EMPLOYEES STATE INSURANCE CORPORATION & ANR.versusMANGALAM PUBLICATIONS (I) PRIVATE LIMITED

                     [2017) 8 S. C.R. 697


 EMPLOYEES STATE INSURANCE CORPORATION & ANR.                       A
                                v.
     MANGALAM PUBLICATIONS (I) PRIVATE LIMITED
                  (Civil Appeal No. 4681 of2009)
                      SEPTEMBER21, 2017                             B

                [ARUN MISHRA AND
           MOHAN M. SHANTANAGOUDAR, JJ.)
       . Employees' State Insurance Act, 1948 - s. 2(22) - Wages -
Interim relief paid by private limited company-respondent to its C
employees, during certain period - Liability of the company-
respondent to pay Employees' State Insurance (ESI} contribution to
its employees - Held: Interim relief paid by the company-respondent
to its employees being "wages" as defined u/s. 2(22) and not a
 'gift' or 'inam ', thus, the company-respondent liable to pay the ESI
contribution to its employees - Payment of interim relief/wages D
emanates from the provisions contained in terms of the settlement,
which forms part of the contract of employment and forms the
ingredients of "wages" as defined u/s. 2(22) - It was not an ex-
gratia payment - Thus, the Employees' State_ Insurance Corporation
entitled to recover the ESI contribution from the respondent for the E
said period.
      Allowing the appeal, the Court
      HELD: 1. A plain reading of the definition of wages under
Bection 2(22) of the Employees State Insurance Act, 1948 makes
it amply clear that "wages" means all remuneration paid or payable F
in· cash to an employee, if the terms of the contract of the
employment, expressed or implied, were fulfilled and includes
other additional remuneration, if any, paid at intervals not
exceeding two months. But payments made on certain
contingencies under Clauses (a) to (d) of Section 2(22) of the
Act, do not fall within the definition of "wages". The interim relief G
paid to the employees of the respondent in the matter on hand,
will definitely not fall within the excluded part of clauses (a) to (d)
of Section 2(22) of the Act, inasmuch as such payment is not
travelling allowance or the value of any travelling concession,
contribution paid by the employer to any pension fund or provident H
                                  697
698          SUPREME COURT REPORTS                      [2017] 8 S.C.R.


A fund; sum paid to an employee to defray special expenses entailed
  on him by the nature of his employment; or any gratuity payable
  on discharge. (Para 71 (704-D-FJ
           2. The Employees' State Insurance Fund set up under the
    Act survives primarily on contributions paid to the Employees'
B State Insurance Corporation (the appellant). All employees
    insured in accordance with the Act are entitled to benefits under
    the Act. Undoubtedly, the literal meaning of statutory provisions
    cannot be ignored. However, in cases whether they may be two
    or more ways to interpret a statutory provision, the spirit of this
    legislation warrants a construction that benefits the working class.
C The inclusive part and exclusive portion of the definition of
       •
    "wages" clearly indicate that the expression "wages" has been
    given wider meaning. Under the definition, firstly whatever
    remuneration is paid or payable to an employee under the terms
    of the contract of the employment, expressed or implied, is
D . ''wages". Secondly, whatever payment is made to an employee in
     respect of any period of authorized leave, lock-out etc. is "wages".
    Thirdly, other additional remuneration, if any, paid at intervals
     not exceeding two months is also "wages". Any ambiguous
     expression, should be given a beneficent construction in favour
     of employees by the Court. If the definition of "wages" is read in
E its entirety including the inclusive part as well as the exclusive
     portion, it appears that inclusive portion is not intended to be
     limited only of items mentioned therein, particularly, having
     regard to the objects and reasons for which the Employees" State
     Insurance Act in enacted. The Act has to be necessarily so
F construed as to serve its purpose and objects. (Para 8] (704-G-
     H; 705-A-Dl
          3. The High Court while allowing the appeal filed by the
   respondent mainly relied upon the office memorandum dated
   19.08.1998 issued by the Department of Public Enterprises,
 G Ministry of Industry, New Delhi which is not applicable to the
   facts of the instant case. The said notification makes it abundantly
   clear that the instruction contained in the said office memorandum
   are applicable to Central Public Sector Enterprises (PSES) only.
   Admittedly, the respondent is a private limited company and
   hence the instructions contained in office memorandum dated
 H
E.S.LC. & ANR. v. MANGALAM PUBLICATIONS (I) PVT. LTD. 699


19.08.1998 are not applicable to the respondent company. The           A
appellant claimed ESI contribution only on the amount paid by
the respondent as interim relief to its employees, treating the
same as "wages" as per Section 2(22) of the Act. The amount
paid as interim relief by the respondent to its employees definitely
falls within the definition of ''wages" as per Section 2(22) of the    B
 Act On the other hand, the High Court observed that the interim
 relief paid for the period from 01.04.1996 to 31.03.2000 can only
 be treated as "ex-gratia payment" paid by the employer to its
employees and cannot be treated as "wages" for the purpose of
ESI contribution. The High Court ignored to appreciate tliat the
effect of ESI Act enacted by the Parliament cannot be                  C
circumvented by the department office memorandum. The High
-Court also failed to appreciate that the payment of interim relief/
wages emanates from the provisions contained in terms of the
settlement, which forms part of the contract of employment and
forms the ingredients of "wages" as defined under Section 2(22)        D
 of the Act and that the respondent paid interim relief, as per a
 scheme voluntarily promulgated by it as per the notification dated
 20.04.1996, issued by the Government of India, in view of the
 recommendations of 'Manisana' Wage Board, pending revision
 of rates of wages. It was not an ex-gratia payment. (Para 10] (708-
~H; ~~~D)                                                              E
       4. The interim relief paid by the respondent to its employees
is not a "gift" or "inam" , but is a part of wages, as defined under
Section 2(22) of the ESI Act. In view thereof, the payment made
by way of interim relief to the employees by the respondent for
the period from 1.04.1996 to 31.03.2000 comes within the               F
definition of "wages", as contained in Section 2(22) of the ESI
Act, and hence, the respondent is liable to pay ESI contribution.
The impugned judgment of the High Court is set aside, and that
of the ESI Court is restored. The appellant is held to be entitled
to recover the ESI contribution from the respondent for the period
from 01.04.1996 to 31.03.2000. [Paras 11, 12] [710-A-C)                G
      Mis. Harihar Polyfibres v. Regional Director, ES!
      Corporation (1984) 4 SCC 324 : [1985] 1 SCR 712;
      Whirlpool of India Ltd. vs. Employees' State Insurance
      Corporation (2000) 3 SCC 185 : (2000] 2 SCR 165;
                                                                       H
700             SUPREME COURT REPORTS                          [2017] 8 S.C.R.


·A            Employees' State Insurance Corporation v. Gnanambigai
              Mills Limited (2005) 6 SCC 67 : [20051 1 Suppl. SCR
              738 - referred to.
                                Case Law Reference
              (1985) 1 SCR 712               referred to              Para8
B
              [2000) 2 SCR 165                referred to             Para9
              (2005) 1 Suppl. SCR 738        referred to              Para 10


 C            CIVJLAPPELLATE JURISDICTION: Civil Appeal No.4681 of
      2009.
            From the final Judgment and Order dated 28.02.2007 passed by
      the High Court of Kerala at Emakulam in Insurance Appeal No. 2 of
      2004.
·D            Ms. Sonam Anand (for Sanjeev Anand), Adv. for the Appellants.
           Raghenth Basant, A. Karthik (for P.V. Dinesh), Advs. for the
      Respondent.
              The Judgment of the Court was delivered by

 E          MOHAN M. SHANTANAGOUDAR, J. 1. The judgment
      dated 28.02.2007 passed in Insurance Appeal No. 2 of2004 by the High
      Court ofKerala at Emakulam is called in question in this appeal. By the
      impugned judgment, the High Court allowed the appeal filed by the
      respondent herein and set aside the order dated 13.10.2003 passed by
      the ESI Court, Idukki, Kerala.
 F
              2. Brief facts leading to this appeal are as follows:
           The respondent is an establishment covered by the provisions of
    Employees State Insurance Act, 1948 (hereinafter referred to as the
    'ESI Act'). It is a private limited company engaged in the business of
· G printing and publishing of a daily Malayalam newspaper called
    "Mangalam"; the respondent has more than 250 employees including
    working and non-workingjoumalists. In order to have a uniform formula
    regarding the wages payable to the employees ofnewspaper companies
    like the respondent, the Central Government appointed Wage Boards
    from time to time to study and submit reports from time to time. Earlier,
 H
E.S.l.C. & ANR. v. MANGALAM PUBLICATIONS (I) PVT. LTD.                        701
            [MOHAN M. SHANTANAGOUDAR, J.]

·the Wage Board headed by Justice Bachawat, known as 'Bachawat A
 Wage Board' was constituted and the Board submitted its
 recommendations. Thereafter, the Government oflndia appointed a new
 Wage Board, headed by Justice Manisana which was called as 'Manisana
 Wage Board'. As per the recommendations of' Manisana Wage Board',
 the Government oflndia issued a notification dated 24.09.1996 fixing B
 interim rates of wages in respect of working journalists, non-working
 journalists and newspaper agency employees at the rate of twenty per
 cent of the basic wages and an additional amount of Rs.l 00/- per month,
 with effect from 20.04.1996. As per the said notification, the respondent
 started paying interim relief to its employees, and paid such interim relief
 from 01.04.1996 to 31.03.2000. However, the respondent did not pay C
 the statutory contribution under the ESIAct for the period during which
 it paid interim wages to its employees. The ESI contribution due on
 interim wages paid by the respondent from 01.04.1996 to 31.03.2000
 worked out to Rs.2,53,272/- (however, as per demand notice dated
.02.11.2000, the figure is Rs.2,58,061.50).
                                                                              D
        Subsequently, another office memorandum was issued by the
 Government of India, Department of Public Enterprises, Ministry of
 Industry, providing for the grant of interim relief to the employees of
 Central Public Sector Enterprises (PSES). The said office memorandum
 was subject to the following conditions: -
                                                                              E
        a) These instructions are applicable to the employees of Central
        PSES following IDA pattern.
       b) The amount paid as interim relief would be fully adjusted and
       .... in the final pay revision package.
       c)    xxx          xxx              xxx                                F
       d)    xxx          xxx              xxx
       e)    xxx          xxx              xxx
       f)    xxx          xxx              xxx
        g) The amount of interim relief will be ....viz. it will neither be
      · termed as 'pay' nor 'allowances' nor 'wages'. Accordingly, this       G
        amount would not count for any service benefit i.e. computation
        of house rent allowance, compensatory allowance, overtime
        allowance, cash compensation, encashment ofleave, pay fixation,
        pension or gratuity etc.
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702           SUPREME COURT REPORTS                         [2017) 8 S.C.R.


A        The afore-mentioned office memorandum dated 19.08.1998 of
  the Ministry of Industry had nothing to do with the notification dated
  20.04.1996 providing for interim relief to the employees of newspaper .
  agencies. The office memorandum dated 19 .08.1998 makes itself clear
  that the same was applicable to employees of the Central PSES, and
B consequently it had no application to employees of private sector
  undertakings like that of the respondent company.
         3. The premises of the respondent-company was inspected by
  the Insurance Inspector of the appellant-Corporation on 13.06.2000,
  wherein it was found that the respondent had not paid any contribution
  on the interim wages paid by it to its employees during the period from
C 01.04.1996 to 31.03.2000. The contention of the respondent was that it
  was not required to pay any contribution on the interim relief paid by it to
  its employees in view of office memorandum dated 19.08.1998. Since
  the contribution was not paid by the respondent, as mentioned supra, a
  notice dated 18.07 .2000 was issued by the appellant to the respondent to
D pay contribution of the afore-mentioned amount for the afore-mentioned
  period. The notice of demand dated 02.11.2000 was also served on the
   respondent demanding an amount ofRs.2,58,061.50 with interest thereon.
           4. Feeling aggrieved by the afore-mentioned notices, the
   respondent moved the Employees Insurance Court, Idukki, Kerala, by
 E filing a petition under Section 75 of the ESI Act, which came to be
   numbered as Insurance Case No. 19/2000. In the said petition also, the
   respondent relied upon the office memorandum dated 19.08.1998 and a
   clarificatory letter dated 20.12.1996 of the Indian Newspaper Society.
   The said petition was opposed by the appellant contending that the office
   memorandum dated 19.08.1998 was not applicable to the respondent,
 F and that the clarification given by the Indian Newspaper Society has no
   legal validity; the effect of the Act of Parliament i.e., ESI Act cannot be
   superseded by the office memorandum issued by the department; that
   under Section 2(22) of the ESI Act, all remuneration is wages except
   the categories mentioned in clauses (a) to (d) of Section 2(22) of the
 G ESI Act, and that interim relief does not come within the excluded parts
   of clauses (a) to (d). After consideration of the material on record, the
   ESI Court dismissed the application filed by the respondent holding that
    the interim relief paid by the respondent to the employees was "wages"
    as defined under Section 2(22) of the EST Act, and hence the respondent

 H
E.S.I.C. & ANR. v. MANGALAM PUBLICATIONS (I) PVT. LTD. 703
            [MOHAN M. SHANTANAGOUDAR, J.]

 was liable to pay contribution for the interim relief paid. It was observed A
 by the ESI Court that the respondent paid interim relief to its employees
 as per the direction contained in the notification dated 20.04.1996 and
.the provisions of the notification became a part of the contract of
 employment of the employees of the respondent compa_p.y. It was also
 observed that the office memorandum dated 19.08.1998 was only B
 applicable to the employees of the Central PSES, and it does not
 anywhere say that the interim relief is not "wages" as defined under
 Section 2(22) of the ESI Act or that contribution need not be paid on the
 payment of interim relief.
         The respondent filed Insurance Appeal No. 2/2000 before the
High Court ofKerala under Section 82 of the ESIAct, challenging the C
order passed by the ESI Court on 13.10.2003. The appeal came to be
allowed by the impugned judgment, holding that the appellant herein is
not entitled to collect any contribution in respect of interim relief paid by
the respondent to its employees. While concluding so, the High Court
has held that the amount paid as interim relief cannot be treated as D
"wages" or "part of wages" and can only be treated as "ex-gratia
payment". Hence, this appeal.
      · 5. The only question to be considered and decided in this appeal is
as to whether the interim relief paid by the respondent to its employees,
during the period from 01.04.1996 to 31.03.2000, is to be treated as          E
"wages" as defined under Section2(22) of the ESIAct, and if so, whether
the respondent is liable to pay the ESI contribution?
      6. There cannot be any dispute that if the interim relief paid by the
respondent is held by this Court as "wages" as defined under Section
2(22) of the ESI Act, then the respondent is necessarily liable to pay ESI    F
contribution on the amount of interim relief paid to its employees.
       7. Before proceeding further, it would be relevant to note the
definition of wages, as defined under Section 2(22) of the ESIAct. The
same is extracted hereunder:
       "Section 2 (22) of the Employees' State Insurance Act, 1948            G
       defines Wages. It reads as follows:-
        "wages" means all remuneration paid or payable in cash to an
      · employee, if the terms of the contract of employment, express or

                                                                              H
704            SUPREME COURT REPORTS                           [2017] 8 S.C.R.


A           implied, were fulfilled and includes any payment to an employee
            in respect of any period of authorized leave, lock-out, strike which
            is not illegal or lay-off and other additional remuneration, if any,
            paid at intervals not exceeding two months, but does not include-
            (a) Any contribution paid by the employer to any pension fund
B           or provident fund, or under this act;
            (b) Any travelling allowance or the value of any travelling
            concession;
            (c) any sum paid to the person employed to defray special
            expenses entailed on him by the nature of his employment; or
c
            (d) Any gratuity payable on discharge."
           A plain reading of the afore-mentioned definition of Section 2(22)
    of the ESIAct makes it amply clear that "wages" means all remuneration
    paid or payable in cash to an employee, if the terms of the contract of
 D the employment, expressed or implied, were fulfilled and includes other
    additional remuneration, if any, paid at intervals not exceeding two months.
    But payments made on certain contingencies under Clauses (a) to (d) of
    Section 2(22) of the ESIAct, do not fall within the definition of"wages".
    The interim relief paid to the employees of the respondent in the matter
    on hand, as mentioned supra, will definitely not fall within the excluded
· E part of clauses (a) to (d) of Section 2(22) of the ESI Act, inasmuch as
    such payment is not travelling allowance or the value of any travelling
    concession, contribution paid by the employer to any pension fund or
    provident fund; sum paid to an employee to defray special expenses
    entailed on him by the nature of his employment; or any gratuity payable
  F on discharge.
             8. The Employees' State Insurance Act is a welfare legislation. It
      has been enacted to protect and safeguard the rights of the working
      class. Its preamble states that it is meant to "provide for certain benefits
   to employees in case of sickness, maternity and 'employment injury'
 G and to make provision for certain other matters in relation thereto".
      The Employees' State Insurance Fund set Up under this Act survives
      primarily on contributions paid to the Employees' State Insurance
      Corporation (the appellant). All employees insured in accordance with
      this Act are entitled to benefits under the Act. Undoubtedly, the literal
      meaning of statutory provisions cannot be ignored. However, in cases
 H
E.S.l.C. & ANR. v. MANGALAM PUBLICATIONS (I) PVT. LTD.                          705
            [MOHAN M. SHANTANAGOUDAR, J.]

 where there may be two or more ways to interpret a statutory provision,        A
 the spirit of this legislation warrants a construction that benefits the
 working class. The inclusive part and exclusive portion ofthe definition
 of"wages" clearly indicate that the expression "wages" has been given
 wider meaning. As mentioned supra, under the definition, firstly whatever
 remuneration is paid or payable to an employee under the terms of the          B
·contract of the employment, expressed or implied, is "wages". Secondly,
 whatever payment is made to an employee in respect of any period of
 authorized leave, Jock-out etc. is "wages". Thirdly, other additional
 remuneration, if any, paid at intervals not exceeding two months is also
 "wages". Any ambiguous expression, according to us, should be given a
 beneficent construction in favour of employees by the Court. If the            C
 definition of"wages" is read in its entirety including the inclusive part as
 well as the exclusive portion, it appears that inclusive portion is not
 intended to be limited only of items mentioned therein, particularly, having
 regard to the objects and reasons for which the Employees' State
 Insurance Act is enacted. The Act has to be necessarily so construed           D
 as to serve its purpose and objects. This Court in the case of Mis
 Harihar Polyfibres vs. Regional Director, ESI Corporation, (1984)
 4 SCC 324 has held that the definition of"wages" contained in Section
 2(22) of the ESI Act is wide enough to include House Rent Allowance,
 Night Shift Allowance, Incentive Allowance and Heat, Gas and Dust
.Allowance. To come to the aforesaid conclusion, this Court observed            E
 thus:·
       "2. The Employees' State Insurance Act is a welfare legislation
       and the definition of 'wages' is designedly wide. Any ambiguous
       expression is, of course, bound to receive a beneficent construction
       at our hands too. Now, under the definition, first, whatever remune- F
       ration is paid or payable to an employee under the terms of the
       contract of the employment, express or implied is wages; thus if
       remuneration is paid in terms of the original contract of
       employment or in terms of a settlement arrived at between the
       employer and the employees which by necessary implication
       becomes part of the contract of employment it is wages; second, G
       whatever payment is made to an employee in respect of any period
       of authorised leave, Jock-out, strike which is not illegal or lay-off
       is wages; and third, other additional remuneration, if any, paid at
       intervals not exceeding two months is also wages; this is unqualified
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706      SUPREME COURT REPORTS                           [2017] 8 S.C.R.


A     by any requirement that it should be pursuant to any term of the
      contract of employment, express or implied. However, 'wages'
      does not include any contribution paid by the employer to any
      pension fund or provident fund, or under the Act, any travelling
      allowance or the value of any travelling concession any sum paid
      to the person employed to defray special expenses entailed on
B
      him by the nature of his employment and any gratuity payable on
      discharge. Therefore wages as defined includes remunera-tion
      paid or payable under the terms of the contract of employment,
      express or implied but further extends to other additional remunera-
      tion, if any, paid at intervals not exceeding two months, though
c     out-side the terms of employment. Thus remuneration paid under
      the terms of the contract of the employment (express or implied)
      or otherwise ifpaid at intervals not exceeding two months is wages.
      The interposition of the clause "and includes any payment to an
      employee in respect of any period of authorised leave, lock-out,
      strike which is not illegal or lay-off" between the first clause, "all
D     remuneration paid or payable in cash to an employee, ifthe terms
       of the contract of employment, express or implied, was fulfilled"
       and the third clause, "other additional remuneration, if any, paid at
       intervals not exceed-ing two months," makes it abundantly clear
       that while 'remuneration' under the first clause has to be under a
 E     contract of employment, express or implied, 'remuneration' under
       the third clause need not be under the contract of employment but
       may be any 'additional remuneration' outside the contract of
       employment. So, there appears to our mind no reason to exclude
       'House Rent Allowance', 'Night Shift Allowance', 'Incentive
       Allowance' and 'Heat, Gas and Dust Allowance' from the
 F
       definition of 'wages'. A Full Bench of the Karnataka High Court
       in N.GE.F. Ltd. v. Deputy Regional Director, E.S.l.C. considering
       the question at some length held that the amount paid by way of
        incentive under the scheme of settlement entered into between
       the Management and its workmen was wages within the meaning
 G      of Section 2(22) of the Employees' State Insurance Act. It was
        observed by the Full Bench of the Karnataka High Court as follows:
      It is true that the word 'remuneration' is found both in the first
      and second parts of the definition. But the condition attached to
      such payment in the first part cannot legitimately be extended to
 H
E.S.l.C. & ANR. v. MANGALAM PUBLICATIONS (I) PVT. LTD.                     707
            [MOHAN M. SHANTANAGOUDAR, J.]

      the second part. The other 'additional remuneration' referred to . A
      in the second part of the definition is only qualified by condition
      attached thereto (that is, paid at intervals not exceeding two
      months). That was also the view taken by a Full Bench of the
      Andhra Pradesh High Court in E.S.J. Corpn., Hyderabad vs
      A.P Paper Mills Ltd., and also the Bombay High Court in B
      Mahalaxmi Glass Works Pvt. Ltd. v. E.S.I. But this aspect of
      the matter has been completely overlooked by this Court in
      Kirloskar case (1974) I Kant L.J 358.
       Justice Amarendra Nath Sen, concurred with the aforementioned
observations of Justice 0. Chinnappa Reddy and supplemented as
under:                                                                     C
      "8. I entirely agree that on true interpretation of the word 'wages'
      defined in Section 2(22) of the Employees' State Insurance Act,
      'wages' must necessarily include 'House Rent Allowance, Night
      Shift Allowance, Heat, Gas and Dust Allowance and Incentive
      Allowance'.                                                          D
       9. The definition of 'wages' has been set out in the judgment of
       my learned brother. The inclusive part and the exclusive portion
       in the definition clearly indicate, to my mind, that the expression
       "wages" has been given a very wide meaning. The indusive part
       of the definition read with exclusive part in the definition clearly E
       shows, to my mind, that the inclusive portion it not intended to be
       limited only to the items mentioned therein. Taking into consideration
     · the excluding part in the definition and reading the definition as a
       whole the inclusive part, to my mind, is only illustrative and tends to
       express the wide meaning and import of the word 'wages' used in F
       the Employees' State Insurance Act.
      10. The Employees' State Insurance Act is a piece of social
      welfare legislation enacted for the benefit of the employees. The
      Act has to be necessarily so construed as will serve its purpose
      and objects.                                                  ·       G
      11. I entirely agree with my learned brother that on a proper
      interpretation of the term 'wages' the legislative intent is made
      manifestly clear that the term 'wages' as used in the Act will
      include House RentAllowance, Night Shift Allowance, Heat, Gas
                                                                            H
708            SUPREME COURT REPORTS                           (2017) 8 S.C.R.


A           and Dust Allowance, Night Shift Allowance, Heat, Gas and Dust
            Allowance and Incentive Allowance. The definition, to my mind,
            on its plain reading is clear and unambiguous. Even If any ambiguity
            could have been suggested, the expression must be given a liberal
            interpretation beneficial to the interest of the employees for whose
            benefit the Employees' State Insurance Act has been passed."
B
            9. This Court, in the case of Whirlpool of India Ltd. vs
      Employees' State Insurance Corporation, (2000) 3 SCC 185, has
      succinctly described the intention of the legislature in passing the E.S.I.
      Act, and the same reads as thus,
 c          "5. The Act is a social legislation enacted to provide benefits to
            employees in case of sickness, maternity and employment injury
            and to make a provision for certain other matters in relation thereto.
            Broadly this is the purpose for which the Corporation has been
            established under Section 3 of the Act. The main source of the
            Employees' State Insurance Fund is the contributions paid to the
 D          Corporation (Section 26). The benefits to be provided to insured
            persons and others are as provided in Chapter V, in particular,
            Section 46 thereof. The words and expressions used but not defined
            in the Act and defined in the Industrial Disputes Act, 1947, are to
            have the meanings respectively assigned to them in the Industrial
 E          Disputes Act, Undoubtedly, any provision of which two
            interpretations may be possible would deserve such construction
            as would be beneficial to the working class but, at the same time,
            we cannot give a go-by to the plain language of a provision."
           10. As mentioned supra, the High Court while allowing the appeal
. p filed by the respondent has mainly relied upon the office memorandum
    dated 19 .08.1998 issued by the Department of Public Enterprises, Ministry
    of Industry, New Delh~ which is not applicable to the facts of this case.
    The said notification makes it abundantly clear that the instructions
    contained in the said office memorandum are applicable to Central Public
    Sector Enterprises (PSES) only. Admittedly, the respondent is a private
  G limited company and hence the instructions contained in office
    memorandum dated 19.08.1998 are not applicable to the respondent
    company. In the matter on hand, the appellant claimed ESI contribution
    only on the amount paid by the respondent as interim relief to its
    employees, treating the same as "wages" as per Section 2(22) of the
 H
E.S.I.C. & ANR. v. MANGALAM PUBLICATIONS (I) PVT. LTD.                        709
            [MOHAN M. SHANTANAGOUDAR, J.]

 ESI Act. The amount paid as interim relief by the respondent to its          A
 employees definitely falls within the definition of"wages" as per Section
 2(22) of the ESI Act. On the other hand, the High Court has strangely
 observed that the interim relief paid for the period from 01.04.1996 to
 31.03.2000 can only be treated as "ex-gratia payment" paid by the
 employer to its employees and cannot be treated as "wages" for the           B
 purpose ofESI contribution. In our considered opinion, the High Court
 has ignored to appreciate that the effect of ESI Act enacted by the
 Parliament cannot be circumvented by the department office
 memorandum. The High Court has also failed to appreciate that the
 payment of interim relief/wages emanates from the provisions contained
·in terms of the settlement, which forms part of the contract of employment   C
 and forms the ingredients of"wages" as defined under Section 2(22) of
 the ESI Act and that the respondent paid interim relief, as per a scheme
 voluntarily promulgated by it as per the notification dated 20.04.1996,
 issued by the Government of India, in view of the recommendations of
 "Manisana' Wage Board, pending revision of rates of wages. It was not        D
 an ex-gratia payment. In this context, it is beneficial to note the
 observations of this Court in the case of Employees State Insurance
 Corporation vs. Gnanambigai Mills Limited, (2005) 6 SCC 67,
 which read thus:
        "6. In our view the High Court has gone completely wrong in
        concluding that by virtue of the award it ceases to be wages. As E
        stated above, the Tribunal has not applied its mind as to whether
        or not the payments were wages. All that the Tribunal did was to
        give its imprimatur to a compromise between the parties. Merely
        because the parties in their compromise chose to term the
      · payments as "ex gratia payments" does not mean that those F
        payments cease to be wages if they were otherwise wages. As
        stated above, they were wages at the time that they were paid.
        They did not cease to be wages after the award merely because
        the terms of compromise termed them as "ex gratia payments".
        We are therefore unable to accept the reasoning of the judgments
        of the High Court. The judgment of the Division Bench as well as G
        that of the Single Judge accordingly stands set aside. It is held
        that the amounts paid are wages and contribution will have to be
        made oil those amounts also. We, however, make it clear that
        payments of the interest will be as per the statutory provisions."
                                                                              H
710                SUPREME COURT REPORTS                 [2017] 8 S.C.R.


A        11. The interim relief paid by the respondent to its employees is
  not a "gift" or "inam", but is a part of wages, as defined under Section
  2(22) of the ESI Act. In view of the above, we hold that the payment
  made by way of interim relief to the employees by the respondent for
  the period from 1.04.1996 to 31.03.2000 comes within the definition of
B "wages", as contained in Section 2(22) of the ES! Act, and hence the
  respondent is liable to pay ESI contribution.
          12. Accordingly, the instant appeal is allowed, the impugned
   judgment of the High Court is set aside, and that of the ESI Court is
   restored. The appellant is held to be entitled to recover the ESI
   contribution from the respondent for the period from 01.04.1996 to
 C 31.03.2000 as per demand notice dated 02.11.2000. No order as to
   costs.



      Nidhi Jain                                             Appeal allowed.