The main legal point established in the judgment is the interpretation of 'wages' under S.2(22) of the Employees State Insurance Act, 1948, based on the nature of payments and their connection to the employees' work.

G.H. Gutla1.J.

1. The question which arises for consideration in this appeal by the Employees' State Insurance Corporation of India is whether (i) the payment of daily bhatta to the conductors of the buses and other staff described as "running staff (ii) the incentive allowance paid to such staff and (iii) the payment to the labourers engaged for the maintenance and repairs of the building used by the establishment of the respondent-employer, are "wages" within the meaning of S.2(22) of the Employees State Insurance Act, 1948 (hereinafter referred to as the act). The question arises out of the facts stated in paragraph 2 and 3 below:

2. The respondent is a company known as C.W.M.S.(P) Limited, engaged in the business of transport of passengers. The appellant is the Employees State Insurance Corporation, Trichur, created by the Act. Under the Act, the respondent is liable to pay contribution to the Employees' State Insurance Fund created under Chapter III of the Act. The employer is, under the Act, liable 10 contribute to the Employees' State Insurance Fund. The contribution depends upon and is related to the wages paid to the employees. The respondent made an application No. E.I.C. 32/1983 to the Employees State Insurance Court, Calicut for a declaration that it is not liable to contribute to the fund, as, according to the three categories of payment referred to in paragraph No.l are not "wages" as defined in S.2(22) of the Act.

3. The nature of the payment, the status of which is under our consideration may be briefly outlined. The characteristics of daily allowance are these:

(a) The "running staff consists of conductors of buses and other employees whose duty entails travelling

(b) During the time and on the days that they perform travelling duties they arc paid, per day of such duly the daily allowance

(c) The purpose of such payment is to enable item to meet the expenses occasioned by the special nature of travelling assignments, such as food, tea etc.

(d) This allowance is in addition to the wages payable to them

(c) The allowance is' not paid when the employees do not perform travelling duly. When not engaged in travelling assignment they are paid the normal wages.

The second category of payment is known as collection allowance or collection bhatta. This allowance is paid as incentive for increasing profits by at trading more passengers, through better service to the passengers and the travelling public.

The third category of payment with which we arc concerned is the remuneration paid to the workers engaged in the maintenance and repairs of the building in which the respondent carries on business. The workers are employed by the respondent.

4. The expression "wages" means all remuneration paid or payable in cash and includes, inter alia other additional remuneration, if any, paid at intervals not exceeding two months. However, the "wages" does not include, any sum paid to the employee, to defray special expenses entailed on him by the nature of his employment)

5. The trial court has found as a fact that the daily allowance or bhatta is paid for the specific purpose of defraying expenses occasioned by the nature of work. We do not see any reason to interfere with this finding based on testimony of witnesses.

6. The nature of the payment of daily allowance to the "running staff' shows that it is intended to be paid for special kind of work and for enabling the employee to' meet the expenses occasioned by such work. The employee does not receive the allowance when he performs his normal duty which excludes travelling assignments. In other words, the "na lure of the employment" in this case, is I raveling assignment involving expenses incidental to the fulfillment of such assignments. This characteristic of the payment is underscored by the fact that when he is not on travelling duty he docs not receive the allowance and such allowance is paid in addition to his normal wages. For all these reasons the sums payable to the ru