THE HON’BLE SHRI JUSTICE ANIL KUMAR JUKANTI CIVIL MISCELLANEOUS APPEAL No.418 of 2014

JUDGMENT:

This Civil Miscellaneous Appeal is filed aggrieved by the order dated 05.08.2011 passed in E.I.C.No.21 of 2006 on the file of the Employees Insurance Court and Chairman, Industrial Tribunal-I, Hyderabad.

2. Heard Mr. P.Venugopal Reddy, learned counsel representing Mr. B.G.Ravindra Reddy, learned counsel for appellants, and Mr. C.Niranjan Rao, learned counsel for respondent.

3. The substantial question of law which falls for consideration is as follows:

A) Whether the fixed amount of Conveyance Allowance paid to the employees in terms of the Settlement irrespective of the expenditure incurred by the employees, is a wage within the meaning of Section 2(2) of the ESI Act.

4. Learned counsel for appellants/respondent Nos.1 and 2 contended that respondent/petitioner has not responded to the notice issued by the Corporation, the other facts are not in dispute. It is the contention of learned counsel for appellants that the company is liable to pay the contribution towards the conveyance allowance for the period 2004-2006 that C-18 notices were issued and 45-A orders were passed for an amount of Rs.52,262/-. The question as to whether the conveyance allowance falls under the definition of wages or not has been decided by a learned Single Judge of this Court in Asian Paints (India) Ltd., Patancheru, Medak District v. Employees State Insurance Corporation, Hyderabad and another1

5. Learned counsel for respondent company has placed reliance upon the judgment of the Hon’ble Apex Court in The Employees State Insurance Corporation v. M/s.

Texmo Industries, Special Leave to Appeal (C) No.811/2021

1 2011 (4) ALD 237

6. On a perusal of the Apex Court judgment, it is observed that the Apex Court has held that the travelling allowance includes conveyance allowance and that all kinds of travelling allowance are excluded from the definition of wages as per Section 2(22)(b) of ESI Act. In view of the settled proposition of law, the civil miscellaneous appeal preferred by the appellants/respondent Nos.1 and 2 is liable to be dismissed. It is also brought to the notice of this Court that communication was addressed by the Ministry of Labour & Employment, Government of India, with respect to Employees’ State Insurance Corporation, the communication bearing No.T-11/13/56/02/2020 Rev.II, dated 08.11.2021 held as follows:

“…I am directed to enclosed herewith a copy of the judgment of the Hon'ble Supreme Court of India, in the above mentioned SLP wherein the Hon'ble Supreme Court has held that the payment of Conveyance Allowance on the fact of present case does not fall under the definition of term "wages" as defined in section 2(22) of the ESI Act.

A dispute arose between M/s Texmo Industries Vs.

ESIC on payment of contribution on conveyance allowance. The SRO Coimbatore had issued a demand to the employer for payment of contributions on conveyance allowance paid to the employees. This led to filing of an application u/s 75 of the Act by the employer before the E.I. Court challenging the said demand. The E.I. court gave its verdict against Corporation. Subsequently ESIC filed an appeal before Hon'ble High court which also went against Corporation.

Thereafter an SLP No.811/2021 was filed by Corporation before Hon'ble Supreme court of India, which was listed on 08.03.2021 for final hearing & decision. Hon'ble Supreme court of India dismissed the said SLP file by the Corporation vide its judgment dt.08.03.2021. As per the judgment of the Hon'ble Supreme Court of India and opinion of our learned Advocate, Conveyance Allowance shall not form part of the wages of the employees and the judgment holds good w.e.f. 08/03/2021.

Keeping in view of the above decision, copy of the judgment is circulated for necessary action and strict compliance.

This issues with the approval of the Director General.”

7. The said letter is addressed to ESI Corporation. In view of the law laid down by the