Charitable institutions and bonus liability: incidental surplus does not make a trust profit-making, and complaints were quashed.

Charitable or public-utility institutions do not lose the protection of section 32(v)(c) of the Payment of Bonus Act, 1965 merely because they generate incidental surplus. The Court examined the trust's objects, audited financial material, and prior findings on charitable activity, and held that the applicant trust remained an institution established not for purposes of profit. Employees of such institutions fall outside the Act's application, so the complaints were not maintainable. The Court also noted prior reply to the show-cause notice and suppression of material facts, warranting exercise of inherent jurisdiction to prevent abuse of process. The complaints were quashed.

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Issues: Whether the complaints under the Payment of Bonus Act, 1965 were liable to be quashed on the ground that the applicant trust was an institution established not for purposes of profit and therefore outside the ambit of section 32(v)(c) of the Act.

Analysis: The Court examined the objects of the trust, the audited financial particulars placed on record, and the earlier finding that the trust's activities were for general public utility and charitable purposes. It held that incidental surplus generated from those activities did not convert the trust into a profit-making institution. In view of section 32(v)(c) of the Payment of Bonus Act, 1965, employees of institutions established not for purposes of profit are excluded from the Act's application. The Court further found that the complaints were instituted despite the applicants' prior reply to the show-cause notice and that material facts had been suppressed, bringing the case within the principles governing exercise of inherent jurisdiction to prevent abuse of process.

Conclusion: The complaints were not maintainable against the applicant trust and were liable to be quashed under section 482 of the Code of Criminal Procedure, 1973.

Ratio Decidendi: An institution carrying on charitable or public-utility activities does not lose the protection of section 32(v)(c) of the Payment of Bonus Act, 1965 merely because its operations generate incidental surplus, and criminal complaints founded on such inapplicable provisions may be quashed in exercise of inherent powers to prevent abuse of process.

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