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ITC Limited, PSPD Unit: Rep. by its EVP Finance & MIS, C.V. Sarma, Coimbatore v/s The Joint Director, The Employees State Insurance Corporation, Ramanathapuram, Coimbatore


Company & Directors' Information:- ITC LIMITED [Active] CIN = L16005WB1910PLC001985

Company & Directors' Information:- S P FINANCE PRIVATE LIMITED [Active] CIN = U65990MH1979PTC021790

Company & Directors' Information:- V L S FINANCE LIMITED [Active] CIN = L65910DL1986PLC023129

Company & Directors' Information:- L R N FINANCE LIMITED [Active] CIN = U65921TN1992PLC089288

Company & Directors' Information:- S B FINANCE PVT LTD [Strike Off] CIN = U65921TG1988PTC008268

Company & Directors' Information:- INDIA FINANCE LTD. [Active] CIN = L65110WB1984PLC050214

Company & Directors' Information:- J J FINANCE CORPORATION LTD [Active] CIN = L65921WB1982PLC035092

Company & Directors' Information:- G T P FINANCE LIMITED [Active] CIN = U65921TZ1991PLC003149

Company & Directors' Information:- S R K FINANCE PRIVATE LIMITED [Active] CIN = U65910UP1994PTC016038

Company & Directors' Information:- R N FINANCE LIMITED [Active] CIN = U74899DL1988PLC034289

Company & Directors' Information:- J R D FINANCE LTD [Active] CIN = U65999WB1993PLC058107

Company & Directors' Information:- C K G FINANCE PRIVATE LIMITED [Active] CIN = U65910KL1996PTC010147

Company & Directors' Information:- L N FINANCE LTD [Active] CIN = U65923WB1991PLC052876

Company & Directors' Information:- R K FINANCE LTD [Active] CIN = L65921WB1983PLC035896

Company & Directors' Information:- V P C L FINANCE LIMITED [Active] CIN = U65920TG1996PLC023172

Company & Directors' Information:- J S M FINANCE PVT LTD [Active] CIN = U74140MP1995PTC009542

Company & Directors' Information:- L N FINANCE PVT LTD [Active] CIN = U65929AS1992PTC003766

Company & Directors' Information:- N B A FINANCE LIMITED [Strike Off] CIN = U74899DL1993PLC052393

Company & Directors' Information:- T P D FINANCE LIMITED [Strike Off] CIN = U67120RJ1994PLC008051

Company & Directors' Information:- R G L FINANCE COMPANY PRIVATE LIMITED [Active] CIN = U74899DL1983PTC015809

Company & Directors' Information:- J V FINANCE PRIVATE LIMITED [Strike Off] CIN = U74899DL1985PTC067873

Company & Directors' Information:- L C J FINANCE PVT. LTD. [Active] CIN = U65921WB1995PTC068809

Company & Directors' Information:- H L T FINANCE PRIVATE LIMITED [Strike Off] CIN = U65921DL1996PTC078128

Company & Directors' Information:- R N C P FINANCE LTD. [Dissolved] CIN = U67120WB1995PLC072339

Company & Directors' Information:- M M V R FINANCE LIMITED [Active] CIN = U65921TZ1997PLC007705

Company & Directors' Information:- D B FINANCE PRIVATE LIMITED [Active] CIN = U65191TN1989PTC016705

Company & Directors' Information:- C H P FINANCE PVT LTD [Active] CIN = U65921PB1992PTC012788

Company & Directors' Information:- S L B P FINANCE PRIVATE LIMITED [Active] CIN = U74899DL1990PTC041694

Company & Directors' Information:- R S FINANCE PVT LTD [Active] CIN = U65191WB1988PTC044144

Company & Directors' Information:- I C FINANCE PRIVATE LIMITED [Active] CIN = U65921UP1989PTC011236

Company & Directors' Information:- C D R FINANCE LIMITED [Strike Off] CIN = U65910TG1995PLC022237

Company & Directors' Information:- I C S FINANCE LIMITED [Strike Off] CIN = U65921TZ1987PLC001991

Company & Directors' Information:- K V L FINANCE LIMITED [Strike Off] CIN = U65191TN1989PLC016715

Company & Directors' Information:- D A S FINANCE PVT LIMITED [Strike Off] CIN = U65921PB1993PTC012888

Company & Directors' Information:- U B FINANCE PRIVATE LIMITED [Strike Off] CIN = U74899DL1992PTC051300

Company & Directors' Information:- V L G FINANCE PRIVATE LIMITED [Strike Off] CIN = U65910AP1997PTC027952

Company & Directors' Information:- E M S FINANCE PRIVATE LIMITED [Strike Off] CIN = U65921TZ1986PTC001789

Company & Directors' Information:- T D M FINANCE COMPANY PRIVATE LIMITED [Active] CIN = U65923KL1997PTC011601

Company & Directors' Information:- S. F. FINANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U65921PB1996PTC018702

Company & Directors' Information:- R D P FINANCE PRIVATE LIMITED [Active] CIN = U65929DL1997PTC089092

Company & Directors' Information:- S R K C FINANCE LIMITED [Amalgamated] CIN = U65999TZ1989PLC002445

Company & Directors' Information:- R K N FINANCE PRIVATE LIMITED [Strike Off] CIN = U65191TN1997PTC038377

Company & Directors' Information:- V V A FINANCE LTD [Active] CIN = U65993WB1984PLC037171

Company & Directors' Information:- Y B FINANCE PRIVATE LIMITED [Strike Off] CIN = U65921CH1996PTC017745

Company & Directors' Information:- M S R FINANCE PVT LTD [Strike Off] CIN = U65191TN1989PTC016789

Company & Directors' Information:- S S P FINANCE PRIVATE LIMITED [Strike Off] CIN = U65191TN1987PTC014526

Company & Directors' Information:- C R N FINANCE PRIVATE LIMITED [Strike Off] CIN = U74899DL1994PTC062802

Company & Directors' Information:- Y AND K FINANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL1985PTC019837

Company & Directors' Information:- D S K FINANCE LIMITED [Strike Off] CIN = U65910UP1988PLC010317

Company & Directors' Information:- G B V FINANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U65110UP1988PTC010219

Company & Directors' Information:- M .R .S . FINANCE LIMITED [Strike Off] CIN = U65929DL1995PLC067184

Company & Directors' Information:- P R K FINANCE P LTD [Strike Off] CIN = U65191TN1995PTC033478

Company & Directors' Information:- T AND C FINANCE LIMITED [Strike Off] CIN = U67120RJ1996PLC012576

Company & Directors' Information:- W S FINANCE PRIVATE LIMITED [Strike Off] CIN = U65192UP1996PTC020243

Company & Directors' Information:- C C FINANCE PRIVATE LIMITED [Strike Off] CIN = U65191TN1997PTC037805

Company & Directors' Information:- S R B FINANCE LIMITED [Strike Off] CIN = U65910UP1988PLC010045

Company & Directors' Information:- P V FINANCE PRIVATE LIMITED [Strike Off] CIN = U65993DL1987PTC027270

Company & Directors' Information:- R V S FINANCE PRIVATE LIMITED [Strike Off] CIN = U65990KA1995PTC018436

Company & Directors' Information:- B B P FINANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U65921PB1996PTC018183

Company & Directors' Information:- A E FINANCE PRIVATE LIMITED [Active] CIN = U65999TZ1990PTC002905

Company & Directors' Information:- L R FINANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U65910UP1988PTC009758

Company & Directors' Information:- S B M FINANCE LIMITED [Strike Off] CIN = U65921PB1994PLC014374

Company & Directors' Information:- T A S FINANCE PVT LTD [Strike Off] CIN = U65191TN1990PTC018654

Company & Directors' Information:- D AND O FINANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL1993PTC054788

Company & Directors' Information:- H R P FINANCE PRIVATE LIMITED [Strike Off] CIN = U65921PB1995PTC015715

Company & Directors' Information:- P T R FINANCE PRIVATE LIMITED [Strike Off] CIN = U65191TN1989PTC016795

Company & Directors' Information:- H S B FINANCE PVT LTD [Strike Off] CIN = U67120RJ1996PTC012119

Company & Directors' Information:- M. J. S. FINANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U65921PB1971PTC003049

Company & Directors' Information:- A R FINANCE PVT LTD [Strike Off] CIN = U65921PB1989PTC009778

Company & Directors' Information:- K G FINANCE LIMITED [Strike Off] CIN = U65910TZ1982PLC001219

Company & Directors' Information:- H S N FINANCE PVT LTD [Strike Off] CIN = U67120PB1993PTC013900

Company & Directors' Information:- G N FINANCE PVT LTD [Strike Off] CIN = U65990MH1981PTC024294

    Civil Miscellaneous Appeal No. 2990 of 2019 & C.M.P. No. 16088 of 2019

    Decided On, 20 February 2020

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE S. VAIDYANATHAN

    For the Appellant: M. Jayaraman, Advocate. For the Respondent: C.V. Ramachandramurthy, Standing Counsel.



Judgment Text


(Prayer: Appeal is filed under Section 82 of the Employees' State Insurance Act to set aside the judgment and decree of the Employees Insurance Court (Labour Court) Coimbatore dated 18.08.2017 in E.S.I.O.P.No.5 of 2013 and allow the appeal.)

1. This Appeal has been filed to set aside the order of the Employees' Insurance Court (Labour Court) Coimbatore dated 18.08.2017 in E.S.I.O.P.No.5 of 2013, by which the request of the Appellant to revoke the order dated 20.05.2011 passed under Section 45-A of the Employees' State Insurance Act, 1948 (in short 'the ESI Act'), directing them to pay the interest of Rs.1,09,595/- on the actual amount of production incentive was rejected by the respondent.

2. The Appellant has submitted that the actual amount of production incentive was disbursed during the year 2005 – 2006 and 2006 – 2007 and there is a delay in calculation, as the order was passed only in the year 2011 and therefore, the demand itself is contrary to the provisions of the ESI Act. It is further submitted that there was a settlement entered into between the Management and the Trade Union on 31.07.2009 under Section 12(3) of the Industrial Disputes Act, 1947, as per which the Annual Productivity Incentive Plan is applicable only one set of workmen and the annual incentive amount and the monthly incentive advance amount paid shall not be taken into account for computing the ESI, PF, OT, etc., and the drivers cannot be included for the purpose of deducting contribution during the year end.

3. Per contra, the learned Standing Counsel for the respondent has contended that a cursory glance at the order makes it clear that the wages paid to drivers alone has been deducted and the production incentive has not been taken into account for the purpose of arriving at the amount payable to the ESI Corporation. It is further contended that the benefits given under the Annual Productivity Incentive Plan cannot be considered as part of wages under Section 2(22) of the ESI Act and there is no delay and that the order has been passed strictly in accordance with the provisions of Section 45-A of the Act and there is no violation of the provisions mentioned therein.

4. Heard the learned counsel on either side and perused the material documents available on record.

5. Before going into the merits of the matter, this Court feels it appropriate to extract Sections 2(22) and 45-A of the ESI Act, which read as follows:

“(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.

45 (A) Determination of contributions in certain cases.

(1) Where in respect of a factory or establishment no returns, particulars, registers or records are submitted, furnished or maintained in accordance with the provisions of section 44 or any [Social Security Officer] or other official of the Corporation referred to in sub-section

(2) of section 45 is [prevented in any manner] by the principal or immediate employer or any other person, in exercising his functions or discharging his duties under section 45, the Corporation may, on the basis of information available to it, by order, determine the amount of contributions payable in respect of the employees of that factory or establishment: [Provided that no such order shall be passed by the Corporation unless the principal or immediate employer or the person in charge of the factory or establishment has been given a reasonable opportunity of being heard:] [Provided further that no such order shall be passed by the Corporation in respect of the period beyond five years from the date on which the contribution shall become payable.]

(2) An order made by the Corporation under sub-section (1) shall be sufficient proof of the claim of the Corporation under section 75 or for recovery of the amount determined by such order as an arrear of land revenue under section 45B 124 [or the recovery under sections 45C to 45-I].”

6. The settlement under Section 12(3) of the I.D.Act pertains to the Annual Productivity Incentive Plan and the benefit has been extended only to those, who have involved in the production and the contention of the Management that the drivers will not come under the Annual Productivity Incentive Plan has been considered and and no deduction has been made from that portion of the incentive, as according to the Management, Annual Productivity Incentive Plan has not been extended to those employees. However, the submission of the Management is that a major portion of workers may go out of coverage, if the element of production incentive is added to their salary, a their salary shall cross the ceiling limit, which has not been considered by the respondent at all.

7. Though this Court is not inclined to accept the contention of the Appellant with regard to the fact that the production incentive will not come under Wages as per Section 2(22) of the ESI Act, as rightly pointed out by the learned counsel for the Appellant the order has not been pronounced within a period of five years, the deduction made for the year 2005 – 2006 is erroneous and the amount will have to be refunded to the Appellant. In case, no deduction has been made from the employees on account of the pendency of the matter, in terms of Section 72 of the ESI Act, the employer shall not reduce the wages. However, it does not

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mean that if no deduction is made pursuant to the orders of any Court, it cannot be recovered at all from the employees' salary; certainly it has got to be recovered in case there is vacation of interim order. 8. In fine, this Civil Miscellaneous Appeal is allowed. The Respondent / Employees State Insurance Corporation (in short 'ESIC') is directed to refund the amount within 90 days from the date of receipt of a copy of this order, failing which, the same rate of interest and penalty as per the provisions of the Act is applicable to ESIC payable to the employer from the date of this order. No costs. Consequently, connected miscellaneous petition is closed.
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