Judgment:
R.P. Gupta, J.
1. This appeal is directed against Judgment dated 25th April, 1990 of Judge, Employees Insurance Court, Jabalpur, whereby petition filed by the present respondent M/s Central India Sales Corporation, Jabalpur, was accepted. Employees State Insurance Corporation (the present appellant), was directed not to proceed with the recovery of their demand of Rs. 20,415=00 made on the Sales Corporation by Regional Director of E.S.I. Corporation vide their Letter dated 5-2-1985.
2. The E.S.I. had made a demand of the aforementioned amount as an additional contribution by the Sales Corporation to E.S.I. fund for the wages paid to its employees.
3. Initially, a letter of demand for Rs. 16,118.90 was issued by E.S.I, on 31-10-1983 on the ground that additional wages to the tune of Rs. 2,30,269=59 had been paid by the Sales Corporation to its employees and in respect of them no contribution had been paid which had to be 7% of this wages for the period from September, 1981 to August, 1982. Later on, it appears that some penalties or interests were added to make amount Rs. 20,415.67 on 5-2-1985. The E.S.I. authorities refused to consider the objections filed by the Sales Corporation before them. Hence, the petition before the E. I. Court, resulting in success of the petition. Now the E.S.I. through the Regional Director, Panchdeep Bhavan, Indore has approached this Court in appeal under section 82 of the E.S.I. Act.
4. After hearing the learned counsel for both sides and perusal of the record, I find there is no force in this appeal. It was on the basis of certain entries in the ledger of the Sales Corporation that the aforesaid demand was raised by the officers of E.S.I. (C). These entries pertain to the following payments during the relevant period shown in the ledger of the Sales Corporation.
(i) Repairs and Maintenance Rs. 30,474.35
(ii) Repairs and others Rs. 2,415.52
(iii) General expenses Rs. 20,578.16
(iv) Loading and unloading charges Rs. 2,063.74
(v) Packing and delivery charges Rs. 32,295.10
(vi) Ex gratia Rs. 325.00
(vii) Other allowances Rs. 2,345.00
(viii) Office Service charges Rs. 18,031.67
(ix) Sales Incentives Rs. 1,21,741 .00
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Total of this comes to Rs. 2,30,269.54.
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The demand was 7% of this amount towards contribution.
5. In the demand letter which is on record, it was no where mentioned whether these payments were considered payment to the employees of the Sales Corporation. However, it was mentioned that this demand was towards 'wages' and therefore contribution, as required, under the scheme framed under the said Act was demanded. The contention of the Sales Corporation before E.I. Court was that these payments were not towards any wages to employees of the Sales Corporation or any other employees. Thus, two sales incentives were allegedly paid to the dealers or their mechanics who have nothing to do with the Sales Corporation. Repairs and maintenance charges were paid towards repairs of duplicators, typewriters, Coolers and Air Conditioners etc., fitted in the office of the Sales Corporation, but not to the employees of the Corporation. General expenses were incurred towards purchase of certain materials. Loading and unloading charges was not paid to the employees, but outsiders packing and delivery charges were not also paid to the employees, but to certain transporter used for delivering the goods or material purchased for packing the goods. It is not clear to who the ex gratia was paid or for what purpose it was paid. But the amount was so small as Rs. 325/-. Other allowances were washing and cycle allowance which are expenses incurred by the employee. Office Service charges are the expenses incurred by Divisional Manager, but these charges were not paid to any of the employees.
6. On a consideration of evidence led by Sales Corporation before the Court, the learned Judge held that none of these charges were towards wages and therefore could not be subject matter of counting contribution of this Corporation to E.S.I.
7. On a consideration of evidence, as it has been brought to my notice, and the reasoning of the learned trial Court, I do not find that reasoning in any manner is incorrect or that any of these charges could be considered as wages. Officers of the Corporation had appeared with their records before E.I. Court and stated under what details these expenses had been incurred. These expenses, by no stretch of imagination or under any provision or definition under E.S.I. Act can be considered as wages to its employees. In fact, these payments are not payments to the employees.
8. 'Wages' has been defined in section 2(22) of Employees' State Insurance Act, 1948 as under :-
(22) 'Wages' means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied were fulfilled 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 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 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
(d) any gratuity payable on discharge.'
A perusal of this definition clearly shows that the remuneration mentioned in this definition should be paid or payable to an employee and not any expenses incurred by the employer in connection with purchase or services obtained from somebody, not an employee. Thus, the E.S.I. Officers appear to have wrongly assumed the various payments earlier referred to as wages to the employees. I find no infirmity in the impugned judgment. The appeal fails. I leave parties to bear their own costs of this appeal.