Principal To Principal Bais

Dear All,
I would like to know about principal to principal basis of contract.
Can you please help me to know where the aspect of :Principal to Principal" is defined and what are the benefits going to a contract on principal to principal case.
Is there any case ruling related to this.
If a company is going for a prncipal to principa basis contract does it mean that the parent company(principal employer) doesn't have any statutory liability.
Kindly help me.
Regards,
RAM

Dear Ram,
The word ' Principal ' standing before the word ' Employer ' not only distinguishes but also qualifys it so as to give a distinct term " Principal Employer ". Just a simple analysis and understanding of the term in the context of the Contract Labour( Regulation & Abolition ) Act,1970 would make one understand the fact that there can be only one Principal Employer in an establishment in the matter of engagement of contract labour.In any particular establishment contractors can be many including sub-contractors but the Principal Employer can be only one in terms of their obligations under the Act.

Ram,
The provisions of contract labour act are very clear.
The definition of contract worker is also clearly stated.
If the workers come under the definition, then the principal employer is liable for wages, safety, Heath, welfare,and all statutory dues. Claiming that an agreement is on principal to principal basis or that it's services contract or that it's lump sum or piece rate, etc holds no water in a court.
It would be different if the contract was for ONLY SUPPLY OF PRODUCTS / GOODS. Without any other services or work linked (and therefore the workers are not in your factory), would the principal to principal system work