HARIHAR POLYFIBRES versus THE REGIONAL DIRECTOR ESI CORPORATION

Citation: [1985] 1 S.C.R. 712 · Decided: 04-09-1984 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Dismissed
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Judgment (excerpt)

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HARIHAR POL YFIBRES 
v. 
THE REGIONAL DIRECTOR 
ESI CORPORATION 
September 4, 1984 
(0. CHINNAPPA REDDY AND AMARENDRA NATH SEN, JJ.J 
En1ployees' State Insurance Act 1948, Section 2 (22)-"Wages"-'House 
rent allowance'-'Night shift allowance'-'Heat, gas and dust allowance'-
'lncentfrc allowance'-Pay1n~nt of-Whether "wages". 
Words & Phrases : uWages"-Meaning of-Section 2 (22) Employees 
State Insurance Act 1948. 
The question was whether the expression 'wages' as defined ins. 2 (22) of 
the Employees State Insurance Act, 1948 includes 'l-lousc' Rent Allowance', 
Night Shift Allowance' 'Heat, Gas and Dust Allowance' and 'Incentive 
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Allowance' paid by an employer to his employees, 
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HELD : By the Coul't 
1. Employees' State Insurance Act, 1948 is a piece of social welfare 
legislation. The definition of 'wages' is designedly wide. The definition on its 
plain reading is clear and unambiguous. Even if there is any a1nbiguity, 
the .expression has to be given a liberal interpretation and receive beneficent 
construction. [714C] 
2. 'Wages• as defined in s. 2 (22) of the Employees' State Insurance Act, 
1948 must necessarily include 'House Rent Allowance', 'Night Shift Allowance', 
'Heat, Gas and Dust Allowance' and 'Incentive Allowance'. [7l5CJ 
Braithwaite & Co. (India) Ltd, v. The Employees' State Insurance Corpora· 
tion, [1968] 1 S.C.R. 771, referred to 
N.G.E.F. Ltd. v. Deputy Regional Directo1·e, E.S.I.C., Bangalore, [t980] 1 
LAB. I.C, 431 and Employees' State Insurance Cor,1oration, Hyderabad v. 
Andhra Pradesh Paper Mi/ls Ltd., Rajahamundry, 1978 LAB. J.C. 19, approved. 
Bengal Potteries Ltd. v. Regional Director, W. Bengal Region, Employees 
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H. POLYFIBRES '· ECI CORP. (Chinnappa Raddy, J.) 
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State Insurance Corporation and others, [1973] LAB. J.C. 1328 (V 6 P 295), 
over-ruled. 
Per Chinnappa Reddy, J. 
Wages as defined in s. 2 (22) of the Act includes not only 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. 
[714G] 
'Rcn1uneration' under the first clause has to be under a contract of 
employment, express or implied while 'remuneration' under the third clause 
need not be under the contract of en1ploymcnt but may be any 'additional 
remuneration' outside the contract of employment, 
[715B) 
Per Amarendra Nath Sen, J. 
The inclusive part and the exciusive poftion in the definilion of 'wages' 
ins. 2 (22) clearly indicate that the expression 'wages' has been given a very 
wide meaning. The inclusive part of the definition read with the exclusive part 
in the definition clearly shows that the inclusive portion is not intended to be 
limited only to the items mentioned therein. Taking into consideration the 
ex.eluding part in the definition and reading the definition as a whole the inclu-
sive part, is only illustrative and tends to express the wide meaning and import 
of the word 'wages'. 
[7J7H; 7J8A-B] 
CIVIL 
APPELLATE JURISDICTION 
Special Leave Petition 
(Civil) No. 9795 of 1983. 
From the Judgment and Order dated the 20th April, 1983 of 
the Karnataka High Court in Misc. First Appeal No. 639 of 1983. 
K.R. Nagara;, Naresh Kaushik, R.S. Hegde and B. Krishna 
Prasad, Miss CS La/itha for the Petitioners. 
The following Orders were delivered 
CH!NNAPPA REDDY, J. The question for consideration in 
this petition for special leave to appeal under Article 136 of the 
Constitution oflndia is whether the expression 'wages'; defined by 
s.2(22) of the Employees State Insurance Act, includes 'House Rent 
Allwance', 'Night Shift Allowance, paid to those employe.es who are 
obliged to work in the night shift and the 'Heat, Gas and Dust 
Allowance' and 'Incentive Allowance' paid by an employer to bis 
employees. Section 2(22) defines 'wages' as meaning ; 
"all remuneration paid or payable in cash to an 
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employee, if the terms of the contract of employment, 
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SUPREME COURt REPORTS 
(1985] 1 S.C.ll. 
express or implied, were fulfilled and includes any payment 
to an employee in respect of any period of authorised 
]eave, lock out, strike which is not illegal or lay off and 
other additional remuneration, if any, paid at intervals not 
exceeding two months, but does not include -(a) any con-
tribution paid by the employe
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