Case: Royal Talkies, Hyderabad and Others Vs. Employees State Insurance Corp

A brief factual narration may help get a hang of the case. The High Court, before which the present appellants had filed fruitless appeals has summarised the facts succinctlyappellants are owners of theatres in the twin cities of Hyderabad and Secunderabad, where films are exhibited. Within the same premises as the theatre, in every case, there in a canteen and a cycle stand. The canteen and the cycle stand are leased out to contractors under instruments of lease. The contractors emplo y their own servants to run the can teen and the cycle stand. In regard to persons so employed by the contractors, the owners of the theatres were treated Principal Employers and notices of demand were issued to them calling u pon them to pay contribution under the employees State Insurance Act. Thereupon the owners of theaters 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 theaters and that they were not liable to any contribution in respect of the persons employed in the can teens and cycle stands attached to the theaters.The Insurance Court, on a consideration of the relevant lease deeds and other evidence, noticed the following features in regard to the running of theAll these canteens are within the premisses of the cinema theatres (2) A few of these canteens have access directly from the abutting roads whereas the other canteens can be reached only through the open space inside the cinema theatres. (3) The persons running the canteens are t hem selves responsible for equipping the canteens with the necessary furniture and for providing the required utensils. (4) The Managements of all these Cinema theaters pay the electricity charges due in respect of these canteens. (5) The persons working in these canteens are employed only by the contractors or tenants who run the canteens and they alone are responsible for the salaries payable to the persons. (6) The managements of the cinema theatres have absolutely no supervisory control over the persons employed in these canteens. (7) These canteens have to be run only during the show hours. This is made abundantly clear by Exhibits10 and in the, face of the recitals contained in these agreements, I am not prepared to accept P.W. 1s evidence that the tenants of these canteens are at liberty to run them at other times also. In particular Exhibitprovides th at the lessee shall run the business only during the show hours and that it shall be closed as soon as the cinema shows are closed. (8) A few of the persons working in the can teens are allowed inside the auditorium during the interval for vending eatables and beverages. They can enter the auditorium a few minutes before the interval and can remain inside the auditorium for a few minutes after the interval. (9) It is seen Freon10 t hat the management of the cinema theatre had reserved to itself the right to specify what types of things should be sold in the canteen. The canteens are expected to maintain a high degree of cleanliness and sanitation . (10) In some cases the managements of the theatres reserve the right to enter the canteen premises at all reasonable time for purposes of check and inspection. Ex. P. 9 contains a specific clause in thatfeatures led the Insurance Court to arrive at the following findings ofthe several circumstance mentioned above it is clear that these canteens are meant primarily for the convenience and comfort of those visiting the cinema theatres though in a few cases the persons in charge of canteens seem to be allowing the general public also to have access to the canteens taking advantage of the fact that the canteens can be recalls directly from the abutting road. But this Circumstance does not by itself indicate that these canteens are A thrown open to the general public as other hotels, restaurants or eatingregard to cycle stands, the Insurance Courtit may safely be concluded that these cycle stands are meant exclusively for the convenience of persons visiting B, theInsurance Court found that the owners of theaters where principal employers with reference to the persons employed by contractors in the canteens and the cycle stands attached to the theaters and rejected the applications filed by the owners of theaters under Sec. 75 of thedisappointed theatre owners appealed under Sec. 82, without avail, but undaunted. moved this Court for Special Leave to Appeal which we have granted, as stated earlier, so that we may discuss the facets of the definitional dispute in some detail and lay down the law on the main question.

Court's reasoning:
In short, the social orientation, protective purpose and human coverage of the Act are important considerations in the statutory construction, more weighty than mere logomachy or grammaticalis common ground that there is no statutory obligation on me part of the appellants to run canteens or keep cycle stands. It is common ground? again. that the workers with whom we are concerned are not directly employed by the appellants and, if we go by the master and servant relationship under the law of contracts, there is nonexus. Even so, it has been held cone currently by the Insurance Court and the High Court that "canteens are meant primarily for the convenience and comfort of persons visiting the theatres and the cyclestands are meant exclusively for t he 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 principalis no doubt 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. Admittedly, the canteens and cycle stands are within the theatre premises. Within this factual metrix let us see if the definition in S. 2(9) willreach and range of the definition is apparently wide and deliberately transcends pure contractual relationships. We are 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 the interpretativehere is aof Sec. 2(9). The clause 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. He may not do anything directly for the establishment; he may not do anything statutorily obligatory in the establishment; he may not even do any thing which is primary or necessary for the survival or smooth running of t he establishment or integral to the adventure. It is enough if the employee does some work which is ancillary, incidental or has relevance to or link with the object of the establishment. Surely, an amenity or facility for the customers who frequent the establishment has connection with the work of the establishment. The question is not whether without that amenity or facility the establishment cannot be carried on but whether such amenity or facility, even peripheral may be, has not a l ink with the establishment. Illustrations may not be exhaustive but may be informative. Taking the present case, an establishment like a cinema theatre is not bound to run a canteen or keep a cycle stand (in Andhra Pradesh) but no one will deny that a can teen service, a toilet service, a car park or cycle stand, a booth foresail of catchy film literature on actors, song hits and the like, surely have connection with the cinema theatre and even further the venture. On the other hand, awhere scientific works or tools are A sold or stall where religious propaganda is done, may not have anything to do with the cinema establishment and may, therefore, be excluded on the score that the employees do not do any work in connection with the establishment, that is, the theatre. In the case of a fivestar hotel, for instance, a barber shop or an arcade, massage parlour, foreign exchange counter or tourist assistance counter may be run by some one other than the owner of the establishment but the employees so engaged do work in connection With the establishment or the hotel even though there is no obligation for a hotel to, maintain such an ancillary attraction. By contrast, not a lawyers chamber or architects consultancy. Nor indeed, is it a legal ingredient that such adjunct should be exclusively for the establishment, if it is mainly its ancillary.The primary test in the substantive clause being thus wide, the employees of t he 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 ainterpretation. The whole goal of the statute is to make the principal employer primarily liable for the insurance of kindred kinds of employees on the premises, whether they are there in the work or are merely in connection with the work of thebeing employed in connection with the work of an establishment, in itself, does not entitle a person to be employee. He must not only be employed in connection with the work of the establishment but also be shown to be employed in one or other of the three categories mentioned in Sec. 2(9).2(9) (i) covers only employees who are directly employed by the principal employer. Even here, 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 eligible under Sec. 2(9) (i) . In the present case, the employees concerned are admittedly not directly employed by t he cinemawe move down to Sec. 2(9) (ii). Here again, the language used is extensive and diffusive imaginatively embracing all Possible alternatives of employment by or through all 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 Sec. 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 Sec. 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. No one can seriously say that a canteen or cycle stand or cinema magazine booth is not even 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. All that the statute requires is that the work should not be irrelevant to the purpose of the establishment. It is sufficient if it is incidental to it. A thing is incidental to another if it merely appertains to something else as primary. Surely, such work should not be extraneous or contrary to the purpose of the establishment but need not be integral to it either. Much depends on time and place, habits and appetites, ordinary expectations and social circumstances. In our view, clearly the two operations in the present case, namely, keeping a cycle stand and running canteen are incidental or adjuncts to the primary purpose of the theatre.We are not concerned with Sec. 2(9) (iii) nor with the rest of the definitionalpunctilious sense of grammar and minute precision of language may sometimes lend unwitting support to narrow interpretation. But language is handmaid, not mistress. Maxwell and Fowler move along different streets, sometimes. When, as in Sec. 2(9), the definition has been cast deliberately in the widest terms and the draftsman has endeavoured to cover every possibility so as not to exclude even distant categories of men employed either in the primary work or cognate activities, it will defeat the object of the statute to truncate its semantic sweep and throw out of its ambit those who obviously are within the benign contemplation of the Act. Salvationary effort, when the welfare of the weaker sections of society is the statutory object and is faced with stultifying effect, is permissible judicialthis view we have no doubt that the findings assailed before us are correct and that the conclusion reached deserves to be affirmed. We doagree. The assessment of the quantum of the employers contribution has now been made on an ad hoc basis because they merely pleadedability and made no returns on the strength of Sec. 45A the contribution was determined without hearing. In the circumstances of the case,and the learned Attorney General has nothink it right to direct the relevant Corporation authorities to give a fresh hearing to the principal employers concerned, if sought within 2 months fromto prove any errors or infirmities in the physical determination of the contribution. Such a hearing in tune with the ruling, of this Court in the Central Press case([1977] 3 S.C.R. 35.) is fair and so we order that the assessment shall be reconsidered in the light of a de novo hearing to the appellants and the quantum of contribution affirmed or modified by fresh orders.Before we formally wind up we think it apt to make a critical remark on the cumbersome definition in Sec. 2(9) of the Act when has promoted considerable argument. This reminds us of thedictum or Sir James Fitzjames Stephen "that in drafting it is not enough to gain a degree of precision which a person reading in good faith can understand, hut it is necessary to attain if possible to a degree of precision which a person reading in bad faith cannot misunderstand."(Lux Gentium974 p. 7.)