Krishnamoorthy Iyer, J.
1. These appeals filed under Section 82 of the Employees' State Insurance Act, 1948 (Act 34 of 1948) involve an interesting and important question relating to the interpretationof Section 2, Sub-section (9) of the said Act, which defines 'Employee' in the following manner.
''Employee' means any person employed for wages in or in connection with the work of a Factory or establishment to which this Act applies and-
(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to, or connected with the work of, the factory or establishment whether such work is done by the employee in the factory or establishment or elsewhere; or,
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment, or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; but does not include-
(a) any member of the Indian Naval, military or air force; or
(b) any person employed on a remuneration which in the aggregate exceeds four hundred rupees a month.
The plea of the employer who is the appellant, in all the appeals is that the term 'remuneration' in Clause (b) above will also include the contribution paid by the employer to the Provident Fund under the Employees' Provident Funds Act 1952 read with the Employees' Provident Funds Scheme, 1952. It is agreed that if the employer's contribution is not included in the term 'remuneration' the employees will not be excluded from the definition of 'employee' in Section 2, Sub-section (9) of the Employees' State Insurance Act.
2. The Employees' State Insurance Court, Quilon took the view that the employees whose contributions are in dispute are persons employed on a remuneration which in the aggregate does not exceed Rs. 400 a month. The increase of the figure Rs. 400 to Rs. 500 by the Insurance Act 44 of 1968 is not relevant for these appeals. The question to be decided is whether the view of the authority is right.
3. Section 2, Sub-section (22) of the Employees' State Insurance Act, 1968, which defines 'wages' reads thus :--
' 'Wages' means all remuneration paid or payable in cash to an employee if the terms of the contract of the employment express or implied, were fulfilled and includes 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 entailed on him by the nature of his employment or
(d) any gratuity payable on discharge.'
The submission on behalf of the appellants is that the term 'remuneration' is wider than the term 'wages' and since the definition of the term 'wages' specifically excludes the contribution paid by the employer to provident fund, the term 'remuneration' being wider in its content and amplitude should include the same.
4. In our view the definition of 'wages' in Section 2, Sub-section (22) of the Employees' State Insurance Act does not afford any guidance to interpret Section 2, Sub-section (9) of the Act. The fact that in the definition of 'wages' employees' contribution to provident fund is excluded does not follow that the expression 'remuneration' in Section 2(9)(b) should include it. The counsel for the appellants relied on the decision in Skailes v. Blue Anchor Lines Limited, 1911-1 KB 360 and Central Bank of India v. Their Workmen, AIR 1960 SC 12 and Accountant-General v. V.P. Bakshi, AIR 1962 SC 505, to bring out the connotation of the word 'remuneration.' It is unnecessary to examine these decisions as in our view, the meaning to be given to the term 'remuneration' should depend upon the context in which the word is used. The words 'any person employed on a remuneration' in Section 2(9) of the Employees' State Insurance Act show that the remuneration in that context is what is payable under the terms of the contract of employment. Employees' contribution to the Provident Fund does not arise out of the contract of employment but is a liability imposed on the employer by the Employees' Provident Funds Act, 1952, and the Employees' Provident Funds Scheme, 1952. An employer has got to contribute from the date of the extension of the provisions of the Employees' Provident Funds Scheme to a particular establishment, and the liability arises the moment the scheme is made applicable to a particular establishment. The Act and the Scheme compel the employer to require its employees to become members of the fund, and it is also compulsory for the employees to obey it. The object of the Employees' State Insurance Act is to ensure sickness, maternity, disablement and medical benefits to employees of factories and establishments of a particular category and dependants' benefits to their dependants. On a plain interpretation of the provision we have no hesitation to hold that the contention advanced on behalf of the appellants is without substance.
5. We shall now examine the Employees' Provident Funds Act, 1952 and the Employees' Provident Funds Scheme, 1952,to find out whether the employees' contribution to provident fund tinder the Employees' Provident Funds Act and the Employees' Provident Funds Scheme is 'remuneration' within the meaning of Section 2, Sub-section (9), Clause (b) of the Employees State Insurance Act. Section 12 of the Employees' Provident Funds Act prevents the employer from reducing the wages of any employee to whom the scheme applies or the total quantum of benefits in the nature of old age pension, gratuity or provident fund to which the employee is entitled under the terms of his employment, express or implied, because of his liability to contribute. Paragraph 31 of the scheme provides that notwithstanding any contract to the contrary the employer shall not be entitled to deduct the employer's contribution from the wage of a member or otherwise to recover it from him, and Paragraph 32 of the Scheme provides for the recovery by an employer of the member's share of contribution paid by the employer. Even in the matter of advance from the fund to the employee, Paragraph 43B of the Scheme stipulates that the amount advanced cannot exceed 12 months basic wages and dearness allowance or his own total contributions with interest thereon, whichever is less, for the purposes mentioned in the said paragraph. Paragraph 71 of the scheme which will throw considerable light on the question to be solved reads thus:--
'Notwithstanding anything contained in Paragraph 68, if a member is dismissed by an employer in a factory or other establishment to which the scheme applies for serious and wilful misconduct the employer shall send intimation thereof to the Central Board and on receipt of such intimation the Central Board or where so authorised by the Central Board, the Commissioner shall have the power to forfeit the employer's contribution up to a maximum of the employer's contribution in the last two complete periods of currency of the contribution cards and that of the period of currency of the current contribution card.'
6. In our view, therefore the employer's contribution to the fund is never considered as part of the remuneration arising out of the contract of employment. We therefore hold that in the term 'remuneration' in Section 2, Sub-section (9), Clause (b) of the Employees' State Insurance Act, employer's contribution to Provident Fund is not included.
7. The learned counsel for the appellants contended that the applications filed by the respondent before the Employees Insurance Court are barred by limitation. Though the contention was raised in the objections, it is seen from the orders of the authority that this plea is not pressed. There is nothing to show that this statement in the orders under appeal is a mistake.
8. We therefore find no merit in the appeals and we dismiss them. But we make no order as to costs.