_R"ep.;"'1jy it~s_Genera1_ Manager [Persor1nel).
1N "rm: HIGH comm or KARNATAKA AT BANGALORE
[)ate<:i the 17*" day of December 2009
:BEFORE:
THE HONBLE MRJUSTICE : V.JAGAi\¥NA'i"}~I--£iN
MISCELLANEOUS FIRST APPEAL No. 2962 /411351)
BETWEEN :
1. The Regional Director, 1
E.S.I. Corporation, No.10,
Birmy Fields, Bangaj]oreA5G,O:'{Jd23. . 2 V' K
2. The Deputy Regional 'DvVi'rector,"' ._ '
E.S.I. Corpo1~a_t.ior1. NVo..i'O,_
Binny Fiedls, iBanga'lore?5.£3O O23.
-A it ...Appe11ar1tS
{ B_y_:Sr__i V.1$Jé1i*aSi1n.h'a:fE{oiia;.i/Sidxrocate. )
M / S7--Bhuwal'ké{' -Stjeelé" -hidxzistzries Limited.
{A con:p2iny 'in_c'orpor'ate'd"under
Compar1i.eSvAct._ r95e}_
Registered Offi<;:'e No.71. 111 Cross.
§<é:Sid_e12cy Ro'ad.3...Ber1g21Iore-560025.
...Respor1dcr1t'
A 'j_'[V..7BVy Sri Kama] 8: Bhanu. Advocates. )
"..V__AMisce]1ar1eous First, Appeal. filed under Section
_ of the E381 Act against. the order dated 15.1 1.200?
péissed in E.S.I. App1ica.tion No.1/2006 on the file of the
Judge, ESI Court, Baiigalore. allowing the app]i(tat.io1i
filed under Sections 75 and 77 of the E81. Act.
I--J
This appeal coming on for heeiring.-pi this day. the
court delivered the following 2
J U D G M E N "F
This appeal is by the Regional l)ire(:tv()r:,:ll'»tl.£.S.l.
Corporation. calling in q_uest:ion the order
l31.S.I. Court. allowing the app1icatisn--lijfilelrl
Sections 75 and 77 of the S'
and consequently settingdasiade tile
appellant under Section the
2. The main contfenltiori _ofthe'~aplpe1lants--Corporation
before this court is;t'hat:'§e'ct.i:'on .£V.¥5'~--;..'l'AVl'V"(')]/.d€]/. was passed
by the Co1*porat.i:o:1v4'("L:"L§€;z'3\¥1} calling for the cohtributiori
from the_vlhrespo_nde'nt:}~principal employer in a sum of
period from 4/1998 to 3/2001
' for the said amount being sought as
it from the respondent. was that the ezegratia
amount said to have been paid by the principal
.Vel.r”r”ij«ploye1′ to the contractors was in fact. wages falling
Within the definition of Section 2{22) of the 13.8.1. Act
and in arriving at: this conclusion. the authority who
passed the impugned order under Section 45A also
obsewed that what was paid as exgggraitizi was reiatxzd to
the production and, therefore. the ex-gratia payment
that was paid was nothing ‘out, wages paid at th’e-end of
the relevant. year. Another factor that
being passed under Section 45-A was
by the authority concerned the is
inspection held on various datesllduri11g.”‘.i,thve llmefnthllof
8/2003 also i-Hdrieated th’a’tV.._l’pthe aggtatla paid to the
employees was J[W”_lAC€’i–f.I;lC,_’i1E).l’Hf1Ell wages that was
paid during ,_the corr.eS.po–11de1’it’i. and, therefore,
takinlgllliiiott: of’§i:a11 ‘”thp”ese fact.ors, the contribution was
demanded’ as afores4aid.,.4 it
3. _ The said ‘ord–er”~was questioned by the respondent
15_e’i:’oreA the E.S.’l’:~€ourt: and. after h_earir1g both sides and
V “of the evidence let in by the parties. the
was of the View that the ex-gratia payment.
mad.eA’3=i:o the workers engaged by the labour contractors
it * not fail within the pU1’Vit’.\?V of wages that. is defined
under Section 2622) of the 13.8.1. Act and consequently,
the order passed under Section 45A by the appellants-
3%:
by the employer t,hr()i1gh the coi1t.1’aet,ors. Under these
circumstances. the court. below was not justified in
simply accepting the contention of the 1’espc)nciaei’;i,. that
what was paid was exagratia and not t,he”‘v.:ages’ _»_7in
support of the above submission. Counse.1
referred to the inspection report«and’aa,.to.”thefzieasehs ‘
assigned while passing the’-.order~.urideriV 4i5§A
the 13.8.1. Act as per Ex.
6. On the other counsel for the
respondent that the payment
that was. “nothing to do with the
wages was paid pursuant. to an
agreeirxent. between the respondent-
exghployer anridthe contractors and the said incentive was
» jegiveriviri.:order to boost. the production and after the
H ‘- :flprodu’c.ti0ri[;;.started to increase. the payment of eX–gratia
xifasflstoipped subsequent to the year 2000-01.
2 herefore. the question of treating the exegratia payment
as wages under Section 2{22) of the Act does not arise.
The further submission made is that. if the amount is
paid pursuant to a scheme or agreement and if the
i»»
:2
(5
payment of additional remuneration being paid at the
intervals of exceeding two months. then. the said
payment cannot be brought within Section 24[22}:’of the
Act to call it as wages. In this
counsel placed reliance on the.,._iudgrne”nt–:’_of
Court in the case of M/s ‘o’}.’_l .
Employees State Insurc’m_ce..V Corporruion, ‘{revport.ed in
A.I.R. 2000 SC. 1190.
7. Having thus tiaking note of
the _a’nd:: _”reavs:ons*”assigned in the 45–A
order of the Corporation. the
examined as to whether the
paynieiaotpp voluntary in nature and
ylvltetvheri each of the employee was paid his
V 1″mVsnVth.ly’«;Wages on regular basis for the relevant period
‘g.a–rid tliey:-.contractors concerned also ought to have been
eixarnined so as to justify the claim made by the
;re.spondent–employer. Apart from all these. the very
stand taken by the respondent–employer in the
application filed under Sections 75 and 77 of the E.S.l.
Act before the E.S.i. Court and the relevant averments
fig”
made at paragraphA12 also ought” to have been taken
note of by the 13.8.1. Court. The averments in the said
paragraph–12 of the application read as under:
“12. The e:><~grat'ia paid to the
employed by the Cont:raeto.r
production / labour charges
Contractor on month-1.y. basis and 3
payment Cont1'aetors<.,:.he1ve Vdi.sb'u~rse.d: the
said amount."'there.V*iis' se~p_arat.'e"payn1ent
by the Principle tothe ex–gratia
8.,-I’1′}()”/11/i1’\*QL’,’«., = ‘
8. A aforesaid averments
indicates…ti1atV’::9§y}1aiyvas ‘ret:e’ifved by the contractor on
rnonnt–h1:y.basis’«.iXi=as’ vt_h’e.,:amount that was paid at the end
of the ye’arVVasVexAgzfati”a and secondly. the said averrnent
‘ A ‘aisoi..y’indieatesthat it was the labour charges that was
‘Vby_t.he contractor on monthly basis and apart
A amount, it was paid at the end of the year
AA to employees and the principal employer had not
” -paid any eX~gratia amount separately. Therefore. there
i is some force in the submission made by the learned
counsel for the Corporation that the amount which the
»9>.f
9
9. For the aforesaid reasons, the rriatter remanded
to the E3.S.I. Court for the limited purpose of
ascertaining as to whether the payment that xyéxarhade
as exvgratia was in fact part of t.he
was paid at the end of the yeariri the.iigh-tiofditheyst.ah’dy4\’~–_
taken by t.he employer ”*:’_the it
application. The responderi-tyjemtpioyer .31ibe1*–t.y’
to examine any ‘of the.___u:emp].oyeeS”«.ahd_f§ also the
cor1tract.ors eorieerIi”ec1’y.=:o’. case that what
was paid wast’ that was paid
every merit’? .. d
AfterVreeording’aeviderice in regard to the above
aspeeteand’ VgiV=i.r’i-gV”‘b__o’t}’i’ sides opportunity to erosS~
e>§;am_ir1e thewitlneéases concerned. the E.S.1. Court shall
fo’f._t.he matter within. three months from the date
._ preeefipt ofvvthis order.
appeal.” therefore. stands disposed of
~ : ‘aecordingiy.
Sdl –
mos-E
eke/W