Employee State Insurance Act, 1948 – s.2(22) and s.2(24) – Whether ‘wages’, as defined in s.2(22) of the ESI Act would include Conveyance Allowance paid by a Company to its employees – Held: From the definition of wages in s.2(22), it is amply clear that wages includes remunerative payments, but does not include compensatory payments – Travelling allowance including the value of travelling concession has expressly been excluded from the definition of wages, as also any payment made to an employee to reimburse or compensate for special expenses that an employee might incur by reason of the nature of his employment – Conveyance Allowance is in the nature of travelling allowance, the object of which is to enable the employee to reach his place of work and to defray costs incurred on travel from his place of residence to his place of work – If instead of paying the Conveyance Allowance, the employer provided free transport to the employee, the monetary value of that benefit of travel from his residence, to his place of work would also not be regarded as forming part of his wages – The definition of wages in s.2(22) of the ESI Act clearly excludes Travelling Allowance – Expression “Travelling Allowance” has not been defined in the ESI Act – Under s.2(24) of the ESI Act all words and expressions used, but not defined in the ESI Act shall have the meaning assigned to them under the Industrial Disputes Act – Travelling Allowance is also not defined in the Industrial Disputes Act – No provision in the ESI Act or in the Industrial Disputes Act, which restricts the scope and ambit of Travelling Allowance – In absence of any definition or explanation of the expression “Travelling Allowance” in either of those Acts, the expression has to be construed as per its ordinary meaning in common parlance – No such difference between Conveyance Allowance and Travelling Allowance to justify the stand of the Petitioner Corporation that Conveyance Allowance would not fall within the ambit of Travelling Allowance – Travelling Allowance includes Conveyance Allowance – Use of the expression “any travelling allowance” in s.2(22)(b) makes it clear that all kinds of travelling allowance are excluded from the definition of wages – No reason why Conveyance Allowance should not be excluded from the definition of wages – Industrial Disputes Act, 1947.
Words and Phrases – “conveyance” and “travel” – Meaning
Interpretation of Statutes – Rule of construction – In the face of ambiguity – Held: When there is any ambiguity in any provision, the Court would ordinarily favour a construction that would be beneficial to those for whom the legislation is enacted.
of.
Regional Director, Employees State Insurance
Corporation v. M/s IT Solutions (India) Private Limited ILR 2002 KAR 4019 – overruled.
Wellman (India) (P) Ltd. v. ESI Corporation (1999) 1 SCC 219: [1993] 3 Suppl. SCR 568; Modella
Woollens Ltd. v. ESI Corporation 1994 Supp (3) SCC 580; and Harihar Polyfibres v. Regional Director, ESI Corporation (1994) 4 SCC 7 – distinguished.
Management of Oriental Hotels Ltd., Chennai v. Employees’ State Insurance Corporation, Chennai 2002
(1) LLJ 14; Regional Director, ESI Corporation v. Sundaram Clayton Ltd. 2004 (II) LLJ 30 and Regional Director, ESI Corporation, Thrissur v. Royal Plastics Industries, Aluva 2015 (2) KLT 64 – affirmed.
Whirlpool of India Limited v. ESI Corporation (2000) 3 SCC 185:[ 2000] 2 SCR 165 – referred to.
Oxford Learner’s Dictionary, 8th Edition – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.