There are many benefits for permanent employment and hence sometimes the triangular relationship is used as ruse to conceal the employer’s identity as the real employer, to deny employer-employee relationship and deprive workers of the benefits of a permanent employment. The courts order regularization of Contract Labour in case the contract is found to be a ruse to deny permanency to the Contract Labour. There is substantial ambiguity pertaining to the standards for regularization and test courts used to see if the contract is sham. This Article tries to adress this ambiguity