K VENKATESWARA RAO Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The Employees State Insurance Act, was passed in 1948. Its object was to provide benefits to the employees in case of sickness, maternity and 'employment injury' and to make provision for certain other matters in relation thereto. It was made applicable in the first instance, to all factories including factories belonging to the Government other than seasonal factories. Sub-section (5) of Section 1 of the Employees' State Insurance Act (hereinafter referred to as 'the Act') reads as follows:

(2.) The Estimates Committee of the Parliament in its 123rd Report on the Employees' State Insurance Scheme recommended that a small committee, consisting of members of the Corporation and other experts, should be set up to go into certain important recommendations made by the Estimates Committee. A committee called the Committee on Perspective Planning was accordingly set up with the approval of the Central Government. The Committee submitted its report in 1 972. It recommended the extension of the Employees' State Insurance Scheme to certain categories of establishments. One such category is 'theatres, including cinemas'. The Government of Andhra Pradesh wanted to extend the scheme to those class of establishments. It is not disputed that the Government consulted the Employees' State Insurance Corporation and the later agreed to it. On 10th September, 1974, the State Government wrote to the Central Government stating that it was considering to issue a notification under Section 1(5) of the Act, announcing its intention to extend the Employees State Insurance Scheme to the class of establishments referred to therein as recommended by the Committee on perspective Planning and the Central Government's approval under Section 1(5) of the Act was solicited to the extension of the scheme to all or any of the establishments specified therein, in all or any of the areas in the State where Chapters IV and V of the Act are in force. The Central Government by its letter dated 19th September, 1974, conveyed its approval under Section 1 (5) of the Act to the extension of the provisions of the Act by the State Government to the following establishments:

(3.) Questioning G.O.Ms.No. 297 dated 25th March, 1975 some exhibitors of motion Pictures in this State have filed this writ petition. Sri T. Anantha Babu, the learned counsel for the petitioners, has raised two objections. First, the cycle-stands and the canteens attached to the theatres are maintained by independent contractors and are separate establishments and the petitioners cannot be treated as principal employers, so far as the persons working in the canteens and cycle-stands are concerned. That question is now concluded by the decision of the Supreme Court in Royal Talkies, Hyderabad vs. E.S.I. Corpn (AIR 1978 S.C. 1478). In that decision the Supreme Court held, that if a cinema theater 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 person to maintain a canteen and a cycle-stand and that person employs, on his own, workers in connection with the canteen and the cycle-stand, the Manager of the Cinema theatre is 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.