EMPLOYEES STATE INSURANCE CORPORATION HYDERABAD Vs. ANDHRA PRADESH PAPER MILLS LIMITED RAJAHMUNDRY

JUDGEMENT

(1.) These two matters have been referred by a Division Bench of this court consisting of Madhava Reddy, and A. V. Krishna Rao, JJ. under the following circumstances : The view expressed by the Supreme Court in Braithwaite and Co. v. E.S.I.C., (1968) 1 Lab LJ 550: (AIR 1968 SC 413), came to be considered by Division Bench of this Court in Regional Director , E.S.I.C. v. Vazir Sultan Tobacoo Co. Ltd. , (1972) 2 Lab LJ 602 : (1973 Lab IC 523 (Andh Pra) ). In a subsequent judgment in C.M.A. No. 331 of 1974 decided by a Division Bench consisting of Chinnappa Reddy Punnayya JJ. on 13/04/1976 (reported in 1977 Lab IC 313 (Andh Pra)), a different view was taken and the subsequent Division Bench of this Court felt that the view expressed in the earlier division in Regional Director , E.S.I.C. v. Vazir Sultan Tobacoo Co. (Supra) was directly opposed to what the Supreme Court laid down in Braithwaite and Co. v. E.S.I.C. (Supra). In view of this difference of opinion the Division Bench consisting of Madhava Reddy and Krishna Rao JJ., have referred A.A.O. 94 of 1975 which relates to the incentive bonus, to a larger Bench. The question arising for consideration in A.A.O.No.229 of 1974 is regarding the house rent by the Company to its workmen. Originally directions were issued that A.A.O. 229 of 1974 should be posted along with A.A.O. No. 94 of 1975 for hearing and, hence, A.A.O. No. 229 of 1974 also came to be referred to the Full Bench.

(2.) The question which is referred in A.A.O. 94 of 1975 is whether incentive bonus paid by the Company i.e., employer, constitutes wages within the meaning of Section 2 (22) of Employees State Insurance Act.

(3.) In order to appreciate the controversy and to understand the view taken by the Supreme Court in Braithwaite and Cos case. (AIR 1968 SC 413), by the Division Bench of this court in Vazir Sultan Tobacoo Co.s case (1973 Lab IC 523 (Andh Pra) and by Chinnappa Reddy and Punnayya JJ. in the unreported case, (since reported in 1977 Lab IC 313 (Andh Pra) ), it is necessary for us to refer to some of the sections of the Employees State Insurance Act, 1948.