Vijayalakshmi Mills vs The Regional Director, E.S.I. Corporation

AR. Lakshmanan, J.—By consent of both parties the main appeal itself is taken up for final hearing. The question of law raised by the Appellant in this appeal reads thus:

D. The Court below has committed Anr. error of law in finding that there was no legislative intention to exclude the payment of overtime wages while enacting Section 2(22) of the Act. Further finding of the Court below that in the definition of employee u/s 2(9) of the Act overtime wages is specifically excluded and thus the intention of legislature while enacting Section 2(22) to exclude overtime wages also within the fold of ''wages'' is clear, is erroneous and unsustainable in law. It is submitted that the overtime work cannot be regarded as either an express or implied term of contract of employment inasmuch as the engagement of employees for overtime work is regulated by Sections 51, 54 and 59 of the Factories Act. The finding that an employee is expected to do overtime work at the behest of the employer who offers an opportunity and therefore there is a subsisting contract of employment and payment made by an employer for overtime work is ''wages'' for the purpose of Section 2(22) of the Act is erroneous. There is no obligation on the part of the employer to offer overtime work and a corresponding duty for the employees to do the said overtime work. Therefore, the Court below should have accepted the judicial pronouncement of the High Court of Karnataka reported in 1990 II LL.J. 195, the High Court of Calcutta reported in 1979 Lab. I.C. 852 and the High Court of Rajasthan reported in 1991 (2) LL.N. 1035 1991 (63) F.L.R. 277 and held that overtime wages will not be ''wages'' for the purpose of the Act. The finding of the Court below, that the overtime work is done in pursuance of the contract of service subsisting between the parties and the said overtime work is in pursuance of the original contract of employment and therefore overtime wages paid for that additional work in fulfilment of the implied term of contract would be remuneration paid or payable coming within the first part of the definition of ''wages'' contained in Section 2(22) of the Act is clearly illegal. The Court below has misdirected itself in relying on the decisions reported in 1974 (1) LL.J. 453 (Bombay High Court), 1979 Lab I.C. 527 (Delhi High Court) and 1981 Lab. I.C. 457 (Andhra Pradesh High Court). It is submitted that the Court below, is not justified in discarding the well considered decisions of the High Court of Karnataka reported in 1990 (2) LL.J. 195 and the Rajasthan High Court reported in 1991 (63) F.L.R. 277.

It appears that different High Courts have expressed conflicting opinion on the point raised by the Appellant in this appeal. The same question was raised before the Supreme Court in C.A. No. 2777/1980 etc. batch. The question raised before the Supreme Court was whether overtime wages would be wages within the meaning of Section 2(22) of the E.S.I. Act, 1948. The Supreme Court after a survey of the authorities and taking note of the conflict of judicial opinion on the point between several High Courts came to the conclusion that overtime wages would be wages within the meaning of Section 2(22) of the Act. In view of the opinion now expressed by the Supreme Court in the above judgment namely, Indian Drugs and Phamarceuticals Ltd. v. Employees State Insurance Corporation 1997 (2) LL.J. 700, the appeal has to fail and therefore it is dismissed. C.M.P. No. 444/93 also stands dismissed. No costs.