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Royal Talkies V. Esi: a Socio Legal Judgment

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Introduction to the topic Royal Talkies v. Employee State Insurance Corporation[1] is a case pertaining to Employee State Insurance Act, 1948.

The said Act is a piece of welfare legislation that guarantees social security to an employee. Thus before analyzing a case on hand it is appropriate on the part of researcher to illuminate the concept of labour welfare and applicability and objective of Employee State Insurance Act in brief.

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Thereafter the researcher will comparatively analyse the meaning of term employee under various legislations since the main issue in the aforementioned case is pertaining to meaning of term employee under Section 2(9) of the Employee State Insurance Act, 1948. 1. 1 Concept of Labour welfare and Social security Industry and State cannot flourish when the labour languishes. Labour is considered to be a back bone of any economy. It plays pivotal role in economic growth and development of the organization and to the larger extent of the State. Any organization without productive and satisfied labour force is like body without life.

In other words, productivity of labour is considered to be an essential condition for the prosperity of organization as well as of State[2]. The productivity of labour depends upon numerous factors such as wages paid to the workmen, health of workmen, appropriate working condition, training etc. One of the important factors that affect productivity of labour inter alia is Welfare of the workmen. Welfare of workmen directly contributes towards the productivity and efficiency of the workmen. Therefore it is incumbent that labour policy of State and organization to provide schemes for labour welfare.

Labour welfare is an important aspect of Industrial relation. The term labour welfare of workmen elucidates anything done for intellectual, physical, moral and economic betterment of the workmen whether by employers, by Government or by other agencies including what is laid down by law or what is normally expected on the part of contracted benefits for which workmen may have bargained[3]. Labour welfare is very comprehensive term and includes everything undertaken by State, employer and association of workers for the improvement of worker’s standard of living and promotion of their economic and social well being.

The basic objective behind providing welfare schemes is to have satisfied labor force for the organization. The purpose of providing such facilities is to make their work life better and also to raise their standard of living. The benefits of welfare measures can be summarized as follows: • It provides better physical and mental health to workers and thus promotes a healthy work environment. • Facilities like housing schemes, medical benefits, and education and recreation facilities for workers’ families help in raising their standards of living. This makes workers to pay more attention towards work and thus increases their productivity. Employers get stable labour force by providing welfare facilities. Workers take active interest in their jobs and work with a feeling of involvement and participation. • Employee welfare measures increase the productivity of organization and promote healthy industrial relations thereby maintaining industrial peace[4]. One of the means of labour welfare is to provide social security to the workmen or employee. Social security in context of labour laws may be defined as “the security that employer or government furnishes, through appropriate organization, against certain risks to which employee or workmen are exposed”.

These risks are essentially contingencies against which the employee or workmen, who have small means, cannot protect themselves. These contingencies include employment injury, sickness, disablement, industrial disease, maternity, old age, burial, widowhood, orphanhood and unemployment. Security of workmen against these contingencies forms an essential part of labour welfare schemes because it permits a workman to pay more attention towards his work without getting worried about his family. A sense of security among the workman also reduces mental fatigue.

The State seeks to ensure social security of workmen through policies like pension, provident fund. Compensation is case of accidents, insurance etc. 1. 2 Labour welfare and Social security in India India is a welfare State and one of the objectives of welfare state is to Render social services to the people and promote their general welfare which includes welfare of workmen and employees[5]. Article 39(e) of the Constitution of India cast duty on State to ensure that the health and strength of workmen are not abused and workmen are not forced by economic necessity to enter avocation unsuited to their strength.

Article41 of the Constitution of India cast a duty on the State to make effective provision for securing right to work and public assistance in case of unemployment, old age, sickness and disablement. Likewise Article 42 and 43 of the Constitution of India makes it obligatory on the part of State to take certain measure for labour welfare by securing just and humane condition of work, maternity relief, and basic wages through appropriate legislation. Thus the principles of labour welfare are well enshrined under the Part IV of the Constitution of India.

Several laws have been enacted by the Parliament to attain the objective of labour welfare enshrined under Part IV of the Constitution. In implementing these directive principles Social security of the workmen or employees has been specially taken care of by the Parliament. Parliament of India has enacted several laws that ensure social security workmen or employee. Some of those legislations are The Maternity Benefit Act, 1961, The Workmen’s Compensation Act, 1923, The Employees’ State Insurance Act, 1948, The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952, The Payment of Gratuity Act, 1972 etc.

Among the aforementioned legislations, The Employees State Insurance Act, 1948 is one of the finest piece of labour welfare legislation that provides for all round Social security to the employee. The said Act provides for medical benefits, old age benefits, dependant benefits, disablement benefits and at last the funeral expenses. The case with which the present research project is concerned is based on this labour welfare legislation. 1. 3 Nature of the study The nature of the study is a doctrinal one. The subject matter of the study being a socio legal one on the subject Royal Talkies v.

Employee State Insurance Corporation – A case Study, it would have been impracticable to carry out a non-doctrinal research project. Therefore the researcher has opted for doctrinal research project. This project is an in depth study of the judgment in case of the Royal Talkies v. Employment State Insurance Corporation[6] and later development in the law. For the purpose of research project the researcher proposes to critically scrutinize the judgment in case of Royal Talkies v. Employment State Insurance Corporation[7] and thereafter analyse latest case laws in which the said judgment is being referred, followed or dissented.

It will be help to analyse the current position of law on the issue involved in the aforementioned judgment. Besides, the researcher will discuss the objective and applicability of the Employee State Insurance, Act 1948 for the better understanding of the research project. It would have been impracticable to carry out non doctrinal research project since the research project involves analysis of the judgment and the one of the socio legal enactment. 1. 4 Scope of the study The scope of the research project is limited to interpretation of Section 2 (9) the Employees State Insurance Act, 1948 in the case of Royal Talkies v.

Employment State Insurance Corporation[8] since the main issue before the Hon’ble Supreme Court, in this case, revolved around the aforementioned provision. For the better understanding of the research project the researcher will provide brief analysis of objective and applicability of the Employees State Insurance Act, 1948 and thereafter compare the Section 2 (9) of the said Act with the other enactments. Thereafter the researcher will critically analyse the judgment in Royal Talkies v. Employment State Insurance Corporation[9].

Moreover in the present research project the researcher also proposes to analyse the cases in which the judgment in case of Royal Talkies v. Employment State Insurance Corporation[10] has been followed, referred or dissented to bring out the current position in law. Therefore the scope of study is primarily confined to Section 2(9) of the Employee State Insurance Act, 1948 but for the better under standing of the research project the researcher will also discuss the object and applicability of Employee State Insurance Act, 1948 and compare Section 2 (9) with the provisions of other legislations. . 6 Objective of the Study The Judgment in case of Royal Talkies v. Employment State Insurance Corporation[11] Special Economic Zones is a land mark in the field of labour welfare and social security. The primary objective to undertake this research project is to critically analyse the Judgment in aforementioned case and its contribution towards labour welfare and social security of the employee. The researcher through this project aims to analyse the evolution of law on the issue with the help of judicial pronouncement.

The secondary objective of this research project is ascertaining the reliability of the judgment in case of Royal Talkies v. Employment State Insurance Corporation[12] and its relevance in the present scenario. 1. 7 Hypothesis In order to conduct a research work, some important hypotheses are to be formulated. The focal points and assumptions are normally available through the formulation of hypothesis. The major hypotheses developed on the basis of study of available literature and evaluation of primary as well as secondary data and work done earlier including related studies is that: The researcher assumes that term employee under Section 2(9) of the Employees State Insurance Act, 1948 is very wide. o The researcher assumes that the judgment in case of Royal Talkies v. Employee State Insurance Corporation[13] is in accordance with the objective of Employee State Insurance Act, 1948. o The researcher assumes that in case of Royal Talkies v. Employee State Insurance Corporation[14] Hon’ble Supreme Court rightly interpreted the term ‘Employee’ under Section 2(9) of the Employee State Insurance Act, 1948. The researcher assumes that the case of Royal Talkies v. Employee State Insurance Corporation[15] is still a good precedent in law and it not overruled by any other judgment of Hon’ble Supreme Court. 1. 8 Research Question o Whether the term employee under Section 2(9) of the Employees State Insurance Act, 1948 is wide. o Whether the judgment in case of Royal Talkies v. Employee State Insurance Corporation[16] is in accordance with the objective of Employee State Insurance Act, 1948. Whether Hon’ble Supreme Court rightly interpreted the term ‘Employee’ under Section 2(9) of the Employee State Insurance Act, 1948 in case of Royal Talkies v. Employee State Insurance Corporation[17] o Whether the case of Royal Talkies v. Employee State Insurance Corporation[18] is still a good precedent in law and it not overruled by any other judgment of Hon’ble Supreme Court. 1. 9 Research Methodology The quality and value of research depends upon the proper and particular methodology adopted for the completion of research work.

Looking at the nature and importance of the research topic doctrinal legal research methodology has been adopted. To make an authenticated study of the research topic ‘Royal Talkies v. Employee State Insurance Corporation- A case study’ enormous amount of study material is required. The relevant information and data necessary for its completion has been gathered from both primary as well as secondary sources available in the books, journals, periodicals, newspapers, research articles and proceedings of the books on Labour and Industrial Law and Constitutional Law, Journals, seminars, conventions, and websites.

Keeping in view the need of present research, various cases filed in the Supreme Court as well as in the High Courts on the issue of and the judgments therein have also been used as a source of information. The judgments pronounced in the cases have been analyzed in detail and used as a means of diagnosis to determine the current position of law. From the collected material and information, researcher proposes to critically analyse the topic of the study and tries to reach the core aspects of the study.

CHAPTER 2 Prologue to Employees State Insurance Act, 1948 The Employees State Insurance Act, 1948 is a pioneering measure in the field of social insurance in our country. It is a piece of social welfare legislation enacted primarily with the object of providing certain benefits to employees in case of sickness, maternity and employment injury and also to make provision for certain others matters incidental thereto.

Though said Act is a pre-constitution legislation, it tries to attain the goal of socio-economic justice enshrined in the Directive principles of state policy under Part IV of Constitution of India, in particular, articles 41, 42 and 43 which enjoin the State to make effective provision for securing, the right to work, to education and public assistance in cases of unemployment, old age, sickness and disablement. The said Act strives to materialize these avowed objects through only to a limited extent.

This act becomes a wider spectrum than Factories Act, 1948 in the sense that the factory act is concerned with the health, safety, welfare, leave etc of the workers employed in the factory premises only. But the benefits of this act extend to employees whether working inside the factory or establishment or elsewhere or they are directly employed by the principal employee or through an intermediate agency, if the employment is incidental or in connection with the factory or establishment. 2. 1 Historical Background of Employees State Insurance Act, 1948

In an organization workman or employee is exposed to several kinds of risks. But with the small means of income and lack of awareness it is practically impossible for a workman to cover all those risks by way on insurance. Therefore a mechanism is required wherein the employer or the State insures employee and workmen against all the risks and dangers. In India, prior to the independence there existed Workmen’s Compensation Act, 1923. The main objective of this Act was to provide compensation to the workmen for the injury arising out of work or in course of work.

Therefore it is apparent from the object of the Act that Workmen’s Compensation Act, 1923 though designed to protect and safeguard the interest of the labour was in the nature of social assistance and did not make any provisions for social insurance of the employees or the workmen. Besides this, there was growth in use of machinery and chemicals, consequent danger to workmen and industrial complexity with the passage of time. In light of these circumstances it became necessary to enact a law that provides social security in form of insurance to the workmen and employees.

The question of formulating a suitable social insurance scheme came up for consideration for the first time in the year 1927. The subject of health insurance for industrial workers was first discussed in 1927 by the Indian Legislature, when the applicability of the conventions adopted by the International Labour Conference was considered by the Government of India. The Royal commission on Labour in its report 1931 stressed the need for health insurance for workers in India. One of the earlier decisions of Labour Ministers Conference between 1940 and 1942 was to invite an expert to frame a scheme to provide health insurance to workers.

In pursuance thereof the work of preparing details of the scheme of health insurance for industrial workers was entrusted in March 1943 to Prof. B. P. Adarkar, an officer on special duty. The report submitted by Prof. Adarkar in December, 1944, was considered by the Government of India in consultation with the State Governments and the other interested concerned. The Adarkar Plan and various other suggestions emerged finally in the form of Workmen’s State Insurance Bill, 1946. The Bill was further referred to a select Committee on 12th November 1947.

The select Committee modified the provisions making it applicable to all the employees in the factories and changed the name of the Bill from Workmen’s State Insurance Bill, to Employees State Insurance Act. The Act came into force from 19th April, 1948[19]. 2. 2 Objective of the Employees State Insurance Act, 1948 The object of this Act is to provide for certain benefits to employees in cases of sickness, maternity and employment injury and to make provisions for certain other matter in relation thereto as the preamble to this Act reflects.

The preamble of the said Act reads as follows: “An act to provide for certain benefits to employees in case of sickness maternity and employment & injury to make provisions for certain other matters in relation thereto. ” The main object of the Act is to evolve a scheme of socio-economic welfare, making elaborate provisions in respect of it. The ESI Act is a legislation which aims at bringing about social and economic justice to the poor labour class of the land. It aims at the labour welfare.

But labour welfare is an elastic term bearing some-what different interpretation in one country from another according to different social customs, the degree of industrialization and the educational development of the workers. Investigation Committee of the Government of India has preferred to include under welfare activities anything done for intellectual, physical, moral and economic betterment of workers whether by employers, by Government or by other agencies, over and above what is laid down by law or what is normally expected as part of contractual benefits for which workers have bargained.

Accordingly under the said Act the employees will be entitled to medical relief, cash benefits, maternity benefits, pension to dependents of deceased workers and compensation for fatal or other injuries and diseases. 2. 3 Applicability of the Act The Employee State Insurance Act, 1948 has very wide application. The Employee State Insurance Act, 1948 applies to non-seasonal, power using factories or manufacturing units employing ten or more persons and non-power using establishments employing twenty or more persons.

Under the enabling provisions of the act, a factory or establishment, located in a geographical area, notified for implementation of the scheme, falls in the purview of the Act. Employees of the aforesaid categories of factories or establishments, but drawing wages only up to Rs 6,500 a month are entitled to health insurance cover under the Employee State Insurance Act, 1948. The wage ceiling for purpose of coverage is revised from time to time; to keep pace with rising cost of living and subsequent wage hikes.

The present ceiling of Rs 6,500 has been effective from 1 January 1997. Moreover according to Section 1(5) of the Employee State Insurance Act, 1948 the State or Central is empowered to extend the provision of the Employee State Insurance Act, 1948 to various classes of establishment, industrial, commercial, agricultural or otherwise in nature. Under these enabling provisions most of the state governments have extended the Employee State Insurance Act, 1948 act to certain specific classes of establishments like shops, hotels, restaurants, cinemas, employing 20 or more persons.

But no industry has the right to opt out of the scheme. In Reunion Engineering Co. Pvt. Ltd. v Employee State Insurance Corporation[20], Hon’ble Karnataka High Court observed that, “the premises where the business of undertaking electrical works contract in th factories and other places of the customer was carried on is a Shop and the provision of Employee State Insurance Act, 1948 applies by virtue of notification issued by Karnataka Government extending the provisions of the Act to shops.

The word otherwise use at the in Section 1(5) of the Employee State Insurance Act, 1948 should be interpreted to achieve the object of the Act, namely the welfare of low paid employees. There are many such cases wherein the judiciary has interpreted the provisions of Employee State Insurance Act, 1948 liberally so as to extend the applicability of Act to various organizations and thereby accomplish the objective of the said Act. 2. 4 Benefits under the Act Employees covered under the scheme are entitled to medical facilities for self and dependants.

They are also entitled to cash benefits in the event of specified contingencies resulting in loss of wages or earning capacity. The insured women are entitled to maternity benefit for confinement. Where death of an insured employee occurs due to employment injury or occupational disease, the dependants are entitled to family pension[21]. Various benefits that the insured employees and their dependants are entitled to, the duration of benefits and contributory conditions thereof are as under: o Medical benefits o Sickness benefits o Extended sickness benefit Enhanced sickness benefit o Maternity benefit o Disablement benefit o Dependants benefit o Other benefits like funeral expenses, vocational rehabilitation, free supply of physical aids and appliances, preventive health care and medical bonus. CHAPTER 3 Meaning of term ‘Employee’ under different Labour legislations The term employee or the workmen in the general sense includes a person who performs any work for or provide any services to an employer for wages. But under the Labour legislation the term ‘Employee’ carries a specific definite meaning.

The applicability of particular legislation to the great extent depends upon the definition of the term ‘Employee’; because the benefits under the labour legislation can be availed only by person who are ‘Employees’ within the meaning of the Act. In the present chapter the researcher shall comparatively analyse the meaning of term ‘Employees’ or ‘Workmen’ under the different legislation for the better understanding of the case study. 3. 1 Industrial Disputes Act, 1947 The term “Workman” is defined in Sec 2(s) of the Industrial Disputes Act, 1947. The said provision reads as follows. Any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged, or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person ……. The aforementioned definition excludes: (i) persons employed in a managerial or administrative capacity (ii) persons employed in a supervisory capacity and drawing wages exceeding Rs1600 per month (iii) persons employed in the police service, or an officer/employee of a prison; and (iv) those who are subject to the Air Force Act, Army Act or Navy Act. The definition can be split into three parts.

The first part envisages that for any person employed in an industry to qualify as a workman, he must be engaged in a type of work mentioned in the definition. The second part gives an extended meaning to the word workman as it includes employees dismissed, discharged or retrenched in connection with an industrial dispute or whose dismissal, discharge or retrenchment has led to an industrial dispute. The third part is exclusionary in nature[22]. In Management of Sonipat Cooperative Sugar Mills Ltd. Ajit Singh[23], the respondent was appointed as a legal assistant by the appellant to prepare written statement and notices and draft legal opinions. He also used to perform some quasi-judicial functions like conducting departmental enquiries against the workmen employed in the industrial undertaking of the appellant. While he was employed by the appellant in that capacity, it was decided to abolish the position. The respondent raised an industrial dispute raising his contention that his termination was not justified.

However, the appellant opposed the respondent’s contention and pleaded that he was not performing any managerial or supervisory duties and, therefore, would not be a workman. The Supreme Court held that the job performed by the respondent was of “legal clerical nature” which involves creativity of mind. Further, merely because the respondent had not performed any managerial or supervisory duties did not disqualify him as a workman.

From the above it is clear it is clear that the Court, while determining the issue of whether a person is a workman under Section 2(s) of the Industrial disputes Act will see the main or substantial work for which a person has been employed. Nomenclature is not the basis of the test. Neither the designation nor any incidental work that may be done or required to be done by such person will disqualify him as a workman. Each case is decided depending on the nature of the duties pre-dominantly or primarily performed by such an employee.

Further, the Courts have interpreted Section 2(s) very liberally so as to include many people within the ambit of the term ‘Workman’ under the Industrial Disputes Act, 1947. 3. 2 Employee’s Compensation Act, 1923[24] The definition of the term Workmen has been replaced by the term ‘Employee’ through Workmen’s Compensation (Amendment) Act of 2009. According to the amended provision the term ‘Employee’ includes following person. i) A railway servant as defined in clause (34) of section 2 of the Railways Act, 1989, not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or (ii) (a) a master, seaman or other member of the crew of a ship, (b) a captain or other member of the crew of an aircraft, (c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle, (d) a person recruited for work abroad by a company, and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or (iii) (a) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing. (b) where the employee is dead, include a reference to his dependants or any of them; However, any person working in the capacity of a member of the Armed Forces of the Union are not considered to be an ‘Employee’ Under Section 2 (1) (dd) of the Workmen’s Compensation Act, 1927.

This amended definition is quite exhaustive when read with Schedule II of the said Act. It includes railway servant, master, seaman or any other member of the crew of a ship. Besides it also includes captain or other members of the crew on the air craft and a person recruited for work abroad by a company to do any work as mentioned in the Schedule II within its broad ambit. It also includes dependant of the person when the person is dead. In comparison to the Industrial Disputes Act, 1947 the amended definition of the term ‘Employee’ under Section 2 (1) (dd) in the Employees Compensation Act is exhaustive in nature. It includes plethora of person with in its ambit.

The definition under the Industrial Disputes Act, 1947 only provides broad criteria for determining whether a particular person is employee but leaves the final decision in the hands of interpreter. Whereas the amended definition under the Employee’s Compensation Act, 1923 is more definite in nature since it specifically provides for categories of person to be termed as ‘Employees’ for the purpose of the Act. 3. 3 Factories Act, 1948 In the Factories Act instead of the term ‘Employee’ the term ‘Worker’ is used by the legislature. The term ‘Worker’ is defined under Section 2 (1) (l) of the Factories Act. According to the said definition the term worker includes a person employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process but does not include any member of the armed forces of the Union. ’ According to the aforementioned definition a person is considered to be ‘worker’ when person is employed in manufacturing process any work incidental to the manufacturing process directly by the principal employer. Further it also includes any person employed by the any agency or through any agency in the manufacturing process or any work incidental thereto with or without knowledge.

Under both these condition a person in order to be worker need not necessarily receive wages. The definition of term ‘Worker’ under Factories Act, 1948 has strong nexus with the object of the Act. It provides that every person involved in the manufacturing process or any work incidental to manufacturing process is considered to be a worker for the purpose of the Act. The said definition is inclusive in nature and has very wide application. It not only includes a person employed by the principal employer with in the within the meaning of term employer but it also include any person employed by or through the agency within the ambit of term ‘Worker’.

Further it is immaterial that the principal employer has the knowledge that a person is employed by or through the agency. Moreover the courts have liberally construed the word ‘Workmen’ under Factories Act, 1948 so as to extend the benefits under the Act to poor labour class. In Rohtas Industries v. R. Singh[25], the issue before Supreme Court was whether a person employed in paper factory and engaged in supervision and checking quality of waste papers and rags which are the basic raw materials for the manufacture of paper be termed as a ‘Worker’ under Section 2(1) (l) of the Factories Act, 1948. The person used to deal with receipts and maintain records of stock and pass the bills of the suppliers of the waste papers and rags.

It was held that the person was working in the factory premises in connection with the work of the ‘subject of the manufacturing process’, namely’ the raw materials and therefore he is a factory worker within the meaning of Section 2 (1) (l) of the Factories Act, 1948. The aforementioned case is not the only illustration wherein the Court have interpreted the term ‘Worker’ liberally so as to extend the benefits of the Factories Act, 1948 to poor labour class. There are plethora of cases wherein the Courts have construed the meaning of term ‘Worker’ liberally. Therefore it can be safely concluded that the term ‘Worker’ under Section 2 (1) (l) of the Factories Act, 1948 carries a wide meaning. 3. 4 Payment of Gratuity Act, 1972 The term ‘Employee’ is defined under Section 2 (e) of the Payment of Gratuity Act, 1972.

According to said section “employee” means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity. Therefore a person may be termed as ‘Employee’ only when the following conditions are fulfilled. 1. A person employed on wages. 2. A person employed on wages must be working in establishment, factory, mine, oilfield, plantation, port, Railway Company or shops. 3. The person so employed must be engaged to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work.

If the aforementioned conditions are fulfilled a person can be termed as employee under Section 2 (e) of the Payment of Gratuity Act irrespective of the fact that the terms of employment are expressed or implied or such person is employed in managerial or administrative capacity. However apprentice and any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity are excluded from the purview of the term ‘Employee’. Again the definition of term ‘Employee’ under Section 2 (e) is inclusive in nature. The definition provides broad criteria to determine whether a particular person is employee and leaves final interpretation in the hands of Court. According to the aforementioned definition if the person satisfies certain criteria he can be termed as ‘Employee’ under Section 2 (e) of the Payment of Gratuity Act. 3. Payment of Bonus Act, 1965 Payment of Bonus is again a piece of welfare legislation that provides for payment of bonus to the employees. Therefore under this Act the term ‘Employee’ carries a distinct importance. Section 2 (13) of the Payment of Bonus Act, 1965 defines the term Employee. The said Section reads as follows. “Employee” means any person (other than an apprentice) employed on a salary or wage not execeding three thousand and five hundred rupees per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;

The definition of term ‘Employee’ under payment of Bonus Act, 1965 is quite similar to that of Industrial Disputes Act, 1947 except for the condition that it fixes the maximum wage limit. Only those employees who receive wages or salary not exceeding Rs. 3500 are considered to be employee for the purpose of the said Act. 3. 6 Employee State Insurance Act, 1948 The Employee State Insurance Act, 1948 is a piece of welfare legislation that provides social security to the employee working in the organization. Under the said Act the employees are entitled to numerous benefits. However in order to receive this benefits under this Act a person must be ‘Employee’ with in the meaning of Section 2 (9) of the Employee State Insurance Act, 1948. The said provision reads as follows. (9) “employee” means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies, and (i) who is directly employed by the principal employer or 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 of 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 person whose services are so lent or let on hire has entered into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment; but does not include :- (a) any member of the Indian naval, military or air forces; or (b) any person so employed whose wages (excluding remuneration for overtime work) exceed five hundred rupees a month:- Provided that an employee whose wages (excluding remuneration for overtime work) exceed five-hundred rupees a month at any time after and not before, the beginning of the contribution period, shall continue to be an employee until the end of that period.

The definition of the term ‘Employee’ under Section 2 (9) contains two substantive parts. Unless the person employed qualifies under both he is not an ’employee’. Firstly he must be employed “in or in connection with the work of an establishment. The expression “in connection with the work of an establishment” ropes in a wide variety of workmen who may not be employed in the establishment but may be engaged only in connection with the work of the establishment. Some nexus must exist between the establishment and the work of the employee but it may be a loose connection. ‘In connection with the work of an establishment’ only postulates some connection between what the employee does and the work of the establishment.

Therefore reach and range of the definition is apparently wide and deliberately transcends pure contractual relationships. The comparative analysis of the term ‘Employee’ under numerous legislations will help in the better understanding of the term ‘Employee’ which is one of the main issues in the resent case analysis. With this background the researcher proposes to critically analyse the case of Royal Talkies v. Employee State Insurance Corporation[26]. CHAPTER 4 Royal Talkies v. Employee State Insurance Corporation[27] 4. 1 Introduction to the Case In Royal Talkies v. Employee State Insurance Corporation is one of the landmarks in field of labour welfare.

This is the case wherein Hon’ble Supreme Court has liberally construed the provision of labour welfare legislation so as to extend the benefits of the Act to poor labour class. The judgment in this case embarked new era of labour welfare keeping in view the Directive principles of State policy as enshrined under Part IV of the Constitution. In the present case the sole issue before the Hon’ble Supreme Court was pertaining to definitional amplitude of the term ‘Employee’ in Section 2 (9) of the Employee State Insurance Act, 1948. The Appellants, in the present case, filed a Special leave petition before Hon’ble Supreme Court under Article 136 of the Constitution of India.

In this Special leave petition the Appellant sought to challenge the order passed by the Hon’ble Andhra Pradesh High Court wherein the Hon’ble High Court rejected the appeal filed by the Appellant. Taking into consideration the significance attached to the case and consequential fall out of the decision in this case, Hon’ble Supreme Court thought it proper to grant Special leave to appeal filed by the appellant. The judges presiding over the case were Hon’ble Mr. Justice D. A. Desai and Hon’ble Mr. Justice V. R. Krishna Iyer. The advocates who appeared on behalf Appellant were Mr. Y. S. Chitale, Mr. A. A. Khan, Mr. J. B. Dadachanji & Mr. D. N. Mishra. Whereas on behalf of Respondent Mr. S. V. Gupta (the then Attorney General of India) & Mr. Girish Chandra appeared before the Hon’ble Court. 4. 2 Background of the Case

The appellants of the present case filed application under Section 75 of the Employees State Insurance Act, 1948 before the Employees Insurance Court for a declaration that the provisions of the Act were not applicable to their theatres and that they were not liable to contribute in respect of the persons employed in the canteens and cycle stands attached to the theatres. However the Insurance Court was of the opinion that the owners of theatres were ‘Principal employers’ with reference to the persons employed by contractors in the canteens and the cycle stands attached to the theatres and rejected the applications filed by the owners of theatres under Section 75 of the Act.

The Appellants were made liable to contribute towards the Employees insurance scheme in respect of the persons employed in the canteens and cycle stands attached to the theatres. Aggrieved by the decision of the Employee State Insurance Court the Appellants filed an appeal before Hon’ble High Court of the Andhra Pradesh under Section 82. It was vehemently contended before the High Court that the persons employed in the canteens and cycle stands attached to the theatres were not appointed by the theatre owner and therefore they were not liable to contribute towards the Employee Insurance scheme. The High Court, however, rejected the contention of the Appellant and dismissed the appeal.

The High Court held that “canteens are meant primarily for the convenience and comfort of persons visiting the theatres and the cycle stands are meant exclusively for the convenience of the persons visiting theatres” and “that the persons employed in the canteens and cycle stands are persons employed on work which is ordinarily part of the work of the theatre or incidental to the purpose of the theatres. In relation to the person so employed, therefore, the owners of the theatres are principal employers and therefore they are liable to contribute towards the employee state insurance scheme. ” 4. 3 Facts of the Case The Appellants were the owners of theatres in the twin cities of Hyderabad and Secunderabad, where films are exhibited. Within the premises of every theatre there was a canteen and a cycle stand that provide better facilities to the customers.

However, the cycle stand and the canteen were not regulated by the Appellant. The canteen and the cycle stand are leased out to contractors under instruments of lease. Though the canteens were situated in the premises of the theatre a few of these canteens had direct access from the abutting roads whereas the other canteens were reachable only through the open space inside the cinema theatres. The contractors employed their own servants to run the canteen and the cycle stand and they alone were responsible for the payment of salaries to the persons. The managements of the cinema theatres had absolutely no supervisory control over the persons employed in these canteens.

However the management of the cinema theatre had reserved to itself the right to specify what types of things should be sold in the canteen. In some cases the managements of the theatres also reserved the right to enter the canteen premises at all reasonable time for purposes of check and inspection and the Managements of all these Cinema theatres used to pay the electricity charges due in respect of these canteens. Now it so happened that in regard to persons so employed by the contractors and the tenants of the cycle stand and canteens, the owners of the theatres were treated as ‘Principal Employers’ and notices of demand were issued to them calling upon them to pay contribution under the Employees’ State Insurance Act, 1948.

Consequently, the owners of theatres filed application under Section 75 of the Employees State Insurance Act before the Employees Insurance Court for a declaration that the provisions of the Act were not applicable to their theatres and that they were not liable to any contribution in respect of the persons employed in the canteens and cycle stands attached to the theatres. The Employees Insurance Court rejected the application. The disappointed theatre owners appealed before Hon’ble High Court of Andhra Pradesh under Section 82. The High Court dismissed their appeal and therefore the Appellants moved before Hon’ble Supreme Court for Special Leave to Appeal which was granted. 4. 4 Issue The only issue before the Hon’ble Supreme Court in this case was pertaining to interpretation of the term ‘Employee’ under Section 2 (9) of the Employees State Insurance Act, 1948. The essential question was whether a cinema theatre manager who has no statutory obligation to run a canteen or provide a cycle stand but, for the better amenities of his customers and improvement of his business, enters into an arrangement with another to maintain a canteen and a cycle stand and that other employs, on his own, workers in connection with the canteen and the cycle stand, can be held liable for contribution as the principal employer of the workmen although they are engaged independently by the owner of the canteen or the cycle stand. 4. 5 Contention before the Supreme Court It was vehemently contended by the petitioner that there was no statutory obligation on the part of the appellants to run canteens or keep cycle stands and the workers employed in the cycle stand and Canteen are not directly employed by the appellants and, if we go by the master and servant relationship under the law of contracts, there is no employer-employee nexus.

In lights of these circumstances the persons employed in the cycle stand and Canteen was not an ‘Employee’ under Section 2 (9) of the Employees State Insurance Act, 1948. Further it was contended that on a minute dissection of the various clauses of the provision it was possible to exclude canteen employees and cycle stand attendants. The respondent on the other hand denied all the contention of the Appellant and argued that the persons employed by the contractors in canteen and cycle stands were ‘Employee’ within the meaning to Section 2 (9) of the said Act. 4. 6 Judgment of the Hon’ble Supreme Court Dismissing the appeal Hon’ble Supreme Court held that the Appellants were liable to contribute towards the Employee State Insurance scheme in respect f persons employed in canteen and cycle stands since they were ‘Employees’ within the meaning of Section 2 (9) of the Employees State Insurance Act, 1948. Though such person were not appointed directly by the theatre owners i. e. the appellant the facilities of the canteen and cycle stand was incidental to the primary purpose of the theatre and these facilities aimed at providing better amenities to the customers and therefore the person employed to provides such services are ‘Employee’ according to the Section 2 (9) of the Employees State Insurance Act, 1948. At the outset the Hon’ble Supreme Court thought it fit to discuss the object of the Employees State Insurance Act, 1948 in order to decide the issue on hand.

While discussing the object of the Act Hon’ble Supreme Court observed that, “…. although, technically, the Act is a pre-Constitution one; it is a post-Independence measure and shares the passion of the Constitution for social justice. Articles 38, 39, 41, 42, 43 and 43A of the Constitution show concern for workers and their welfare. Since Independence, this legislative motivation has found expression in many enactments. We are concerned with one such law designed to confer benefits on this weaker segment in situations of distress as is apparent from the Preamble. The machinery for state insurance is set up in the shape of a Corporation and subsidiary agencies. ”

After considering the object of the Act Hon’ble Supreme Court went on to consider the definitional amplitude of the term ‘Employee’ in Section 2 (9) of the Employee State Insurance Act, 1948 since there were no two opinions on the fact that a cinema theatre is an ‘establishment’ and that the appellants, as theatre owners, are principal employers, being persons responsible for the supervision and control of the establishment. In order to decide the issue on hand Hon’ble Supreme Court considered the meaning of term ‘Employee’ at length. After detailed analysis of sub-clause (i) of Section 2 (9) Hon’ble Supreme Court held that Section 2(9) (i) covers only those employees who are directly employed by the principal employer.

In the said clause though there are expressions which take in a wider group of employees than traditionally so regarded, but it is imperative that any employee who is not directly employed by the principal employer cannot be termed as ‘Employee’ under Section 2(9) (i). In the present case, the employees concerned are admittedly not directly employed by the cinema proprietors. Therefore Hon’ble Supreme Court moved further to analyse sub-clause (ii) of Section 2 (9). While analyzing the said provision Hon’ble Court observed, “….. the language used is extensive and includes all possible alternatives of employment by or through an independent employer.

In such cases, the ‘principal employer’ has no direct employment relationship since the ‘immediate employer’ of the employee, concerned is some one else. Even so, such an employee, if he works (a) on the premises of the establishment, or (b) under the supervision of the Principal employer or his agent “on work which is ordinarily part of the work of the establishment or which is preliminary to the work carried on in or incidental to the purpose of the establishment”, qualifies under Section 2(9) (ii). The plurality of persons engaged in various activities who are brought into the definitional net is wide and considerable; and all that is necessary is that the employee be on the premises or be under the supervision of the principal employer or his agent.

Assuming that the last part of Section 2(9) (ii) qualifies both these categories, all that is needed to satisfy that requirement is that the work done by the employee must be (a) such as is ordinarily (not necessarily nor statutorily) part of the work of the establishment, or (b) which is merely preliminary to the work carried on in the establishment, or (c) is just incidental to the purpose of the establishment…. ” Therefore according the said provision any person engaged in work that is ordinarily the part of establishment or preliminary to the work carried on in the establishment or incidental to the purpose of the establishment is considered to be an ‘Employee’ within the meaning of Section 2 (9) (ii). In lights of these circumstances Hon’ble Court opined that canteens or cycle stand are incidental to the purpose of the theatre.

The cinema goers ordinarily find such work an advantage, a facility an amenity and some times a necessity. Therefore the two operations in the present case, namely, keeping a cycle stand and running a, canteen are incidental or adjuncts to the primary purpose of the theatre. And a person engaged in such work is an ‘Employee’ according to Section 2 (9) (ii) of the Employee State Insurance Act, 1948 and in this case it is immaterial whether the person is employed by the Principal employer or his agent. Hon’ble Supreme Court further observed that there was no need to scrutinize minutely the clauses of Section 2 (9) because punctilious sense of grammar and minute precision of language may sometimes lend unwitting support to narrow interpretation.

When the definition deliberately cast widest terms and the draftsman has endeavored to cover every possibility so as not to exclude even distant categories of men employed either in the primary work or cognate activities it would not be favorable to adopt narrow interpretation and thereby truncate semantic sweep of the legislation. Such interpretation will defeat the whole object of the statute by throwing out of its ambit those persons who obviously are within the benign contemplation of the Act. Thus Hon’ble Supreme Court adopted a liberal approach in interpreting the term employee under Section 2 (9) of the Employees State Insurance Act so as to uphold the object of the Act. 4. 7 Critical analysis of the judgment The decision this case is one of the finest examples of liberal interpretation adopted by the Supreme Court to whereby it has sough to achieve welfare of labour in India.

In the present case the sole issue before the Supreme Court was whether the worker employed in the canteens and the cycle stands of the theatre is ‘Employee’ within the meaning of Section 2 (9) of the Employee State Insurance Act, 1948 inspite of the fact that he was neither appointed by the owner of the theatre nor the salaries were paid by the owner of the theatre. The Supreme Court by adopting a very liberal interpretation held that such workers were ‘Employee’ with in the meaning of Section 2 (9) of the Employees State Insurance Act, 1948. In the present case Hon’ble Supreme Court has beautifully co-related the object of the welfare legislation in form of Employee State Insurance Act, 1948 and the need to interpret provision of such legislation liberally so as to achieve the objective enshrined under part IV of the Constitution of India.

In this case the definition of the term ‘Employee’ was considered at length by the Supreme Court and after detailed analysis of all the clauses the Court came to the conclusion that the person engaged in the work that is incidentally connected to the primary work is also considered to be and ‘Employee’ and in such cases it is immaterial whether such worker is appointed by the principal employer or not. Such an interpretation by the Supreme Court unveils the facts that the judiciary is keen to achieve the objective of social welfare that is one of the prime objectives enshrined under the Constitution. Herein this case the Supreme Court interpreted the provision of Employee State Insurance Act, 1948 liberally so as to fulfill the object of the Act.

The court in this case laid down the principle that whenever two interpretations are possible in case of welfare legislation, as is in the present case, the liberal interpretation must be adopted by the Courts. CHAPTER 5 Later development in law The judgment in case of Royal Talkies v. Employee State Insurance Corporation[28] was delivered in the year of 1978. Since then lots of water have flown under the bridge. Many cases relating to labour welfare came up before Supreme Court wherein the Supreme Court adopted liberal approach so as to extend the benefits of the labour welfare legislations to the weaker segment. In spite of this fact the judgment in case of Royal Talkies v. Employee State Insurance Corporation[29] is a landmark in the field of labour welfare.

The said cases is referred in the 53 cases by the various High Courts and Supreme Courts in total out of which 44 time various High Courts have referred the said case whereas 9 times Hon’ble Supreme Court has referred the said case. In the present chapter researcher aims to analyse the development in law after the judgment in case of Royal Talkies v. Employee State Insurance Corporation[30] by analyzing several case laws. 5. 1 Regional Director, Employees’ State Insurance Corpn, Madras v. South India Flour Mills (P) Ltd. [31] Facts: Herein this case the respondent company was engaged in milling wheat into wheat products employed worker on the daily wages for construction of the additional factory building for the expansion of the factory.

The Division Bench of the Madras High Court held that the workers employed for the construction of additional factory buildings of the mills in question were not ‘Employee’ within the meaning of Section 2(9) of the Employees State Insurance Act, 1948. Hence the Employee State Insurance Corporation filed Special Leave Petitions before Supreme Court of India to challenge the order passed by the Madras High Court. It was the case of the appellant that the work of construction of the additional factory building for the expansion of the factory was incidental to the primary work of the factory and therefore the person engaged in the construction of additional factory building are ‘Employee’ under the Employees State Insurance Act, 1948.

Issue: The only issue before the Hon’ble Supreme Court was whether the workers employed for the construction of additional buildings for the expansion of the factories in question are employees within the meaning of Section 2(9) of the Employee State Insurance Act, 1948. Judgment: Allowing the appeal court held that the workers employed for the construction of additional buildings for the expansion of the factories in question are employees within the meaning of Section 2(9) of the Employee State Insurance Act, 1948. Taking into consideration the object of the Employee State Insurance Act, 1948 and the decision in case of the Royal Talkies v.

Employee State Insurance Corporation[32] Hon’ble Supreme Court observed that, “The Act is a piece of social security legislation enacted to provide for certain benefits to employees in case of sickness, maternity and employment injury. To hold that the workers employed for the work of construction of buildings for the expansion of the factory are not employees within the meaning of Section 2(9) of the Act on the ground that such construction is not incidental or preliminary to or connected with the work of the factory will be against the object of the Act. In an enactment of this nature, the endeavour of the Court should be to interpret the provisions liberally in favour of the persons for whose benefit the enactment has been made…..

Therefore in our opinion the work of construction of additional buildings required for the expansion of a factory must be held to be ancillary, incidental or having some relevance to or link with the object of the factory. It is not correct to say that such work must always have some direct connection with the manufacturing process that is carried on in the factory. The expression “work of the factory” should also be understood in the sense of any work necessary for the expansion of the factory or establishment or for augmenting or increasing the work of the factory or establishment. Such work is incidental or preliminary to or connected with the work of the factory or establishment. ” 5. 2 C. E. S. C. Limited and Ors. . Subhash Chandra Bose and Ors. [33] Facts: In this case the Respondent was carrying on business of electrical installation as independent contractors holding licenses from Government of West Bengal. They were engaged to lay underground cable and erect overhead lines in public road by Calcutta Electricity Supply Corporation (India) Ltd. The Employee State Insurance authorities informed C. E. S. C. that the employee whose wages are paid through contractor would fall within the scope of Section 2 (9) of the Employees State Insurance Act, 1948. The contractors contended that for carrying out their contract they were not supervised by C. E. S. C. the principal employer and they were carrying out the works allotted to them in sites outside the factory establishment and as such the worker engaged by them were not covered by the definition of ‘Employee’ under Section 2 (9) of Employee State Insurance Act, 1948. Judgment: It was held that when the employee is put to work under the eye and gaze of the principal employer, or his agent, where he can be watched secretly, accidently or occasionally while the work is in progress, so as to scrutinize the quality thereof and to detect faults therein, as also put to timely remedial measures by directions given, finally leading to satisfactory completion of satisfactory completion and acceptance of the work, that would in our view be supervision for the purposes of Section 2(9) of the Act. This function can be delegated by the principal employer to his agent.

The electrical contractors can never be the agent of the principal employer because if such a relationship is permitted it would obliterate the distinction between two and violate the provisions of the Act as well as the contractual principle that a contractor and contractee cannot be the same person. Therefore the employees of the contractor are not covered by the definition under Section 2 (9) of the Employee State Insurance Act, 1948. 5. 3 Rajakamal Transport v. Employees’ State Insurance Corporation, Hyderabad[34] Facts: In this case the appellants had engaged homilies for loading and unloading of the goods undertaken by them for carriage as carriers. The respondent applied the Employees’ State Insurance Act, 1948 to the appellant’s establishment and called upon them to pay their contribution for the periods mentioned in the notice served on them with interest at 1% 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 homilies arc 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 homilies at the piece rate for the work they do, they have got supervision of loading and unloading by the homilies. The homilies 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. The appellants have filed Special leave to appeal.

Issue: The main and the only issue before the Hon’ble Supreme Court was whether the homilies appointed by them for loading and unloading of the goods undertaken by them for carriage as carriers were ‘Employee’ within the meaning of Section 2 (9) of the Employee State Insurance Act, 1948. Judgment: The Court dismissed the appeal and observed that a person to be an ‘Employee’ under Section 2 (9) of the Employee State Insurance Act, 1948 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. Herein this case the appellants have the control over loading and unloading of the goods entrusted to them. The appellants’ regular business was transportation of the goods entrusted to it as carrier.

Now, when the goods were brought to the warehouse of the appellants, necessarily the appellants have to get the goods loaded or unloaded through the homilies and they control the activities of loading and unloading. The loading and unloading of the work is done at their directions and control. Therefore the homilies can be termed as ‘Employee’ within the meaning of Section 2 (9) of the Employee State Insurance Act, 1948. 5. 4 Saraswath Films v. Regional Director, E. S. I. Corporation, Trichur[35] Facts: Herein this case the appellants were the owner of the theatre. For the purpose of security of theatre premises the security guards in the cinema hall were employed through another agency which used to send guard by rotation.

A dispute arose between the appellant and respondent whether two security guards working on the premises could be considered as employees of the appellant. It was the case of the appellant that the security guards concerned were employees of the agency which used to send two security guards by rotation for duty at the premises of the cinema hall. Since there was no relationship of employer and employee between the appellants and the security guards, they could not be counted as part of the appellant’s establishment for the purpose of registration under the Act. Issue: Whether the security guards are employees within the meaning of Section 2(9) of the Employee State Insurance Act, 1948?

Judgment: Hon’ble Supreme Court discussed Section 2 (9) of the Employee State Insurance Act, 1948 at length and held that the definition of term ‘Employee’ under the Employee State Insurance Corporation is wide and comprehensive so as to include a person doing any work which is incidentally or substantively related to the primary function of establishment. Herein this case that the security guards engaged on the premises of cinema hall discharge the duty of checking tickets of persons seeking entry into the hall, which work is directly and intrinsically a part of the work of the establishment and therefore they are employees within the meaning of Section 2 (9) of the Employee State Insurance Act. 1948. 5. 5 Jodhpur Vidyut Vitran Nigam Ltd. v. Karmachari Rajya Beema Nigam [36] Facts: In the said case the Central Government by notification extended the provisions of the Employee State Insurance Act, 1948 to Hanumangarh town and therefore the insurance scheme was applicable in this area also.

The appellant contended before High Court that it was not a factory and as such its employees were not covered by the Employee State Insurance Scheme. Judgment: It was held by the High Court that the term ‘Employee’ under Section 2 (9) of the Employee State Insurance Act, 1948 was not confined to those employed in the factory but also extended to those engaged in work incidental or preliminary to work of the establishment. In this case it was not disputed that the sub station of the agent was engaged in distribution of energy and hence it was in connection with the work in generation of electricity if factory. Hence the appellants were held liable under the Act. CHAPTER 5 Conclusion

Social security and welfare of the labour are one of the prime objectives of a welfare State and India being one of them these principles are well enshrined under the Constitution of India. Part IV of the Constitution of India and more specifically Article 39, 40 41 42 and 43 makes it obligatory on the part of State to make certain laws to ensure welfare of the weaker segment. Numerous legislations has been enacted by the parliament of India to give effect to these directive principles of State policy. But in order to apply these legislation in its letter and spirit it is important that the provisions of these welfare legislations are construed liberally so as to extend the benefit to the weaker segment.

One of such legislation that provides for social security to the ‘Employee’ is Employee State Insurance Act, 1948. The Employees’ State Insurance Act 1948 seeks to serve the twin objects namely, social security i. e. medical benefits in case of sickness, maternity and employment injury and other matters relating, thereto and to augment the efficient performance of the duty. In order to accomplish the object of the said Act it is necessary that the scope and applicability of the provision are wide enough to include remotest person within the ambit of the Act. The term employee under Section 2 (9) of the Employee State insurance Act, 1948 was one of most relevant term to determine the scope and applicability of the Act.

And form the above analysis the researcher concludes that the definition of term ‘Employee’ under Section 2 (9) is very wide and therefore the first hypothesis of the researcher stands correct. Royal Talkies v. Employee State Insurance Corporation[37] is a of the landmark case where in the definitional amplitude of the term ‘Employee’ in section 2 (9) of the Employee State Insurance Act, 1948 was discussed by Hon’ble Supreme Court at length in consonance with the object of the Act. The legislation that provides for labour welfare will remain meaningless if the Court interprets the provisions of this legislation in the narrow and literal sense.

Therefore it necessary that the provisions of welfare legislation are interpreted liberally so as to accomplish the greater objective as enshrined under Part IV of the Constitution of India. In Royal Talkies v. Employee State Insurance Corporation[38] Hon’ble Supreme Court did exactly the same and interpreted the term ‘Employee’ liberally so as to extend the benefits of the Act to remotest person working in the establishment. In this case Hon’ble Supreme Court was of the opinion that taking into consideration the object of the Act it was necessary to interpret the provision of this Act liberally. Therefore the second hypothesis of the researcher hereby stands correct.

The decision in case of Royal Talkies v. Employee State Insurance Corporation[39] seem to have paved way for the courts to interpret the provisions of the welfare legislation liberally so as to extend the benefits of the legislation to as many as possible. After the decision in case of Royal Talkies v. Employee State Insurance Corporation[40] the homilies, Watch man, person engaged in construction of factory building for the purpose of expansion of factory were considered to be an ‘Employee’ within the meaning Section 2 (9) of the Employee State Insurance Act. It is apparent from the above illustrated cases that after the decision in case of Royal Talkies v.

Employee State Insurance Corporation the courts in India have adopted the liberal approach so as to extend the benefit of the Employee State Insurance Act, 1948 to the maximum possible people. Therefore the third hypothesis if the researcher also stands correct. CHAPTER 5 Bibliography BOOKS REFERRED 1. Kumar. H. L. , Practical Guide to Employees State Insurance – Act, Rules & Regulations, (Delhi: Universal Law Publishing Co. Pvt. Ltd. , 2007) 2. Padhi. P. K. , Labour And Industrial Law, (New Delhi: PHI Publication. , 2008) 3. Mishra. S. N. , Labour and Industrial Laws, (Allahabad: Central Law Publication, 2009) 4. Kumar. Anil, Labour Welfare and Social Security, (New Delhi: Deep & Deep Publication Pvt. Ltd. , 2003) 5. Gupta.

Meenakshi, Labour Welfare and Social Security in Unorganized Sector, (New Delhi: Deep and Deep publication Pvt. Ltd. , 2007) 6. Erraiah. G. and Chinnaswamy. M. , Labour and Development in Twenty First Century: Challenges and Perspectives,(New Delhi: Serials Publication, 2005) 7. G. B. Pai. , Labour Law in India, (New Delhi: Butter Worths. , 2001) 8. Malik. P. L. , Handbook of Labour and Industrial Law, (Lucknow: Eastern Book Company. , 2009) 9. Singh Avtar and Kaur Harpreet. , Introduction to Labour and Industrial Law, (New Delhi: Butters Worths Lexis Nexis. , 2008) 10. Kumar. H. L. , Labour and Industrial Law, (Delhi: Universal Law Publishing Co. Pvt. Ltd. , 2007) 11. Kumar. Sanjeev. Industrial & Labour Laws, (Faridabad: Allahabad Law Agency. , 2008) 12. Dr. Sharma. J. P. , Bharat’s Employee State Insurance Act, 1948, (New Delhi: Bharat Law House Pvt. Ltd. , 2009) 13. Prof. Jain. M. P. , Indian Constitutional Law, (New Delhi: Lexis Nexis Butters Worth. , 2008) CASES REFERRED 1. Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 2. Management of Sonipat Cooperative Sugar Mills Ltd. v Ajit Singh [2005 1 LLJ 1122] 3. Rohtas Industries v. Ramlakhan Singh, AIR 1978 SC 849 4. Regional Director, Employees’ State Insurance Corpn, Madras v. South India Flour Mills (P) Ltd. , AIR 1986 SC 1686 5. C. E. S. C. Limited and Ors v.

Subhash Chandra Bose and Ors, AIR 1992 SC 573 6. Rajakamal Transport v. Employees’ State Insurance Corporation, Hyderabad, (1996) 9 SCC 644 7. Reunion Engineering Co. Pvt. Ltd. v Employee State Insurance Corporation, 1983 I LLJ 31 (Karn) 8. Saraswath Films v. Regional Director, E. S. I. Corporation, Trichur, (2002) IIIL LJ 169 (SC) 9. Jodhpur Vidyut Vitran Nigam Ltd. v. Karmachari Rajya Beema Nigam, (2007) I LLJ 104 (Raj) ARTICLES REFERRED • Dr. N. Martin. , Employee welfare in India, (Online database: http: //www. articlesbase. com/human-resources-articles/employee-welfare-999627. html, 2009), Last visited on 13th April 2010. • Dr. C. L. Patel. Social Security under the Employees State Insurance Act, 1948 (Online database: www. Indiakanoon. com, 1998), Last visited on 8th April 2010. • Rajkumar Adukia, Employee State Insurance Act, 1948 – An overview (Online database: http://www. lawyersclubindia. com/articles/Employee-State-Insurance-Act-1948-8211-An-overview/382/, 2008), Last visited on 3rd April 2010. JOURNALS • Indian Law Journal • All India Reporter • Indian Bar Review • Supreme Court Cases • Supreme Court Journal • Journal of Indian Law Institute ———————– [1] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [2] S. N. Mishra. , Labour and Industrial Laws, (Allahabad: Central Law Publication, 2009), 6. [3]Anil Kumar. Labour Welfare and Social Security, (New Delhi: Deep & Deep Publication Pvt. Ltd. , 2003), 19. [4]Dr. N. Martin. , Employee welfare in India, (Online database: http: //www. articlesbase. com/human-resources-articles/employee-welfare-999627. html, 2009), Last visited on 13th April 2010. [5] Prof. M. P. Jain. , Indian Constitutional Law, (New Delhi: Lexis Nexis Butters Worth. , 2008), 14. [6] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [7] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [8] Ibid. [9] Ibid. [10]Ibid. [11]Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [12]Ibid. 13] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [14] Ibid. [15] Ibid. [16] Ibid. [17] Ibid. [18] Ibid. [19]Dr. C. L. Patel. , Social Security under the Employees State Insurance Act, 1948 (Online database: www. Indiakanoon. com, 1998), Last visited on 8th April 2010. [20] Reunion Engineering Co. Pvt. Ltd. v Employee State Insurance Corporation, 1983 I LLJ 31 (Karn) [21] Rajkumar Adukia, Employee State Insurance Act, 1948 – An overview (Online database: http://www. lawyersclubindia. com/articles/Employee-State-Insurance-Act-1948-8211-An-overview/382/, 2008), Last visited on 3rd April 2010. [22] Avtar Singh and Harpreet Kaur. Introduction to Labour and Industrial Law, (New Delhi: Butters Worths Lexis Nexis. , 2008), 28. [23] Management of Sonipat Cooperative Sugar Mills Ltd. v Ajit Singh [2005 1 LLJ 1122] [24] The Workmen’s Compensation Act has been amended to Employee’s Compensation Act by Workmen’s Compensation (Amendment) Act No. 45 of 2009. [25] Rohtas Industries v. Ramlakhan Singh, AIR 1978 SC 849 [26] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [27] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [28] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [29] Ibid. [30] Ibid. [31] Regional Director, Employees’ State Insurance Corpn, Madras v.

South India Flour Mills (P) Ltd. , AIR 1986 SC 1686 [32] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [33] C. E. S. C. Limited and Ors v. Subhash Chandra Bose and Ors, AIR 1992 SC 573 [34] Rajakamal Transport v. Employees’ State Insurance Corporation, Hyderabad, (1996) 9 SCC 644 [35] Saraswath Films v. Regional Director, E. S. I. Corporation, Trichur, (2002) IIIL LJ 169 (SC) [36]Jodhpur Vidyut Vitran Nigam Ltd. v. Karmachari Rajya Beema Nigam, (2007) I LLJ 104 (Raj) [37] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [38] Royal Talkies v. Employee State Insurance Corporation, AIR 1978 SC 1478 [39] Ibid. [40] Ibid.

Cite this Royal Talkies V. Esi: a Socio Legal Judgment

Royal Talkies V. Esi: a Socio Legal Judgment. (2016, Oct 07). Retrieved from https://graduateway.com/royal-talkies-v-esi-a-socio-legal-judgment/

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