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2002 DIGILAW 766 (MAD)

R. Meenakshi Ammal v. Velusamy & Others

2002-08-07

K.RAVIRAJA PANDIAN, S.JAGADEESAN

body2002
Judgment :- K.RAVIRAJA PANDIAN, J. The Letter Patent Appeal No.50 of 1999 is filed by the E.S.I.Corporation against the Order of the learned single Judge of this Court in C.M.A.No.480 of 1991 dated 12.1.1999 confirming the Order of the Employees' Insurance Court (District Court), Coimbatore in E.S.I.O.P.No.212 of 1989 dated 31.1.1991. Letter Patent Appeal No.7 of 2000 is filed by the Managing Director, Kanyakumari District, Co.op.Spinning Mills Limited, Aralvaimozhy against the Order of the learned single Judge of this Court in C.M.A.No.910 of 1989 dated 1.4.1998 reversing the Order of the Employees' Insurance Court (District Court) at Nagercoil in E.S.I.O.P.No.6 of 1988 of dated 28.4.1989. C.M.A.No.738 of 1992, 739 of 1992 and 100 of 1993 are filed by M/s.Sree Meenakshi Mills Limited, Paravai Unit, M/s.Annamalaiar Mills Pvt. Limited, Dindigul and M/s.Vijayshree Spinning Mills Ltd., Dindigul respectively against the orders dated 3.3.1992 of the E.S.I.Court, (II Addl.District Judge), Madurai in E.S.I.OP.Nos.32 of 1988, 3 of 1989 and 20 of 1988 respectively, wherein the E.S.I.Court has dismissed the petitions filed by the respective Managements for declaration that the "ex gratia payment" made by the Managements were not wages. C.M.A.No.1481 of 1993 is filed by the E.S.I.Corporation against the order of the E.S.I.Court, (District Judge), Coimbatore in E.S.I.OP.No.245 of 1990 dated 18.8.1992 and C.M.A.No.1504 of 1993 is filed by the Regional Director, E.S.I.Corporation against the order of the E.S.I.Court, (District Judge), Tirunelveli in E.S.I.OP.No.5 of 1990 dated 11.2.1994, wherein the petitions filed by the Management for declaration that the demand of E.S.I.Corporation is illegal on the ground that the amount would not partake the character of 'wages' were allowed. 2. In all the above cases, the the real controversy centres around the interpretation of clause 22 of Section 2 of the Employees State Insurance Act, which defines "wages". In order to appreciate the controversy, the facts of the cases, which formed the basis for filing of the above cases, an illustrative case in L.P.A.No.7 of 2000 is narrated below: The last of the proceedings pursuant to which the revision of wages, dearness allowance and the grant of other benefits to workmen in several textile mills in the State of Tamil Nadu was made on 28.9.1979 in award made in I.D.No.1 of 1979 on the basis of the settlement dated 17.7.1979 between the managements of textile mills and the various trade unions representing their workmen. The said award was for a period of five years. Even after the expiry of the said award, in or about 16.7.1984, the terms thereof continued to be in force. In order to have the revision of wages, dearness allowance and for securing other benefits, various unions of the textile workers formed a joint action council and issued a strike notice under Section 22 of the Industrial Disputes Act together with a Charter of demands, dated 17.6.1985 to almost all the textile mills in the State terminating the terms of the earlier award dated 28.9.1979 in I.D.No.1 of 1979. Following the refusal by mill management to comply with the demands, Conciliation Proceedings were taken up and a failure report dated 12.7.1985 under Section 12(4) of the Industrial Disputes Act was submitted. Thereupon the Government referred the dispute to the Special Tribunal, Madras for adjudication in I.D.Nos.1 to 5 of 1985. Pending adjudication, the Government of Tamil Nadu passed orders under Section 10-B of the Industrial Disputes Act in G.O.Ms.No.1399 dated 15.7.1985 and G.O.Ms.No.1545 dated 29.7.1985. Under the above said orders, the Managements were prohibited from declaring lock out and the workmen were also prohibited from indulging in strike. By G.O.No.1399 dated 15.7.1985, the Managements were directed to pay a lumpsum payment of Rs.500/- and a monthly payment of Rs.75/- from 23.7.1985 for the permanent and badli workmen of the mills which have the spindlages of 6001 and above as interim relief. By G.O.Ms.No.1545, dated 29.7.1985, in respect of workmen other permanent or badli a lumpsum payment of Rs.260/- and an amount of Rs.2.50 per day or a monthly payment of Rs.65/- from 1.8.1985 was ordered to be paid. In the above two Government orders, it was also made clear that the amount paid to the employees pursuant to the G.Os would be deducted by the employer, from and out of the monetary benefits to which the employees become entitled under the provisions of the award that may be passed by the Tribunal in the pending dispute before it. Pursuant to the above two Government Orders, the appellant paid its workmen a sum of Rs.8,05,539-23 between the period July 1985 to February, 1987. The Tribunal passed its award in the I.D. on 23.2.1987 and the same was published in the Gazette on 4.3.1987. The Tribunal ordered increase in wages for the workers from 1.5.1986. Pursuant to the above two Government Orders, the appellant paid its workmen a sum of Rs.8,05,539-23 between the period July 1985 to February, 1987. The Tribunal passed its award in the I.D. on 23.2.1987 and the same was published in the Gazette on 4.3.1987. The Tribunal ordered increase in wages for the workers from 1.5.1986. By its award dated 23.2.1987, the Tribunal ordered that the payments made already in compliance with the Government Orders from 25.7.1985 to April, 1986 shall not be recovered from the workmen or adjusted against the increase given under the award and in effect they shall stand written off as 'Ex gratia' payment. In the above circumstances, the payment of Rs.8,05,539-23 paid to workmen of the appellant were not treated as wages for all purposes including for payment of contribution under the E.S.I.Act and E.P.F.Act. However, the respondent E.S.I.Corporation issued notice to the appellant and sought for recovery of ESI contribution in respect of the above payment made pursuant to Government Orders. The appellant contended that the above payments were purely 'Ex gratia' in nature, as per the award of the Industrial Tribunal and therefore no contribution is liable to be paid. However, by order dated 8.7.1988, the first respondent held that the above payment would be wages within the meaning of Section 2(22) of the ESI Act and directed the appellant to pay contribution at Rs.58,401-55ps. Aggrieved by the above order, the appellant filed an O.P. under Section 75 of the E.S.I. Act before the District Court, Nagercoil in E.S.I.O.P.No.6 of 1988. By its order dated 28.4.1989, the learned Judge held that payment made under the Government Orders for the period upto April 1986 did not amount to wages, although they were initially paid as interim relief but subsequently since the same was directed to be treated as 'Ex gratia' payment in the award of the Industrial Tribunal. Against the order of the learned Judge dated 28.4.1989 made in E.S.I.O.P.No.6 of 1988, the respondent preferred an appeal before this Court in A.A.O.No.910 of 1989. Against the order of the learned Judge dated 28.4.1989 made in E.S.I.O.P.No.6 of 1988, the respondent preferred an appeal before this Court in A.A.O.No.910 of 1989. By Order dated 1.4.1989, the Single Judge of this Court reversed the findings of the trial Judge and held that the payments made were not 'Ex gratia' in nature, they were made pursuant to Government Orders, the above payment were not voluntary in nature, that the payments were not made by the Mills out of gratis or because of goodwill and it was paid by compulsion referable to the industrial dispute raised by the workers and therefore it would amount to wages within the meaning of Section 2(22) of the E.S.I. Act and therefore upheld the order of the respondent dated 8.7.1988 passed under Section 45-A of the E.S.I.Act. In the above appeal, the correctness of the order of the learned Single Judge is put in issue. 3. In the other L.P.A.No.50 of 1999, though the facts are identical, another learned Single Judge of this Court has held that the amounts paid up to the period April, 1986 are only ex gratia payment and as such cannot be roped in within the definition of "wages" as defined under Section 2(22) of the E.S.I.Act. The Corporation filed the appeal questioning the correctness of the said orders. In the other C.M.As also, since the issues involved are one and the same they are all posted along with the L.P.As. 4. From the above said facts, the one and only question that has to be decided in these cases is, whether the payment of the amount made by the Management to the workers as interim relief as directed by the Government in its Government Order Nos.1399 dated 15.7.1985 and 1546 dated 29.7.1985 for the period from 25.7.1985 to April, 1986, which was ordered to be written off as "ex gratia payment" by the award dated 23.2.1987 would come within the purview and the meaning of "wages" as defined under section 2(22) of the Employees State Insurance Act. If the decision on the above said issue is in affirmative, then the E.S.I.Corporation is entitled to demand contribution. 5. If the decision on the above said issue is in affirmative, then the E.S.I.Corporation is entitled to demand contribution. 5. In order to resolve the above said issue, it is relevant to refer the definition of "wages" under the Employees State Insurance Act as defined in Section 2(22) and also Section 10-B of the Industrial Disputes Act, which is relevant, in the sense, the interim relief had been paid by the Management or rather directed to be paid by the Management by the Government invoking the power under the above provision. Section 2(22) of E.S.I.Act reads thus: "2(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 entitled on him by the nature of his employment; or (d) any gratuity payable on discharge." 6. On an analysis of the above provision, it is evident that it consists of four limbs. The first limb refers to all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled. In the second limb, the definition of "wages" includes any payment to any employee in respect of any period of authorised leave, lock out, strike, which is not illegal or lay-off. In the third limb, the definition of wages includes other additional remuneration, if any paid at intervals not exceeding two months. In the fourth limb of the definition, the term "wages" does not include any contribution paid by the employer to any pension fund or provident fund or under the Act, the travelling allowances or value of any travelling concession or any sum paid to the person employed to defray special expenses entitled on him by nature of his employment. 7. In the fourth limb of the definition, the term "wages" does not include any contribution paid by the employer to any pension fund or provident fund or under the Act, the travelling allowances or value of any travelling concession or any sum paid to the person employed to defray special expenses entitled on him by nature of his employment. 7. Section 10-B of the Industrial Disputes Act reads as follows:- ''10-B. Power to issue order regarding terms and conditions of service pending settlement of dispute. - (1) Where an industrial dispute has been referred by the State Government to a Labour Court or a Tribunal under sub-section (1) of Section 10 and if in the opinion of the State Government it is necessary or expedient so to do for securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment or industrial peace in the establishment concerning which such reference has been made, it may, by general or special order, make provision, - (a) for requiring the employer or workman or both to observe such terms and conditions of employment as may be specified in the order or as may be determined in accordance with the order, including payment of money by the employer to any person who is or has been a workman; (b) for requiring any public utility service not to close or remain closed and to work or continue to work on such terms and conditions as may be specified in the order; and (c) for any incidental or supplementary matter which appears to it to be necessary or expedient for the purpose of the order: Provided that no order made under this sub-section shall require any employer to observe terms and conditions of employment less favourable to the workman than those which were applicable to them at any time within three months immediately preceding the date of the order. Explanation. - For the purpose of this sub-section, "public utility service" means - (i) any section of an industrial establishment on the working of which the safety of the establishment or the workman employed therein depends; (ii) any industry which supplies power, light or water to the public; (iii) any industry which has been declared by the State Government to be a public utility service for the purpose of this Act. (2) An order made under sub-section (1) shall cease to operate on the expiry of a period of six months from the date of the order or on the date of the award of the Labour Court or the Tribunal, as the case may be, whichever is earlier. (3) Any money paid by an employer to any person in pursuance of an order under sub-section (1), may be deducted by that employer from out of any monetary benefit to which such person becomes entitled under the provisions of any award passed by the Labour Court or the Tribunal as the case may be." 8. From the above provision, it is evident that pending adjudication of an industrial dispute referred by the Government under Section 10(1) of the Industrial Disputes Act, if the Government is of the opinion that in order to secure public safety or convenience or maintenance of public order or supplies and services essential to the life of the community or for maintaining employment or industrial peace in the establishment, the Government may by general or special order make provision requiring the employer and workmen or both to observe such terms and conditions of employment as may be specified in the order or as may be determined in accordance with the order, including payment of money by the employer to any person who is or has been a workman for a period of six months and the money so paid may be deducted by the employer from out of the monthly benefit to which such person becomes entitled to under the provisions of the Award. 9. From the facts as narrated above, the employees in various textile mills were agitating for raise in their wages and there were threat of strikes and as a matter of fact, strike notices were issued. 9. From the facts as narrated above, the employees in various textile mills were agitating for raise in their wages and there were threat of strikes and as a matter of fact, strike notices were issued. The Government on taking into consideration of the fact that the cotton textile industry has been declared as a public utility service for the purpose of Industrial Dispute Act, 1947 in G.O.Ms.No.432 Labour dated 4.5.1985, for the purpose of maintaining supplies and services essential for the life of the community, for maintaining employment and industrial peace in the cotton textile industry, pending adjudication of the reference by the Special Tribunal, and by invoking the power invested on them under Section 10-B of the Industrial Disputes Act to issue order regarding terms and conditions of service pending settlement of dispute, issued the Government Orders. Hence, as per the provision Section 10-B, the amount directed to be paid would come within the purview of clause (a) of sub-section (1) of Section 10-B, which empowered the Government by general or special order make provision for requiring the employer or workmen or both to observe such terms and conditions of employment as may be specified in the Order or as may be determined in accordance with the Order, including payment of money by the employer to any person, who is or has been the workman. In this case, the money payable has been determined and quantified in the Government Order and the Mills were directed to pay the said amount until the award was passed by the Industrial Tribunal. Such direction would tantamount to observance of terms and conditions of employment. 10. As per Section 2(22) of the E.S.I.Act, the 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. Hence, certainly, the amount paid in obedience of the Government Orders passed under Section 10-B would amount to payment made to the employee under the terms and conditions of employment. 11. However, the further facts of the case make all the more different the point in issue. Hence, certainly, the amount paid in obedience of the Government Orders passed under Section 10-B would amount to payment made to the employee under the terms and conditions of employment. 11. However, the further facts of the case make all the more different the point in issue. Pending adjudication of the Industrial Dispute before the Tribunal, the mills, which belonged to the category (D), as categorised by the Industrial Tribunal, settled the matter with their workers and filed a memo of compromise dated 21.3.1986 and the Tribunal in its award granted the relief in terms of the compromise memo filed before the Tribunal. Paragraph 68(d) of the award reads as follows: "To the workmen in the textile mills falling in Group (D) the relief granted shall be in the terms contained in Annexures I and III to the memorandum of compromise, dated 21st March 1986 (Appendix III) which have been adopted by me as my own findings and adjudication on the relevant issues and the same shall be effective from 1st May 1986." Clause 3(c) of the Memorandum of Compromise provided as follows: "It is agreed that the lumpsum payment of Rs.500, Rs.260 and Rs.75, Rs.65 per month, as the case may be paid or payable to the workmen upto April 30, 1986, as per the Government Orders No.1399, dated 15th July 1985 and NO.1546, dated 29th July 1985 under section 10-B of the Industrial Disputes Act and consent letter, dated 14th February 1986 by the Special Industrial Tribunal, be treated as an ex-gratia payment and shall not be adjusted against the future benefits covered under this settlement." Clauses 6 and 7 of the Memorandum of compromise reads as follows: "6. This settlement shall be in force for a period of five years with effect from 1st May 1986 and both the parties agree not to press other issues or demands referred to in the Charter of Demands or disputes pending before the Special Industrial Tribunal in Industrial Disputes Nos.1, 2, 3 and 5 of 1985. The unions agree not to raise any demands covered by these references and involving financial commitments during the currency of the settlement." 7. This settlement supersedes all previous awards and settlements relating to the benefits to the extent mentioned in Annexure-I." 12. The unions agree not to raise any demands covered by these references and involving financial commitments during the currency of the settlement." 7. This settlement supersedes all previous awards and settlements relating to the benefits to the extent mentioned in Annexure-I." 12. Annexures I, II and III are not relevant, because they speak about basic wages, category, dearness allowance, house rent allowance, annual increment, apprentices, casuals, temporary and other categories, Maistries, staff, leave, medical allowances, payment for efficiency linked wages, line of promotion, etc. 13. The said memorandum of compromise, as stated in para 68(d) of the award, has been adopted by the Tribunal as its finding and that is how in clause (f) of paragraph 66 of the Award, it is stated that the payments made already in compliance with section 10-B order of the Government as also the accord before the Tribunal in M.P.No.20 of 1986 (as the dispute was not over by December, 1985, the Tribunal recorded "an accord" between the parties to the extent the interim payment till April, 1986) shall not be recovered from the workmen or adjusted against the increase given under this award and in effect, they shall stand written-off as "ex-gratia payment". Wherever the section 10-B order of the Government and the "accord" before the Tribunal in M.P.No.20 of 1986 had not been complied with and payments made, it shall be open to the concerned workmen to take steps to recover the same in appropriate proceeding under section 33-C of the Industrial Disputes Act. 14. Thus, it is evident that a settlement has been reached between the parties to the dispute mutually and they agreed for certain terms and conditions and the settlement has been given as award by the Industrial Tribunal as stated above. As per the settlement, which has been transformed as the award, the payment made pursuant to the Government Orders above referred to, till April, 1986, shall not be recovered from the workmen or adjusted against the increase given under this award and in effect they shall stand written-off as "ex-gratia payment". This settlement and the award given is binding on the parties. This settlement and the award given is binding on the parties. There is absolutely no provision under the Employees State Insurance Act, which prohibits contracting to the contrary or which provides any non-absentee clause like notwithstanding any contract to the contrary so far as the remuneration paid or payable under the terms of the contract of employment is concerned. 15. It is very well settled law that the contract of employment may be varied by mutual consent of the parties after the original contract of employment was entered into. If the terms are varied by mutual consent, it is the varied terms, which form part of the contract of employment and therefore it is the original contract of employment as varied by mutual consent subsequently, which would be contract of employment. In this case, though originally the amount has been paid pursuant to the G.O. issued under Section 10-B of the Industrial Disputes Act, since the settlement between the parties which provided that the payment made under the Government Orders issued under Section 10-B upto April, 1986 would be treated as "ex gratia" and it should not be recovered from the workmen or adjusted against the increase given under the award and further the Act nowhere prohibits for settling the dispute mutually, on the other hand the settlement arrived at by the parties are recognised and given as an award, the amount paid upto April, 1986 would be considered as "ex gratia" payment and the said payment cannot be considered as "wages" within the meaning of Section 2(22) of the E.S.I.Act. Since no provision of law prohibits contracting out in the manner in which the parties have done in the instant case, the amount paid under the G.Os upto April, 1986 cannot be said to be remuneration paid or payable if the terms of contract of employment were fulfilled. If the terms of the employment are to be fulfilled viz., the terms of employment including the terms of the settlement dated 21.3.1986, which has been transformed as the award, then the very express term of the award the amount paid upto April, 1986 can be considered only as the "ex gratia" and excluded from the definition of "Wages" under Section 2(22) of the E.S.I.Act. 16. 16. In Black's Law Dictionary, 5th Edition, the meaning of the word "ex gratia" is given as follows: "Out of grace; as a matter of grace, favor, or indulgence; gratuitous. A term applied to anything accorded as a favor, as distinguished from that which may be demanded as ex debito, as a matter of right. In the very same Dictionary, the meaning of the word "ex gratia payment" is given as follows: "Payment made by one who recognises no legal obligation to pay but who makes payment to avoid greater expense as in the case of a settlement by an Insurance Company to avoid costs of suit. A payment without legal consideration." As stated above, it is not disputed that the amount paid upto April, 1986 were not recovered from the employees or adjusted against the increase given under the award and the amount is written off as "ex gratia" as agreed. 17. The learned counsels referred certain decisions, which are considered below. In EMPLOYEES' STATE INSURANCE CORPORATION, HYDERABAD VS. ANDHRA PRADESH PAPER MILLS LTD., RAJAHMUNDRY reported in AIR 1978 ANDHRA PRADESH 18 FULL BENCH, the question as to whether the incentive bonus paid to the employees under settlement amount to wages was considered by the Full Bench of the Andhra Pradesh High Court. In that case, a settlement was arrived at between the employer and workmen under Section 18 of the Industrial Disputes Act. Annexure to the settlement mentions the scheme. Under Clause (ii) the production bonus will be calculated on the basis wages earned while on duty by a payment to workman and should be paid every month as per the schedule annexed to the scheme. It is expressly understood that the bonus so paid shall not form part of the wages for computation of any other payment including provident fund, E.S.I. Contribution, gratuity or any other benefit payments made with reference to the wages of the workmen concerned. Under clause (vi) the payment of production bonus as and when due has to be made in the month next to the month for which production bonus is payable. In those circumstances, it was held thus: "The Act nowhere prohibits contracting out of the liability to pay contribution in respect of sums payable under the terms of contract of employment. Under clause (vi) the payment of production bonus as and when due has to be made in the month next to the month for which production bonus is payable. In those circumstances, it was held thus: "The Act nowhere prohibits contracting out of the liability to pay contribution in respect of sums payable under the terms of contract of employment. Therefore the production bonus paid in the instant case under the deed of settlement cannot be said to be remuneration paid or payable if the terms of contract of employment were fulfilled. If the terms of employment are to be fulfilled viz., the terms of contract of employment inclusive of the terms of the settlement then by the very express terms of the agreement incentive bonus is excluded from the definition of 'wages' under S.2(22) first part." It was further held that though the incentive bonus becomes wages by virtue of the third part of wages, because of the express exclusion, as agreed between the parties, the incentive bonus will not be considered as "wages". The analogy of the said judgment is in all fours apply to the facts of the present case. The said judgment has been approved by the Supreme Court, though in a different context, in the case of M/S.HARIHAR POLYFIBRES VS. THE REGIONAL DIRECTOR, E.S.I.CORPORATION reported in AIR 1984 SUPREME COURT 1680, where the House Rent Allowance, Night Shift Allowance, Heat, Gas and Dust Allowance were considered to be wages under the second limb of the definition of "additional remuneration" outside the contract of employment. 18. In BRAITHWAITE AND CO. LTD. VS. THE EMPLOYEES' STATE INSURANCE CORPORATION reported in AIR 1968 SUPREME COURT 413, the issue was, whether the Inam paid to the workers under the Inam Scheme would come within the purview of the definition of "wages" under Section 2(22). In that case, the appellant/Company introduced the Inam Scheme in December 1955. The payment of Inam was not amongst the original terms of contract of employment of the employees of the Company. In those terms, there was no offer of any reward or prize to be paid for any work done by the employees. The employees were expected to work for certain periods at agreed rates of wages. The only offer under the Scheme was to make incentive payments if certain specified conditions were fulfilled by the employees. In those terms, there was no offer of any reward or prize to be paid for any work done by the employees. The employees were expected to work for certain periods at agreed rates of wages. The only offer under the Scheme was to make incentive payments if certain specified conditions were fulfilled by the employees. The Company, however, reserved the right to withdraw the scheme altogether without assigning any reason or to revise its conditions at its sole discretion. The payment of the Inam was dependent upon the employees exceeding the target of out-put appropriately applicable to him. But though primarily the right to receive the Inam depended on the efficient working of the employee, there was another clause which laid down that, if the targets were not achieved due to lack of orders, lack of materials, breakdown of machinery, lack of labour, strikes, lockouts, go-slow or any other reason whatsoever, no Inam was to be awarded. In those facts of the case, it was held that the payment of inam, though remuneration, could not be said to have become a term of the contract of employment within the meaning of the definition of 'wages' as given in Section 2(22) and the mere fact that a reward for good work offered by the employer was accepted by the employee after he had successfully satisfied the requirement laid down by the employer for earning reward could not mean that this payment became a part of contract of employment. 19. The other decision is THE EMPLOYEES STATE INSURANCE CORPORATION, REP.BY ITS REGIONAL DIRECTOR (TAMIL NADU), MADRAS VS. E.I.D. PARRY (INDIA) LTD. Reported in 1984(1) M.L.J. 45 = 1984(1) L.L.N. 159, wherein the Division Bench of this Court referring BRAITHWAITE AND CO. LTD. VS. THE EMPLOYEES' STATE INSURANCE CORPORATION reported in AIR 1968 SUPREME COURT 413 has held that the ad hoc allowance and incentive earnings are not part of wages, as held by the Supreme Court in the above decision ( AIR 1968 S.C. 413 ) and it was perfectly legitimate for the employee while settling the dispute to come to a settlement that such payment shall not be reckoned for the purpose of provident fund, bonus, gratuity, employees state insurance contribution, etc., and to clarify the matter when the provisions of the Industrial Disputes Act do not forbid such settlement or make such provision in a settlement invalid. The proposition of law as laid down by the Division Bench is in tune with the Full Bench decision of the Andhra Pradesh High Court referred to supra in EMPLOYEES' STATE INSURANCE CORPORATION, HYDERABAD VS. ANDHRA PRADESH PAPER MILLS LTD., RAJAHMUNDRY reported in AIR 1978 ANDHRA PRADESH 18 FULL BENCH, which has been approved by the Supreme Court in M/S.HARIHAR POLYFIBRES VS. THE REGIONAL DIRECTOR, E.S.I.CORPORATION reported in AIR 1984 SUPREME COURT 1680. The proposition of law as laid down in the above said case in all fours apply to the facts of the present case also. 20. The Supreme Court in REGIONAL DIRECTOR, E.S.I. CORPORATION VS. BATA SHOE CO.(P) LTD. reported in AIR 1986 SUPREME COURT 237 has considered the bonus paid by the Company to its employee and found it was in the nature of ex gratia payment or as has been described in one of the settlements, it was paid as a gesture of goodwill on the part of the respondent. The bonus in question was neither in the nature of production bonus nor incentive bonus nor customary bonus nor any statutory bonus and ultimately held that the bonus in question did not fall under any category or class mentioned in the definition of 'wages' as contained in S.2(22) of the Act. Hence the said decision of the Supreme Court has also advanced the case of the Management Mills. 21. Further, the Judgment, which is questioned in L.P.A.No.7 of 2000 has not considered the settlement arrived at between the parties, which was subsequently transformed as an award and ultimately concluded that the amount paid is not gesture, but under the provisions of the Act and as such amount to wages. 22. On the facts of these appeals, we hold that the amount paid to the employees as per the direction of the Government Orders above said cannot be considered to be the wages falling under Section 2(22) of the E.S.I.Act. 23. 22. On the facts of these appeals, we hold that the amount paid to the employees as per the direction of the Government Orders above said cannot be considered to be the wages falling under Section 2(22) of the E.S.I.Act. 23. In view of the above discussion, which have the support of the decisions of the Apex Court, our High Court and Andhra Pradesh High Court as referred to above, we are of the view that the Order made in C.M.A.No.910 of 1989, dated 1.4.1998, which is the subject matter of L.P.A.No.7 of 2000 has to be set aside and is set aside and the Order of the E.S.I.Court dated 28.4.1989 made in E.S.I.O.P.No.6 of 1988 is restored. For the very same reasoning, L.P.A.No.50 of 1999 is dismissed. C.M.A.NOs.738 and 739 of 1992 and 100 of 1993 are allowed by setting aside the Orders dated 3.3.1992 of the E.S.I.Court in E.S.I.O.P.Nos.32 of 1988, 3 of 1989 and 20 of 1988 respectively. C.M.A.Nos.1481 and 1504 of 1994 are dismissed. Consequently, the connected C.M.P.No.807 of 2000 is dismissed.