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X was an employee of univ ltd. he retired from d company on 31 mar2010 and died after few months.Y,the heir of X,applied within prescribed time to d co. for payment of due bonus of X.The company refuses to pay d bonus.Examine the validity of company's refusal and also state the procedure to recover the bonus under the provisions of payment of bonus act 1965.

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CMA. CS. Sanjay Gupta

"PROUD TO BE AN INDIAN"

114245 Points Joined February 2009

Company cannot refuse to pay the bonus amount to the legal heir. Section 19 says that all amounts payable to
employee shall be paid in CASH within following time limit :-
i ) Where, there is a dispute pending before any authority u/s 22, then within one month from the date on which award becomes enforceable or settlement comes in operations, in respect of such dispute.
ii) In any other case, within eight months from the end of accounting year. However, if the employer applies to appropriate government or any authorised officer, and has SUFFICIENT REASONS, then that Govt. or authority may extend this period of eight months upto TWO YEARS.

Section 21 states that money may be due from employer to employee under settlement, award or agreement. Employer may not pay the amount. In such case, employee or any authorised person, or if employee is dead, then his
heirs or assignee may make application to APPROPRIATE GOVERNMENT. If appropriate govt. or other authority appointed by appropriate govt. for this purpose is satisfied, that money is so due, it shall issue a CERTIFICATE for that amount to collector, who shall recover the same as land revenue.

Time Limit : The aforesaid application must be made within one year from the date on which money is due from
employer to employee. But appropriate govt. may accept the application even after one year if applicant has
sufficient cause.

CMA. CS. Sanjay Gupta

"PROUD TO BE AN INDIAN"

114245 Points Joined February 2009

Sec 19. Time-limit for payment of bonus. – 2[All amounts] payable to an employee by way of bonus under this Act shall be paid in cash by his employer --

(a) where there is a dispute regarding payment of bonus pending before any authority under section 22, within a month from the date on which the award becomes enforceable or the settlement comes into operation, in respect of such dispute;

(b) in any other case, within a period of eight months from the close of the accounting year:

Provided that the appropriate Government or such authority as the appropriate Government may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, extended the said period of eight months to such further period or periods as it thinks fit; so, however, that the total period so extended shall not in any case exceed two years.

Sec 21. Recovery of bonus due from an employer.- Where any money is due to an employee by way of bonus from his employer under a settlement or an award or agreement, the employee himself or any other person authorised by him in writing in this behalf, or in the case of the death of the employee, his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the appropriate Government or such authority as the appropriate Government may specify in this behalf is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrears of land revenue.

Provided that every such application shall be made within one year from the date on which the money became due to the employee from the employer.

Provided further that any such application may be entertained after the expiry of the said period of one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not making the application within the said period.