Sabharwal, J. - (1.) Leave granted.
(2.) The appellant under a 'Production Incentive Scheme' pays to its workers production incentive at the rates specified in the Scheme besides normal wages. For the purpose of calculating contributions towards Employees' State Insurance Fund, the payment of production incentive by the appellant to its workers is not treated by it as 'wages' within the meaning of the term as defined in Section 2(22) of the Employees' State Insurance Act, 1948 (for short 'the Act'). The respondent-Employees' State Insurance Corporation (for short 'the Corporation') treating the said payment as 'wages' issued a demand to the appellant for payment of contributions towards the Employees' State Insurance Fund. This led to filing of an application under Section 75 of the Act by the appellant before Employees' Insurance Court challenging the said demand. The said Court allowed the application and quashed the demand. It held that the payment was made quarterly and was not 'wages' under the Act as it did not fall either under the first part of Section 2(22) or under third part thereof. The payment made by the appellant, it was held, did not fall under the first part of the definition of 'wages' as there was no agreement between the appellant and its workers for payment of production incentive and also that it did not fall under the third part of the definition as the actual payment was made quarterly which means at intervals exceeding two months.
(3.) The appeal filed by the Corporation against the order of the Employees' Insurance Court was allowed by a learned single Judge of the High Court holding that the production incentive was calculated on the basis of the extra work done by the workers in each month but to avoid contribution under the Act, the payment was postponed and was made quarterly. The Letters Patent Appeal of the appellant was dismissed and, therefore, the present appeal.;