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PETITIONER: M/S. RAJAKAMAL TRANSPORT & ANR.

       Vs.

RESPONDENT: THE EMPLOYEES STATE INSURANCECORPORATION, HYDERABAD.

DATE OF JUDGMENT:       17/04/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. BHARUCHA S.P. (J)

CITATION:  1996 SCALE  (3)806

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      These appeals  arise from  the order  of  the  Division Bench of  the Andhra  Pradesh High  Court dated  February 7, 1985 made  in C.M.A.  Nos.868 and 297/81. The admitted facts are that  the appellants had engaged hamalis for loading and unloading of  the goods  undertaken by  them for carriage as carriers. The  respondent has  applied the  Employees’ State Insurance Act,  1948 [Act  No.34 of  1948] [for  short,  the ’Act’] to the appellants’ establishment and called upon them to pay  their contribution  for the periods mentioned in the notice served  on them  with interest  at  7%  thereon.  The appellants  have   disputed  the   liability  and   made  an application for  determination under  Section 76 of the Act. The Insurance  Court had held that the hamalis are employees within the  meaning of  Section 2(9)  of the Act. Though the appellants collect  the charges  from the  customers and pay the amount  to the  hamalis at  the piece  rate for the work they do,  they have got supervision of loading and unloading by the  hamalis. The hamalis are not appointed or controlled by any  other agency.  Accordingly appellants  are liable to contribute the  amount called  upon  towards  the  insurance benefit of the workmen under the Act. The appeals came to be dismissed by  the High  Court. Thus these appeals by special leave.      Shri C.  Sitaramiah, learned  senior counsel  appearing for the  appellants contended  that there is no relationship of master  and servant;  no regular  salary is  paid by  the appellants to  the hamalis  and there  is no  fixed hours of work for the hamalis. Under those circumstances, the hamalis cannot be  considered to be the employees nor the appellants be treated  as employer  under the  Act. We find no force in the contention.      Section 2(9)  of the Act defines "employee" to mean any person employed  for wages in or in connection with the work of a  factory or  establishment to  which the  Act  applies. Clause (ii)  envisages that  they need  not  necessarily  be

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directly employed by the employer. Those who are 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  is  an  employee within  the   meaning  of  Section  2(9)  of  the  Act.  The controversy is no longer res integra.      This Court  in  Royal  Talkies,  Hyderabad  &  Ors.  v. Employees State  Insurance Corpn.  [(1979) 1  SCR  80],  was called upon to consider whether workmen engaged in the cycle stand and  canteen of a cinema theater were employees of the theater within  the meaning of Section 2(9) of the Act. This Court, on  interpretation, held  that the reach and range of the  definition   is  apparently   wide   and   deliberately transcends pure  contractual relationships.  In the field of labour  jurisprudence,  welfare  legislation  and  statutory construction which  must have  due regard  to Part IV of the Constitution, a teleological approach and social perspective must play  upon she interpretative process. The primary test in the  substantive clause being thus wide, the employees of the canteen  and the  cycle stand may be correctly described as  employed   in  connection   with   the   work   of   the establishment. A narrower construction may be possible but a larger ambit  is  clearly  imported  by  a  purpose-oriented interpretation. The  whole object  of the statute is to make the principal employer primarily liable for the insurance of kind of employees on the premises, whether they are there in the work  or are  merely in  connection with the work of the establishment.      Accordingly it  was held  thereon that  they  were  the workmen or  employees within the meaning of Section 2 [9] of the Act.  The same  ratio was  followed in  E.S.I. Corpn. v. South Flour  Mills [(1986)  2 SCR 863 at 864] where even the casual employees  employed by  the employer  were held to be employees within the meaning of Section 2(9) of the Act.      The same  question was  considered  in  another  recent judgment  of  this  Court  in  Kirloskar  Brothers  Ltd.  v. Employees’ State  Insurance Corpn.  [(1996) 2  SCALE 1  t 5] wherein this Court held in paragraph 11 that:      "The test  of predominant  business      activity or  too remote  connection      are not relevant. The employee need      not   necessarily    be   the   one      integrally     or     predominantly      connected with  the entire business      or  trading  activities.  The  true      test is  control by  the  principal      employer over  the  employee.  That      test will  alone  be  the  relevant      test."      It is  seen that  the Insurance  Court after  elaborate consideration, found as a fact, that the appellants have the control over loading and unloading of the goods entrusted to the  appellants.   The  appellants’   regular  business   is transportation of the goods entrusted to it as carrier. When the goods  are brought  to the  warehouse of the appellants, necessarily the  appellants have  to get the goods loaded or unloaded through the hamalis and they control the activities of loading  and unloading.  lt  is  true  as  found  by  the Insurance Court  that instead  of appellants directly paying the charges from their pocket, they collect as a part of the consideration for  transportation  of  the  goods  from  the customers and  pay the  amount to  the hamalis.  The test of

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payment of  salary or wages in the facts of this case is not relevant consideration.  What is important is that they work in connection  with  the  work  of  the  establishment.  The loading  and   unloading  of  the  work  is  done  at  their directions and control.      Shri C.  Sitaramiah  next  contended  that  the  Andhra Pradesh Muttah Jattu and Other Manual Workers (Regulation of Employment &  Welfare) Act,  1976 applied  to the  scheduled establishment in item 6 of the Schedule and that, therefore, the Act has no application. Since the State Act has received the assent of the President on December 27, 1976 in relation to its  application to  the State of Andhra Pradesh, the Act stands repealed  and,  therefore,  the  appellants  are  not liable to  make the  contribution under the Act. Though this argument appears  to have been raised in the High Court, the High Court  has not  rightly gone  into that  question as no material was  placed before  the High Court not any material has been  placed before  us in that behalf, hence, it is not necessary  for   us  to   go  into   the  question   of  the applicability of the local Act.      The appeals are accordingly dismissed. No costs.