LexEMPLOYEES STATE INSURANCE CORPORATION & ANR. versus MANGALAM PUBLICATIONS (I) PRIVATE LIMITED
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[2017) 8 S. C.R. 697 EMPLOYEES STATE INSURANCE CORPORATION & ANR. A v. MANGALAM PUBLICATIONS (I) PRIVATE LIMITED (Civil Appeal No. 4681 of2009) SEPTEMBER21, 2017 [ARUN MISHRA AND MOHAN M. SHANTANAGOUDAR, JJ.) B . Employees' State Insurance Act, 1948 - s. 2(22) - Wages - Interim relief paid by private limited company-respondent to its C employees, during certain period - Liability of the company- respondent to pay Employees' State Insurance (ESI} contribution to its employees - Held: Interim relief paid by the company-respondent to its employees being "wages" as defined u/s. 2(22) and not a 'gift' or 'inam ', thus, the company-respondent liable to pay the ESI contribution to its employees - Payment of interim relief/wages D emanates from the provisions contained in terms of the settlement, which forms part of the contract of employment and forms the ingredients of "wages" as defined u/s. 2(22) - It was not an ex- gratia payment - Thus, the Employees' State_ Insurance Corporation entitled to recover the ESI contribution from the respondent for the E said period. Allowing the appeal, the Court HELD: 1. A plain reading of the definition of wages under Bection 2(22) of the Employees State Insurance Act, 1948 makes it amply clear that "wages" means all remuneration paid or payable F in· cash to an employee, if the terms of the contract of the employment, expressed or implied, were fulfilled and includes other additional remuneration, if any, paid at intervals not exceeding two months. But payments made on certain contingencies under Clauses (a) to (d) of Section 2(22) of the Act, do not fall within the definition of "wages". The interim relief G paid to the employees of the respondent in the matter on hand, will definitely not fall within the excluded part of clauses (a) to (d) of Section 2(22) of the Act, inasmuch as such payment is not travelling allowance or the value of any travelling concession, contribution paid by the employer to any pension fund or provident H 697 698 SUPREME COURT REPORTS [2017] 8 S.C.R. A fund; sum paid to an employee to defray special expenses entailed on him by the nature of his employment; or any gratuity payable on discharge. (Para 71 (704-D-FJ 2. The Employees' State Insurance Fund set up under the Act survives primarily on contributions paid to the Employees' B State Insurance Corporation (the appellant). All employees insured in accordance with the Act are entitled to benefits under the Act. Undoubtedly, the literal meaning of statutory provisions cannot be ignored. However, in cases whether they may be two or more ways to interpret a statutory provision, the spirit of this legislation warrants a construction that benefits the working class. C The inclusive part and exclusive portion of the definition of • "wages" clearly indicate that the expression "wages" has been given wider meaning. Under the definition, firstly whatever remuneration is paid or payable to an employee under the terms of the contract of the employment, expressed or implied, is D . ''wages". Secondly, whatever payment is made to an employee in respect of any period of authorized leave, lock-out etc. is "wages". Thirdly, other additional remuneration, if any, paid at intervals not exceeding two months is also "wages". Any ambiguous expression, should be given a beneficent construction in favour of employees by the Court. If the definition of "wages" is read in E its entirety including the inclusive part as well as the exclusive portion, it appears that inclusive portion is not intended to be limited only of items mentioned therein, particularly, having regard to the objects and reasons for which the Employees" State Insurance Act in enacted. The Act has to be necessarily so F construed as to serve its purpose and objects. (Para 8] (704-G- H; 705-A-Dl 3. The High Court while allowing the appeal filed by the respondent mainly relied upon the office memorandum dated 19.08.1998 issued by the Department of Public Enterprises, G Ministry of Industry, New Delhi which is not applicable to the facts of the instant case. The said notification makes it abundantly clear that the instruction contained in the said office memorandum are applicable to Central Public Sector Enterprises (PSES) only. Admittedly, the respondent is a private limited company and hence the instructions contained in office memorandum dated H E.S.LC. & ANR. v. MANGALAM PUBLICATIONS
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