Dipak Kumar Sen, A.C.J. - (1.) The material facts and proceedings leading up to this appeal are, inter alia, that Subhas Chandra Bose and others, the appellants before us, are either proprietors of firms, or partnership firms or limited companies or partners or managing directors respectively of such partnership firms or companies. The appellants carry on the business of electrical installations in the State of West Bengal as independent contractors holding licences from the Government of West Bengal for carrying on such business. Under several and separate contracts entered into by and between the Calcutta Electric Supply Corporation (India) Limited, the respondent No. 4 on the one hand, and the appellants individually, on the other, the appellants have been and still are carrying on the work of erection of over-head electric lines or laying underground cables under public roads and repair and maintenance of the aforesaid. The appellants do not own or run any factory or establishment and for the purpose of the aforesaid work the appellants have been engaging and engage workmen on temporary job basis.
(2.) The material terms and conditions of the contracts between the appellants and the respondent No. 4, as will appear from one particular contract dated 20th January, 1984, entered into by and between the appellant No. 4 and the respondent No. 4, are as follows. The said contract relates to laying of new underground cables and conversion of overhead mains and service to underground system at Barrackpore Trunk Road between Paikpara to D.F.1/6 and from Baranagar P/T to D.F. 1/67: "Please note that you will have to provide competent supervision while carrying out the work in accordance with the provisions of the Indian Electricity Rules, 1956. You will also have to provide adequate watch and ward arrangement for the safe custody of the materials till such time as complete installation is handed over to us. You will be required to insure against theft and pilferage of all materials while held in your site godown". Material terms and conditions of the licences issued by the Government of West Bengal to the appellants will appear from one such licence issued to the appellant No. 6 and read as follows: "Mr./Messrs. Eastern Engineers and Constructions is/are hereby authorised to carry out electrical installation work in the State of West Bengal. This licence is issued subject to the compliance with the conditions set out on the reverse, and also to the continued compliance with the conditions set out in Regulation 24 of the Regulations under Rule 45(1) of the Indian Electricity Rules, 1956. (1) All electrical installation work coming within the purview of Rule 45(1) of the Indian Electricity Rules, 1956, undertaken by the holder of this licence, shall be carried out under the direct supervision of a person holding a valid certificate of competency.... (2) The holder of this licence shall maintain a register of supervision and workmen in the form below and shall produce the register for inspection on demand by an electrical inspector or other person authorised in this behalf by the licensing Board. (3) On the completion of any electrical installation work coming within the purview of Rule 45(1) of the Indian Electricity Rules, 1956, a test report in the form prescribed by the Board shall be submitted by the holder of this licence to the Secretary. The report shall be signed by the supervisor under whose supervision the work has been carried out, and countersigned by the holder of this licence, who shall be wholly responsible for the due execution of the work. (4) If the holder of this licence ceases to be in possession of a valid supervisor's certificate of competency, or ceases to retain in his said employ atleast one supervisor holding a valid certificate of competency, this licence shall be invalid. (5) If the holder of this licence accepts an employment under any other firm or person for the purpose of carrying out or supervising any electrical installation work coming within the purview of Rule 45(1) of the Indian Electricity Rules, 1956, this licence shall be invalid and the holder shall return the same to the Secretary for cancellation".
(3.) On the 26th August, 1975, pursuant to queries raised by the respondent No. 4, the respondent No. 2, the Regional Director of the respondent No. 1, issued a communication to the Executive Director (Administration) of respondent No. 1, stating, inter alia, that persons employed for wages through a contractor will not normally fall within the meaning of the term "employee" as defined under Section 2(9) of the Employees' State Insurance Act, 1948 (hereafter referred to as the said Act) unless they are employed in any work incidental or preliminary to or in connection with the work of a factory of the respondent No. 1 inside the factory premises or in the event of their being employed elsewhere, they work under the supervision of the principal employer.;