Cases : Key Takeaways

Asia Publishing House (Pvt.) Ltd. v. Its Workmen, 1966 – Company suffers losses for the accounting year 1962 and
argues against paying minimum bonus. High court rules against the appeal and orders the company to pay
minimum bonus to the workers subject to them fulfilling conditions which later got drafted into the Payment of
Bonus Act under sections 8 and 9

Dharangadhara Chemical National Workers’ Union v. Industrial Tribunal, 1975 – The worker’s union at Sahupuram
demanded additional bonus over and above the 4 % that was paid to them. The High Court ruled against this
petition and declared it invalid as per section 3 of the Payment of Bonus Act, despite the Sahupuram unit not
having any independent share capital of it’s own and the petitioner’s demand to treat it as a separate unit. Since
there was no separate balance sheet and P&L statement prepared for this unit, the court ordered the company to
continue paying uniform bonuses across all units and departments.

Delhi Cloth and General Mills Co. Ltd. v. Their Workmen, 1971 – Management at Delhi Cloth and General Mills
decided to stop paying bonus as long as the conciliation proceedings were going on. In addition, workers also
questioned the reasonableness of the allocations of reserves made by the management toward the bonus of the
workers. Court ordered the management to lift the stop on the payment of bonus and rejected the petition from
the workers questioning the allocations and contended that the management has the right to distribute and
allocate the surpluses from the current year as well as the previous years to the units as long as it is not in violation
of the Payment of Bonus Act.
Central Coal Washery v. Workmen, 1978 – Worker’s union contended that they be paid bonus for the
accounting years from 1964-65 to 1968-69. This matter was finally settled by the Supreme Court of
India which ruled against the demands from the workers and ordered the management at Central Coal
Washery to not pay bonus as the demands were in violation of sub-section 1(A) of section 16. Since
organization had not made any profits during this period and also hadn’t entered the sixth accounting
year of it’s operation, it was therefore under no obligation to pay bonuses to the workers for the
aforementioned period.