Omega Zips, v. The Joint Director,

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 27.10.2017 CORAM :

THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN C.M.A.(MD)No.565 of 2015 and M.P.(MD) No.1 of 2015 Omega Zips, 10-A, Papanasam Road, Mela Ambasamudram, Ambasamudram - 627 401 Tirunelveli District.

Rep. by its Authorised Signatory ... Appellant Vs.

The Joint Director, ESI Corporation, Sub Regional Office, Panchdeep Bhavan, ESIC Complex, Salai Street, Vannarpettai Tirunelveli - 627 003.

... Respondent Prayer: This Appeal is filed under Section 82(2) of the Employees State Insurance Act 1948, to set aside the order dated 01.04.2015 made in E.S.I.O.P.No.4 of 2014 on the file of the Employees State Insurance Court (Labour Court), Tirunelvel.

For Appellant : Mr.T.Ravichandran For Respondent : Mr..K.C.Ramalingam

JUDGMENT

This appeal is directed against the order dated 01.04.2015 made in E.S.I.O.P.No.4 of 2014 filed by the appellant herein. 2.The appellant herein suffered an order under Section 45 A of the Employees State Insurance Act, 1948. That the appellant is covered by the said Act is admitted. The only issue is regarding the levy of contribution. The authority took the view that while calculating the contribution, certain heads were omitted. During the proceedings before the E.S.I. Court, as well as this Court, it was conceded by the appellant that the scope of controversy is as to whether the component of conveyance allowance paid by them to the purpose can be included in the term "wages" for the purpose of calculating the contribution. The ESI Court did not agree with the said submission. The ESI Court took the view that payment of conveyance allowance on a uniform basis regardless of the employee

concerned incurred any expenditure on his journey to the place of work is not synonyms with the travelling allowance envisaged in Section 2(22)(b) of the ESI Act.

3.This appeal was admitted as the following substantial questions of law arose for consideration:

"Whether the Court below ought to have excluded the conveyance allowance paid by the appellant in view of section 2(22)(b) of the E.S.I.Act?"

4.Heard the learned counsel on either side.

5.The learned counsel appearing for the appellant took me through the evidence adduced on both sides before the E.S.I. Court. The testimony of R.W.1, the Social Security Officer working in the E.S.I.Corporation is significant. He admitted that if transport arrangements were to be made by the establishment for all the workers, they would need atleast 20 vans. But, the establishment was having only 4 or 5 vans. The learned counsel would also draw the attention of this Court to the decision rendered in (2004) 1 LLN 630 - Regional Director, Employees Insurance Corporation, Madras V. Sundaram Clayton Ltd., Moppet Division (Registered Office, Madras) Following an earlier Division Bench decision of this Court reported in 2001(1) LLN 943 - Management of Oriental Hotels Ltd., V. E.S.I. Corporation.

It was held that the amount paid as conveyance allowance will have to be excluded having regard to the specific exclusion provided in the definition itself for travelling allowance or the value of any travelling concession. The conveyance allowance paid is in the nature of travelling allowance as the object of that payment is to enable the employee to reach his place of work and to defray a part of the cost incurred on a travel from his place of residence to the place of work.

6.I am of the view that the case on hand is covered by the aforesaid Division Bench decisions. I therefore set aside the order dated 01.04.2015 dismissing E.S.I.O.P. No.4 of 2015 on the file of E.S.I.Court, Tirunelveli. The order dated 27.09.13 passed under Section 45 A of the Act by the respondent is also set aside. The matter is remitted to the file of the respondent. The respondent is at liberty to pass fresh orders redetermining the contribution payable by the appellant but without including the component of conveyance allowance.

7.This civil miscellaneous appeal stands allowed accordingly. No costs. Consequently, connected miscellaneous petition is closed. Sd/- Assistant Registrar (CS-I) /True Copy/ Sub Assistant Registrar

To

1. The Judge, Employees State Insurance Court (Labour Court), Tirunelvel.

2. The Record Keeper, Vernacular Section, Madurai Bench of Madras High Court, Madurai.

+ 1 CC TO Mr.K.C.RAMALINGAM, ADVOCATE IN SR No. 84166 + 1 CC TO Mr.T.RAVICHANDRAN, ADVOCATE IN SR No. 84300 ARUL TE/KP/SAR-IV : 16/11/2017 : 3P/5C C.M.A.(MD)No.565 of 2015 and M.P.(MD) No.1 of 2015 27.10.2017