1958 (3) TMI 84 - SC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the Authority under the Payment of Wages Act.
2. Definition and interpretation of "wages" under the Payment of Wages Act.
3. Applicability of bonuses awarded by an Industrial Court under the definition of "wages".

Issue-wise Detailed Analysis:

1. Jurisdiction of the Authority under the Payment of Wages Act:
The appellant challenged the jurisdiction of the Authority under the Payment of Wages Act to entertain petitions regarding the bonus claims. The Authority's jurisdiction, as per Section 15 of the Act, is limited to hearing claims arising out of deductions from wages and delays in the payment of wages. Therefore, the primary issue was whether the bonuses in question fell within the definition of "wages" under Section 2(vi) of the Act.

2. Definition and Interpretation of "Wages" under the Payment of Wages Act:
The definition of "wages" in Section 2(vi) of the Act includes "all remuneration" payable under the terms of the contract of employment, whether express or implied, and includes any bonus or additional remuneration of the nature aforesaid which would be so payable. The court examined whether the bonuses awarded by the Industrial Court could be considered "remuneration" payable under the terms of the contract of employment. The judgment clarified that for a payment to be considered "wages," it must be remuneration payable if the terms of the contract of employment are fulfilled. The court concluded that the bonus awarded by the Industrial Court did not meet this criterion, as it was not payable due to the fulfillment of the contract terms but rather due to the award itself.

3. Applicability of Bonuses Awarded by an Industrial Court under the Definition of "Wages":
The court analyzed whether bonuses awarded by an Industrial Court could be included in the definition of "wages." It was argued that the Industrial Court's award of bonuses did not depend on the fulfillment of the contract terms but on resolving an industrial dispute. The court held that the definition of "wages" required the bonus to be payable due to the fulfillment of the contract terms, which was not the case here. The court referred to the Federal Court's decision in F. W. Heilger & Co. v. N. C. Chakravarthi, which held that a bonus not payable under a contract of employment does not fall within the definition of "wages." The court affirmed this view, stating that the bonus in question was not "wages" within the meaning of the Payment of Wages Act.

Conclusion:
The Supreme Court concluded that the Authority under the Payment of Wages Act did not have jurisdiction to entertain the petitions for bonuses awarded by the Industrial Court, as such bonuses did not fall within the definition of "wages" under the Act. Consequently, the appeals were allowed, the decisions of the Bombay High Court were set aside, and the decrees of the Authority under the Payment of Wages Act were annulled. The court awarded costs to the appellant.