Exclusive adjudicatory forum for declaring contract labour arrangements as sham, nominal, or camouflage

Where workmen engaged through an intermediary contractor allege that the underlying contract is a mere ruse, camouflage, or sham designed to evade welfare and labour legislations, such a dispute raises complex disputed questions of fact that cannot be decided summarily or by constitutional writ courts under Article 226. An inquiry into whether the principal employer exercises comprehensive operational control, directs daily supervision, and provides remuneration requires comprehensive trial and adduction of evidence. Therefore, the specialized adjudicatory forums established under the Industrial Disputes Act, 1947, such as the Labour Court or Industrial Tribunal, possess the exclusive and competent jurisdiction to lift the corporate veil and determine the real nature of the employment relationship. Neither a Conciliation Officer during conciliation proceedings nor a High Court in summary proceedings can declare a contractual arrangement to be sham or determine employer-employee status. (M/S Premium Transmission Private Limited Vs The State of Maharashtra and Others | 2026 INSC 87).