{"id":174400,"date":"2004-11-20T00:00:00","date_gmt":"2004-11-19T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-management-of-vs-the-workmen-on-20-november-2004"},"modified":"2015-04-06T21:34:36","modified_gmt":"2015-04-06T16:04:36","slug":"the-management-of-vs-the-workmen-on-20-november-2004","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-management-of-vs-the-workmen-on-20-november-2004","title":{"rendered":"The Management Of vs The Workmen on 20 November, 2004"},"content":{"rendered":"<div class=\"docsource_main\">Madras High Court<\/div>\n<div class=\"doc_title\">The Management Of vs The Workmen on 20 November, 2004<\/div>\n<pre>       \n\n  \n\n  \n\n \n \n IN THE HIGH COURT OF JUDICATURE AT MADRAS           \n\nDATED: 20\/11\/2004  \n\nCORAM   \n\nTHE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA            \n\nWrit Petition No.6356 of 2000\n\n\nThe Management of  \nTamil Nadu State Apex Co-op. Bank  \n233, N.S.C.Bose Road  \nChennai 600 001.                ...                     Petitioner\n\n-Vs-\n\n1. The Workmen  \nrep. by its Secretary\nThe Tamil Nadu State Co-op. Bank  \nEmployees Union,  \n233, N.S.C.Bose Road  \nChennai 600 001. \n\n2.The Presiding Officer\nIndustrial Tribunal\n2nd Floor, City Civil Court Buildings\nHigh Court, Chennai 600 104.      ...                Respondents\n\n\n        Prayer:  Petition filed under  Article  226  of  the  Constitution  of\nIndia,  praying  to issue a writ of Mandamus, to call for the records from the\nsecond respondent relating to the Award dated 26.02.1999  in  I.D.    No.65\/90\npublished  in the Tamil Nadu Government Gazette Part II Sec.2 supplement dated\n28.07.1999 and quash the same.  \n\n!For Petitioner         :  Mr.C.K.Chandrasekaran\n                        for M\/s Row and Reddy\n\nFor Respondents :  Mr.Venkataraman  \n                for M\/s.Aiyar and Dolia for R1.\n\n\n:ORDER  \n<\/pre>\n<p>        The petitioner which is the Tamil Nadu State Apex Cooperative Bank  is<br \/>\naggrieved  against  the  award  of  the second respondent\/ Industrial Tribunal<br \/>\ndated 26.02.1999 made in I.D.No.65 of 1990.  In the said  dispute,  the  issue<br \/>\nwhich was referred for adjudication was to prescribe the manner of creation of<br \/>\nreserve fund under Clause-(v) of Item No.2 of iii-schedule appended to Payment<br \/>\nof  Bonus  Act,  1965  in  respect  of  Tamil Nadu State Apex Cooperative Bank<br \/>\nLimited and accordingly to determine the allocable surplus for the  accounting<br \/>\nyears  1984-85  to  1987-8  8  and  to fix the quantum of bonus payable to the<br \/>\nemployees of the above said bank for the above said years.\n<\/p>\n<p>        2.  The brief facts which lead to the culmination of  the  above  said<br \/>\ndispute can be stated as under:\n<\/p>\n<p>        The  petitioner  Bank  is  admittedly a Cooperative Society registered<br \/>\nunder the provisions of the Tamil Nadu Cooperative Societies Act.  It is  also<br \/>\nnot  in  dispute that the petitioner Bank is governed by the provisions of the<br \/>\nPayment of Bonus Act, 1965 and falls within the definition of Banking  Company<br \/>\nas defined under Section 2(8) of the Payment of Bonus Act.  For the accounting<br \/>\nyears  1984-85 to 1987-88, the workmen were paid the minimum bonus of 8.33% as<br \/>\naccording to the petitioner, after providing for the necessary  deductions  as<\/p>\n<p>per  the  Payment of Bonus Act and also based on the directives of the Reserve<br \/>\nBank of India, the calculations made under the Payment of Bonus  Act  enabling<br \/>\nthe petitioner only to declare the minimum bonus of 8.33%.\n<\/p>\n<p>        3.   The  petitioner  relied upon Exs.M3 and M.4 which are the Reserve<br \/>\nBank direction and the clarification letter respectively, as  regards  certain<br \/>\ndeductions to be made as per Section 6(d) of the Payment of Bonus Act.\n<\/p>\n<p>        4.   In  the  above stated background, the question that was posed for<br \/>\nconsideration before the Tribunal was whether by virtue of the application  of<br \/>\nSection  6(d)  read along with Item No.2 of the (iii)-schedule, the petitioner<br \/>\nbank was entitled to claim that the deduction made to  an  extend  of  40%  to<br \/>\ncreate  Reserve  Fund  from  the  net profit for the purpose of calculation of<br \/>\nbonus was justified.\n<\/p>\n<p>        5.  The Tribunal before carrying out the above said  exercise,  relied<br \/>\nupon  the  decision of this Court reported in <a href=\"\/doc\/906788\/\">Vellore Central Cooperative Bank<br \/>\nvs.  I.T.Madras and others<\/a> (1989(2) LLJ 453), held that by virtue of the  said<br \/>\ndecision,  the  petitioner  though  a cooperative society registered under the<br \/>\nTamil Nadu Cooperative Societies Act, would still  be  a  banking  institution<br \/>\nfalling  under Section 2(8) of the Act and therefore it would be entitled only<br \/>\nto go by what is provided under Item No.2 of  the  (iii)-schedule  read  along<br \/>\nwith Section  6(d)  of the Act.  Thereafter, the Tribunal held that even going<br \/>\nby the said Item No.2 Clause (iv) (a) and (b), the petitioner could have  made<br \/>\na  deduction  under  either of the above said sub-clause (a) or (b) and not of<br \/>\nboth.  As stated earlier, the deduction  made  by  the  petitioner  to  create<br \/>\nReserve  Fund in the relevant accounting years was 40% of the sum from the net<br \/>\nprofit.  The Tribunal was of the view that of the 40% so provided,  while  25%<br \/>\nwould  be  the  sum  which  was  available to the petitioner to be deducted by<br \/>\nvirtue of Section 17(1) of the Banking Regulation  Act  viz.,  the  sum  which<br \/>\ncould  be  deducted for the purpose of creating a reserve fund, the additional<br \/>\nsum of 15% which was deducted in addition to the  said  25%  was  contrary  to<br \/>\nsection  6(d)  read  along with Item No.2(iv) (a) and (b) of (iii)-schedule of<br \/>\nthe Payment of Bonus Act.\n<\/p>\n<p>        6.  In this context, when a reference is made to Exs.M.3 and M.4 which<br \/>\nare the directives issued by the Reserve Bank  of  India  in  accordance  with<br \/>\nSection  6(d)  and Item No.2(iv) of (iii)-schedule of the Payment of Bonus Act<br \/>\nas well as Section 17(1) of the Banking Regulation Act, I find that in  Ex.M.3<br \/>\ndated  11.10.l965, the Reserve Bank of India directed all Cooperative Banks to<br \/>\ncontribute a maximum of 15% of the  net  profit  towards  agricultural  credit<br \/>\nstabilization  fund  along  with  its  regular  contribution  to the statutory<br \/>\nreserve fund which would be 25% of the net profit.  In all it provided for 40%<br \/>\nof the net profit in so far as the  cooperative  banks  were  concerned.    In<br \/>\nEx.M.3 it was also suggested that in the State where the Cooperative Societies<br \/>\nAct  provided  for  contribution  to  the  statutory  reserve  fund  at a rate<br \/>\nexceeding 25% of the net profit suitable amendments in the said Act should  be<br \/>\nmade.   Subsequently,  by  way  of  clarification, Ex.M.4 came to be issued on<br \/>\n30.09.1966 which made it clear that whatever direction given in Ex.M.3 to  the<br \/>\nCooperative  Banks  to  make deductions to the maximum level of 40% would fall<br \/>\nwithin Item No.2(iv)(b) of the (iii)schedule of  the  Payment  of  Bonus  Act.<br \/>\nThus  the  Reserve  Bank of India made it crystal clear under Ex.M.4 as to the<br \/>\npurport and intent of its earlier directions made in Ex.M.3.\n<\/p>\n<p>        7.  A combined reading of Exs.M.3 and M.4 therefore was  clear  enough<br \/>\nto  state  that  the petitioner\/bank was well within its limits when it made a<br \/>\ndeduction to create Reserve Fund to the extent of 40% in its net profit during<br \/>\nthe relevant years viz., 4-85 to 1987-88 and such a deduction  of  40%  having<br \/>\nfallen  under  Item  2(iv)(b) of (iii)schedule of the Payment of Bonus Act and<br \/>\nthe said sum being higher than what was otherwise provided by  way  of  normal<br \/>\ndeduction  under  17(1) towards reserve fund which can only be to an extent of<br \/>\n25%, the petitioner could have made a calculation for the purpose of  arriving<br \/>\nat  the  bonus  payable  to  its  employees  by  giving credit to the said 40%<br \/>\ndeduction so made.  Therefore, there was no  scope  to  find  fault  with  the<br \/>\nallocable  surplus arrived at by the petitioner by taking into account the 40%<br \/>\ndeduction in the net profit when it declared a minimum bonus of  8.33  to  its<br \/>\nemployees.\n<\/p>\n<p>        8.   The  conclusion  to  the  contrary made by the Tribunal under the<br \/>\nimpugned award cannot therefore be sustained.  The award is liable to  be  set<br \/>\naside and accordingly set aside.\n<\/p>\n<p>        9.  In the result, the writ petition is allowed.  No costs.\n<\/p>\n<p>Index:yes\/<br \/>\nInternet:yes<\/p>\n<p>ksr<\/p>\n<p>To\n<\/p>\n<p>1.  The Secretary,<br \/>\nThe Tamil Nadu State Co-op.  Bank<br \/>\nEmployees Union,<br \/>\n233, N.S.C.Bose Road<br \/>\nChennai 600 001.\n<\/p>\n<p>2.The Presiding Officer<br \/>\nIndustrial Tribunal<br \/>\n2nd Floor, City Civil Court Buildings<br \/>\nHigh Court, Chennai 600 104.\n<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Madras High Court The Management Of vs The Workmen on 20 November, 2004 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 20\/11\/2004 CORAM THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA Writ Petition No.6356 of 2000 The Management of Tamil Nadu State Apex Co-op. Bank 233, N.S.C.Bose Road Chennai 600 001. &#8230; Petitioner -Vs- 1. The Workmen [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-174400","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Management Of vs The Workmen on 20 November, 2004 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-management-of-vs-the-workmen-on-20-november-2004\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Management Of vs The Workmen on 20 November, 2004 - Free Judgements of Supreme Court &amp; 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