S T REDDIAR AND SONS Vs. REGIONAL DIRECTOR

JUDGEMENT

(1.) The only question which arises for consideration in this appeal is whether the Employees Insurance Court was right in holding that ex gratia payments which the appellant employer made to some of the employees on 31-12-1975 and 29-7-1976 for prompt completion of a specific item of work assigned to them were 'wages' as defined in S.2 (22) of the Employees State Insurance Act, 1948 (for short the Act).

(2.) The short facts which are relevant are the following: The employer was conducting a printing press. It is a covered establishment and has been paying contributions in respect of the wages paid to its employees. It had entered with a contract with the Government for printing text books. That work was assigned to some temporary employees. They completed the work a head of schedule in 1975 and again in 1976. On consolidated vouchers Exts.A1 and A2 dated 31-12-1975 and 29-7-1976 respectively, the employer paid Rs. 24,137.17 and Rs. 8,751.55 to the concerned employees as ex gratia. Such payments were called 'Inam' in Exts.A1 and A2 vouchers. In letter dated 30-7-1978, the Director of Employees State Insurance Corporation required the employer to pay contribution on those amounts, claiming those amounts to be omitted wages. In the meantime, in Exts.D1 and D2 letters dated 2-5-1978 and 18-7-1978, in reply to the demands of the Directorate, the employer had stated that the amounts were paid ex gratia, but he would pay contributions ad hoc. In Ext.D3 letter dated 13-10-1978 the employer disputed its liability to pay contributions on the two amounts on the averment that those amounts were not "wages" which were paid or payable. Notwithstanding this, the demand was sought to be enforced. The employer filed Employees Insurance Case No.85 of 1982 before the Employees Insurance Court under S.75 of the Act. The main contention which it urged was that the amounts not being 'wages' as defined in S.2(22) of the Act, it had no obligation to pay contribution on those amounts. The employer relied on the decision of the Supreme Court in Braithwaite & Co. v. E.S.I. Corporation ( (1968) I LIC 550). The Insurance Court held against the employer, for the reason that the documentary evidence adduced by the opposite party, viz. the Corporation, indicated that the amounts formed part of wages and therefore the decision of the Supreme Court did not apply. The employer appeals that decision of the Employees Insurance Court.

(3.) The question to be decided is whether the two amounts paid to the employees under Exts.A1 and A2 vouchers were remuneration paid or payable on fulfilment of the contract of employment, whether express or implied; or whether they were additional remuneration paid at intervals not exceeding two months. Those payments would constitute wages only in two contingencies. (1) if they were remuneration paid or payable in cash or fulfilment of the contract of employment, express or implied, or (2) if they were additional remuneration paid at intervals not exceeding two months otherwise than on fulfilment of the contract of employment.