Definition of wages cannot be imported across statutes; a post-appeal bonus during winding-up is not a preferential wage claim.

The note addresses whether a directors' resolution awarding a bonus during pending appeal and winding-up proceedings qualifies as 'wages' and thus a preferential claim in liquidation. It states a statutory definition confined to one Act cannot be imported into another; consequently the local Payment of Wages Act definition of 'wages' is inapplicable to the Companies Act. A post-appeal bonus approved during winding-up would prejudice existing creditors and cannot be recharacterised as contractually compensatory for voluntary past services where employment obligations already existed. The bonus therefore does not qualify as preferential wages; employees may prove as ordinary creditors subject to inquiry into the nature of payments.

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Issues: Whether a directors' resolution granting a bonus to employees (passed after an appeal was filed and while winding-up proceedings were pending) constitutes 'wages' or a preferential claim under the Companies Act and therefore entitles employees to be recognised as preferential creditors in the liquidation.

Analysis: The scope of a statutory definition confined to a particular Act cannot be read as a general definition applicable to other statutes; therefore the definition of "wages" in the Travancore Payment of Wages Act, 1116 cannot be imported into the Companies Act. The bonus sanctioned by the directors was approved after the appeal and while winding-up proceedings were pending; paying a bonus of the amount shown would prejudice existing creditors. The promise to pay the bonus cannot be treated as compensation for voluntary past services under Section 25(2) of the Indian Contract Act where services were rendered under existing employment obligations and wages were already payable. The consequence is that the bonus does not qualify as wages giving rise to a preferential claim under the Companies Act provisions identified.

Conclusion: The appeal is allowed; the order below recognising the bonus as forming part of preferential wages is set aside. Employees may, when the list of creditors is settled, prove claims as ordinary creditors, subject to inquiry whether the payments are gifts or otherwise.

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