1. An interesting question arises in this first appeal under the Workmen's Compensation Act, 1923. The question is whether food allowance, overseas allowance devaluation supplement (hereinafter referred to as O.A.D.S), and overtime wages paid to a seaman in addition to his basic wages are wages within the meaning of S. 2(1)(m) of, the Workmen's Compensation Act, 1923.

2. The appellants are the widow and children of one Cyril Vaz. Cyril Vaz was employed by the respondents, Caltex (India), Ltd., as a general steward on their ship s.s “Chevron Genoa”. The appellants made an application under S. 3 of the Workmen's Compensation Act, to the Commissioner for Workmen's Compensation, Bombay, alleging that Cyril Vaz died on 11 September, 1969 on account of an accident arising out of and in the course of his employment with the respondents. The appellants claimed Rs. 10,000 as compensation. It was alleged in the application that the monthly wages of the deceased amounted to Rs. 426 inclusive of food allowance.

3. The application was resisted by the respondents, inter alia. on the ground that the deceased Cyril Vaz was not a workman within the meaning of the definition of “workman” under S. 2(1)(n) of the Workmen's Compensation Act, inasmuch as he was employed on monthly wage exceeding Rs. 500. In their written statement, they submitted as follows:

“The opposite party say that the deceased was engaged at Bombay on 22 December, 1968 for the purposes of his employment on boards “Chevron Genoa” as general servant at the monthly basic salary of Rs. 290. The opposite party say that besides the basic salary of Rs. 290, the deceased was, entitled to Rs. 283.73 and the defendants paid an overseas allowance devalution supplement (O.A.D.S) for his employment till his death on 6 September, 1969. The opposite party further say that during his period of employment on board the said vessel from 22 December, 1968 to 6 September, 1969, i.e, for about 8 months and 16 days, the deceased worked overtime and earned Rs. 1,391, that is, on an average of Rs. 163 per month as overtime wages. The opposite party respectfully says and submits that taking into consideration the basic salary at Rs. 290 per month, the value of food allowance at Rs. 165 per month, O.A.D.S at Rs. 33.35 per month and the overtime wages at Rs. 163 per month, the total wages of the deceased came to Rs. 651.35”.

4. The learned Second Additional Commissioner for Workmen's Compensation, Bombay, by his judgment, dated 27 June, 1972, upheld the contention raised on behalf of the respondents and dismissed the application.

5. The said decision is challenged in the above appeal. Sri Solkar, the learned counsel for the appellants, submitted that the learned. Commissioner erred in law in including in the term “wages” as defined by S. 2(1)(m) of the Workmen's Compensation Act, food allowance of Rs. 165 per month and O.A.D.S at Rs. 33.35 per month. In my judgment, this contention must be rejected because these two allowances must be held to be privileges or benefits which are capable of being estimated in money within the meaning of S. 2(1)(m) which runs as follows :

“‘wages’ includes any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concession or a contribution paid by the employer of a workman towards any pension or provident fund or a sum paid to a workman to cover any special expenses entailed on him by the nature of his employment,”

The definition is, no doubt, an inclusive definition. The Act does not define what exactly is meant by “wages”. The word “wages” is however, very important in the interpretation and application of Workmen's Compensation Act, because the jurisdiction of the Workmen's Compensation Commissioner to entertain the application depends on the monthly wages of a workman who is defined in S. 2(1)(n) as follows :

“‘workman’ means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) who is—

(i) a railway servant as defined in S. 3 of the Indian Railways Act, 1890, not permanently employed in any administrative district or subdivisional office of a railway and not employed in any such capacity as is specified in Sch. II, or

(ii) employed on monthly wages not exceeding five hundred rupees, in any such capacity as is specified in Sch. II,

whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the armed forces of the Union; and any reference to a workman who has been injured shall, where the workman is dead, include a reference to his dependants or any of them”.

6. Sri Singhavi, the learned counsel for the respondents, submitted that the only mode of determining what are the monthly wages of a workman is as laid down in S. 5 of the Act which defines “monthly wages” as meaning the amount of wages. “deemed, to be payable for a month's service” whether the wages are payable by the month or by whatever other period or at piece-rates and calculated in the manner laid down in that section. Sub-clause (a) deals with workman empolyed during a continuous period of not less than twelve months and says:

“the monthly wages of the workman shall be one-twelfth of the total wages which have fallen due for payment into him by the employer in the last twelve months of that period”.

Sub-clause (???) deals with workman who was in the employment for less than one month and lays down that:

“the monthly wages of the workman shall be the average monthly amount which during the twelve months immediately preceding the accident, was being earned by a workman employed on the same work by the same employer or, if there was no workman so employed, by a workman employed on similar work in the same locality”.

Sub-clause (c) deals with other cases of workman and lays down that:

“the monthly wages shall be thirty times the total wages earned in respect of the last continuous period of service immediately preceding the accident from the employer who is liable to pay compensation, divided by the number of days comprising such period”.

Sri Singhavi submitted that although food allowance and O.A.D.S may not be commonly understood as wages for the purpose of Workmen's Compensation Act, having regard to the definition of “wages” contained in S. 2(1)(m) and the provisions of S. 5, they must be included in the calculation of the monthly wages of a workman. The question as to what is the monthly wages is not only important with regard to the definition of “workman” which in turn determines the jurisdiction of the Workmen's Compensation Commissioner but it is also the most important factor to be taken into consideration in determining the compensation payable to the workman under S. 4 of the Workmen's Compensation Act, 1923.

7. Sri Singhavi submitted that whatever be the definition of “wages” under the Payment of Wages Act, 1936, which under S. 2(vi)(b) specially includes overtime remuneration, the word “wages” as understood in the context of the Workmen's Compensation Act in England when it was in force and in India, must include any earrings of a workman which are incidental to his employment. He has submitted that O.A.D.S overtime wages and food allowance are all such earnings of the workman. This contention must be upheld because it is supported by high authority in Perm v. Spiers and Pond, Ltd. [(1908) 1 K.B 766]. The Court of Appeal in England was concerned with the interpretation of the words

“Earning in the employment of the same employer”

under the English Workmen's Compensation Act, 1906, and the question which the Court was called upon to decide was whether “tips” received by the employee from strangers must be brought into account in estimating the average weekly earnings in respect of which compensation had to be awarded. Cozens-Hardy, M.R observed (p. 769):

“It has often been pointed out in this Court that the measure of compensation under the Act is not wages, but earnings. This is conceded by the respondents, who admit that the value of the board must be taken into account. It is not every kind of earnings which can be taken into account. They must be earnings in the employment. If the workman by the exercise of his talents during his leisure hours, as, say, a conjurer or a musician, gains money, the money thus gained will increase his income, but not his ‘earnings,’ within the Act. ‘Earnings in the employment’ do not always come from the employer. It is common knowledge that there are many classes of employees whose remuneration is derived largely from strangers. A hallporter at an hotel and a driver of a postchaise are sufficient illustrations. It would be absurd to say that the money received from the hotelkeeper or the postmaster alone represents the rate per week at which the workman was being remunerated. The 3rd. per mile to the post-boy or driver is clearly part of his remuneration. We can see no ground for insisting upon an express or direct contract in this sense, that it must be proved that the workman said before he was engaged that he would only accept the wages offered on the express condition that he should be allowed to retain the ‘tips’. It is, at any rate, sufficient if the Court finds that it was an implied term of the contract, and that both parties contracted on that footing. To avoid misconceptions, we desire to state that nothing in this judgment extends to ‘tips’ or gratuities

(a) which are illicit;

(b) which involve or encourage a neglect or breach of duty oh the part of the recipient to his employer; or

(c) which are casual and sporadic and trivial in amount.

But where the employment is of such nature that the habitual giving and receiving of ‘tips’ is open and notorious and sanctioned by the employer, so that he could not complain of the retention by the servant of the money thus received, we think the money thus received with his knowledge and approval ought to be brought into account in estimating the average weekly earnings. Assuming the principle thus indicated to be sound, it is impossible to doubt that the employment of the deceased as a waiter in a restaurant-car was of the class lastly described. It is notorious that ‘tips’ are given to waiter, and the employers could not pretend to be ignorant of the custom. They must have known that the deceased would receive, and so far as they were concerned, they must be taken to have agreed that he should receive, ‘tips’ from customers in addition to his cash wages. In short, it was an implied term of the contract of employment that these ‘tips’ should be part of his earnings in his employment, and by virtue of his employment.” (The italics are mine.)

With very great respect, the test, as emerging from this judgment of the Court of Appeal, is to consider whether the earnings of an employee are earnings in the employment as part of the employment and by virtue of his employment. Applying this test, there can be no doubt that the O.A.D.S, overtime wages and food allowance, which the unfortunate deceased Cyril was receiving from the respondents were all earnings in the employment as part of the employment and by virtue of the employment and they should, therefore, be considered to be earnings.

8. In this connexion, it is useful to refer to the decision relied upon by Sri Singhavi in Dothie v. Robert Macandrew & Co. [(1908) 1 K.B 803], in the same volume. In that case the question was what, was the correct test of the money value of the board provided by the owners, in considering the remuneration of a ship's Captain under S. 13 of the English Workmen's Compensation Act, 1906. It was held by the Court of Appeal that the test was not what the Captain saved by the arrangement or, in other words, what he could have boarded himself for, but what the reasonable style of board provided by the owners would have cost him if he had had to purhase it himself.

9. Sri Solkar, the learned counsel for the appellants, submitted that the food allowance which was being given to the deceased seaman by the employers should not have been accept ed by the Compensation Commissioner without making an inquiry as to what was the reason able food allowance aboard the ship, He, however, admitted that this allowance was fixed by the Central Government under the provisions of the Merchant Shipping Act and it was fixed as the reasonable food allowance which should be given to a seaman going aboard from India. What is important is that food allowance was held to be included in the remuneration of a workman in Dothie case [(1908) 1 K.B 803] (vide supra).

10. Sri Singhavi also referred to Skailes v. Blue Anchor Line, Ltd. [(1911) 1 K.B 360], where the Court of Appeal consisting of Cozens-Hardy, M.R, Fletcher Moulton, L.J, and Farwell, L.J, were called upon to consider whether in calculating the remuneration under S. 13 of the English Workmen's Compensation Act, 1906, it is necessary to include, in addition to his regular wages, at the end of each voyage, a bonus or extra wages, and a profit which the purser made by the sale on board the ship of whisky in nips. It seems that he was debited with so much per bottle, and nips were sold at a fixed price which produced a larger sum per bottle than the sum debited. This balance was kept by the purser with the knowledge and consent of his employers. Cozens-Hardy, M.R, and Farwell, L.J, held that both the bonus and the profit on the whisky ought to be taken into account in estimating the purser's remuneration. Cozens-Hardy, M.R, pointed out at P. 363 that the word “remuneration” involves precisely the same considerations as earnings. He further observed (p. 365):

“… It is true that there is no direct evidence that a single bottle of whisky was opened on board, and no such evidence can be forthcoming, because the vessel with all on board is at the bottom of the sea. But in a case like this it is competent to the Judge, and in my opinion it is the duty of the Judge, to estimate as best he can what amount ought to be allowed in respect of these sums which in ordinary course Skailes would have been allowed, with the full knowledge of his employers, to retain”.[The italics are mine.]

Even Fletcher Moulton, L.J, who did not agree with the other two Judges in all respects, so far as the disposal of the appeal was concerned, agreed with them in holding (p. 369):

“In my opinion, the Tribunal in order to determine whether it has jurisdiction has to look at the contract only and to decide whether or not such a contract of service comes within the exception. In so doing it must of course interpret the contract fairly. If in addition to wages there is remuneration in kind, such as gratuitous board and lodging, it must take a fair estimate of the annual value of such remuneration to the workman. And even where part of the remuneration is in the form of gratuities so customary and so capable of being estimated as to justify their inclusion in ‘earnings’ (as in the case of waiters' tips), I think it probable that they also must be taken into consideration in deciding whether the contract of service comes within the exception. But these special cases do not militate in any way against the principle that the jurisdiction is decided by a consideration of the contract itself”. [The italics are mine.]

Even applying this test of a fair interpretation of a contract between the seaman in the present case and the respondents, it must be held that the wages which he was receiving must include O.A.D.S, overtime wages, and food allowance which he was receiving as incidental to the contract of service.

11. In Great Western Railway v. Helps [1918 A.C 141], the House of Lords approved the decision of the Court of Appeal in Perm v. Spiers and Pond, Ltd. [(1908) 1 K.B 766] (vide supra). The House of Lords included the tips received from passengers by railway porters as earnings which should be included for the purpose of assessing the compensation payable under the English Workmen's Compensation Act, 1906. Lord Dunedin observed at p. 145:

“The result is that these tips ate part of the man's ordinary earnings”.

It is also clear from Lord Dunedin's judgment that in ordinary parlance, there would be no difference between “earnings” and “wages” for he pointed out further (p. 145):

“… The whole point, therefore, is, do these tips fall within the statutory expression of earnings'? If you were to ask a person in ordinary common parlance what this porter earned, the answer would be:

‘Well, I will tell you what he gets; he gets so much wages from his employers, and he gets on an average so much in tips'.”

It is, therefore, clear that whether the word is “wages” or “remuneration” or “earnings”, it would include all that a workman gets as incidental to his employment. Applying these principles, I have no hesitation in holding that O.A.D.S, overtime wages, and food allowance paid to Cyril Vaz by the respondents must be included in his monthly wages. It may also be noted that the deceased Cyril was employed in accordance with the provisions of the Merchant Shipping Act, 1958, which defines “wages” as including emoluments, under S. 2(57) of that Act. Even in this sense the emoluments of Cyril exceeded Rs. 500.

12. In view of this conclusion, it is not necessary to discuss the other cases relied upon by Sri Singhavi, viz.,

(1) The Godavri Sugar Mills, Ltd.…(Original Opponent), v. Shakuntala…(Original Claimant), .* [(1947) 49 Bom. L.R 791],

(2) Maharashtra Sugar Mills Ltd. v. Ashru Jaiwant Tribhuvan* [(1965) 67 Bom. L.R 893 : 1966-I L.L.J 84 : 1966-I L.L.J 84], and

(3) Ganpatilal v. Civil Judge, Nagpur [A.I.R 1958 Bom. 262],

as they were not cases dealing directly with food allowance, overtime wages and O.A.D.S

13. It will, however, be useful to refer to Chitru Tanti v. Tata Iron and Steel Company [A.I.R 1946 Pat. 437] on which Sri Singhavi strenuously relied, where the above English cases have been considered at some length by Fazl Ali, C.J, as he then was, and he held profit-sharing bonus should be included as part of the wages.

14. It is necessary to mention that Sri Singhavi further relied on the principles stated in B.M & G. Engineering Factory v. Bahadur Singh [A.I.R 1955 All 182], where a Division Bench of the Allahabad High Court held that the words “privilege or benefit” in the definition in Workmen's Compensation Act include the benefit of free accommodation.

15. The view which I am taking is also supported by a decision of the Mysore High Court cited by Sri Singhavi in support of his contention in Hindustan Aeronautics, Ltd. v. Bani Jan [(1971) 39 F.J.R 11], where a Division Bench of the Mysore High Court held that overtime allowance and outstation allowance are the privilege or benefit which the employee was entitled to get for working beyond specified hours and for his work at outstation and hence they came within the definition of “wages” under S. 2(1) (m) of the Workmen's Compensation Act, 1923.

16. In the result, I find that the learned Workmen's Compensation Commissioner was right in holding that the monthly wages of the deceased Cyril Vaz exceeded Rs. 500 and hence the application filed by the appellants was not maintainable under the Workmen's Compensation Act, 1923. The appeal is, therefore, dismissed. In the circumstances of the case, no order as to costs.