JUDGMENT

RANGANATH MISRA, C.J.C.J.I. (Per majority):- 1 have had the advantage of perusing the draft judgments prepared by my learned brethren Punchhi and Ramaswamy, JJ. While Justice Punchhi by the literal construction of the statute, brother Ramaswamy has tried to find out the spirit of the legislation and with a view to conferring the benefit on the workmen, has adopted a construction different from the reported decision 1 of this Court.

2. I agree with Justice Punchhi that the appeals should be dismissed and the judgment of the Division Bench should be sustained. At the same time, 1 would like to add that the legislative intention should have been brought out more clearly-by undertaking appropriate legislation once this Court took a different view in the decision referred to in brother Punchhis judgment. The legislation is beneficial and if by interpretation but by the Court the intention is not properly brought out it becomes a matter for the legislature to attend to.

PUNCHHI, J. (Per majority):- 3. The sole question which falls for determination in these appeals is, whether on the facts found, the right of the Principal employer to reject or accept work on completion, on scrutinizing compliance with job requirements, as accomplished by a contractor, the immediate employer, through his employees, is in itself an effective and meaningful "supervision" as envisaged under Section 2 (9) of the Employees State Insurance Act, 1948 (for short the Act)? The said provision, as it stood at the relevant time, is set out below, as is relevant for our purpose:-

"2(9) - employee means any person employed for wages in or in connection with lane work of a factory or establishment to which this Act 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 person whose services are so lent or let on hire has entered into a contract of service;

4. The Calcutta Electricity Supply Corration (India) Ltd., hereinafter referred to PO as the C.E.S.C. engages various contractors to carry out work of excavation, conversion of overhead electric lines and laying of underground cables under public roads, as well as for repair and maintenance of the aforesaid works. Subhash Chandra Bose & some others, the private respondents herein, were given such contracts, terms and conditions in respect of each were reduced to writing. They would be adverted to at the appropriate time common as they are to all. The C.E.S.C. was on notice alerted by the Regional Director of the Employees State Insurance Corporation (for short E.S.I.C.) by means of communication dated 26 August, 1975 that the employees whose wages were being paid through such a contractor would fall within the scope of Section 2 (9) of the Act and for reasons and details mentioned in the communication. Thereupon the C. E. S. C. on its part engaged in correspondence with the Association of Electrical Contractors of Eastern India, a representative body of the contractors who are parties respondents herein, requiring them to comply with the provisions of the said Act immediately or else it will deduct a lump sum of 7 from their bills. The Association questioned the move and strongly refuted such obligation. After indulging in some correspondence on the subject, the C. E. S. C. started making deductions from their bills on account of contri