Case Note & Summary
The appellant, Khadi Gramodyog Emporium, was assessed by the ESI Corporation for contributions on honorarium paid to two elected secretaries (Shri Shankarrao Padhye and Shri R.M. Aswale) and on Mazdoori Khata paid to staff for work during lunch hours. The appellant contended that the secretaries were members of the society, not employees, and that the Mazdoori Khata was not wages. The ESI Court dismissed the appellant's application under Section 75(1) of the ESI Act. On appeal, the High Court framed two substantial questions of law: whether honorarium paid to elected secretaries is wages under Section 2(22), and whether Mazdoori Khata paid for work during lunch hours is wages under Section 2(22). The court held that the honorarium paid to elected secretaries is not wages as there is no employer-employee relationship, but the Mazdoori Khata paid for work during lunch hours is wages as it is remuneration for work. The appeal was partly allowed, setting aside the demand for contributions on honorarium but upholding the demand for contributions on Mazdoori Khata.
Headnote
A) ESI Act - Definition of Wages - Section 2(22) - Honorarium paid to elected secretaries of a society - The court held that honorarium paid to elected secretaries who are members of the society and not employees does not fall within the definition of wages under Section 2(22) of the ESI Act, as there is no employer-employee relationship. (Paras 4-6) B) ESI Act - Definition of Wages - Section 2(22) - Mazdoori Khata paid for work during lunch hours - The court held that Mazdoori Khata paid to staff for working during lunch hours constitutes wages under Section 2(22) of the ESI Act, as it is remuneration paid for work done. (Paras 4-6)
Issue of Consideration
Whether honorarium paid to elected secretaries and Mazdoori Khata paid for work during lunch hours constitute wages under Section 2(22) of the Employees' State Insurance Act, 1948
Final Decision
Appeal partly allowed. The demand for contributions on honorarium paid to elected secretaries is set aside. The demand for contributions on Mazdoori Khata paid for work during lunch hours is upheld.
Law Points
- Honorarium paid to elected secretaries of a society is not wages under Section 2(22) of the ESI Act
- Mazdoori Khata paid for work during lunch hours is wages under Section 2(22) of the ESI Act
