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Issues Involved:
1. Retrospective effect of the exemption order dated 23rd November 1982. 2. Applicability of the Payment of Bonus Act, 1965 to the Housing Board under Section 32(v)(c). 3. Validity of exemption orders issued by the State of Tamil Nadu under Section 36 of the Act without hearing the employees. Summary: Issue 1: Retrospective Effect of the Exemption Order Dated 23rd November 1982 The Supreme Court examined whether the exemption order dated 23rd November 1982 could apply retrospectively to earlier accounting years (1978-79 to 1981-82). The Court concluded that the language of the notification did not indicate any retrospective application. The notification only exempted the Tamil Nadu Housing Board from the provisions of the Payment of Bonus Act, 1965 for the period up to the accounting year 1982-83 from the date of the notification. Therefore, the High Court's decision that the notification had no retrospective effect was upheld, and the broader question of legal permissibility for retrospective application under Section 36 was left open. Issue 2: Applicability of the Payment of Bonus Act, 1965 to the Housing Board under Section 32(v)(c) The Court considered whether the Housing Board was exempt from the Act under Section 32(v)(c), which excludes institutions established not for the purposes of profit. The Housing Board had consistently sought exemptions under Section 36, implicitly admitting that the Act applied to it. The Court noted that the Housing Board had waived its contention regarding statutory exemption under Section 32(v)(c) by repeatedly seeking exemptions under Section 36. The Court held that the Housing Board could not simultaneously invoke Sections 32(v)(c) and 36, and thus, the High Court was correct in rejecting the Housing Board's claim for exemption under Section 32(v)(c). Issue 3: Validity of Exemption Orders Issued by the State of Tamil Nadu under Section 36 The Court addressed whether the exemption orders issued by the State of Tamil Nadu were valid, given that no hearing was provided to the employees. The Court held that while Section 36 is a piece of conditional legislation, the exercise of power under this section requires objective consideration of relevant data from both the establishment seeking exemption and the affected employees. The Court emphasized that the appropriate Government must consider the rival versions and data before forming an opinion under Section 36. The procedure for such consideration includes public notice, opportunity for employees to submit rebuttal evidence, and possible inspection of the material furnished by the establishment. The High Court's decision that the exemption orders were null and void was upheld because the procedural requirements for objective assessment were not followed. Conclusion: The appeals were dismissed, and the Housing Board was required to pay the statutory bonus to its employees for the relevant accounting years. The Court emphasized the necessity of fair procedure and objective assessment in the exercise of conditional legislative powers under Section 36 of the Payment of Bonus Act, 1965.
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