In Brief
The Supreme Court held that company directors receiving remuneration for their assigned duties fall within the definition of 'employee' under the Employees' State Insurance Act, 1948. The Court affirmed that a company, as a legal entity, can employ its own directors and such directors may hold dual capacity as both principal employer and employee. The remuneration paid to directors constitutes 'wages' under the Act, making the company liable to contribute to the ESI fund. The Court allowed the appeal, setting aside the High Court's judgment which had relied on overruled Bombay High Court decisions, and dismissed the company's application under Section 75 of the ESI Act.
The lawyer headnote and full judgment text are available to registered users.