INSURANCE INSPECTOR Vs. VICTORY TILE WORKS

JUDGEMENT

(1.) AN interesting question has been raised in this appeal and that is whether a person who satisfied the definition of 'employee' in s. 2 (9) of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act) and who also satisfies the definition of 'principal employer' in s. 2 (1?) of the Act could be said to be entitled to fall within the coverage of the Act. This question has arisen when the Employees' State Insurance corporation moved an application under S. 15 (2) of the Act for recovery of contribution in regard to one P. Easwara Iyer, the Manager of a Factory of the opposite Party-This application made before the Employees' State Insurance Court, kozhikode stands dismissed and the Corporation has taken up this matter in appeal to this court.

(2.) THAT Sri. Easwara Iyer was the manager of the factory of the opposite party is not disputed. But the liability of the opposite party to contribute under the Act is seriously challenged since it is the plea that the manager is one who has been named as such under the Factories Act, 1948 and therefore he comes within the definition of Principal Employer. If he is the principal employer it is said that he cannot be an employee at the same time and therefore there is no scope for contribution in regard to such manager.

(3.) WE have, in this context, to remember that the term principal employer' is employed in the statute for a definite purpose and that purpose is evident from the provisions where the said terms occur. The liability to contribute under the Act is that of the principal employer and s. 40 provides that he shall pay in respect of every employee both the employer's contribution and the employee's contribution. In regard to employee's contribution he has got a right to recover by deduction from the wages of the employee. Where he is not the immediate employer he has a right to recover from the immediate employer the contribution he pays on behalf of the employee either by deduction from the amount payable to him or as a debt recoverable from him. It is clear from the scheme of the Act that there is no apparent conflict of interest between the principal employer and the employee and there is no reason why if a person satisfies the definition of employee and belongs to that class he cannot in certain cases be also a 'principal employer'. To construe otherwise would mean that though he is an employee who should normally come within the scope of the Act he would not get the benefits of the Act because he is, by the definition of principal employer included in that category. It is not as if his obligations as the principal employer are irreconcilable with his obligations or rights as an employee. In his character as the principal employer he is bound to pay contribution even in regard to him-self and that could be recovered from his salary which he is bound to do as the manager and thereby the principal employer.