JUDGMENT
Viney Mittal, J.
1. Municipal Committee, Amritsar passed a Resolution dated July 14, 1973, whereby a settlement was arrived at between the Municipal Committee, Amritsar and its employees through Nagar Palika Karamchari Sangh as well as Safai Mazdoor Union. Through the aforesaid settlement, as reflected in the Resolution, Municipal Committee, Amritsar agreed to pay bonus to its employees at the rate of 8.33% for the years 1970-71 and 1971-72 which was to be continued thereafter. The aforesaid Resolution passed by the Municipal Committee was annulled by the State Government. Aggrieved against the aforesaid order of annulment, the employees of the Municipal Committee approached the Labour Court under Section 33-C(2) of the Industrial Disputes Act, ! 947. The aforesaid application filed by the employees was dismissed by the Labour Court vide order dated August 20, 1974. The said decision of the Labour Court as well as the annulment of the Resolution of the Municipal Committee by the State Government were challenged by the employees through a Civil Writ Petition No. 6650 of 1974 before this Court. Vide an order dated November 30, 1982, the learned single Judge held that the settlement arrived at between the Municipal Committee, Amritsar and its employees was a valid settlement and that the Resolution passed on the basis of the aforesaid settlement could not have been annulled by the State Government. Thereafter, Municipal Committee, Amritsar filed a Letters Patent Appeal No. 1 of 1983 before this Court challenging the judgment of the learned single Judge. Vide judgment dated December 10, 1984 a Division Bench of this Court dismissed the aforesaid appeal filed by the Municipal Committee. It was held that the settlement arrived at between the Municipal Committee, Amritsar and its workmen was well within the rights of the Municipal Committee and, as such, the State Government could not have annulled the Resolution. On that basis Letters Patent Appeal filed by the Municipal Committee was dismissed, A similar appeal filed by the State of Punjab, being LPA No. 111 of 1983, was also dismissed. Subsequently, Special Leave Petition filed by the Municipal Committee as well as by the State Government were also dismissed by the Apex Court vide order dated July, 29, 1985.
2. After the said finalisation of the litigation, the Municipal Committee, Amritsar passed a Resolution No. 720 dated September 11, 1985 whereby after acknowledging the factual position and taking note of the litigation pending between the Municipal Committee and its employees, it was decided that because of the financial constraints it would not be possible for the Municipal Corporation, Amritsar to make the payment of the arrears of the bonus in lump-sum. Therefore, with the agreement of the representatives of the employees’ union, a decision was taken to make the payments by way of instalments. The following decision was taken through the aforesaid Resolution No. 720 dated September 11, 1985 :
“(a) Payment for bonus upto the maximum extent of Rs. 50.00 lacs may be made in the current year. This would include in the first instance payment for the year 1984-85 due in 1985-86 to be cleared by 2.10.1985 and thereafter payment relating to the base years 1971-72, 1972-73, 1973-74 and so on subject to the maximum limit of Rs. 50,00 lacs including the current year’s amount. The amount of arrears is to be paid by the first week of November, 1985.
(b) Necessary provision in the Budget Estimates may be made by way of preparing a revised Budget Estimates immediately and approval of the Government be obtained.
(c) From 1986-87, onward the sum of Rs. 50.00 lacs is to be provided in the budget every year for this purpose with increase to the extent of 5% each year on the above sum so as to cover the increase in salary due to increments etc.
(d) In future every year the arrears will be cleared alongwith the amount of current year subject to the maximum to be paid as referred to in Clause ‘C above. Accordingly, the following provisions may be made in the budget estimates during the coming years : 1986-87 Rs. 52,50 lacs; 1987-88 Rs. 56.00 and 1988-89 Rs. 58.00″.
3. As a consequence of the aforesaid decision, the Municipal Corporation, Amritsar made the payment of bonus to its employees for the years 1971-72, 1976-77 and also for the years 1985-86 to 1986-87.
4. At this stage, a proposal was made by the Municipal Corporation, Amritsar whereby it was considered that since the earlier settlement dated July 14, 1973 was not based upon any provision of law and was not covered under the Payment of Bonus Act, 1965, therefore, it was not incumbent upon the Municipal Corporation, Amritsar to continue with the aforesaid settlement. Accordingly, it was proposed to withdraw the aforesaid settlement. In this view of the matter, show cause notices were issued to the various employees unions. The employees and their unions submitted replies claiming that the aforesaid settlement dated July 14, 1973 was binding between the parties and since the same had been upheld upto the Apex Court, therefore, the benefits under the same could not be withdrawn by the Municipal Corporation, Amritsar. The matter was put up before the Commissioner, Municipal Corporation, who passed an order dated March 28, 1987. The Commissioner came to the conclusion that since the Municipal Corporation, Amritsar was not covered under the provisions of the Payment of Bonus Act, 1965, therefore, it was not incumbent upon the Municipal Corporation to continue with the aforesaid payments of bonus which was in the shape of an ex-gratia payment. Accordingly, it was proposed that the aforesaid payment of bonus allowed in the terms of the agreement dated July 14, 1973 be stopped forthwith. The aforesaid order of the Commissioner, Municipal Corporation, was accepted by the Municipal Corporation vide its Resolution dated March 30, 1987. A copy of the aforesaid Resolution dated March, 30, 1987 is appended as Annexure P.7 with the present petition and is subject matter of challenge in the present writ petition.
5. No one has chosen to appear on behalf of the respondents, despite service.
6. I have heard Mr. A.C. Jain, the learned Counsel for the petitioners and with his assistance have also gone through the record of the case.
7. From the perusal of the record of the case and from the narration of the facts as noticed above, it is apparent that the validity and the consequential liability of the Municipal Committee under the Resolution dated July 14, 1973 to pay bonus to its employees had attained finality upto the Apex Court. It had also been held by this Court in the earlier writ petition as well as in the Letters Patent Appeal that the State Government had no power to annul the Resolution dated July 14, 1973 passed by the Municipal Committee, Amritsar. In this view of the matter, it is apparent that the Municipal Committee, Amritsar is bound in law, being the successor of Municipal Committee, Amritsar, to honour the aforesaid settlement and make the payments to its employees, eligible for the bonus, in terms of the aforesaid settlement upto March, 30, 1987. From the perusal of the order Annexure P.7, it appears that whereas the bonus had been paid to its employees for the years 1971-72 till 1976-77 and again for the years 1985-86 and also for the years 1986-1987 but the aforesaid payment had not been made for the years 1977-78 to 1984-85. There is no justification whatsoever to deny the aforesaid payment of bonus to its employees in terms of the settlement dated July 14, 1973. The claim of the petitioners to the aforesaid payment is absolutely justified and is, in fact, covered by the judgment rendered by this Court in the earlier litigation.
8. The question which now arises for consideration is as to whether the Municipal Corporation, Amritsar was justified in law in annulling/withdrawing the settlement dated July 14, 1973 by passing a Resolution dated March 30, 1987 (Annexure P.7).
9. The perusal of the Resolution/Order Annexure P.7 shows that show cause notices had been issued by the Municipal Corporation, Amritsar to its employees as well as the employees Union. Their replies had been received. In the aforesaid replies, the employees as well as the employees unions challenged the proposals of the Municipal Corporation, Amritsar to withdraw the benefits already granted to the employees vide Resolution dated July 14, 1973. The aforesaid objections have not been taken into consideration by the Commissioner, Municipal Corporation, Amritsar while passing the order dated March 28, 1987, nor by the Municipal Corporation while passing the Resolution dated March 30, 1987. In fact, the perusal of the order shows that the aforesaid order is not a speaking order dealing with the aforesaid objections raised by the employees and their unions. It is, thus, apparent that the order/Resolution (Annexure P.7) is in violation of the principles of natural justice. Accordingly, it is held that whereas the employees would be entitled to receive the payments of bonus for the period 1977-78 till 1984-85, in terms of the Resolution dated July 14, 1973, but the question of withdrawal of the aforesaid benefits through Resolution Annexure P.7 for future would have to be re-determined again by the Municipal Corporation, Amritsar by passing a fresh order. While passing the aforesaid fresh order, the Municipal Corporation, Amritsar would be required to deal with the various objections, raised by the employees and their unions and also take into consideration the facts and circumstances of the case and the observations made by this Court in the earlier litigation. A speaking order in tills regard shall be passed by the Municipal Corporation, Amritsar within a period of six months from the date a certified copy of this order is received.
In this view of the matter, the present writ petition is allowed and the Resolution Annexure P.7 dated March 30,1987 is quashed. The matter is remitted back to the Municipal Corporation, Amritsar for taking a fresh decision in the light of observations made above.
Needless to say that payment with regard to the arrears, as noticed above, would be made to the employees in the meantime.
With the aforesaid observations, the present, writ petition is disposed of.