding minimum bonus under Section 34 of the Act, emphasizing that the Primary Banks and the State Bank are separate entities with distinct financial accounts and cooperative identities. The appellant contended that the staff, though drawn from the State Bank, are employees of the Primary Bank with different service conditions. The appellant further highlighted the need for aggregating profits of Primary Banks running at a loss with that of the State Bank to justify parity in bonus payment.

The respondent no.1-union, on the other hand, supported the High Court's decision, asserting that the High Court correctly analyzed the legal position. The respondent referred to correspondences by the Managing Director regarding bonus payments to argue in favor of the High Court's ruling. The dispute revolved around the interpretation of Sections 3, 10, 34, and 34-A of the Act, particularly focusing on the provisions related to the computation and payment of minimum bonus to employees.

The Court delved into the statutory provisions and the legal principles governing the interpretation of provisos in statutes. It emphasized the need to consider the separate corporate existence and financial accounts of the Primary Banks, as highlighted in previous judgments. The Court noted that the High Court erred in giving overriding effect to Rule 21 over Section 34 of the Act. It clarified that the Primary Banks, as independent entities, were maintaining separate financial records, making the proviso to Section 3 applicable. The Court also underscored that the documents referred to by the respondent no.1, pertaining to a period of profit for Primary Banks, were irrelevant given the current scenario of losses and absence of allocable surplus.

Ultimately, the Court set aside the High Court's judgment, ruling in favor of the appellant. The Court dismissed the writ petition filed before the High Court, concluding the appeal without any order as to costs.