Oscar Mines and Granites Ltd. (OMGL) is having mining license to extract marble and granite in the surrounding area of Kishangarh. In order to extract the raw stone beneath the earth, the OMGL availed the services of Kis

Answer 3(b) It has been well settled by the various judgements of Apex Court & High Courts that the contractor's employees will not automatically become the employees of the principal employer, even if the principal employer does not get registration and the contractor does not hold licence, though employing contract labour without obtaining registration or without obtaining licence is an offence under the Act. Legal consequences for default on the part of contractor for non-renewal of his licence have been discussed by a bench of Madras High Court in Workmen of Best & Crompton Industries Limited represented by their General Secretary of Socialist Workers Union, Madras v. Management of Best & Crompton Engineering Itd., Madras (1985-I-LLJ, 492), their lordship observed that the contractor's licence has not been renewed within the prescribed time limit and that the registration under section 7 was initially granted for 30 workmen, has not been amended to cover engagement of 75 workmen. Rule 29 requires that the application of renewal should be made before the validity of license. It would therefore, be inferred that the contractor is not eligible to apply for renewal at all and that his only remedy if he wants to work as a licensed contractor, is to apply for a fresh and new license. Otherwise, the workmen would not be deemed to be employed as contract labour. The Act mandates that the principal employer should be registered and the contractor have a valid license prior to engaging contract labours. In Workmen of Best & Crompton Industries Ltd. v. Best & Crompton Industries Ltd., the Madras High Court has held that the principal employer must engage contract labour through a contractor who has a valid license, because an invalid license of a contractor would imply direct employment of contract labour by the principal employer. Further, such a license of the contractor is job specific, non-transferable for any other job and indicative of the maximum number of contract labours to be engaged. In Food Corporation of India Workers Union vs. Food Corporation of India and other, 1992 LLJ (Guj.), it has been held that workmen can be employed as contract labour only through licensed contractors, who shall obtain licence under section 12. As per section 7, the principal employer is required to obtain Certificate of Registration. Unless both these conditions are complied with, the provisions of Contract Labour Act will not be attracted. Even if one of these conditions is not complied with, the provisions of Contract Labour Act will not apply. In a situation where in either of these two conditions is not satisfied, the position would be that a workman employed by an intermediary is deemed to have been employed by the principal employer. In the given case, contract labour supply by the Kishan Lal become the employee of OMGL even though OMGL registration has been expired.