Municipal Commissioner, Baroda v. Patel Engineering Co. Ltd.
1975-11-24
A.D.DESAI, N.H.BHATT
body1975
DigiLaw.ai
JUDGMENT : A.D. DESAI, J. 1. All these 6 appeals are directed against the judgment and award passed by the Commissioner for Workmen's Compensation, Baroda, allowing the compensation claims in full except in respect of interest made by the heirs of 3 deceased employees of the Baroda Municipal Corporation (hereinafter referred to as the Corporation), who died in an accident which took place on November 26, 1967 at the main pumping station at Sewage Disposal Works of Baroda Municipal Corporation at Altadra. 2. To state shortly the facts are that the Corporation entered into a contract on March 12, 1965 with Patel Engineering Co. Ltd. (hereinafter referred to as the Contractor) for supply of Sewage Treatment Plant which was to be erected for the Corporation at village Altadra. In respect of the Sewage Treatment Plant tenders were invited and the tender of the Contractor was accepted by the Corporation. According to the Corporation the Contractor was under the terms of the agreement bound to hand over the Corporation a complete Sewage Treatment Plant at Altadra and from the date of commencement of the plant till the plant was completely handed over, the Contractor was fully responsible for any damage, loss or injury to the works or any part thereof. The contract also provided that the Contractor shall indemnify and keep indemnified the Corporation against all damages, losses and claims for injuries to any person or property whatsoever which might arise out of or in consequence of the construction and maintenance of the works and against all claims, demands, proceedings, damages costs charges and expenses whatsoever in respect thereof or in relation thereto. As the Contractor was under the obligation to maintenance of plant the installation was complete, the Corporation sent 23 employees for the purpose of training. On November 6, 1967, Somabhai Haribhai, Ramanbhai Ishwerbhai and Ambalal Somabhai were the persons who were receiving training from the Contractor. In working the plant on that date chains of float switches got entangled. Ramanbhai Ishwarbhai, Somabhai Haribhai and Ambalal Somabhai at the instance of C.V. Patel, an engineer of the Contractor, had got down and due to poisonous gas became unconscious and subsequently died. Somabhai Kalabhai and Ratanben, Somabhai, father and mother of deceased Ambalal Somabhai filed workmen's compensation Case No. 6 of 1963 before the Commissioner for Workmen's Compensation, Baroda against the Corporation to recover the compensation amount of Rs.
Somabhai Kalabhai and Ratanben, Somabhai, father and mother of deceased Ambalal Somabhai filed workmen's compensation Case No. 6 of 1963 before the Commissioner for Workmen's Compensation, Baroda against the Corporation to recover the compensation amount of Rs. 7,000/- and interest and costs in respect of the death of their son Ambalal which took place during the course of employment. Bai Deviben Somabhai widow of the deceased was joined as opponent at the instance of the Corporation. Ishwarbhai Shankerbhai, Dariyaben Ishwarbhai and Bhikhiben Ramanbhai filed workmen's compensation Case No. 7 of 1968 before the same office and against the Corporation to recover compensation amount of Rs. 6,000/- plus interest and costs. Ishwarbhai Shankerbhai and Dariyaben Ishwarbhai are the father and the mother of the deceased Ramanbhai Ishwarbhai and Bhikhiben Ramanbhai is the widow of the deceased. Workmen's compensation Case No. 13 of 1968 was filed against the Corporation by Jasubhai Somabhai Solanki and Maniben Somabhai Solanki, the son and the widow of deceased Somabhai Haribhai claiming compensation of Rs. 6,000/- plus interest and costs. The Corporation filed a written statement contending that the deceased were casual labourers and, therefore, not entitled to any compensation, that the persons claiming compensation were not dependents and legal heirs of the deceased, that the accident had happened due to carelessness of the deceased that Patel Engineering Co. Ltd. was a necessary party and that in any case the Corporation was entitled to be reimbursed by Patel Engineering Co. Ltd. in respect of the awarded amounts as per the provisions of section 12 of the Workmen's Compensation Act, 1923 (hereinafter referred to as the Act). In pursuance of this written statement Patel Engineering Co.
Ltd. was a necessary party and that in any case the Corporation was entitled to be reimbursed by Patel Engineering Co. Ltd. in respect of the awarded amounts as per the provisions of section 12 of the Workmen's Compensation Act, 1923 (hereinafter referred to as the Act). In pursuance of this written statement Patel Engineering Co. Ltd. was made party in all these compensation cases and it filed its written statement contending that the construction of the plant was completed on May 6, 1967, that the staff of the Corporation was to run the plant from October 1, 1967, that the staff of the Contractor was acquainting the employees of the Corporation with the running of the plant, that the officers and the employees of the Corporation were running the plant on the date of the incident and if there was any defect in operating the machinery the contractor had to set it right, that the employees of the Contractor were assisting the employees of the Corporation, and that the plant was formally handed over to the Corporation on January 23, 1968 on which date the entire establishment of the Contractor was wound up. It was also contended by the Contractor that the accident had taken place because of the careless working of the machinery by the employees of the Corporation and, therefore, they were not liable to indemnify the Corporation. The Commissioner for Workmen's Compensation came to the conclusion that the applicants were dependent heirs of the deceased, that the three employees died on account of the accident and during the course of their employment but that the three deceased were the employees of the Corporation and, therefore, decreed the claims for compensation against the Corporation. The contentions of the Corporation that the three deceased were the employees of the Patel Engineering Co. Ltd. that the Patel Engineering Co. Ltd. was entitled to reimburse the compensation amounts in view of the provisions of section 12 of the Act and that the Contractor was negligent in his work was not accepted by the Court. The Court passed an award granting the amounts which the claimants claimed with costs. The Commissioner for Workmen's Compensation (herein after referred to as the Commissioner) did not order interest on the amount as was claimed by the petitioners.
The Court passed an award granting the amounts which the claimants claimed with costs. The Commissioner for Workmen's Compensation (herein after referred to as the Commissioner) did not order interest on the amount as was claimed by the petitioners. Being aggrieved by the judgment and award in the aforesaid compensation cases, the Corporation has filed First Appeal No. 618 of 1970 which relates to compensation Case No. 6 of 1968. First Appeal No. 619 of 1970 which relates to compensation Case No. 7 of 1968 and First Appeal No. 620 of 1970 which relates to compensation Case No. 13 of 1968. The dependent heirs in respective compensation cases filed First Appeal No. 48 of 1971, First Appeal No. 49 of 1971 and First Appeal No. 50 of 1971 in so far as the claim for interest on the decreed compensation amount has not been awarded by the Commissioner. 3. We shall first take up the appeals filed by the Corporation against the awards passed by the Commissioner in the aforesaid cases. Mr. Oza, appearing for the Corporation, contended that the deceased persons were the employees of the Contractor and not of the Corporation and a further argument based upon this contention was that in case the Court comes to the conclusion that the Corporation was liable to pay compensation to the aforesaid employees, the Corporation was entitled to be indemnified by the Contractor under the provisions of section 12 of the Act. The question whether the deceased were the employees of the Contractor has also to be considered while deciding the claim of the Corporation that it is entitled to be indemnified under the provisions of section 12 of the Act with the consequence that the main question that arises for our consideration is whether the Corporation is entitled to be indemnified in view of the provisions of section 12 of the Act.
Section 12 of the Act so far material provides that where any principal in the course of or for the purpose of his trade or business contracts with any contractor for the execution by or under the contract of the whole or any part of any work which is ordinarily part of the trade or business of the principal, the principal shall be liable to pay to any workman employed in the execution of the work any compensation which he would have been liable to pay if that workman had been immediately employed by him and where compensation is claimed from the principal the Act shall apply as if references to the principal were substituted for reference to the employer. Sub-section (2) of section 12 of the Act provides, so far relevant, that where the principal is liable to pay compensation under sub-section (1), he shall be entitled to be indemnified by the contractor and all questions as to the right to and the amount of any such indemnity shall, in default of agreement, be settled by the Commissioner. A bare reading of the aforesaid two sub-sections clearly indicates that the principal is liable to be indemnified by the Contractor provided the principal has to pay compensation to any workman employed by the Contractor. To put in other words, if a person employed by the Corporation receives injuries during the course of his employment and an award has been passed against the Corporation for compensation in respect of such an employee, the principal that is the Corporation cannot make any claim of indemnity from the Contractor under section 12 of the Act. Mr. Oza contended that on the date on which the incident occurred, the deceased were employees of the Contractor and in support of this argument he relied upon the definition of the word "employer" as given in section 2(e) of the Act. Section 2(e) defines "employer" including any body of persons whether incorporated or not and any managing agent of any employer and the legal representative of a deceased employer, and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him The argument of Mr.
Oza was that the three deceased workmen were temporarily lent to the Contractor for working with him. He also invited our attention to clause 4.1 of the contract which provides that the contract comprises the construction, completion and maintenance of the works and the provision of all labour materials, constructional plant, temporary works and everything whether of a temporary or permanent nature required in and for such construction, completion and maintenance so far as the necessity for providing the same is specified in or reasonably to be inferred from the contract. He also invited our attention to clause 6.11 which provides, so far relevant, that the Contractor shall indemnify and keep indemnified the employer that is the Corporation against all losses, and claims for injuries or damage to any person or property whatsoever which may arise out of or in consequence of the construction and maintenance of the works and against all claims, demands, proceedings, damages, costs, charges and expenses whatsoever in respect thereof or in relation thereto. Clause 6.12 provides, so far relevant, that the Corporation shall not be liable for or in respect of any damages or compensation payable at law in respect or in consequence of any accident or injury to any workman or other person in the employment of the Contractor. It was further argued by Mr. Oza that the Corporation had entered into a contract to supply a machine which required a special knowledge to work it and as per the terms of the contract the Contractor was under a duty to maintain the plant, the Contractor was also duty bound to train the personnels of the Corporation in the working of the machine. A duty to train the Corporation personals to run the machine was implied as under the contract the contractor was bound to maintain the plant for a period of one year from the date of completion of the construction of the plant. 24.11.1975: 4. Now the construction of the plant was completed on May 6, 1967 and the electricity for the working of the plant was supplied on August 5, 1967. The Contractor's duty thereafter was to maintain the plant that is to see that the plant remained working continuously and if there was any defect, to remove the same.
24.11.1975: 4. Now the construction of the plant was completed on May 6, 1967 and the electricity for the working of the plant was supplied on August 5, 1967. The Contractor's duty thereafter was to maintain the plant that is to see that the plant remained working continuously and if there was any defect, to remove the same. The Contractor by their letter dated September 19, 1967 informed the Corporation that they had completed testing and adjustment of the equipment after the central electrical control panel of the plant was energised and as per personal discussion with the officer of the Corporation, it requested that the trainees now be sent so that they could be acquainted with the equipment of the plant so that they would run the plant from October 1, 1967. Admittedly there is no specific clause in the agreement that the Contractor was bound to give training to the employees of the Corporation in connection with the running of the plant. Duty to maintain the plant only means that the Contractor was under an obligation to see that the plant remained continuously working and to repair the same if any defect was noticed. The obligation to maintain the plant cannot include any obligation to train the employees of the Corporation. The argument of Mr. Oza that there was implied obligation on the Contractor to train the employees of the Corporation cannot be accepted. Further more the Corporation sent the deceased and other employees for training. It cannot be said therefore that the Corporation lent its employees to do the work on behalf of the Contractor. The word "train" means to educate and the said employees were asked by the Corporation to get trained in the working of the ma- chine. The said employees cannot be said to be temporarily lent to do work of the Contractor but in reality the employees were getting training for their master that is the Corporation. It is true that during the course of training the said employees were under the supervision and control of the Contractor but they were not employees of the Contractor. A contract of service between the employer and the employee exists when the employee that is the person engaged by the employer agrees to serve the employer. The relation of master and servant must exist between the two.
A contract of service between the employer and the employee exists when the employee that is the person engaged by the employer agrees to serve the employer. The relation of master and servant must exist between the two. In the present case as the Contractor had agreed to give training to the employees of the Corporation, it did not mean that the employees were the servants of the Contractor. The trainees were the employees of the Corporation and the relation of master and servant between the Corporation and the employees was not snapped merely because the Contractor agreed to give them training. During the period of training the trainees remained the servants of the Corporation and not of the Contractor. Therefore, the deceased who were the trainees cannot be regarded as the employees of the Contractor. Under the provisions of section 3 of the Act, the Corporation is liable to pay compensation for death of its employees during the course of employment. As the trainees were all the employees of the Corporation, the Corporation cannot claim benefit of section 12 of the Act, the Corporation cannot also claim to be indemnified by the Contractor under the said provisions. 5. It was next contended by Oza that under the provisions of section 20 of the Act the Government is authorised to appoint any person as Commissioner for Workmen's Compensation and the appointment of any person must be by his name and not by virtue of office. In support of this contention Mr. Oza tried to draw our attention to a copy of the notification from the High Court Administrative Department's file. Under this notification the appointment is made not by name but by virtue of the office. Now in this connection it must be noted that no point in this connection was raised during the trial before the Commissioner, no point is taken up in the memo of appeal and the point is for the first time sought to be argued in these appeals. What is relied upon is merely a copy of the notification and there is nothing to show that this notification has not been subsequently modified so as to appoint a person as Commissioner by name.
What is relied upon is merely a copy of the notification and there is nothing to show that this notification has not been subsequently modified so as to appoint a person as Commissioner by name. Moreover section 15 of the General Clauses Act, 1897, provides that where, by any Central Act or Regulation, a power to appoint any person to fill any office or to execute any function is conferred, then, unless it is otherwise expressly provided, any such appointment, if it is made after the commencement of the Act, may be made either by name or by virtue of office. In view of this clear and specific provision even if it is assumed that the Government has appointed the Commissioner by virtue of office, the said appointment cannot be said to be illegal or bad in law. The result is that for the afore-said reasons all the three appeals preferred by the Corporation are dismissed. 6. Mr. Zaveri appearing for respondent No. 3 in First Appeal No. 618 of 1970 which is filed against the award in workmen's compensation case No. 6 of 1968, contended that the Commissioner erred in not awarding the full or part of the compensation amount to the re-married widow of the deceased that is respondent No. 3 Mr. Zaveri contended that the provisions of sections 2(d), 4-A and 8 of the Act cast a duty on the Commissioner to award compensation to re-married widow either on full or a part thereof. The fact that the widow remarried, contended Mr. Zaveri, did not mean that she lost the right to receive the compensation. The right to receive compensation vested in the remarried widow as a dependent on the date of the incident and in this case on November 6, 1967. The said right was not divested subsequently by re-marriage and hence she alone ought to have been awarded the full amount of compensation or such proportionate amount as the Commissioner in his discretion thought fit. The Commissioner did not award any amount to the widow of the deceased and had given no reasons to do so, with the consequence that the award is illegal and bad in law. Now it must be noted that initially an application for compensation in workmen's compensation Case No. 6 of 1968 was made by the father and the mother of the deceased.
Now it must be noted that initially an application for compensation in workmen's compensation Case No. 6 of 1968 was made by the father and the mother of the deceased. At the time of the application the widow had remarried. The Corporation raised a contention that the widow was a necessary party and therefore, she was joined as opponent No. 3 in the said compensation case. Opponent-respondent No. 3 did not appear in the compensation proceedings even though she was served with a notice. An order awarding compensation of Rs. 7,000/- was passed in favour of the father and the mother of the deceased. Against this award which was passed in favour of the father and the mother of the deceased, the widow that is respondent No. 3 had not filed any appeal. Therefore, the aforesaid circumstances clearly indicate that she was not interested in the compensation claimed or to put it positively she relinquished her interest in the amount of compensation. The Commissioner has under section 8(5) of the Act exercised his discretion and awarded the compensation to the father and the mother of the deceased. Under the circumstances it cannot be said that the award of the Commissioner is illegal and bad as no amount of compensation was awarded to the re-married widow of the deceased. 7. The heirs of the three deceased have filed First Appeals Nos. 48, 49 and 50 of 1971, claiming interest on the amount awarded. The interest is claimed from November 6, 1967 to August 3, 1970. The claim for interest on the awarded amount is based upon the provisions of section 4-A of the Act. Sub-section (1) of section 4-A of the Act provides that compensation under section 4 shall be paid as soon as it falls due. Sub-section (3) of section 4-A of the Act provides that where any employer is in default in paying the compensation due under the Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of 6 per cent, per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further suns not exceeding fifty per cent of such amount shall be recovered from the employer by way of penalty.
A bare reading of these provisions indicates that the employer is under the obligation to pay the amount of compensation as soon as it falls due and the compensation shall fall due on the date on which the incident occurred. If the employer fails to do so the law cast a duty on him to pay interest at the rate of 6 per cent if the Commissioner so orders. The employer who does not pay compensation on the date when it falls due can be made liable to pay interest on the amount of compensation because there is a delay in the payment which the statute requires him to pay as soon as it falls due. In the present case the incident occurred on November 6, 1967 and, therefore, the Corporation being the employer was under the obligation to pay the amount of compensation in view of the provisions of section 3 read with section 4 of the Act. The Corporation did not make such a payment but only deposited the amount on June 13, 1970. It was contended by Mr. Oza that in this case the Corporation cannot be said to be in default in paying the compensation because a genuine dispute was raised by the Corporation about its liability. Now the Corporation had taken an extreme stand, namely, that the three employees were merely casual workers and not its regular employees. The Commissioner has turned down this defence. Even the witness on behalf of the Corporation during the course of his evidence admitted that these three employees were not casual employees. It must be noted that the Corporation did not deposit the amount before the Commissioner even under protest and the Corporation has delayed without adequate reasons the payment of the compensation amount to its employees. For the aforesaid reasons it is clear that the Corporation was in default in paying the compensation due to the heirs of the deceased within one month from the date when it fell due. The Commissioner has not awarded simple interest at the rate of 6 per cent per annum on the amount awarded for the period from November 1967 to June 13, 1970 i.e. the date on which the compensation amounts were deposited. Under the provisions of law, the interest at the rate of 4 per cent on the amounts awarded is required to be decreed.
Under the provisions of law, the interest at the rate of 4 per cent on the amounts awarded is required to be decreed. The parties have agreed that in compensation Case No. 6 of 1968 and First Appeal No. 48 of 1971, the amount of interest calculated on the awarded sum for the said period amounts to Rs. 1,151/- in compensation Case No. 7 of 1968 and First Appeal No. 49 of 1971 and in compensation Case No. 13 of 1968 and First Appeal No. 50 of 1971 the amounts of interest for the period aforesaid amount to Rs. 970/-. The appellants in First Appeals Nos. 48, 49 and 50 of 1971 are, therefore, entitled to the interest as aforesaid on the amounts of compensation awarded to them. 8. The result is that First Appeals Nos. 618, 619 and 620 of 1970 preferred by the Corporation are dismissed with costs. First Appeals Nos. 48, 49 and 50 of 1971 are allowed with costs and the decree of the trial court is modified to the extent that the appellants in the aforesaid 3 appeals are entitled to the aforesaid amounts of interest.