G.M.,(Osd),Bengal Nagpur Cotton Mills vs Bharatlal & Anr

The Supreme Court held that under Section 31(3) of the Madhya Pradesh Industrial Relations Act, 1960, the termination of the first respondent was illegal, and he should be treated as a direct employee of the appellant despite being appointed by a contractor. The Court affirmed the Industrial Court's finding that the agreement between the appellant and the second respondent was sham, as the appellant exercised direct control over the first respondent. The appeal was dismissed, upholding the reinstatement order and payment of arrears to the first respondent.