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PETITIONER: THE REGIONAL DIRECTOR,EMPLOYEES’ STATE INSURANCECORPORATION

       Vs.

RESPONDENT: M/S. POPULAR AUTOMOBILES ETC.

DATE OF JUDGMENT:       29/09/1997

BENCH: S.B. MAJMUDAR, S. SAGHIR AHMAD

ACT:

HEADNOTE:

JUDGMENT:               THE 29TH DAY OF SEPTEMBER, 1997 Present:              Hon’ble Mr. Justice S.B. Majmudar              Hon’ble Mr. Justice S. Saghir Ahmad V. J. Francis, Rajiv Nanda, Ms. Anubha Jain and A.K. Sharma, Advs. for the appellant T. L.  Vishwanatha  Iyer,  Sr.  Adv.,  S.  Balakrishnan,  S. Prasad, Ms.  Ramni Tneja  and G. Prakash, Advs. with him for the Respondents.                       J U D G M E N T      The following Judgment of the Court was delivered:                             WITH [Civil Appeal  No. 6724  of  1997  (Arising  out  of  S.L.P. (Civil) No.  14299 of  1984); Civil  Appeal No. 6723 of 1997 (Arising out  of S.L.P.  (Civil) No.  528  of  1992);  Civil Appeal No.  6725 of  1997 (Arising out of S.L.P. (Civil) No. 4029 of  1997); and  Civil Appeal  No. 6726 of 1997 (Arising out of S.L.P. (Civil) No. 13172 of 1997)]                       J U D G M E N T S.B. Majmudar. J.      Leave  granted   in  all   the  cognate  Special  Leave Petitions.      By consent  of learned  advocates of  parties all these appeals were heard finally and are being disposed of by this common judgment.  The Employees’ State Insurance Corporation (in short  ‘the corporation’)  functioning in  the State  of Kerala as  well as  in the State of Karnataka in the appeals concerned, have  posed for  our consideration  the following question of law:      "Whether a  suspended employee  and      his employer  are liable  to  remit      under    the    Employees’    State      Insurance  Act,  1948  (hereinafter      referred  to   as  ‘the  Act’)  the      requisite contributions  under  the      said Act  in  connection  with  the      subsistence    allowance    amounts      received by  the suspended employee      during the period of his suspension      pending domestic enquiry."

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    In the  impugned judgments under appeal the High Courts of Kerala and Karnataka have taken the view that there is no such liability  on the part of the suspended employee or his employer. The  learned counsel for the appellant-Corporation submitted to the contrary for our consideration.      A few  relevant facts  leading to  these appeals may be noted at  the outset.  It is  not  in  dispute  between  the contesting parties that the respondents in these appeals are the employers and the suspended persons are their employees. Both of  them are  governed by  the Act.  It is  also not in dispute between  the parties that prior to the suspension of these employees  the respondent-employers were remitting the requisite contributions  under Sections 39 and 40 of the Act both by  way of  employees’ contributions and the employers’ contributions to the Corporation which had insured all these employees concerned  as per  Section 38  of the  Act in  the manner provided  thereunder. It  is also not in dispute that even during the period of suspension the suspended employees were covered  by the  beneficial provisions  of the  Act and were entitled  to all  the benefits  available to  employees under Chapter  V of  the Act  and  the  coverage  of  entire beneficial scheme  provided by  the Act in that Chapter from Section 46  to Section  73 was  available even  in cases  of suspended  employees   who  were  getting  only  subsistence allowance as  per the  rules and regulations governing their conditions of  service. The  High  Courts  in  the  impugned judgments have  taken the  view that  subsistence  allowance paid to  an  employee  during  suspension  pending  domestic enquiry would  not be  covered by the definition of the term ‘Wages’ as  found in  sub-section (22)  of Section  2 of the Act. The said definition reads as under:      "(22)     ‘Wages’     means     all      remuneration  pair  or  payable  in      cash to  an employee,  if the terms      of  the   contract  of  employment,      express or  implied, were fulfilled      and  includes  any  payment  to  an      employee in  respect of  any period      of  authorised   leave,   lock-out,      strike which is not illegal or lay-      off    and     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;"      It was  held  that  before  any  payment  made  by  the employer to  the employee  is covered by the said definition of ‘wages’  it should  be a  remuneration paid or payable in cash to  an employee,  if  the  terms  of  the  contract  of employment, express or implied, were fulfilled. That in case of a  suspended employee the terms of contract of employment would not  be fulfilled  as he is not actually rendering any service during the period of suspension.      Learned counsel appearing for the appellant-corporation contended that  the aforesaid  view of  the High  Courts  is

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clearly erroneous  in law.  He submitted  that the  Act is a beneficial piece of legislation offering statutory insurance against employment  injuries  suffered  by  insured  workmen while in  service and  for earning the statutory coverage of insurance the insured workmen had to contribute as laid down by the  Act and  simultaneously their  employers had also to add their contribution to the said amount and remit the same to the  Corporation to  enable the  Corporation to discharge its statutory  obligations under  the Act for the benefit of the insured  employees. It  was submitted  that  during  the period of suspension the employer-employee relationship does not get snapped. The employee cannot be said to have refused to fulfil  his part of the contract as he is willing to work but it is the employer who does not want him to work instead pays him  reduced amount  of wages  as permissible under the rules by  way of subsistence allowance which in a given case beyond the  requisite period  may not only go up from 50% of wages to  75% but may also go up in given contingencies to a ceiling of 100% of wages. Consequently subsistence allowance squarely falls  within the  first part  of the definition of the term  ‘wages’ as  found in sub-section (22) of Section 2 of the  Act. In support of his contention three decisions of this Court  were pressed  in service - Modella Woollens Ltd. v. Employees  State Insurance  Corporation and another [1994 Supp. (3)  SCC 580];  Harihar  Polyfibres  v.  The  Regional Director ESI  Corporation [1985] 1 SCR 712; and Indian Drugs & Pharmaceuticals  Ltd. Etc.  v. Employees  State  Insurance Corporation Etc.  [1996 (8)  SCALE 688].  The first judgment refers to  production bonus.  The second one refers, amongst others, to  incentive bonus  while the  third one  refers to overtime wages.  All these additional monetary benefits were held to  be covered  by the inclusive definition of the term ‘wages’ as  found in  sub-section (22)  of Section  2 of the Act. It  was, therefore,  contended that  there is no reason why subsistence  allowance which is a reduced scale of wages payable to  the suspended employee cannot also form part and parcel of the term ‘wages’ as defined in the Act.      Learned counsel  for the  respondent-employers  on  the other hand  submitted, placing  reliance on  a decision of a Bench of  two learned  Judges of  this Court  in the case of Assistant Regional  Director, Nagpur  v. Model  Mills Nagpur Ltd. [1993  Supp. (1)  SCC 615], that prior to the amendment of the  definition of  the term  ‘wages’  in  the  Act  even payment for  any leave  period was  not treated as wages. He also placed  reliance on  two decisions  of the  Bombay High Court in  the case  of Ganpatlal  Mulchandji Joshi  v. First Civil Judge,  Class I,  Nagpur and  another [Air 1958 Bombay 262]  and   Nutan  Mills   v.  Employees   State   Insurance Corporation [AIR  1956 Bombay  336] for submitting that even maternity leave  benefit was  not considered  to be wages in the first judgment and in the second judgment it was held of course in  the light  of unamended  definition of  the  term ‘wages’ as found in sub-section (22) of Section 2 of the Act that lay-off  compensation would not be included in the term ‘wages’ for  the purpose of computing contributions from the employees and employers qua the said amount.      Before referring  to the aforesaid decisions it will be necessary to  have a  quick glance at the scheme of the Act. The Act  is to  provide for certain benefits to employees in case of  sickness, maternity  and employment  injury and  to make  provision   for  certain  other  matters  in  relation thereto. Thus  this is  a beneficial  piece  of  legislation which grants  a statutory insurance coverage to employees in the  establishments   covered  by   the  Act   so  that  the Corporation would  be statutorily enjoined to make available

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these benefits  to the  suffering employees and they may not have to  be at  the mercy of the employees concerned who may or may  not readily  make available  these benefits  to  the suffering employees  if statutory coverage of the Act is not available to them. As laid down by Section 1 sub-section (4) of the  Act it  shall apply,  in the  first instance, to all factories (including  factories belonging to the Government) other than  seasoned factories.  As per  sub-section (5)  of Section 1  of the  Act, ‘the  appropriate Government may, in consultation with  the Corporation and where the appropriate Government is  a State  Government, with the approval of the Central Government,  after giving  six months’ notice of its intention of  so  doing  by  notification  in  the  Official Gazette, extend  the provisions  of this Act or any of them, to any  other  establishment  or  class  of  establishments, industrial, commercial,  agricultural or otherwise’. Section 2 is the Definition Section. Sub-section (4) thereof defines ‘contribution’ to  mean, ‘the  sum of  money payable  to the Corporation by  the principal  employer  in  respect  of  an employee and  includes any amount payable by or on behalf of the employee in accordance with the provisions of this Act’. Sub-section (6  ) of Section 2 defines ‘Corporation’ to mean "Employees’ State  Insurance Corporation  set up  under this Act." The  appellant-Corporation is  the  said  Corporation. Sub-section (8)  of Section 2 defines ‘employment injury’ to mean, ‘a  personal injury  to an employee caused by accident or an  occupational disease arising out of and in the course of his  employment, being  an insurable  employment, whether the  accident   occurs  or   the  occupational   disease  is contracted within  or  outside  the  territorial  limits  of India.’ Sub-section  (9) of  Section 2 defines ‘employee’ to mean, ‘any  person employed  for wages  in or  in connection with the  work of  a factory  or establishment to which this Act applies’. We are not concerned in the present cases with such employees  whose wages  exceed the  prescribed limit of wages permanently.  Hence we  need not refer to that part of the definition  of ‘employee’. Sub-section (10) of Section 2 defines ‘exempted employee’ to mean, ‘an employee who is not liable under  this Act  to pay the employee’s contribution’. Such exempted employees are contemplated by Section 42 which lays down that, ‘no employee’s contribution shall be payable by or  on behalf  of an  employee whose  average daily wages during a  wage  period  are  below  such  wages  as  may  be prescribed by the Central Government.’ Chapter IV deals with ‘Contributions’. Section  38 lays down that, ‘subject to the provisions of  this Act,  all  employees  in  factories,  or establishments to which this Act applies shall be insured in the manner  provided by  this Act’.  Section 39  deals  with contributions payable  under the  Act. Such contributions as per sub-section  (1) thereof  will comprise  of contribution payable by  the employer  (referred  to  as  the  employer’s contribution) and  shall be  paid to  the Corporation. These contributions are  to be  paid  at  such  rates  as  may  be prescribed by the Central Government. Section 40 enjoins the principal  employer   to  pay   contribution  in  the  first instance. Section  41 deals  with ‘Recovery  of contribution from immediate employer’. As indicated earlier, the benefits flowing from  the scheme  of the  Act which are available to the  insured   employees  comprise   of   diverse   benefits enumerated in Chapter V as provided in Sections 46 to 73.      On the  aforesaid scheme  of this  Act,  therefore,  it becomes very  clear that  all employees  are entitled to get the  statutory   coverage  of  the  benefits  being  insured employees and any person employed for wages is to be treated as an  employee for  the purpose  of the  Act.  Under  these

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circumstances an  employee who  is admittedly covered by the Act and who is entitled to get the benefits under the Act as insured employee will not cease to be an employee covered by the Act  if he  is placed  under interim  suspension pending domestic enquiry  on any alleged misconduct by his employer. It is axiomatic to say that during suspension period pending enquiry the  employer-employee relationship does not come to an end.  It would come to an end only when after enquiry his services  on   proof  of   misconduct  are   ordered  to  be terminated. Till then he continues to be an employee for all purposes subject  to only two consequences flowing from such interim suspension,  namely, in the first place the employee will remain  prohibited from  actually offering his services and discharging his duties as the employer does not want him to do  so and  secondly  during  the  period  of  suspension pending enquiry  the remuneration  payable to  the  employee will get curtailed the rules and which may range from 50% at the lowest  to even  100% of the wages at the highest if the suspension  continues   beyond  the   requisite  period   as contemplated by the service rules and regulations concerned. It is  also to  be kept  in view  and there is no dispute on this aspect that even during suspension when the employee is being paid  subsistence allowance  and  not  full  wages  he remains entitled  to get  all the  benefits as  available to working employees  on the same basis as laid down by various provisions of  Chapter V.  It  is  not  as  if  a  suspended employee gets  lesser benefits  as  compared  to  a  working employee under  the provisions  of the  said  Chapter.  They stand at  par. It is also to be appreciated that subsistence allowance is  not to  be refunded  by the suspended employee whatever may  ultimately  be  the  result  of  the  domestic enquiry. Hence  only because  the total remuneration paid to the suspended  employee gets reduced to 50% or to any higher percentage going up to 100% it is not possible to appreciate as to  how it  can be said that on the amount of subsistence allowance received  by him  permanently he  is not  bound to contribute any  amount to  the Corporation  and equally  the employer of  such a  suspended employee is also not bound to make his  parallel contribution  as per  the rates  provided under the  Act especially when all the benefits of statutory insurance coverage  are made available by the Corporation to such a  suspended  employee.  However,  great  reliance  was placed by  learned counsel for the respondents on a decision of this  Court in  the case  of Bala  Subrahmanya Rajaram v. B.C. Patel  and others [AIR 1958 SC 518] wherein it has been observed that  the  word  ‘remuneration’  means  the  amount payable for  service rendered. The aforesaid observation was made in  the context  of the payment of Wages Act with which this Court  was concerned  in the  said decision. We fail to appreciate  how  the  said  decision  can  be  of  any  real assistance to  the respondents  in the  present cases as the term ‘wages’ as defined by Section 2 sub section (22) of the Act means  all remuneration  paid or  payable in  cash to an employee, if  the  terms  of  the  contract  of  employment, express or  implied, were  fulfilled.  Thus  it  is  a  more comprehensive definition  which takes  in its  sweep in  the first part all remuneration paid or payable to the employee. Therefore, the  amount payable  to an  employee or  actually paid to  an  employee  if  the  terms  of  the  contract  of employment were  fulfilled would constitute wages. A regular employee who is willing to work and whose services are taken by the  employer gets the remuneration for the work actually done by him under the contract of employment. But in case of a suspended  employee  he  gets  lesser  amount  by  way  of subsistence allowance but that is also as a remuneration for

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being continued on the roll of employment as an employee and so far  as he  is concerned  he cannot  be said  to have not fulfilled his part of the terms of contract of employment as he is  willing to  offer his services but it is the employer who prohibits  him from  actually giving  his services under the contract  of employment.  The situation almost resembles to grant  of half  pay leave or leave on even more than half pay as  the case  may be.  Therefore, it cannot be said that the suspended  employee does  not  fulfil  is  part  of  the contract of employment or commits breach of any of the terms of the  contract of  employment. The prohibition, if any, is imposed by  the employer against him and that prohibition in the absence  of any  rules  and  regulations  governing  the payment of  remuneration during  suspension to the concerned employee would  have entitled  the suspended employee to get the full  remuneration because  he was  ready and willing to perform his  part of  the contract  of employment but it was the employer  who prohibited him from performing his duties, But if there is a valid service regulation which reduces the scale of  remuneration, during suspension, the employee gets that reduced  permissible scale  of remuneration  by way  of subsistence allowance.  All the  same it cannot be said that it is  not the  remuneration paid to him though at a reduced rate.      It is  also to be appreciated that a suspended employee who gets  all the  benefits under  the  Act,  may  in  given contingencies remain suspended for a number of years pending the enquiry and in the meantime may be entitled to draw 100% of wages as subsistence allowance under the relevant service rules and regulations. Under these circumstances even though he may  get full  wages by  way of subsistence allowance and even though he may be entitled to all the benefits under the Act he  may not  be required  to contribute  anything if the contention of  the learned  counsel for  the respondents  is accepted and  ultimately if he is removed from service after the decision  in the departmental enquiry he would walk away with all  benefits under  the Act  without any corresponding obligation to  contribute towards  the said benefits. On the other hand,  if he  is fully  exonerated and  reinstated  in service  and   in  the   meantime  if   he  had  contributed proportionately  to  the  extent  of  subsistence  allowance earned by  him the balance of remuneration which may be paid to him for the back period may make him liable to contribute only remaining  proportionate amount  of contribution to the extent of additional remuneration paid to him to make up for the difference  between the  full wages  for the  period  of erstwhile suspension  in question and the actual subsistence allowance  given  to  him  and  for  which  he  had  already contributed earlier.  In  either  case  employer  will  also remain liable  to give  his proportionate contribution along with employee’s  contribution both  on subsistence allowance amount as  well as  on balance  of  wages  paid  up  to  the employee later  on. If  the suspended employee is ultimately removed from service, there would arise no occasion for such employee to make additional contribution on any extra amount other than subsistence allowance received by him and equally employer would  not be  called upon  to  make  proportionate contribution on  any extra  amount save  and except  on such subsistence allowance  received by  the employee  concerned. The interpretation  canvassed by  learned  counsel  for  the respondents would create an anomalous situation as aforesaid while the  submission canvassed  by learned  counsel for the appellant-Corporation  would   avoid  the   same  and  would fructify and  enhance the  benevolent purpose underlying the enactment of this welfare legislation.

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    In this  connection one  submission of  learned counsel for the  respondents requires  to be  noted.  He  submitted, placing reliance  on the inclusive part of the definition of the term  ‘wages’ in  Section 2 sub-section (22) of the Act, that in  a case  where the employee is ready to work but the employer does  not allow him to work by imposing lock-out or lay-off, payment  made to such employee gets covered only by the inclusive  part  of  the  definition  which  means  that otherwise it  would not  have been covered by the first part of the  definition. That  similar is the situation where the workman is  suspended pending enquiry and payment is made to way of  subsistence allowance.  In such a case also employee is ready but the employer does not allow him to work. On the analogy of  rent made  during the period of lock-out or lay- off, such subsistence allowance would also not be covered by the first  part of  the definition and as the inclusive part of the definition does not mention subsistence allowance, it should be  treated to be outside the sweep of Section 2 sub- section (22)  of the  Act. In our view, this submission does not stand  scrutiny. It  has to  be kept  in view,  as noted earlier, that  subsistence allowance  paid  to  a  suspended employee  is  not  recoverable  or  refundable  even  though ultimately the suspended employee is removed from service on the proof  of misconduct  for which he was proceeded against in departmental  enquiry. The  Kerala Payment of Subsistence Allowance Act,  1972 also clearly provides in Section 3 sub- section (2)  that an  employee shall  not in  any  event  be liable to  refund or  forfeit any  part of  the  subsistence allowance admissible  to him under sub-section (1). But even apart from  the said  statutory  provision  on  the  general principles applicable  to subsistence  allowance paid  to an employee pending  departmental enquiry  no such allowance is refundable by  him in  case  the  employee  gets  ultimately removed from  service on  proof of misconduct. So far as the submission of  learned counsel  for the  respondents on  the inclusive part  of the  definition is concerned it has to be kept in  view that  if the  first part  of the definition of ‘wages’ will  include all  remuneration paid  or payable  in cash to  an employee if the terms of contract of employment, express or  implied, were fulfilled and consequently even if an employee  is suspended  as per the service regulations by the employer  pending enquiry  it cannot  be said  that  the employee has  committed breach  of any  of the  terms of the contract of employment. Nor can it be said that the employer has committed  breach of any of the terms of the contract of employment as  the service  rules applicable to the employee would be part and parcel of his conditions of employment and acting on  the said  service rules if the employer prohibits the employee  from reporting  for duty and doing actual work the employer  cannot be  said to be committing breach of any of the  terms of  the contract  of employment.  Thus neither party can  be said  to have  committed breach  of any of the terms of the contract of employment when legally permissible suspension pending enquiry is imposed by the employer on the employee. Such is not a case when a lock-out or a lay-off is imposed by the contract of employment as in case of lock-out the employer commits breach of the contract of employment by refusing to  give work  to the employee for no fault of his. Similarly in  case of lay-off the employees are refused work by the employer for no fault of the employees. Therefore, in either case  the employer  for no  fault of  the  employees. Therefore, in  either case  the employer would be committing breach of the terms of the contract of employment by his own act  which  may  be  justified  or  otherwise.  Under  these circumstances, therefore,  but for the inclusive part of the

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definition encompassing  payment  made  to  an  employee  in respect of  any period  of lock-out or lay-off, said payment would not  have been  covered by  the definition  of ‘wages’ under Section  2 sub-section (22) of the Act. The first part of the  said definition  obviously would not apply to such a case as  terms of  the contract of employment cannot be said to be  complied with  at least  by the  employer in  such an eventuality. Such  is not  the case  when employer acting as per terms of employment governing the employees suspends him pending enquiry.      It is  not time  for us  to briefly  refer  to  various decisions of  this Court  to which our attention was invited by learned  counsel for  the parties. In the case of Modella Woollens Ltd.  (supra) a Bench of two learned Judges of this Court had to consider whether the term ‘wages’ as defined by sub-section (22)  of  Section  2  of  the  Act  would  cover production bonus.  The Court  observed that production bonus is nothing  but remuneration for additional production which he employees  have brought  about. In  the case  of  Harihar Polyfibres (supra)  another Bench  of two  learned Judges of this  Court   had  to  consider  the  question  whether  the expression ‘wages’  as defined by Section 2 sub-section (22) of  the   Act  would   include,  amongst  others,  incentive allowance. Chinnappa  Reddy, J. delivering the main judgment made the following pertinent observations in this connection at page 714 of the Report:      "The Employees  State Insurance Act      is a  welfare legislation  and  the      definition of ‘wages’ is designedly      wide. Any  ambiguous expression is,      of  course,   bound  to  receive  a      beneficial  construction   at   our      hands   too.    Now,   under    the      definition     first,      whatever      remuneration is  paid or payable to      an employee  under the terms of the      contract of the employment, express      or  implied   is  wages;   thus  if      remuneration is  paid in  terms  of      the original contract of employment      or in terms of a settlement arrived      at between  the  employer  and  the      employees   which    by   necessary      implication  becomes  part  of  the      contract  of   employment   it   is      wages:....."      In the case of Indian Drugs & Pharmaceuticals Ltd. Etc. (supra) a  Bench of  two learned  Judges of  this  Court  K. Ramaswamy and  G.B. Pattanaik,  JJ., considered the question of overtime  wages in the light of the definition of ‘wages’ as found  in Section  2 sub-section (22) of the Act. In this connection it  was observed  that whatever remuneration paid or payable  forms wages under implied terms of the contract. It is of course true that none of these judgments dealt with the question  with which  we are concerned in these appeals. However, the  common thread  which runs  through these three judgments is  to the  effect that the definition of the word ‘wages’ should  be liberally  construed  as  the  Act  is  a welfare piece  of legislation.  On the interpretation of the relevant terms  found in the definition of the term ‘wages’, as discussed  earlier, it  cannot be  gainsaid that anything paid even  by way  of subsistence  allowance to  an existing employee though suspended by the employer cannot but he said to be  remuneration paid  to him  under  the  terms  of  the contract  of  employment  if  they  were  fulfilled  by  the

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employee as well as by the employer. However learned counsel for the  respondents vehemently relied upon a Division Bench judgment of the Bombay High Court in the case of Nutan Mills (supra) for  submitting that  in the  light of  the  earlier unamended definition  of the  term  ‘wages’  as  found  sub- section (22)  of Section  2 of  the Act lay-off compensation was not  held to  be covered  by the  term ‘wages’. The said decision cannot  be of any assistance to learned counsel for the respondents  for two  obvious reasons. Firstly, the High Court was  considering  unamended  definition  of  the  term ‘wages’.  The   Legislature  made  its  intention  clear  by amending the  definition and  bringing in  compensation  for lay-off also  within the  scope of the inclusive part of the definition of  the term ‘wages’. But that apart, secondly it is seen  that in the said judgment Chagla, CJ., speaking for the Division Bench of the Bombay High Court n terms observed that the  provisions of  the Industrial Disputes Act make it clear that  there is  no relationship  of master and servant during the  period of  lay-off. Employer  has  no  right  to dictate to the employee that he shall present himself at his office, nor  is there any obligation upon the employee so to do. During  the period  of lay-off  the  employee  would  be entitled to  go and serve another master. The only result of his doing  so would  be that  he  would  be  disentitled  to receive compensation.  Therefore, during  the period of lay- off the  employee is no longer the servant or the workman of his  employer.  That  relationship  is  suspended  and  that relationship would  only be  revived when  he is  reinstated under the  terms of the contract. It is trite to say that in case of  an employee  suspended pending departmental enquiry such legal  result does  not follow.   On  the  contrary  he continues to  be the  employee and the employer continues to be his  employer. He  has to  stay at  the  headquarters  as directed by  the employer.  All that  happens is that during the  suspension  period  the  employee  is  not  allowed  to actually work and he is not given full remuneration but only permissible subsistence allowance by way of remuneration for remaining attached to the service of the employer as per the relevant  service  regulations  governing  his  contract  of service. Consequently  the aforesaid  decision of the Bombay High Court  is also  of no  avail to learned counsel for the respondents.      As a result of the aforesaid discussion it must be held that the  High Courts  in the  impugned judgments  erred  in taking the view that subsistence allowance was not a part of wages as  defined by  Section 2 sub-section (22) of the Act. It must  be held  that such allowance forms part of wages as per  sub-section   (22)  of   Section  2   of  the  Act  and consequently on  the said amount the employee will be liable to  contribute   under  Section  39  by  way  of  employee’s contribution and  equally the  employer would  be liable  to contribute his  share by  way of  employer’s contribution on the amount  of subsistence  allowance paid  to the suspended employee. The  appeals are  allowed. The  impugned judgments and orders  of the  High Courts  in respective cases are set aside.  The  appellant-  Corporation  is  held  entitled  to enforce the  recovery of  the contributions  centering round subsistence  allowance   paid  to  the  suspended  employees concerned for  the respective period in accordance with law. No costs.