R MEENAKSHI AMMAL Vs. VELUSAMY

JUDGEMENT

(1.) The Letter Patent Appeal No.50 of 1999 is filed by the E.S.I.Corporation against the Order of the learned single Judge of this Court in C.M.A.No.480 of 1991 dated 12.1.1999 confirming the Order of the Employees' Insurance Court (District Court), Coimbatore in E.S.I.O.P.No.212 of 1989 dated 31.1.1991. Letter Patent Appeal No.7 of 2000 is filed by the Managing Director, Kanyakumari District, Co.op.Spinning Mills Limited, Aralvaimozhy against the Order of the learned single Judge of this Court in C.M.A.No.910 of 1989 dated 1.4.1998 reversing the Order of the Employees' Insurance Court (District Court) at Nagercoil in E.S.I.O.P.No.6 of 1988 of dated 28.4.1989. C.M.A.No.738 of 1992, 739 of 1992 and 100 of 1993 are filed by M/s.Sree Meenakshi Mills Limited, Paravai Unit, M/s.Annamalaiar Mills Pvt. Limited, Dindigul and M/s.Vijayshree Spinning Mills Ltd., Dindigul respectively against the orders dated 3.3.1992 of the E.S.I.Court, (II Addl.District Judge), Madurai in E.S.I.OP.Nos.32 of 1988, 3 of 1989 and 20 of 1988 respectively, wherein the E.S.I.Court has dismissed the petitions filed by the respective Managements for declaration that the "ex gratia payment" made by the Managements were not wages. C.M.A.No.1481 of 1993 is filed by the E.S.I.Corporation against the order of the E.S.I.Court, (District Judge), Coimbatore in E.S.I.OP.No.245 of 1990 dated 18.8.1992 and C.M.A.No.1504 of 1993 is filed by the Regional Director, E.S.I.Corporation against the order of the E.S.I.Court, (District Judge), Tirunelveli in E.S.I.OP.No.5 of 1990 dated 11.2.1994, wherein the petitions filed by the Management for declaration that the demand of E.S.I.Corporation is illegal on the ground that the amount would not partake the character of 'wages' were allowed.

(2.) In all the above cases, the the real controversy centres around the interpretation of clause 22 of Section 2 of the Employees State Insurance Act, which defines "wages". In order to appreciate the controversy, the facts of the cases, which formed the basis for filing of the above cases, an illustrative case in L.P.A.No.7 of 2000 is narrated below: The last of the proceedings pursuant to which the revision of wages, dearness allowance and the grant of other benefits to workmen in several textile mills in the State of Tamil Nadu was made on 28.9.1979 in award made in I.D.No.1 of 1979 on the basis of the settlement dated 17.7.1979 between the managements of textile mills and the various trade unions representing their workmen. The said award was for a period of five years. Even after the expiry of the said award, in or about 16.7.1984, the terms thereof continued to be in force. In order to have the revision of wages, dearness allowance and for securing other benefits, various unions of the textile workers formed a joint action council and issued a strike notice under Section 22 of the Industrial Disputes Act together with a Charter of demands, dated 17.6.1985 to almost all the textile mills in the State terminating the terms of the earlier award dated 28.9.1979 in I.D.No.1 of 1979. Following the refusal by mill management to comply with the demands, Conciliation Proceedings were taken up and a failure report dated 12.7.1985 under Section 12(4) of the Industrial Disputes Act was submitted. Thereupon the Government referred the dispute to the Special Tribunal, Madras for adjudication in I.D.Nos.1 to 5 of 1985. Pending adjudication, the Government of Tamil Nadu passed orders under Section 10-B of the Industrial Disputes Act in G.O.Ms.No.1399 dated 15.7.1985 and G.O.Ms.No.1545 dated 29.7.1985. Under the above said orders, the Managements were prohibited from declaring lock out and the workmen were also prohibited from indulging in strike. By G.O.No.1399 dated 15.7.1985, the Managements were directed to pay a lumpsum payment of Rs.500/- and a monthly payment of Rs.75/- from 23.7.1985 for the permanent and badli workmen of the mills which have the spindlages of 6001 and above as interim relief. By G.O.Ms.No.1545, dated 29.7.1985, in respect of workmen other permanent or badli a lumpsum payment of Rs.260/- and an amount of Rs.2.50 per day or a monthly payment of Rs.65/- from 1.8.1985 was ordered to be paid. In the above two Government orders, it was also made clear that the amount paid to the employees pursuant to the G.Os would be deducted by the employer, from and out of the monetary benefits to which the employees become entitled under the provisions of the award that may be passed by the Tribunal in the pending dispute before it. Pursuant to the above two Government Orders, the appellant paid its workmen a sum of Rs.8,05,539-23 between the period July 1985 to February, 1987. The Tribunal passed its award in the I.D. on 23.2.1987 and the same was published in the Gazette on 4.3.1987. The Tribunal ordered increase in wages for the workers from 1.5.1986. By its award dated 23.2.1987, the Tribunal ordered that the payments made already in compliance with the Government Orders from 25.7.1985 to April, 1986 shall not be recovered from the workmen or adjusted against the increase given under the award and in effect they shall stand written off as 'Ex gratia' payment. In the above circumstances, the payment of Rs.8,05,539-23 paid to workmen of the appellant were not treated as wages for all purposes including for payment of contribution under the E.S.I.Act and E.P.F.Act. However, the respondent E.S.I.Corporation issued notice to the appellant and sought for recovery of ESI contribution in respect of the above payment made pursuant to Government Orders. The appellant contended that the above payments were purely 'Ex gratia' in nature, as per the award of the Industrial Tribunal and therefore no contribution is liable to be paid. However, by order dated 8.7.1988, the first respondent held that the above payment would be wages within the meaning of Section 2(22) of the ESI Act and directed the appellant to pay contribution at Rs.58,401-55ps. Aggrieved by the above order, the appellant filed an O.P. under Section 75 of the E.S.I. Act before the District Court, Nagercoil in E.S.I.O.P.No.6 of 1988. By its order dated 28.4.1989, the learned Judge held that payment made under the Government Orders for the period upto April 1986 did not amount to wages, although they were initially paid as interim relief but subsequently since the same was directed to be treated as 'Ex gratia' payment in the award of the Industrial Tribunal. Against the order of the learned Judge dated 28.4.1989 made in E.S.I.O.P.No.6 of 1988, the respondent preferred an appeal before this Court in A.A.O.No.910 of 1989. By Order dated 1.4.1989, the Single Judge of this Court reversed the findings of the trial Judge and held that the payments made were not 'Ex gratia' in nature, they were made pursuant to Government Orders, the above payment were not voluntary in nature, that the payments were not made by the Mills out of gratis or because of goodwill and it was paid by compulsion referable to the industrial dispute raised by the workers and therefore it would amount to wages within the meaning of Section 2(22) of the E.S.I. Act and therefore upheld the order of the respondent dated 8.7.1988 passed under Section 45-A of the E.S.I.Act. In the above appeal, the correctness of the order of the learned Single Judge is put in issue.

(3.) In the other L.P.A.No.50 of 1999, though the facts are identical, another learned Single Judge of this Court has held that the amounts paid up to the period April, 1986 are only ex gratia payment and as such cannot be roped in within the definition of "wages" as defined under Section 2(22) of the E.S.I.Act. The Corporation filed the appeal questioning the correctness of the said orders. In the other C.M.As also, since the issues involved are one and the same they are all posted along with the L.P.As.