Principal employer liability under contract labour law does not extend to wage-parity shortfall under the licence condition.

Section 21 of the Contract Labour (Regulation and Abolition) Act, 1970 places primary responsibility for wage payment on the contractor, and the principal employer's liability arises only if the contractor fails to pay wages within the statutory definition. Rule 25(v)(a) of the Andhra Pradesh Contract Labour Rules, 1971 requires wage parity as a licence condition, but it does not create a separate statutory liability on the principal employer to meet any shortfall caused by breach of that condition. The additional wage amount remains recoverable from the contractor, while the principal employer's liability is confined to unpaid contractual wages.

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Issues: Whether the principal employer is liable under Section 21(4) of the Contract Labour (Regulation and Abolition) Act, 1970 to pay to contract labour the additional amount arising from the wage parity condition in Rule 25(v)(a) of the Andhra Pradesh Contract Labour (Regulation and Abolition) Rules, 1971.

Analysis: Section 21 of the Contract Labour (Regulation and Abolition) Act, 1970 places the primary responsibility for payment of wages on the contractor, with the principal employer's liability arising only when the contractor fails to pay wages that fall within the statutory definition of wages. That definition is tied to contractual wages and amounts payable under an award, settlement, or court order as reflected in the Payment of Wages Act, 1936. Rule 25(v)(a) creates a licence condition requiring wage parity where the contractor's workmen perform the same or similar work as the principal employer's workmen, but it does not create a corresponding statutory liability on the principal employer to make good any shortfall caused by breach of that condition. The dispute concerned the contractor's compliance with the licence condition, not a failure to pay wages within Section 21.

Conclusion: The principal employer is not liable under Section 21(4) to pay the additional wages mandated by Rule 25(v)(a); that obligation lies on the contractor, and the contract workers' remedy for such additional amount is against the contractor.

Final Conclusion: The appeal succeeds to the extent that the direction fastening liability on the principal employer for the wage-parity amount is set aside, while the statutory scheme continues to confine the principal employer's liability to unpaid contractual wages recoverable from the contractor.

Ratio Decidendi: Section 21(4) applies only to unpaid contractual wages within the statutory definition of wages and does not extend the principal employer's liability to additional amounts arising solely from breach of a contractor's licence condition under the applicable rules.

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