M.M. Punchhi, J. - (1.) THE Employees, State Insurance Corporation (for short the Corporation, the Appellant in this Letters Patent Appeal, raised a demand in the sum of Rs. 2,11,034.33 p. together with interest by serving a notice on M/s. Gedore Tools India (Private) Limited the Respondent, on the charge that it had failed to pay contributions in. terms of the provisions of the Employees' State Insurance Act, 1948 in relation to wages paid/payable to employees in the form of sectional rewards, tea allowance and milk allowance. The Respondent challenging the demand notice moved a petition under Section 75 of the Act before the Employees' Insurance Court, Gurgaon, raising the plea that on sectional rewards and milk/tea allowances, no contribution was due as these did not form part of the term 'wages' known to the Act and further the demand notice had not been issued by the Corporation but a person unauthorised. The Respondent was successful in the Employees' Insurance Court on both the pleas. The Corporation's first appeal was allowed by an Hon'ble Single Judge of this Court to the extent that the notice was validly issued that appropriate authority but was disallowed holding that sectional reward and -milk/tea allowance was not part of wages and hence no contribution was due. The dissatisfied Corporation has filed this Letters Patent Appeal.
(2.) THE Hon'ble Single Judge dealing with the matter had framed the following two questions of law, terming them substantial, for determination: (i) Whether payments made to employees under a unilateral reward scheme, which cannot be enforced by the employees but can be altered or rescinded to the detriment of the employees by an unilateral act of the employer, can be termed as 'wages' as defined in Section 2(22) of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act); and (ii) Whether milk and tea allowance paid to the employees would be covered by the definition of 'wages' as given in Section 2(22) of the Act or would be excluded therefrom under any of the exceptions thereto? The decision of the Hon'ble Single Judge mainly rested on his finding that the reward scheme was unilateral and could be altered, rescinded or withdrawn by the unilateral act of the employee and has it could not be termed as 'wages' as defined in Section 2(2) of the Act. In the same way, the Hon'ble Single Judge ruled that the provision of milk and tea allowance was also a unilateral concession which could unilaterally be withdrawn but alternately the provision of milk or the cost thereof to some of the employees would even be Covered by one of the exceptions as special expenses defrayed entailing on the employees by the nature of their employment. The finding otherwise recorded was that the terms of the unilateral reward scheme Exhibit A -5, and unilateral policy, Exhibit A -4, called food concession revealed that sectional reward was evolved to give incentive to employees to put in more work and give better production and better results, and tea was uniformly provided to all employees working in the establishment irrespective of the Sections, but milk was provided to employees working in forging, grinding, heat -treatment and electro -plating sections as those employees had to work under special atmospheric conditions of beat, dust fume 'etc., requiring such provision in order to take good care of their health. At a later stage, the price of a mug -full of tea for all 'employees and half a liter of milk to the employees working in the afore referred to four sections were calculated in terms of money and these have been increased from time to time depending on the price structure. Yet, in the food policy, it is said in categorical terms that the allowance of tea and milk is available to employees while actually on work and the policy, Exhibit A -4, is certain in terms that it would not be admissible to employees who would remain absent from duty or would be on leave of any kind and that a proportional deduction for the days not on duty would be made from the allowance paid. On these findings, whether the Appellant -Corporation has any claim to contribution under these heads has obviously to he viewed in the context of the provisions of the Act.
(3.) TO begin with, the term 'wages' defined in Section 2(22) of, the Act as it was before and after the amendment of Central Act No. 44 of 1966 with effect from 28th January, 1968, is worthwhile to be juxtaposed.;