EMPLOYEES STATE INSURANCE CORPORATION versus GNANAMBIGAI MILLS LTD.

Citation: [2005] SUPP. 1 S.C.R. 738 · Decided: 19-07-2005 · Supreme Court of India · Bench: S.N. VARIAVA, AR. LAKSHMANAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
EMPLOYEES STA TE INSURANCE CORPORATION 
v. 
GNANAMBIGAI MILLS LTD. 
JULY 19, 2005 
B 
(S.N. V ARIAV A AND DR. AR. LAKSHMANAN, JJ.] 
Labour Law: 
Employees State Insurance Corporation Act, 19481/ndustrial Disputes 
C Act, 1948: 
s.2(22)/s.10-B-"Wages"-Payments made to workmen in terms of order 
made by State Government under s.10-B as introduced in State of Tamil 
Nadu-Employees ' demand for increase in wages-Reference made to Special 
D Tribunal-Government of Tamil Nadu-Orders dated 15. 7. 1985 and 
29. 7. 1985-Directing certain payments tO be made to workmen pending the 
dispute-Money so paid to be adjusted against the monetary benefits to be 
awarded by Tribunal-Compromise between the emp/.oyer and employees 
providing that the amount paid under the two orders to be treated as ex-
gratia payment-Award made in terms of the compromise-~Held, the amounts 
E paid under orders dated 15. 7.1985 and 29. 7.1985 were wages-They did not 
cease to be wages after the award merely because in the compromise they 
were termed as "ex-gratia payment"-Contributions will have to be made on 
those amounts. 
- F 
G 
H 
CIVIL APPELLATE JURISDICTION : Civil Ap-peal No. 695 of2004. 
From the Judgment and Order dated 7.8.2002 of the Madras High Court 
in C.M.P. No. 12630/98 in W.A.S.R. No. 49808of1998. 
C.S. Rajan, V.J. Francis, Anupam Mishra and Jenis with him for the 
Appellant. 
E.C. Agrawala for the Respondent. 
The following Ord~r of the Court was delivered : 
738 
EMPLOYEES STA TE INSURANCE CORPN. v. GNANAMBIGAI MILLS LTD. 
739 
ORDER 
A 
This Appeal is against the Judgment of the Madras High Court dated 
7th August, 2002. Briefly stated the facts are as follows:-
· 
The Employees of Respondent Company raised a demand for increase . 
of wages. The · dispute was referred to the Special Tribunal, Madras for B 
adjudication. By virtue of Section 10-B, Industrial Disputes Act, 1947 which 
had been introduced in the State of Tamil Nadu, the Government passed 
orders dated 15th July, 1985 and 29th July, 1985 directing certain payments 
to be made to the workmen pending the disputes. Both orders contained a 
clause that any money paid in pursuance of the order could be deducted by 
the employer from out of the monetary benefits to which the employee would C 
become entitled under the Award which may be passed by the Tribunal. 
At this stage, it would. be convenient· to set out Section 10-B of the 
Industrial Disputes Act, 1947, under which the Orders were passed. Section 
10-B reads as follows:-
"10-B Power to issue order regarding terms and conditions of 
· service pending settlement of disputes. -
D 
( 1) Where an industrial dispute has been referred by the State 
Government to a Labour Court or a Tribunal under sub-section (1) of 
Section JO and if, in the opinion of the State Government it is i:iecessary E 
or expedient so to do for securing the public safety or convenience 
or the maintenance of public order or supplies and services essential 
to the life of the community or for maintaining employment or industrial 
peace in the establishment concerning which such reference has been 
made, it may, by general or special order, make provision, -
F 
(a) for requiring the employer or workman or both to observe such 
terms and conditions of employment as may be specified in the order 
or as may be determined in accordance with the order, including 
payment of money by the employer to any person who is or has been 
a Workman; 
· 
G 
(b) for requiring any public utility service not to close or remain 
closed and to work or continue to work on such terms and conditions 
as may be specified in the order; and 
(c) for any incidental or supplementary matter which appears to H 
740 
SUPREME COURT REPORTS [2005] SUPP. I S.C.R. 
. A 
it to be necessary or expedient for the purpose of the order; 
Provided that no order made under this sub-section shall require 
any employer to observe tenns and conditions of employment less 
favourable to the workman than those which were applicable to them 
at any time within three months immediately preceding the date of the 
B 
order. 
c 
D 
E 
F 
G 
H 
Explanation. - For the purpose of this sub-section, "public utility 
service" means -
(i) 
any section of an industrial establishment on the working of 
which the safety of the establishment or the workman employed 
therein depends; 
(ii) 
any industry which supplies power, light or water to the pubic; 
(ili) any industry which has been declared by the State Gov

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