JUDGMENT
Prabir Kumar Majumdar, J.
1. The petitioner has a factory at Raja Bagan Dock Yard, Garden Reach Road, Calcutta. It is claimed by the petitioner that the employees of the factory of the petitioner are “employees” within the meaning of Section 2(9) of the Employees’ State Insurance Act, 1948 (hereinafter referred to as the said Act.).
2. The petitioner was faced with the demand by the respondent No. 1 the Employees’ State Insurance Corporation to the tune of Rs. 1,54,233 in respect of overtime wages for the period from 27th January 1985 to 28th February, 1985 and also for the late payment and such demand was made by means of a certificate No. 132/EST/86-87 dated 26th November, 1986 received by the petitioner on 15th December, 1986 together with a copy of an application for recovery addressed to the Collector 24-Parganas by application No. C//INS-V/41.8939-71/CI/(94)/944 dated 14th August, 1986.
3. The grievance of the petitioner is that before making the application for recovery, no reasonable opportunity was afforded to the petitioner to make submission against the arbitrary imposition on account of overtime wages and as such the impugned imposition and the application for recovery was in gross violation of the principles of natural justice.
It is also the contention of the petitioner that there is an error apparent on the face of the record inasmuch as the claim preferred is hypothetical as there are many employees drawing wages who are not covered under Section 2(9) of the said Act and no contribution is payable in respect of such workmen.
4. It is also contended on behalf of the petitioner that if the amount of claim as preferred is with regard to overtime wages, the same would not come within the purview of definition of “wages” as contemplated under Section 2(22) of the said Act.
5. It is also contended on behalf of the petitioner that unless the remuneration of workmen is under a contract of employment, such aremuneration would not be wages as defined in Section 2(22) of the said Act and as such the overtime wages paid to the employees cannot come within the scope and ambit of the definition of wages under the said Act. It is also the contention of the petitioner that expression wages under Section 2(22) of the said Act contemplates that the word “remuneration” takes in only all payments paid or payable every month as per terms of contract, irrespective of the work done, but contingent payment like overtime wages will not come within the scope of the definition of wages under the said Act.
6. The petitioner makes this application under Article 226 of the Constitution asking for a writ commanding the respondent Nos. 1 and 2 to withdraw, cancel or rescind the said certificate and notice dated 14th August, 1986, being Annexure ‘A’ to the writ petition.
7. The short question involved in this application is whether “overtime wages” do come within the definition of “wages” as defined in Section 2(22) of the said Act.
8. Dr. Tapas Banerjee, the learned Counsel for the petitioner has placed reliance on a bench decision of this Court in the case of Hindustan Motors Ltd. v. ESI Corporation reported in 1979(1) CLJ 503. It has been observed by the division bench that term “wages” used in most of the sections of the Act plainly does not mean potential wages, but wages earned. It is also observed that the expression ‘remuneration’ which would, if the term of the contract were fulfilled, be payable in this Section means no more than “remuneration” payable on the fulfilment of the contract.
9. In interpreting Section 2(22) of the said Act, this Court by the said decision held that overtime payments were not “wages” under the Employees’ State Insurance Act and as such overtime payments should be disregarded while calculating quantum or contribution payable by the employer.
10. Dr. Banerjee next referred to a decision of the Supreme Court in the case of Harihar Polyfibres v. The Regional Director, E.S.I Corporation reported in 1984-11 LLJ 475 where the Supreme Court observed that wages as defined under Section 2(22) of the said Act include remuneration paid or payable under the terms of the contract of employment, express or implied, but further extends to other additional remuneration, if any, paid at intervals not exceeding two months though outside the terms of employment. There the Supreme Court was concerned whether wages should include house rent allowance, night-shift allowance, incentive allowance, and Heat, Gas and Dust Allowance and the Supreme Court observed that there was no reason to exclude those allowances, from the definition of wages. Dr. Banerjee contended that Supreme Court in this case has not held whether overtime wages is included within the definition of wages under the said Act.
11. Dr. Banerjee next cited another Supreme Court decision in the case of Union of India v. All India Services Pensioners’ Association and Ors. reported in 1988(2) LLJ 196 and relying on this decision, Dr. Banerjee has submitted that the bench decision of this Court referred to above should be binding on the Single Judge. In this case the Supreme Court has observed that where Special Leave Petition was dismissed with reasons, such decision containing the reasons attract Article 141 of the Constitution and would be binding on all the Courts in India.
12. Mr. K.K. Moitra, the learned counsel for the Employees’ State Insurance Corporation has submitted that payment of overtime wages is an implied term and should be taken as part of wages as defined under the said Act. Mr. Moitra has referred to a decision of Delhi High Court in the case of Birla Cotton Spinning & Weaving Mills Ltd. Delhi v. Employees’ State Insurance Corporation, New Delhi, reported in 1979 LIC 527. It is a bench decision of Delhi High Court where it has observed that the word “remuneration” as used in the first part of the definition of wages under the said Act is very significant and it shows that the payments are made by the employer to the employee for some work done. Similarly, overtime payment is made as a remuneration for the work done by employees during a period beyond the normal hours of work of employment. It has also been observed by the Delhi High Court that payment of overtime work is an implied term of the contract of employment and as such is covered by the first part of the definition of the term “wages” as given in Section 2(22) of the said Act. It is observed that overtime payment constitutes an implied term of the contract although the agreement of service may be silent in regard to overtime payment.
13. The next decision cited by Mr. Moitra is in the case of Hyderabad Allwyn Metal Works v. Employees’ State Insurance Corporation reported in 1981 LIC 457. It is a bench decision of the Andhra Pradesh High Court. It has been observed by the Andhra Pradesh High Court that overtime allowance is remunertion paid or payable in cash to an employee upon the fulfilment of the term of the contract of employment, express or implied as envisaged by Section 2(22) of the said Act and therefore comes within the first part of the definition of wages. Andhra Pradesh High Court has also observed that if it was an intention of the Legislature to exclude remuneration for overtime work from the definition of “wages”, it would have specifically said so in Section 2(22) of the said Act. It also goes on observing that on the other hand, the definition of word “employee” in Section 2(9) of the Act shows that if an employee gets wages less than Rupees One thousand a month excluding remuneration for overtime work, he will be covered by the Act. The Andhra Pradesh High Court further observes that the intention of the Legislature was to cover all such employees by the Act. That is why, perhaps, overtime remuneration was not excluded from the definition of “wages”.
14. Mr. Moitra has referred to a decision of Punjab & Harayana High Court in the case of Employees’ State Insurance Corporation v. Gedore Tools India (P) Ltd. 1987 LIC 570. There the Punjab High Court was concerned with the question whether tea allowance and milk allowance given to the employees were to be included in the definition of wages. The Punjab and Haryana High Court has held that the moment an employee gets an additional remuneration over the remuneration payable under the contract of employment and if such additional remuneration is paid at intervals not exceeding two months, it becomes wages by virtue of the 3rd part of the definition of wages.
15. The next decision referred to by Mr. Moitra is the decision of Rajasthan High Court in the case of Employees’ State Insurance Corporation v. Shree Ram Chemical Industriesre-ported in 1987 LIC 1947. There the question was whether the additional remuneration being L.I.C. premium subisdy given to workmen by management was included in “wages” for the purpose of contribution to E.S.I. Fund. The Rajasthan High Court has held that interposition of the clause in definition of wages under Section 2(22) of the Act makes it abundantly clear that while remuneration under the first clause has to be under a contract of employment, express or implied, remuneration under 3rd clause need not be under a contract of employment but may be any additional remuneration outside the contract of employment. The Court accordingly held that the LIC premium subisdy would be required to be included in wages as defined in the Act.
16. Mr. Moitra has also referred to a bench decision of Bombay High Court in the case of Shivraj Fine Art Litho Works v. The Regional Director, Maharashtra, reported in 1974 LIC 328. The Bombay High Court has held that when the definition refers to all “remuneration” there is no difference on principle to exclude from it the remuneration paid for additional period of overtime period.
17. Lastly, Mr. Moitra has referred to an unreported decision of a Single Judge of this Court in the matter of National Jute Manufacturers’ Corporation Staff Association and Ors. v. National Jute Manufacturers’ Corporation Ltd. and Ors. in Civil Order No. 11792(W) of 1985. The judgment was delivered on 16th December, 1985. The question before the learned Single Judge was whether overtime wages would come within the definition of wages as defined in the Employees’ State Insurance Act. There the learned Single Judge has held that any overtime payment which is regularly paid at intervals not exceeding 2 months must come within the meaning of the word “wages” as defined in Section 2(22) of the Employees’ State Insurance Act. This was the view by the learned Single Judge relying on the decision of the Andhra Pradesh High Court in Hyderabad Allwyn Metal Works (supra), the decision of Delhi High Court, in the case of Birla Cotton Spinning & Weaving Mills (supra) and in particular the Supreme Court decision (Supra).
18. Section 2(9) reads as follows:
(9) “employee” means any person employed for wages in or in connection with the work of factory or establishment to which this Act applies and
(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment whether such work is done by the employees in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer on premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services, are so lent or let on hire has enered into a contract of service and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for or the distribution or sale of the products of, the factory or establishment, but does not include –
(a) any member of naval, military or air forces; or
(b) any person so employed whose wages (excluding remuneration for overtime work) exceed one thousand rupees:
Provided that an employee whose wages (excluding remuneration for overtime work) exceed one thousand rupees a month at any time after (and not before) the beginning for the contribution period shall continue to be an employee until the end of that period.
19. The learned Counsel for the petitioner has placed reliance on the provisio which says that an employee whose wages excluding remuneration for overtime work exceed one thousand rupees a month at any time after and not before the beginning of the contribution period shall continue to be an employee until the end of that period.
20 Section 2(22) of the said Act reads as follows:
“wages” means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lockout, strike which is not illegal or lay=off and other additional remuneration, if any, (paidat intervals not exceeding two months), but does not include –
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any travelling allowance or the value of any travelling concession;
(c) any sum paid to the person employed to defray special expenses incurred on him by the nature of his employment; or
(d) any gratuity payable on discharge.
21. It says that wages means all remuneration paid or payable in cash to an employee, if the term of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or lay-off and other additional remuneration, if any, paid at intervals not exceeding two months. The said definition of wages does not include the items specified in form (a) to (d). It appears that if it was the intention, as has been observed by the Andhra Pradesh High Court, of the Legislature that overtime wages should not have formed part of wages, then the definition clause should have specifically excluded the re-muneration for overtime work as has been done in case of travelling allowance, gratuity payable on discharge, any sum paid to the person for special expenses, etc.
22. In the case of Harihar Polyfibres v. Regional Director, E.S.I. Corporation 1984-II LLJ
475 (supra), the Supreme Court has observed
that wages as defined includes remuneration
paid or payable under the terms of the contract
of employment, express or implied but further
extends to other additional remunertion, if any,
paid at intervals not exceeding two months,
though outside the terms of employment.
23. The Supreme Court has also observed that the expression “wages” has been given a very wide meaning and the inclusive part of the definition reads that exclusive part in the definition clearly shows that inclusive portion is not intended to be limited only to the items mentioned therein. The Supreme Court has also observed that taking into consideration the excluding part of the definition and the reading the definition as a whole the inclusive part is only illustrative and tends to express the wide meaning and import of the word “wages” used in the Employees’ State Insurance Act.
24. So far as the decision cited at the bar, the only contrary decision with regard to overtime wages is the decision of this Court reported in 1979(1) CLJ 508 Hindustan Motor’s Case. The exression “wages” as defined in Section 2(22) of the Act has been literally construed and given a wide meaning by several other High Courts as also the Supreme Court in the case referred to above.
Considering the views expressed by the other High Courts as also the Supreme Court on the definition of wages under the said Act, I am unable to accept the contention of Dr. Banerjee that overtime wages do not form part of wages as defined in Section 2(22) of the said Act. The Kerala High Court in the case of Manager, Harrison & Cross Field Ltd. v. The Manager, ESI Corporation has observed that definition of wages in Section 2(22) of the said Act does not afford any guidance to the interpretation of Section 2(9) of the said Act.
26. It also appears to me that the Supreme Court in Harihar Polyfibres v. The Regional Director, E.S.I. Corporation (supra) has indicated clearly the scope of the definition of wages as given in the said Act.
27. In the premises, this writ application is dismissed. Rule, if any, is discharged. Interim order, if any, is vacated. There will be no order as to costs.