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2002 Supreme(Mad) 705
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.JAGADEESAN & THE HONOURABLE MR. JUSTICE K.RAVIRAJA PANDIAN
R.Meenakshi Ammal - Appellant
Versus
Velusamy & Others - Respondents
L.P.A.No.50 of 1999
Decided On : 07 August 2002
The main legal point established in the judgment is that payments made under government orders, subsequently treated as 'ex gratia' and written off as per a settlement transformed into an award, should not be considered 'wages' under the Employees State Insurance Act.
Headnote:
Wages - Interpretation of Section 2(22) of the Employees State Insurance Act - Section 10-B of the Industrial Disputes Act - Ex gratia payment - Settlement and award - Legal provisions and interpretations influencing the court's decision
Fact of the Case:
The case involved disputes over whether payments made by the management to workers as interim relief, directed by government orders, should be considered 'wages' under Section 2(22) of the Employees State Insurance Act.
Finding of the Court:
The court held that the payments made under the government orders, which were subsequently treated as 'ex gratia' and written off as per a settlement transformed into an award, should not be considered 'wages' under the Act.
Issues: The main issue was whether the payments made by the management to workers as interim relief, directed by government orders, should be considered 'wages' under Section 2(22) of the Employees State Insurance Act.
Ratio Decidendi: The court considered the legal provisions of Section 2(22) of the Employees State Insurance Act and Section 10-B of the Industrial Disputes Act, along with relevant settlements and awards, to determine that the payments should be treated as 'ex gratia' and excluded from the definition of 'wages'.
Final Decision: The court set aside the order considering the payments as 'wages' and restored the original order treating the payments as 'ex gratia'.
K.RAVIRAJA PANDIAN, J.
The Letter Patent Appeal No.50 of 1999 is filed by the E.S.I.Corporation against the Order of the learned single Judge of this Court in C.M.A.No.480 of 1991 dated 12.1.1999 confirming the Order of the Employees' Insurance Court (District Court), Coimbatore in E.S.I.O.P.No.212 of 1989 dated 31.1.1991.
Letter Patent Appeal No.7 of 2000 is filed by the Managing Director, Kanyakumari District, Co.op.Spinning Mills Limited, Aralvaimozhy against the Order of the learned single Judge of this Court in C.M.A.No.910 of 1989 dated 1.4.1998 reversing the Order of the Employees' Insurance Court (District Court) at Nagercoil in E.S.I.O.P.No.6 of 1988 of dated 28.4.1989.
C.M.A.No.738 of 1992, 739 of 1992 and 100 of 1993 are filed by M/s.Sree Meenakshi Mills Limited, Paravai Unit, M/s.Annamalaiar Mills Pvt. Limited, Dindigul and M/s.Vijayshree Spinning Mills Ltd., Dindigul respectively against the orders dated 3.3.1992 of the E.S.I.Court, (II Addl.District Judge), Madurai in E.S.I.OP.Nos.32 of 1988, 3 of 1989 and 20 of 1988 respectively, wherein the E.S.I.Court has dismissed the petitions filed by the respective Managements for declaration that the "ex gratia payment" made by the Managements were not wages.
C.M.A.No.1481 of 1993 is filed by the E.S.I.Corporation against the order of the E.S.I.Court, (District Judge), Coimbatore in E.S.I.OP.No.245 of 1990 dated 18.8.1992 and C.M.A.No.1504 of 1993 is filed by the Regional Director, E.S.I.Corporation against the order of the E.S.I.Court, (District Judge), Tirunelveli in E.S.I.OP.No.5 of 1990 dated 11.2.1994, wherein the petitions filed by the Management for declaration that the demand of E.S.I.Corporation is illegal on the ground that the amount would not partake the character of 'wages' were allowed.
2. In all the above cases, the the real controversy centres around the interpretation of clause 22 of Section 2 of the Employees State Insurance Act, which defines "wages". In order to appreciate the controversy, the facts of the cases, which formed the basis for filing of the above cases, an illustrative case in L.P.A.No.7 of 2000 is narrated below:
The last of the proceedings pursuant to which the revision of wages, dearness allowance and the grant of other benefits to workmen in several textile mills in the State of Tamil Nadu was made on 28.9.1979 in award made in I.D.No.1 of 1979 on the basis of the settlement dated 17.7.1979 between the managements of textile mills and the various trade unions representing their workmen. The said award was for a period of five years. Even after the expiry of the said award, in or about 16.7.1984, the terms thereof continued to be in force. In order to have the revision of wages, dearness allowance and for securing other benefits, various unions of the textile workers formed a joint action council and issued a strike notice under Section 22 of the Industrial Disputes Act together with a Charter of demands, dated 17.6.1985 to almost all the textile mills in the State terminating the terms of the earlier award dated 28.9.1979 in I.D.No.1 of 1979. Following the refusal by mill management to comply with the demands, Conciliation Proceedings were taken up and a failure report dated 12.7.1985 under Section 12(4) of the Industrial Disputes Act was submitted. Thereupon the Government referred the dispute to the Special Tribunal, Madras for adjudication in I.D.Nos.1 to 5 of 1985. Pending adjudication, the Government of Tamil Nadu passed orders under Section 10-B of the Industrial Disputes Act in G.O.Ms.No.1399 dated 15.7.1985 and G.O.Ms.No.1545 dated 29.7.1985. Under the above said orders, the Managements were prohibited from declaring lock out and the workmen were also prohibited from indulging in strike. By G.O.No.1399 dated 15.7.1985, the Managements were directed to pay a lumpsum payment of Rs.500/- and a monthly payment of Rs.75/- from 23.7.1985 for the permanent and badli workmen of the mills which have the spindlages of 6001 and a
