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TMI Blog2010 (12) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 2(22) of the Act ? (iii) Whether the director/managing director of the company is the principal employer or the company is the principal employer ? 2. The aforesaid questions have cropped up in this appeal, which is preferred against the order passed by the Employees Insurance Court, Ludhiana dated February 28, 1989, by which the petition filed by the respondent under section 75 of the Act challenging the order passed by the appellant under section 45-A of the Act considering the amount paid to the managing director of the company to be salary and the contribution of Rs. 4,762.50 with interest from the period November, 1984 to June, 1986 was demanded, has been allowed on the ground that the director/managing director of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applies and- (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment whether such work is done by the employee in the factory or establishment or elsewhere ; or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment ; or (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority appointed by such Government in this behalf or where no authority is so appointed, the head of the department ; (iii) in any other establishment, any person responsible for the supervision and control of the establishment ; . . . (22) 'wages' means all remuneration paid 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the company had been regularly paying the contributions and nothing was due. It was pleaded that the director of the company was not covered by the Act as such no recovery could be effected qua the remuneration paid to them. 7. This court, after taking into consideration the provisions of law observed that a reading of the definition of "principal employer" contained in section 2(17) of the Act shows that the owner or occupier of the company includes the managing director or any other person responsible for the supervision and control of the establishment. The work of the limited company is done by the director/managing director and therefore, he would come within the definition of "principal employer" and cannot be termed as "employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal. The matter was then placed before the Supreme Court by way of Civil Appeal No. 3411 of 1996. In the aforesaid case of the Employees' State Insurance Corpn. (supra), the Supreme Court has held that the director and the managing director, who is working for remuneration, shall be an "employee" under section 2(9) of the Act and the salary paid to them fall within the definition of "wages" under section 2(22) of the Act. It was also held that the director/managing director would not be a "principal employer" in terms of section 2(17) of the Act until and unless it is proved that he is the sole owner or occupier of the factory. In the present case, however, admittedly, the managing director of the company is not the sole owner or occupier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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