INDIAN DRUGS AND PHARMACEUTICALS LTD. ETC. versus EMPLOYEES STATE INSURANCE CORPORATION ETC.

Citation: [1996] SUPP. 8 S.C.R. 547 · Decided: 06-11-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Dismissed

Judgment (excerpt)

INDIAN DRUGS AND PHARMACEUTICALS LTD. ETC. 
A 
v. 
EMPLOYEES STATE INSURANCE CORPORATION ETC. 
NOVEMBER 6, 1996 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
Labour Law: 
Employee State Insurance Act, 1948 : 
Ss.2(22) read with s.2(9)-"Wages "-Whether includes "overtime 
wages "-Held, the overtime work done by the employee is an implied 
contract to do overtime and the remuneration paid therefor does form part 
of the wages u/s 2(22)----Concomitantly, the employer is enjoyed to pay the 
contribution under the Act. 
Harihar Polyfibres v. The Regional Director, ES! Corporation, (1985] 
1 SCR 712, relied on. 
Braithwaite and Co. (India) Ltd v. ES!, (1968] 1 SCR 771, held 
no longer applicable. 
B 
c 
D 
E 
Shivraj Fine Art Litho Works, Nagpur v. Director, Regional Office, 
Maharashtra, Bombay and Ors., (1974) Lab. IC 328, V 7 C72; E.S.I.C 
New Delhi v. Bir/a Cotton, Spinning and Weaving Mills Ltd, 
Delhi, (1977) II, LLJ 420 Mis The Hydrabad Allwyn Metal Works 
Ltd. v. Employees State Insurance Corporation, (1981) Lab. IC 457, F 
approved. 
Mis Hindustan Motors Ltd v. ES.I. Corporation and Ors., (1979) 
LAB l.C. 852 and Hind Art Press, Mangalore v. ES! Corporation and 
Anr., (1990) LLJ 195, disapproved. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2777 of 
1980, Etc. 
From the Judgment and Order dated 7.8.80 of the Andhra Pradesh 
G 
High Court in A.A.O. No. 150 of 1980. 
H 
547 
548 
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R. 
A 
V.V. Vaze, Kailash Vasdav, C.K. Sasi, A.T.M. Sampath, Kailash 
Vasdev, Indra Sawhney, Deepak Dewan, C.V.S. Rao and V.J. Francis for 
the appearing parties. 
The following Order of the Court was delivered : 
B 
These appeals are by certificate granted by the Division Bench of 
the Andhra Pradesh High Court under Article 133 of the Constitution. The 
question of law of public importance is: whether the overtime wages paid 
to an employee by the appellants are "wages" within the meaning of Section 
2(22) of the Employees State Insurance Act, 1948 (for short, the 'Act'). It 
is not necessary to record the facts in all these cases. Suffice it to state that 
C the facts in C.A.No.2784/80 a.-e sufficient for disposal of the common 
controversy. Admittedly, the appellants have taken overtime work from 
their existing employees. The employees had done work during the stipulated 
working time and thereafter they were asked to perform overtime work 
which they did and accordingly, the overtime rate of wages was paid in 
terms of the agreement between the appellants and the workmen. 
D 
Therefore, the question has arisen: whether absence of stipulation 
for payment of the overtime wages in the original contract of employment, 
would take away such remuneration paid towards the overtime work from 
the definition of the word 'wages' within the meaning of Section 2(22) of 
E the Act. The said section reads as under: 
F 
G 
H 
'"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, 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 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 entailed on him by the nature of his employment; 
l.D.P. LTD.v.E.S.I.CORPN. 
549 
or 
A 
( d) any gratuity payable on discharge; 
Shri Kai lash Vasdev, learned counsel for the appellants in two appeals 
and Shri Sampath, learned counsel in another appeal representing Agarwal 
Industries, raised two-fold contention. According to Shri Kailash Vasdev, B 
the Legislature having taken care to exclude the overtime wages from the 
purview of the definition of "employee" within the meaning of Section 
2(9) of the Act and equally having defined the "wages" under Section 
2(22) of the Act, necessary intendment therefrom is that the legislature 
intended to exclude overtime wages from the remuneration paid for overtime 
work done by the employer. Unless it is part of contract of appointment, it C 
is outside the definition of'wages'. Admittedly, there is no contract between 
the appellants and the workmen to pay the overtime wages. It is not 
obligatory for the appe

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