Additional Chief Mechanical Engineer, Railway Workshop vs S. Subbiah

C.V. Govardhan, J.—This appeal arises out of the order passed by the Deputy Commissioner of Labour & Commissioner for Workmen's Compensation, Tiruchirapalli, dated 9.1.1986 in Workmen's Compensation Application No. 47 of 1984.

The applicant in his application has stated as follows: The applicant is employed under the opposite party and he was injured by an accident on 15.9.1982 in the course of his employment. The monthly wages of the applicant is Rs. 962.47. The applicant was treated as an in-patient in the Railway Hospital, Golden Rock, for about a month. The Chief Medical Officer fixed the percentage loss of the earning capacity at 10 per cent and an amount of Rs. 4,200/- was sanctioned as compensation by the A.C.M.E. but the compensation was not paid. Hence the application.

The respondent contends that claim is barred by limitation, the applicant was receiving a pay of Rs. 1,034.64 per month and not Rs. 962.47, that the applicant is not an employee under the Workmen's Compensation Act and, therefore, he is not entitled to any amount and that the application is, therefore, liable to be dismissed.

On the above pleadings, the Deputy Commissioner of Labour has passed the impugned order directing the opposite party to deposit a sum of Rs. 4,200/-(Rupees four thousand and two hundred) only being the compensation eligible to the applicant within 30 days from the date of receipt of this order.

Aggrieved over the same, the opposite party has filed this appeal.

The respondent in this appeal has made a claim before the Commissioner for Workmen's Compensation, Tiruchirapalli, for payment of compensation of Rs. 4,200 towards the injuries sustained by him during the course of his employment and the Commissioner for Workmen's Compensation has also accepted his claim and has passed an order directing the respondent to deposit a sum of Rs. 4,200/- being the compensation eligible to the applicant within 30 days from the date of receipt of his order dated 9.1.1986. The learned Counsel appearing for the appellant would argue that the total salary of the applicant is Rs. 1,034.64 per month and yet the Commissioner has held that it is only Rs. 962.47 after deducting the incentive bonus payable to the applicant and it is an error committed by the Deputy Commissioner of Labour & Commissioner for Workmen's Compensation since any amount payable by way of bonus is also to be treated as part of wages.

According to the learned Counsel appearing for the appellant, in industrial employment, however, bonus can no longer be regarded as merely gratuitous payment by the employer and the learned Counsel appearing for the appellant relies upon the decision reported in Maharashtra Sugar Mills Ltd. Vs. Ashru Jaiwant Tribhuvan, , for the above proposition. In the abovesaid decision relied on by the learned Counsel appearing for the appellant, a Division Bench of the Bombay High Court has referred to the decision of the Supreme Court reported in Shree Meenakshi Mills Ltd. v. Their Workmen AIR 1958 SC 158, where the nature of bonus was considered by the Supreme Court. Gajendragadkar, J. speaking for the court says:

The true nature and character of the workmen's claim for bonus against their employers is well settled. Bonus is not, as its etymological meaning would suggest, a mere matter of bounty gratuitously made by the employer to his employees, nor is it a matter of deferred wages. The term ''bonus'' is applied to a cash payment made in addition to wages. It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained.

It is seen from the Supreme Court decision that bonus generally represents cash incentive given conditionally on certain standards of attendance and efficiency being attained and it leads us to the inference that payment of cash as an incentive for improving attendance and efficiency is to be considered as a bonus forming part of wages. In the present case, the Deputy Commissioner of Labour has observed that incentive bonus payable is distinct from bonus under the Payment of Bonus Act as the former comes under the category of bonus linked to productivity. The Commissioner for Workmen's Compensation has distinguished the incentive bonus payable to the workmen as different from the bonus on the ground that it is linked to productivity. But it is not necessary that the payment should be linked to productivity alone to call it bonus as per the decision of the Supreme Court reported in Shree Meenakshi Mills Limited v. Their Workmen AIR 1958 SC 158. All cash payments, which are made as an incentive for maintaining standards of attendance and efficiency, have also to be considered as incentive bonus and, therefore, it is not necessary that only if the recipient of the same shows an increase in the production, it has to be called as bonus and not otherwise. In that view, I am of opinion that the order of Deputy Commissioner of Labour holding that the applicant's wage was only Rs. 962.47 after deducting the incentive bonus and as such, the applicant becomes a "workman" as defined u/s 2(1)(n) of the Workmen's Compensation Act and, therefore, he is entitled to the claim of compensation made by him is erroneous, and it is liable to be set aside.

In the result, the appeal is allowed setting aside the order of the Commissioner for Workmen's Compensation and dismissing the claim made by the applicant.