Judgment Sri G.V.Seethapathy, J 1. This appeal is filed under Section 82 of Employees State Insurance Act, 1945 (for short, "the Act") assailing order dated 24-08-2006 in E.I.Case No.20 of 2003 on the file of the Chairman, Industrial Tribunal-I, Hyderabad, wherein the petition filed by the appellant under Section 75(1)(g) of the Act to declare that the appellant is not liable to pay the contribution, was dismissed. 2. The second respondent passed an order AP/Ins.IX/31-2576-41 dated 18.10.2002 under Section 45-A of the Act demanding contribution in respect of the employees engaged by the contractors with whom the appellant has entered into a contract for transport of the petroleum products. 3. The appellant filed E.I. Case No.20 of 2003 contending that the workers engaged by the contractors are not the employees of the appellant and that the appellant has no control over the said workers and they are not engaged in execution of any work of the appellant, and therefore, the appellant was not liable to pay the contribution. 4. The respondents opposed the said petition contending that Section 40 of the Act casts responsibility on the appellant-petitioner to pay contribution, both in respect of their employees as well as the employees of the contractors and the appellant is exempted from paying contribution only in respect of their regular employees, but not in respect of the employees engaged by the contractors, and therefore, the appellant, being the principal employer of the workers, is liable to pay the contribution. 5. Based on the contentions of both parties, the learned Chairman, Industrial Tribunal-I framed the following issues: 1. Whether the persons engaged by the Transport Contractors are not the employees of the petitioner within the meaning of Section 2(9) and (13) of ESI Act? 2. Whether the regular employees of the petitioner are exempted from the purview of the ESI Act but not the persons engaged by the Transport Contractors, as contended by the ESI Corporation? 3. Whether the petitioner is not liable to pay any amount as demanded in the Section 45A order dt.18.10.2002? 4. To what relief? 6. The Manager of the appellant-Corporation was examined as PW-1 and Exs.P-1 to P-7 were marked. The Branch Manager of the first respondent was examined as RW-1 and Exs.R-1 to R-3 were marked on behalf of the respondents. 7. 4. To what relief? 6. The Manager of the appellant-Corporation was examined as PW-1 and Exs.P-1 to P-7 were marked. The Branch Manager of the first respondent was examined as RW-1 and Exs.R-1 to R-3 were marked on behalf of the respondents. 7. After hearing both sides, the learned Chairman dismissed the petition holding that as per Section 2(9)(ii) read with Section 2(13) of the Act, the petitioner is liable to pay contribution to the workers engaged by the contractors as a principal employer and to recover the same later on, as per Section 40 of the Act. 8. Aggrieved by the same, the petitioner filed the present appeal. 9. The main contention of the learned counsel for the appellant is that the workers engaged by the contractors for the purpose of transporting petroleum products of the appellant-Corporation to the dealers at various places, are not employees of the appellant-Corporation in any capacity and they are engaged by the contractors independently, over whom, the appellant-Corporation has no supervisory or other control whatsoever, and therefore, the appellant cannot be termed "principal employer" in respect of such workers, and hence, no liability can be fastened on them for payment of contribution in respect of such workers. 10. Learned counsel for the respondents, on the other hand, contended that the workers engaged by the immediate employer, i.e., the contractor, for transport of the products of the appellant do their duty in connection with execution of the work of the appellant, and therefore, they come within the meaning of "employee" under Section 2(9) of the Act and the appellant is the principal employer under Section 2(13) of the Act and so, the appellant is liable to pay compensation under Section 40 of the Act. 11. In view of the rival contentions of the parties, the main question, which arises for consideration is, whether the workers engaged by the contractors for the purpose of transporting petroleum products to the retailed outlets from the depots can be termed as "employees" of the appellant Corporation for the purpose of collecting contribution from the appellant. 12. It is not disputed that the appellant-Corporation is involved in manufacture, storing and distribution of petroleum products having its establishment all over the country. 12. It is not disputed that the appellant-Corporation is involved in manufacture, storing and distribution of petroleum products having its establishment all over the country. It is also admitted that the Central Government, in exercise of its power under Section 88 of the Act has exempted the appellant-Corporation from application of the Act, insofar as its employees are concerned, and therefore, the appellant-Corporation is not liable to pay any contribution for its regular employees. It is also not in dispute that the appellant-Corporation imports crude oil from abroad and after purification, supplies the petrol and allied petroleum products to its depots situated all over the country, and the depots, in turn, call for tenders and allot the work of supplying the products to the dealers at various places. The work of such supply is entrusted to the contractors, who engage men for the purpose of loading petrol into tankers and supply the same to the dealers. Such workers engaged for the purpose of loading and unloading are admittedly engaged by the contractors with whom the appellant has entered into contract for transport and they are not engaged or employed directly by the appellant. 13. Section 2(9) of the Act defines the expression "employee" in the following terms: "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and- (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) xxxxxxxxxxx (iii) xxxxxxxxxxxxx 14. Thus, not only a person employed directly by the principal employer, but also a person employed by or through immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work, which is ordinarily part of work of the factory or establishment is also included within the meaning of the expression "employee". 15. 15. Section 2(13) of the Act defines the expression "immediate employer" as follows: "immediate employer" in relation to employees employed by or through him, means a person who has undertaken the execution, on the premises of a factory or an establishment to which this Act applies or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried or in, or incidental to the purpose of, any such factory or establishment, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily lent or let on hire to the principal employer". 16. Thus, "immediate employer" is a person, who has undertaken the execution, in the premises of a factory or an establishment or under the supervision of the principal employer or his agent, of the whole or any part of any work. 17. A combined reading of the above two provisions would go to show that though a contractor is included within the meaning of the expression "immediate employer", the persons engaged by him only come within the meaning of the expression "employee", especially those employed to work on the premises of the factory or establishment or under the supervision of the principal employer or his agent in connection with the work, which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried on, in, or incidental to the purpose of, any such factory or establishment. Section 40 of the Act requires the principal employer to pay the contribution in respect of every employee whether directly employed or by or through immediate employer. 18. The question, which then arises for consideration is, whether the workers engaged by the transport contractors come within the meaning of the expression "employee" under the Act. 19. Admittedly, the said workers are not employed by the appellant- Corporation, either at their place of manufacturing or place of storage or distribution points. They are engaged by the contractors, with whom, the appellant has entered into contract of transport for the purpose of loading and unloading. May be, they enter the premises of the depots for the purpose of loading. They are engaged by the contractors, with whom, the appellant has entered into contract of transport for the purpose of loading and unloading. May be, they enter the premises of the depots for the purpose of loading. Such entry on to the premises of the appellant for the limited purpose is only a casual and occasional entry, but not on regular basis. There is nothing to show that the appellant/Corporation has any sort of supervisory or other control over such workers engaged by the transport contractor. The said workers are amenable to the control of the contractor, but not the appellant. The appellant has no say over the engagement of the workers by the contractor, nor regarding the terms and conditions of such engagement. According to the appellant, the vehicles engaged for transport and also the workers engaged for the purpose of loading and unloading on such vehicles keep changing and the appellant has nothing to do with the logistic operations of the contractor, nor any control over the same. 20. Learned counsel for the respondents contends that the vehicles carry tag inscribing "on contract with HPCL". May be the vehicles carry the said lable, while transporting the products of the appellant, but neither the vehicles are permanently kept at the disposal of the appellant-Corporation nor the workers are engaged for loading and unloading operations. It is not the case of the respondents also that same workers are engaged all the time on the same vehicles. It is in the evidence of PW-1 that the contractors employed by the appellant would supply oil to the other corporations also. Clause (3) of Ex.P- 2/Transport Contract Agreement interalia states that the contractor shall not use the said tank truck/s for any purpose other than for carrying out this agreement. Neither Ex.P-2 nor its schedules, do not, however stipulate that the same work force shall be engaged. Clause (3) of Ex.P- 2/Transport Contract Agreement interalia states that the contractor shall not use the said tank truck/s for any purpose other than for carrying out this agreement. Neither Ex.P-2 nor its schedules, do not, however stipulate that the same work force shall be engaged. On the other hand, clauses (6) and (7) of Ex.P-2 show that in addition to any specific authorization from the contractor regarding the crew and authorized representatives, it will be assumed that the driver and cleaner, who report at the location with the Contractor's truck, are the authorized representatives of the contractor and acknowledgment in challans will be obtained from them and the contractor/s shall bear and pay the entire operation cost of the tank truck/s including provision for the driver, cleaner and all other charges not specified herein relating to the operations and/or maintenance of the said tank truck/s and/or other items incidental thereto and/or connected therewith. 21. There is nothing in Ex.P-2 agreement indicating that the workers employed by the contractor for the purpose of loading and unloading would perform their duty under the supervision of the appellant-Corporation. On the other hand, various clauses pertaining to the liability of the contractors in Ex.P-2 would show that loading and unloading would be the sole responsibility of the contractor, even though the same is done with the help of the personnel of the Corporation and the contractor is solely responsible for safe transport and lawful practice en route. Clause (19) of Ex.P-2 stipulates that the contractor/s agrees/agree to employ competent and efficient employees and operators to ensure that deliveries are correctly effected and any consequential loss would be made good by the contractors. The engagement of the workers is at the option of the contractor over which the appellant-Corporation has no say ensuring proper execution of the work. Such work is the responsibility of the contractor and the liability to make good the loss, if any, arising out of improper execution or otherwise is also cast on the contractor as per the terms of the agreement/Ex.P-2. Thus, the appellant-Corporation has absolutely no domain or control over the workers engaged by the contractors. Such work is the responsibility of the contractor and the liability to make good the loss, if any, arising out of improper execution or otherwise is also cast on the contractor as per the terms of the agreement/Ex.P-2. Thus, the appellant-Corporation has absolutely no domain or control over the workers engaged by the contractors. Such workers are engaged for the purpose of executing the work undertaken by the contractor and not for the purpose of executing any work of appellant-Corporation nor the said workers are engaged to work on the premises of the depots of the Corporation either on regular or casual basis. The activity of the appellant- Corporation is to manufacture, store and supply. The supply is effected by means of transport through vehicles as per the terms of the agreement entered into with the contractors. The contractors are liable for due execution of the contract. How they execute the said work and by engaging whom and on what terms and conditions are not the matters of any concern for the appellant-Corporation. If the terms of the contract are breached or any loss is occasioned to the appellant-Corporation on account of improper execution of the work, it is the sole responsibility of the contractor to make good the loss and be answerable to the Corporation under the terms of the agreement. When that is so, the contractor engages his own labour on his own premises and gets the work executed under his own supervision so as to ensure that the terms and conditions of the agreement are duly implemented without any breach as otherwise, he would be held responsible and answerable. Naturally, the appellant-Corporation would not have any control over the workers engaged by the contractor, whose responsibility it is to ensure proper execution of the work without any breach of the terms of the agreement. 22. In a decision in BOC India Limited v. Assistant Regional Director, Employees State Insurance Corporation and another1, this Court held as follows: " In this regard, it needs to be borne in mind that the term "working on the premises of the establishment", cannot take in its fold the situations of the casual or occasional presence of the persons in the factory. It is true that for the purpose of loading the cylinders and unloading the empty cylinders, the driver of the vehicle and the hamalies have to enter the premises. It is true that for the purpose of loading the cylinders and unloading the empty cylinders, the driver of the vehicle and the hamalies have to enter the premises. So is the case with various persons who are required to unload the raw material, or even to transport the workers to the premises of the factory. If mere entry for such purposes alone is to be treated as the yardstick, every person who enters the factory for whatever purpose, deserves to be covered under the definition. It can never be said to be the purport of the expression. The words "person who has undertaken execution on the premises of the factory" employed in the definition, indicate the presence of the persons for execution of the principal activity of the industrial establishment, and not a casual entry". 23. In the present case also, the workers engaged by the contractor only make a casual entry on the premises of the appellant-Corporation's depots for the purpose of loading and they are answerable only to the contractor for due performance of the said work and not to the appellant-Corporation. 24. In the light of the principles laid down in the above decision and in the facts and circumstances of the present case, the crew engaged by the contractors or the workers engaged by them for the purpose of loading and unloading, do not, therefore come within the meaning of "employee" under Section 2(9)(ii) of the Act read with Section 2(13) nor can the appellant-Corporation be described as "principle employer" in relation to such workers. Consequently, no liability can be fastened on the appellant-Corporation to collect contribution in respect of such workers under Section 40 of the Act. 25. In the circumstances, the finding of the Tribunal is not sustainable and the impugned order dated 24.8.2006 is accordingly set aside. 26. In the result, the appeal is allowed. No order as to costs.