Shri H.D. Sharma ….Appellant(s) VERSUS Northern India Textile Research Association …Respondent(s)

whether any ex gratia payment made to the employee by the Bank would be regarded as

Bonus   (production,   incentive   or   customary).   This Court held that it was not. It was held that it is not possible to employ a term of service on the basis of employment contract. It was held that the payment made   as  ex   gratia  was   neither   in   the   nature   of production   bonus   nor   incentive   bonus   nor customary bonus and nor any statutory bonus. 

It cannot   be   regarded   as   part   of   the   contract “employment”. It was accordingly held that the  ex gratia  payment   made   by   the   Bank   cannot   be regarded as remuneration paid or payable to the employees in fulfillment of the terms of the contract of employment within the meaning of definition of wage under Section 2 (rr) of the ID Act. We are, therefore, of the considered opinion

that the respondent rightly paid Rs.1103.40 to the appellant by way of his wages for one month along with   his   dismissal   order.   Such   payment,   in   our view,   was   made   strictly   in   accordance   with   the requirements of Section 2(y) read with Section 6E (2) of the Act.  On the other hand, we find that the appellant   failed  to  adduce  any  evidence  to   prove that Rs.110/­ was being paid to him every month by the   respondent   as   a   part   of   his   term   of   the employment and, if so, under which head. In view of the foregoing discussion, we are of the view that the High Court was not justified in holding that such amount, even if, held to be the wages, the same could be adjustable against the payments   made   by   the   respondent   under   other head in the appellant’s monthly wages. The High Court,   in   our   view,   failed   to   examine   the   main question as to whether a payment of Rs.110/­ was in the nature of “wages” or its component within the meaning of Section 2(y) of the Act.  Without deciding this   question,   the   High   Court   held   that   such amount   could   be   adjusted   against   the   payment made by the employer (respondent) to the appellant under “leave encashment”. In our opinion, it was not the correct approach.