Case: Regional Director, Employees' State Insurance Corporation and Another Vs. Enfield India Limited

These two civil appeals arise out of a common judgment of the High Court of Judicature at Madras allowing two writ petitions filed by the respondent Company. The contention of the respondent Company before the High Court was that the appellant Corporation is not entitled to direct the respondent Company to remit the employers and employees contributions to the extent to which they covered the amounts of incentive bonus paid to the workmen by the said company during the relevant periods. Two different orders of the appellant authority directing the company to pay these amounts resulted in the aforesaid two writ petitions. A Division Bench of the High Court took the view that the company was not liable to remit either the employers or employees contributions so far as the incentive bonus paid to the employees was concerned as according to the High Court it did not form part of wages. The aforesaid judgment of the High Court was rendered on October 13, 1982. By grant of special leave to appeal, the present appeals are filed by the appellant Corporation. 2. Now, in the meantime, this Court has finally resolved this controversy. The two decisions of this Court which have a direct bearing on the controversy between the parties may be noted. In Harihar Polyfibres v. Regional Director ESI Corpn. (1984-II-LLJ-475) a Bench of two learned Judges of this Court speaking through O. Chinnappa Reddy, J. held that "wages" as defined by Section 2(22) of the Employees State Insurance Act, 1948 (hereinafter to be referred to as "the Act") would include amongst others incentive allowances paid to the workmen. A. N. Sen, J. in his supplementary judgment also took the same view. There is a later decision of this Court in the case of Modella Woollens Ltd. V. ESI Corpn., which had ruled that production bonus is also covered by the term "wages" as defined by Section 2(22) of the said Act.

Decision:
1[ds]2. Now, in the meantime, this Court has finally resolved this controversy. The two decisions of this Court which have a direct bearing on the controversy between the parties may be noted. In Harihar Polyfibres v. Regional Director ESI Corpn.a Bench of two learned Judges of this Court speaking through O. Chinnappa Reddy, J. held that "wages" as defined by Section 2(22) of the Employees State Insurance Act, 1948 (hereinafter to be referred to as "the Act") would include amongst others incentive allowances paid to the workmen. A. N. Sen, J. in his supplementary judgment also took the same view. There is a later decision of this Court in the case of Modella Woollens Ltd. V. ESI Corpn., which had ruled that production bonus is also covered by the term "wages" as defined by Section 2(22) of the said Act.