1978 (8) TMI 239 - SC - Indian Laws

Summary

Issues Involved:
1. Definition of 'employee' u/s 2(9) of the Employees' State Insurance Act, 1948.
2. Liability of theatre owners as 'Principal Employers' for contributions towards Employees' State Insurance for workers employed by contractors in canteens and cycle stands.
3. Interpretation of welfare legislation in the context of social justice.

Summary:

1. Definition of 'employee' u/s 2(9) of the Employees' State Insurance Act, 1948:
The core issue revolves around the definitional amplitude of 'employee' u/s 2(9) of the Employees' State Insurance Act, 1948. The Supreme Court emphasized that the term 'employee' should be interpreted broadly to include persons employed in or in connection with the work of an establishment, even if not directly employed by the principal employer. The definition transcends pure contractual relationships and includes those employed by or through an immediate employer on the premises of the establishment or under the supervision of the principal employer on work ordinarily part of or incidental to the purpose of the establishment.

2. Liability of theatre owners as 'Principal Employers':
The appellants, owners of theatres, contended that they should not be liable for contributions for workers employed by contractors in canteens and cycle stands within their premises. The Insurance Court and the High Court held that the theatre owners were 'Principal Employers' as the canteens and cycle stands were primarily for the convenience of theatre visitors and thus connected with the work of the theatre. The Supreme Court affirmed this view, stating that the work done by the canteen and cycle stand workers is incidental to the purpose of the theatre, making the theatre owners liable for contributions.

3. Interpretation of welfare legislation in the context of social justice:
The Supreme Court highlighted the importance of interpreting welfare legislation with a social perspective, aligning with the Constitution's passion for social justice. The Court noted that the Employees' State Insurance Act is designed to confer benefits on workers and should be construed to cover as extensive a circle as feasible. The Court rejected a narrow interpretation that would exclude canteen and cycle stand workers from the Act's coverage, emphasizing that the statute's goal is to make the principal employer primarily liable for the insurance of employees engaged in activities connected with the establishment.

Conclusion:
The Supreme Court dismissed the appeals, affirming the lower courts' findings that the theatre owners are liable as 'Principal Employers' for contributions towards Employees' State Insurance for workers employed by contractors in canteens and cycle stands. The Court directed that the assessment of the quantum of contributions be reconsidered after a de novo hearing to the appellants, ensuring fairness in the determination process.