Laxmi Vishnu Textile Mills Ltd. v. Abdul Aziz Imamsaheb Sutar And Others

1. All these seven writ petitions under Arts. 226 and 227 of the Constitution can be disposed of by this common judgment and order since the facts are similar and points raised are the same.

2. These petitions arise in the following facts.

3. Each of respondent 1 was working as clerk with the petitioner-company. They have rendered more than 30 years service. After retirement, they claimed that they were entitled to get three months wages as ex gratia payment as it was as established practice and as the said amount was consistently paid to all the employees who have rendered more than 30 years of meritorious service. They contended that this was implied conditions or term of the employment that those who would render meritorious service for 30 years, then the said employee shall be paid three months' wages as ex gratia payment. They contended that they have rendered such meritorious service and retired. The amounts claimed ranged between Rs. 1,900 to Rs. 2,700. The application was filed under S. 15(2) of the Payment of Wages Act, 1936, as the petitioner refused to pay. The Authority under Payment of Wages Act and Judge, First Labour Court, Solapur, came to the conclusion that claim made by each of respondent 1 was maintainable and the claim was towards the wages. It was also held that there was long standing practice of payment of three months wages as ex gratia payment to the staff members who rendered 30 years meritorious service and each of respondent 1 rendered such meritorious service. These findings came to be confirmed by the learned Extra Additional Sessions Judge, Solapur, by his judgment and order, dated 30 November, 1982.

4. Being aggrieved by the said order these petitions are filed.

5. The learned counsel appearing for the petitioner has raised two contentions. He first contended that it cannot be said that each of respondent 1 has rendered meritorious service of 30 years. He secondly submitted that ex gratia payment claimed cannot be said to be wages within the meaning of Payment of Wages Act, 1936, and hence the applications filed by respondent 1 was not maintainable. As against this the learned counsel appearing for respondent 1 contended that it is a finding of fact recorded concurrently on appreciation of evidence that each of respondent 1 has rendered more than 30 years of meritorious service. He further contended that such ex gratia payment was made to employees or staff member who rendered more than 30 years of service consistently and considering this long standing practice, it has become an implied term of employment and hence falls within the definition of wages as contained in S. 2(vi) of the Payment of Wages Act, 1936.

6. As far as the first point is concerned, in my opinion, respondent 1 is right in contending that both the authorities below have appreciated the evidence on record and came to the conclusion that each of respondent 1 has rendered more than 30 years of meritorious service in the company. It is not possible to interfere with the said finding of fact in this petition.

7. It is also not possible to accept the second contention.

7A Definition of service under S. 2(vi) reads as under:

2(vi) ‘wages’ means all remuneration (whether by way of salary, allowances of otherwise) expressed in terms of money of capable of being so expressed which would, if the terms of employment express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes—

(a) any remuneration payable under any award or settlement between the parties or order of a Court,

(b) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period:

(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name),

(d) any sum which by reason of termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum whether with or without deduction but does not provide for the time within which the payment is to be made;

(e) any sum to which the person employed is entitled under any scheme framed under any law for time being in force.

But does not include—

(1) any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;

(2) the value of any house-accommodation, or of the supply of light water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government;

(3) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;

(4) any travelling allowance or the value of any travelling concession;

(5) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or

(6) any gratuity payable on the termination of employment in cases other than those specified in Sub-cl. (d).

8. There is no dispute that there was longstanding practice of granting three months' wages as ex gratia payment to the staff members who rendered 30 years meritorious service. This was consistently followed and payments were made to the employees. In view of this, the said payment is capable of calculating in terms of money and it can be said to be implied term of the employment. It clearly served as incentive to the employee to render meritorious and clean service. Hence all those who rendered such service were entitled to receive the said payment at the time of retirement. So each of respondent 1, who had rendered more than 30 years of meritorious and unblemished service with the petitioner, was entitled to claim the said amount as wages under S. 2(vi) of the Payment of Wages Act, 1936.

9. In addition, I find that payment were actually made to each of respondent 1 has retired more than 20 years ago and that too after rendering more than 30 years of meritorious service.

In view of this, in my opinion, it is not necessary to interfere with the impugned order.

10. Hence the following order:

Rule discharged in each of the petition. In the facts and circumstances, there shall be no order as to costs.