1. This Letters Patent Appeal is directed against the summary dismissal of the appellant's appeal under S. 82 of Employees' State Insurance Act of 1948 (referred to hereinafter as 'the said Act') challenging the order of the Judge, Employees' Insurance Court, Bombay, dated 26th September, 1974, in Application No. 23 of 1973. There is not much dispute about the facts. The appellant was employed as a skilled fitter in 'B' grade with the Premier Automobiles Limited with effect from 14th April, 1959. On 21st November, 1972, the appellant met with an accident, while he was still discharging his duties. He was admitted to the hospital on 24th November, 1972 and discharged on 8th December, 1972. He was again admitted in another hospital and discharged on 22nd December, 1972. He got a fitness certificate on 27th February, 1973 and then reported for duty on 1st March, 1973. He then set up his claim for disablement benefit to which he is entitled under S. 46(1)(c) of the Act before the respondent, i.e., the Employees' State Insurance Corporation. The respondent rejected his claim. The appellant, therefore, made an application to the Employees' Insurance Court under S. 75 of the Act. The learned Judge tried the application, framed necessary issues, and ultimately dismissed the same. The application has been dismissed on the ground that his monthly wages during the month in which the accident took place exceeded Rs. 500 and, therefore, he could not claim to be an 'employee' within the meaning of S. 2(9) of the Act and consequently could not claim to have suffered employment injury within the meaning of the Act. His contention that this case was covered by the proviso to S. 2(9) of the Act also was rejected by the learned Judge.
2. Dr. Kulkarni, the learned advocate appearing for the appellant, contends that the learned Judge was firstly in error in holding that the appellant's case was not covered by the proviso to S. 2(9) of the Act. He, secondly, contends that the learned Judge also erred in holding that the appellant's wages for the relevant month of November, 1972, exceeded Rs. 500.
3. Now, it is not in dispute that the total wages of the appellant for the month of October, 1972, amounted to Rs. 500.70. It is also not disputed that the wages actually paid for the month of November amounted to Rs. 349.04. It is also not in dispute that, as indicated earlier, after the accident dated 21st November, 1972, the appellant could not perform any work, as admittedly he was undergoing treatment in the hospital. Admittedly he was a daily rated worker and paid on that basis. Notwithstanding all this, the learned Judge has calculated his wages for the month of November, 1972, at Rs. 510. Mr. Jayakar, the learned advocate appearing for the respondent, supports this calculation. He relies on the language of clause 2(a) of the First Schedule of the Act. It contemplates calculation of the average daily wages not by reference to what he actually received but by reference to what 'would have been payable to him for the complete wage period had he worked on all the working days in that wage period'. On the fact of it, this calculation reflects and artificial quantum of wages and is intended to work out the amount of weekly contribution 'payable during a contribution period' by the employer and the employee in terms of clause 1 of the said Schedule. Dr. Kulkarni does not dispute that in the event of wages being calculated in this statutorily prescribed artificial method, the appellant's monthly wages do amount to Rs. 510. He, however, disputes the applicability of clause 2(a) of the First Schedule. According to Dr. Kulkarni, S.2(9) defines who the employee is within the meaning of the Act and persons earning wages in excess of Rs. 500 are excluded from the purview of clause (b) of the said definition. According to Dr. Kulkarni wages for the purposes of determining whether a person was employee on the date of the accident within the meaning of S. 2(9) or not shall have to be determined by reference to the definition of the word 'wages' in S. 2(22) of the Act, and not by reference to the artificial calculation contemplated under clause 2(a) of the First Schedule intended for the specific purpose of computing the amount of contribution and certain other purposes indicated in the First Schedule.
4. This contention of Dr. Kulkarni appears to us to be well-founded. As indicated earlier, the definition of the word 'employee' seeks to exclude persons earning 'wages in excess of Rs. 500'. The Legislature in its wisdom has chosen to define the word 'wages' in S. 2(22) itself. It stands to reason that the word 'wages' in different clauses of S. 2(9) is intended by the Legislature to carry the same meaning, as is indicated specifically by it in its definition under S. 2(22). Shorn of the unnecessary verbiage, the word 'wages' is defined under S. 2(22) to mean 'all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled'. So considered, the appellant was paid only for 21 days and the actual amount of wages paid was Rs. 349.04. The appellant being an 'employee' within the meaning of S. 2(9) of this Act, his case shall have to be determined by reference to the quantum of his wages. So considered, the appellant undoubtedly is an 'employee' within the meaning of S. 2(9) of the Act.
5. Mr. Jayakar contends that even the wages 'payable' also are required to be taken into account while considering the qualification of any person to be an employee within the meaning of the Act. Wages computed in terms of clause 2(a) of the First Schedule, so contends Mr. Jayakar, are wages payable within the meaning of S. 2(22) of the Act. He, therefore, contends that the learned trial Judge was justified in relying on so calculated wages of Rs. 510 and refusing the appellant to be treated as an employee within the meaning of the Act. We are unable to see any force in this contention. The word 'payable' in S. 2(22) is not used in contradiction to the word 'paid'. In other words, quantum of wages cannot differ merely because of the same being not paid, and allowed to remain unpaid and, therefore, 'payable' due to some reason or the other because of some accident. It is difficult to see how the quantum of wages calculated artificially in terms of clause 2(a) of the First Schedule can be described as 'payable'. In fact, it cannot be suggested that the employers would have been compelled to make payment to the employee of the amount so worked out. Nor could they be compelled to treat any such amount as 'payable'. As discussed earlier, the figure is artificially calculated merely to determine the quantum of contribution required to be made by the employer and the employees in terms of the relevant section.
6. Mr. Jayakar contends that any such construction will render S. 51 of the Act redundant and it will tantamount to holding that the First Schedule has no application to the rights conferred under S. 46 of the Act. This, to our mind, is an argument of dispair. The question of the First Schedule being not applicable either of S. 51 or S. 46 of the Act can never arise. Section 46(1)(c), no doubt, confers right on the 'insured persons' suffering from disablement to periodical payment' while S. 51 indicates the mode of calculation of such periodical benefits. Clause 6 of the First Schedule indicates the rates at which such disablement benefits are to be paid to such insured persons. Calculation of this rate is closely inter-linked with the determination of average daily wages conceived under clause 2 of the First Schedule. To this extent the First Schedule is closely linked with the Scheme of S. 51, which in terms merely works out the rights conferred under S. 46(1)(c) of the Act. However, for the purposes of identifying the person on whom the rights of periodical payment has been conferred, one has to find out who the 'insured person' is. For that, one has to turn to its definition under S. 2(14) of the Act. The said section introduces the conception of 'an employee' which in turn has been defined under S. 2(9) and, as discussed earlier, the identification of the employee conceived under the Act depends on the calculation of his wages by reference to S. 2(22) of the Act and not by reference to 2(a) of the First Schedule. The learned Judge, therefore, was obviously in error in assuming that the amount of wages of the appellant for the month of November was Rs. 510, and not Rs. 349.04.
7. Now, it is not disputed that the appellant was placed in group 'B' of the employees by the employer in terms of Regulation No. 5 and his relevant contribution period commenced from the month of March, 1972 and ended at the end of September, 1972. The accident took place in the second month of the second contribution period. We have already indicated how the total wages of the appellant for the month of October amounted to Rs. 500.70. It is unnecessary to decide in this case whether excess of 70 ps. in the wages is sufficient to disqualify him from being an employee. We will proceed on the assumption that it does so disqualify him. However, the total wages for the month of October cannot have the effect of making him not an employee in the month of November, 1972, when in fact, his total wages of that month amounted to Rs. 349.04. It is in this context that reference to the proviso to S. 2(9) is relevant. Three clauses of S. 2(9) indicate the different situations in which a person can be considered to be an employee. The section then proceeds to indicate in clause (a) to (c) who cannot be included in the definition of the word 'employee'. Reference to clause (a) is not relevant. Clause (b) and the proviso read as follows :
(b) any person so employed whose wages (excluding remuneration for overtime work) exceeded five hundred rupees a month : Provided that an employee whose wages (excluding remuneration for overtime work) exceeded five hundred rupees a month at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period.'
The year is divided into two 'contribution' and 'benefit' periods, each period consisting of six such months, as are indicated in Regulation No. 3 against each group of workers. The appellant belongs to 'B' set, his first period covers March to September, while second period covers October to February. The combined effect of S. 2(9) and S. 2(22) is that his wages in a month go to determine if he was an 'employee' in that month. This firstly takes notice of the fact that the wages of the employee fluctuate from month to month depending on the fluctuating price index, and further assumes that, a person can be an employee within the meaning of the Act during one month and ceases to be such an employee in the next month depending on his total wages earned by him in each month. Wording of S. 46(1)(c) suggests, that, his wages during the month of the accident is determinative of his being entitled to the disablement benefit. This may result in depriving him of his right there-under if his wages in the month of the accident exceeds Rs. 500 and consequently make him not an employee. The above proviso to S. 2(9)(b) comes to his rescue in such a case in a limited manner. It enables him to continue to be an employee during the other five months of any contribution period, even if his actual wages, whether paid or payable in the first month of that period, did exceed Rs. 500 within the meaning of the Act. The proviso carves out an exception to benefit the workman. The vexed phraseology of the proviso 'a month at any time after (and not before) the beginning of the contribution period', in our opinion, is intended to make the wages of the first of the concerned contribution period, determinative of his claim to be an employee within the meaning of the Act. This, no doubt, is a fiction introduced in the proviso to protect the workmen to enable them to reap the benefits of the contributions made by them in earlier periods. Dr. Kulkarni's extreme contention that the employee gets benefit of this provision, even if his wages do exceed Rs. 500, in any month of the contribution period is not tenable. Equally untenable is the contention of Mr. Jayakar that wages of the worker in the month of the accident alone are determinative of his such entitlement. In view of our finding as to his total wages in the month of November being Rs. 349, the appellant is not required to rely on this proviso, though his wages for the month of October could not have enabled him to rely on this proviso. This much, however, is clear to us that the proviso cannot operate to his disadvantage. In view of our above finding, the appeal deserves to be allowed.
8. We accordingly allow the appeal.
9. In the circumstances of the case, there will be no order as to costs.
10. Mr. Jayakar applies for leave to appeal to the Supreme Court under Art. 133 of the Constitution.
11. Leave refused.