The definition of "wages" in section 2(22) of the Employees State Insurance Act, 1948 does not cover Inam paid to workmen under an Inam Scheme, as it is not a term of the contract of employment.

Judgement

BHARGAVA, J. :- The appellant, M/s. Braithwaite and Co., (India) Ltd., (hereinafter referred to as "the Company") filed an application before the Employees Insurance Court for a declaration that Inam paid or to be paid to its workmen under the Inam Scheme initiated on 28th December, 1955 is not "wages" as defined in the Employees State Insurance Act, 1948 (No. 34 of 1948) (hereinafter referred to as "the Act"), and that no contribution, either as employer s special contribution or employees contribution, is payable by the Company in respect thereof. The opposite party in this application was the present respondent, the Employees State Insurance Corporation, and there was also a prayer for perpetual injunction restraining the respondent from realising any contribution in respect of past or future payments of Inam under that Scheme. A further prayer was for a decree for Rs. 32,761 against the respondent, being the amount which the respondent had already realised from the appellant claiming that the Inam was "wages" and for costs The case was contested by the respondent, but the Employees Insurance Court allowed the application of the appellant, passed a decree with costs, making a declaration that Inam was not wages and that no contribution in respect of Inam paid to the workmen was payable by the appellant to the respondent, and decreeing the claim of the appellant for the sum of Rs. 32,761 against the respondent. The respondent, thereupon, appealed to the High Court of Calcutta under section 82 of the Act. The High Court allowed the appeal, held that the Inam was wages and dismissed the claim of the appellant, but made no order as to costs. The appellant has now come up to this Court on the basis of a certificate granted by the High Court under Article 133 of the Constitution.

2. The decision of this appeal depends solely on the question whether the Inam paid by the appellant under the Scheme dated 28th December, 1955 is covered by the definition of "wages" as given in section 2 (22) of the Act. That definition is reproduced below :

"2. (22) wages means all remuneration paid or payable in cash to an employee, if the terms of contract of employment, express or implied, were fulfilled and includes, 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 or him by the nature of his employment; or

(d) any gratuity payable on discharge." The High Court has held that the Inam in question is covered by this definition where it is laid down that "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. Reliance is not placed on the second clause of the definition which includes other additional remuneration, if any, paid at intervals not exceeding two months. Counsel appearing for the respondent before us also did not rely on this second part of the definition and sought to support the decisions of the High Court only on the basis that it is covered by the first part. Counsel appearing for the appellant also did not rely on the last part of the definition which excludes from the definition of "wages" items mentioned in clauses (a), (b), (c) and (d). In this case, therefore, we have to confine our decision to the interpretation of the first part of the definition of "wages".

3. The facts, which are relevant for deciding this question, are that conditions for the award of Inam were laid down in a Work Notice issued by the appellant on 28th Dec., 1955, and with this Work notice were issued two separate Notices laying down the remaining conditions for payment of Inam which were required to be laid down by the Scheme contained in the first Work No