JUDGMENT : M.N. Shukla, J.—This is an appeal u/s 30 of the Workmen's Compensation Act (8 of 1923) by the contractor who has been ordered by the Commissioner for Workmen's Compensation, Etah to pay Rs. 6,000/- to the Respondent No. 1, namely, Hindustan Lever Limited by way of indemnity u/s 12(2) of the Workmen's Compensation Ac, (hereinafter referred to as the Act). The facts giving rise to this appeal may briefly be stated as follows: Smt. Javitri, widow of Damodar Singh filed an application on 7-9-1967 claiming compensation under the Act on the death of her husband. It appears that the Petitioner's case was that the deceased Damodar died on account of the falling of a stock of bags of skimmed milk powder in the warehouse of M/s. Hindustan Lever Ltd., on 12-6-1967. While he was taking the bags of skimmed milk, one of the bags fell upon him and on account of the injuries sustained in this incident he died. The Respondent No. 1 filed a written statement on 25-1-1968 wherein it was asserted that the deceased was not their employee but was a casual worker employed by M/s. Etah Goods Transport Company represented by Sardar Sewa Singh (Appellant) proprietor and an independent contractor, that M/s. Hindustan Lever Ltd., was not liable to pay any compensation to the Petitioner and that she should have impleaded the said contractor as a party who was the employer in the case. Of course, this was also averred in the written statement that the transporting work of the M/s. Hindustan Lever Ltd., was done by the said contractor, namely Sewa Singh, who was the proprietor of M/s. Etah Transport Company, Etah, which employed its own workers and supervised and controlled their work and the Hindustan Lever Ltd. had no supervision or control over the work of transporting the material. Consequently, a notice was issued to Sardar Sewa Singh, contractor who filed his written statement on 5-3-1968 and pleaded that he was a contractor of Hindustan Lever Ltd. only for the purpose of transporting of articles manufactured by them, that the loading and unloading of goods of the truck of the answering Respondent was done by the labourers supplied by another contractor whose job was to supply the labourers to the factory and that the deceased not a workman of the answering Respondent whose business was confined to the transporting of the goods, as he was merely the owner of the public carrier. Those proceedings were terminated by the order dated 18th July, 1972. Thereafter on 20th December, 1972 M/s. Hindustan Lever Ltd. made an application u/s 12(2) of the Act praying that the applicant may be indemnified by the present Appellant namely, Sardar Sewa Singh (contractor) to the extent of Rs. 6,000/- paid by the applicant to Smt. Javitri plus Rs. 500/- as costs of litigation. These proceedings were concluded by the order dated 1-5-1973 which allowed the application and against which the present appeal is directed. 2. It was contended on behalf of the Appellant that the impugned order bristled with legal infirmities and must be set aside. On the other hand, Sri Rajesh Ji Verma, appearing on behalf of the Respondent M/s. Hindustan Lever Ltd., (hereinafter referred to as the principal) strenuously urged that the findings recorded by the Commissioner for Workmen's Compensation in the earlier order dated 18-7-1972 were conclusive, that after an order passed u/s 12(2) in the presence of the parties, an order in favour of the principal who applied u/s 12(2) should follow as a matter of course as it was only consequential upon the previous order. 3. The question, therefore, which has to be decided in the present appeal is as to whether on the facts of the case the order under appeal, even though it does not independently record any finding and merely adopts those recorded in the earlier order, was a legal order or was it incumbent on the compensation Commissioner to record his findings independently on each of the points at issue between the parties while disposing of the application made u/s 12(2) of the Act? Section 12 reads: 12.(1) Where any person (hereinafter in this section referred to as the principal) in the course of or for the purposes of his trade or business contracts with any other person (hereinafter in this section referred to as the contractor) for the execution by or under the contractor 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 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, this Act shall apply as if reference to the principal were substituted for references to the employer except that the amount of compensation shall be calculated with reference to the wages of the workman under the employer by whom he is immediately employed. (2) Where the principal is liable to pay compensation under this section, he shall be entitled to be indemnified by the contractor, or any other person from whom the workman could have recovered compensation and where a contractor who is himself a principal is liable to pay compensation or to indemnify a principal under this section he shall be entitled to be indemnified by any person standing to him in the relation of a contractor from whom the workman could have recovered compensation 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. (3) Nothing in this section shall be construed as preventing a workman from recovering compensation from the contractor instead of the principal. (4) This section shall not apply in any case where the accident occurred elsewhere than on, in or about the premises on which the principal has undertaken or usually undertakes, as the case may be, to execute the work or which are otherwise under his control or management. Chapter II of the Act captioned 'Workmen's Compensation' deals with the question of compensation claimed by a workman. Ordinarily such claims are disposed of under the provisions of Section 3 to 5. The scheme of the Act is that the 'employer' as defined in Section 2(c) should be liable in the manner mentioned in Section 3. Chapter II of the Act captioned 'Workmen's Compensation' deals with the question of compensation claimed by a workman. Ordinarily such claims are disposed of under the provisions of Section 3 to 5. The scheme of the Act is that the 'employer' as defined in Section 2(c) should be liable in the manner mentioned in Section 3. In view, however, of the vastly increasing ramifications of industrial establishments and the multiplicity of immediate and indirect or remote employers which such process inevitably involves the legislature has inserted a provision in the Act which may relieve a workman of the difficulty of ascertaining with precision as to who should be deemed to be the actual employer liable for compensation under the Act. Section 12, therefore, provides for a case where we have several tiers of employers or petty employers. It is a matter of common knowledge that in big industrial establishments important branches of undertakings are entrusted to contractors, who may in their turn have to employ other petty contractors working under their direction and a workman may be actually employed by one of these aforesaid persons and in such an elaborate hierarchy there is, may be no direct privity of contract between the principal and the workman in the last analysis. The workman has for all practical purposes to deal with an immediate employer but when it comes to lodging a legal claim for compensation on account of an accident he is concerned with the principal employer and not the immediate employer qua the workman. This is an enabling provision for the benefit of the workman and enacted with the clear objective that the workman should not be hampered by technicalities or practical difficulties of deciphering the correct employer. A pragmatic method has thus been devised for fixing the liability of the principal employer and thereby affording speedy relief to the workman for payment of compensation on account of the accident, though the principal has been invested with the right of indemnifying himself from the contractor who may have employed the workman and may have been responsible for immediately taking work from him. 4. It is not unoften that proceedings u/s 12(1) are taken without notice to the contractor who may ultimately be found liable to redeem the principal on whom liability has been fastened in order to give expeditious relief to the workman claiming compensation. 4. It is not unoften that proceedings u/s 12(1) are taken without notice to the contractor who may ultimately be found liable to redeem the principal on whom liability has been fastened in order to give expeditious relief to the workman claiming compensation. In order to avoid such situation rules have been framed under the Act. Section 32 of the Act as it stands now authorises the State Government to make rules to carry out the purposes of the Act. This power was formerly exercised by the Governor-General in Council but the words 'State Government' were subsequently substituted by A.O. of 1937. it was stated at the Bar that no rules had been framed in this regard by the State Government but only the rules framed by the Central Government were still in force. In exercise of the powers conferred by Section 32 of the Workmen's Compensation Act Governor-General in Council made rules known as the "Workmen's Compensation Rules, 1924". The relevant Rule 39, leaving the essential parts runs as follows: 39. In exercise of the powers conferred by Section 32 of the Workmen's Compensation Act Governor-General in Council made rules known as the "Workmen's Compensation Rules, 1924". The relevant Rule 39, leaving the essential parts runs as follows: 39. Procedure where indemnity claim u/s 12(2): (1) Where the opposite party claims that if compensation is recovered against him he will be entitled under Sub-section (2) of Section 12 to be indemnified by a person not being a party to the case, he shall, when first called upon to answer the application, present a notice of such claim to the Commissioner accompanied by the prescribed fee, and the Commissioner shall thereupon issue notice to such person in Form J. (2) If any person served with a notice under Sub-section (1) desires to contest the applicant's claim for compensation or the opposite party's claim to be indemnified, he shall appear before the Commissioner on the date fixed for the hearing of the case or on any date to which the case may be adjourned and, if he so appears, shall have all the rights of a party to the proceedings ; in default of so appearing he shall be deemed to admit the validity of any award made against the opposite party and to admit his own liability to indemnify the opposite party for any compensation recovered from him ; Provided that, if any person so served appears subsequently and satisfies the Commissioner that he was prevented by any sufficient cause from appearing the Commissioner shall after giving notice to the aforesaid opposite party, hear such person and may set aside or vary any award made against such person under this rule upon such terms as may be just. According to this statutory rule where claim for indemnity is made under Sub-section (2) of Section 12, the person who is called upon to pay the amount in the first instance and who after payment applies to be indemnified u/s 12 must, when he was first called upon to answer the claim for compensation, see that notice is issued to the party against whom he subsequently proposes to proceed for indemnification. See Sri S. Krishna Aiyar v. The Superintending Engineer, P.W.D. East Road, Circle Chepauk, Madras AIR 1949 Mad. 427. See Sri S. Krishna Aiyar v. The Superintending Engineer, P.W.D. East Road, Circle Chepauk, Madras AIR 1949 Mad. 427. The result of complying with such rule would be that all the interested parties would be before the compensation Commissioner, including the person against whom the claim for indemnification may be made. It is obvious that the subject of the above rule is to prevent multiplicity of proceedings and decide, if possible, not only the claim for compensation was entitled to it and also raise a dispute as to the amount which should have been awarded. If the procedure laid down in Rule 39(1) and (2) of the said Act is followed, he would be precluded from reagitating these questions. But in actual practice it would be evident that the above rule is not strictly observed, either there is no compliance of it at all, or there is only a partial compliance. I am not inclined to take a strict view with regard to the observance of this rule inasmuch as the Act itself is silent about the procedure in this regard and surely does not provide for any penalty which may be visited upon the party for non-observance of the same Therefore, even though the proceedings u/s 12(1) and (2) of the Act are in two phases, separated by a gap of time, the effect of non-observance of the procedure laid-down in Rule 39 (1) and (2) is not the extinguishment of the claim of indemnification altogether. In a case where notice is issued in the proceedings u/s 12(1) of the Act to the person against whom a claim for indemnification is subsequently lodged, it is the duty of the principal to assert his right to be indemnified and obtain a verdict on the relief specifically claimed by him. However, putting a liberal construction on the provisions of Rule 39 I am not inclined to hold that if the principal omits to make a claim for indemnification in such proceedings u/s 12(1), he would be precluded from making the claim in later proceedings u/s 12(1). The non-determination of the claim for indemnification does not vitiate the award of compensation u/s 12(1) see Shri S. Krishna Aiyar v. The Superintending Engineer, P.W.D. East Road, Circle Chepauk, Madras AIR 1949 Mad. 427 and Resident Engineer, Patel Engineering Co. Ltd. v. Chanda Bewa 1973 (1) Lab. The non-determination of the claim for indemnification does not vitiate the award of compensation u/s 12(1) see Shri S. Krishna Aiyar v. The Superintending Engineer, P.W.D. East Road, Circle Chepauk, Madras AIR 1949 Mad. 427 and Resident Engineer, Patel Engineering Co. Ltd. v. Chanda Bewa 1973 (1) Lab. and Cases 618 where, however, the provisions of Rule 39 have been fully complied with and the principal has prayed for indemnification in proceedings u/s 12 and the person against whom such claim is made has appeared in the proceedings and findings have been recorded, such findings would bind the parties and thereafter no separate proceedings can be subsequently instituted for contesting the claim for indemnification. Obviously in such case the two phases would be combined in a single proceeding and there would be a composite order u/s 12(1) and (2). The moment a claim for indemnification is made by the principal, it becomes obligatory for the Commissioner to adjudicate upon all the points in controversy between the parties. This is what flows from the words: All questions as to the right to and the amount of any such indemnity occurring in Section 12(1). It is a fundamental principle of jurisprudence that where person from whom indemnification is claimed was not a party to the proceedings u/s 12(1), none of the findings recorded therein shall be binding on him. Even where he was impleaded and notice was issued to him in form 'J' according to Rule 39 (1), but the principal did not assert his right to be indemnified, or no finding was recorded on this question and the point was actually pressed in the course of subsequent proceedings brought u/s 12(2), the findings recorded in the earlier proceedings would not bind him. It is the duty of principal employer to specifically claim the relief of indemnification available to him under the Act and if he fails to do so in the earlier proceedings and defers the claim to a second innings u/s 12(2), he cannot take advantage of any of the findings recorded in the earlier proceedings and no liability can be fixed on the subordinate smployer or contractors until all the material findings are recorded independently in the subsequent proceedings u/s 12(2). As observed in Bansidhar Munnalal Vs. As observed in Bansidhar Munnalal Vs. Ramchandra Bardichand,, by H.R. Krishna, J.: I do not see how the fact that the employee himself does state that so and so was the petty contractor is going to make any difference, because the proceedings u/s 12(2) would be a self contained one, and a finding of the relationship of a principal and subordinate contractor will have to be given there independently. From the scheme of Section 12 it appears that it is the duty of the principal employer when served with a notice for a claim of compensation, to disclose the subordinate employer of contractor etc. who may be regarded as the immediate employer of the employee and thereby lay the foundation for a claim of indemnification against him. Evidently all material facts in this regard would be in the exclusive knowledge of the principal employer and not in the knowledge of the employee. Thus, a pronouncement on Section 12(1) enjoins a decision on four points: (1) that the principal for the purpose of his trade of business entered into a contract with another person (contractor), (2) that the contractor was for the execution of any work which was ordinarily a part of the trade or business of the principal, (3) that the employee was employed by such contractor and (4) that the injury etc. must have been caused to the workman by accident arising in the course of such employment. 5. As I have already observed, there is no statutory bar to the splitting up of a proceeding u/s 12 into two phases i.e. 12 (1) and 12 (2). Rule 39 is the only provision which seeks to fuse the two parts into a single proceeding, otherwise for all practical purposes Sub-sections (1) and (2) are independent of each other, each is self-contained and a finding arrived at in the former would not be conclusive between the parties in the later proceedings. Merely because an order under Sub-section (1) has been passed, it does not follow automatically that an order of indemnification must also be passed u/s 12(2), in the later proceedings. All the salient points must be decided afresh and findings must be recorded independently. This interpretation is also supported by the provisions of Section 30 relating to appeals. Merely because an order under Sub-section (1) has been passed, it does not follow automatically that an order of indemnification must also be passed u/s 12(2), in the later proceedings. All the salient points must be decided afresh and findings must be recorded independently. This interpretation is also supported by the provisions of Section 30 relating to appeals. If an order for payment of compensation is passed against the principal employer, he can prefer an appeal under Clause (a) of Sub-Section 1 of Section 30, but as regards a person against whom an order of indemnification is passed, a right of appeal accrues to him only under Clause (d) and not under Clause (a). As observed by Rajmanner, J. in the case of Mulla Madina Saheb Vs. The Province of Madras, : An order awarding compensation is entirely distinct and different from an order allowing or disallowing a claim for the amount of indemnity. There may be an order for compensation, but there may not be an order allowing indemnity. Section 30 of the Act providing for appeals to the High Court mentions separately an appeal against an order awarding compensation in Clause (a) and an appeal against an order allowing or disallowing any claim for the amount of indemnity under the provisions of Sub-section (2) of Section 12 Clause (d). I am in respectful agreement with the dictum of Misra, J. in Patel Engineering Company 1973 (1) Lab. and Cases 618, "an order holding the principal liable to pay compensation u/s 12(1) did not give the principal an absolute right to claim indemnity from the contractor u/s 12(2). 6. Applying the above principles to the facts of the present case I am constrained to hold that the impugned order passed u/s 12(2) was manifestly illegal. In the order passed u/s 12(1) there was no finding that Sewa Singh was a contractor of M/s. Hindustan Lever Ltd. for the execution of any work which was ordinarily part of a trade or business of the principal. The contractor had merely stated in his written statement in those proceedings that he was a contractor of the aforesaid principal but he had categorically denied that the work for which he became the contractor was connected with the ordinary trade or business of the principal. The contractor had merely stated in his written statement in those proceedings that he was a contractor of the aforesaid principal but he had categorically denied that the work for which he became the contractor was connected with the ordinary trade or business of the principal. On the other hand, he had expressly pleaded that the contractor for the loading and unloading was a different person. Still the Commissioner did not record any finding. Admittedly there was no finding with regard to the right of the principal to be indemnified by Sardar Sewa Singh. In fact, no such claim was made at all by M/s. Hindustan Lever Ltd. nor was any issue framed to that effect. The case set up by the principal in those proceedings was that the deceased was not the employee of M/s. Hindustan Lever Ltd. but of Sewa Singh and accordingly the issue framed covering this pleading was, "to what amount of compensation, if any, is the Petitioner entitled and from which of the Respondents ?". The only important point decided in those proceedings was that the workman, namely Damodar Singh had been employed by Sewa Singh but this was wholly immaterial for the purposes of binding the contrctor in subsequent proceedings u/s 12(2), of the Act. It was contended on behalf of the Respondent that that finding was res judicata between the parties, inasmuch as Sewa Singh did not file any appeal against the same. The contention is untenable. There was no order u/s 12(1) against the contractor, it was only against the principal namely, M/s. Hindustan Lever Ltd. and they allowed the order to become final by not choosing to file an appeal which lay u/s 30(1)(a). In law a clear distinction must be drawn between a finding and a decision and it is well settled that any finding recorded against a person in a judgment which ultimately is completely in favour of that party would not operate as res judicata against such party. See Mohd. S. Islam v. R.B. and Co. 1968 A.L.J. 321 at 323, and Rama Shankar Vs. Mst. Hubraji and Others,. Therefore it is pointless to contend that the order dated 18-7-1972 would stand in the way of Sewa Singh because he did not challenge the same by filing an appeal, even though no such appeal lay. 7. See Mohd. S. Islam v. R.B. and Co. 1968 A.L.J. 321 at 323, and Rama Shankar Vs. Mst. Hubraji and Others,. Therefore it is pointless to contend that the order dated 18-7-1972 would stand in the way of Sewa Singh because he did not challenge the same by filing an appeal, even though no such appeal lay. 7. However, the numerous shortcomings which vitiated the order passed in the proceedings u/s 12(1) could have been mitigated if the finding on all those vital points had been recorded against Sewa Singh Appellant in the proceedings u/s 12(2) which led to the passing of the impugned order but the Commissioner Workmen's Compensation passed most cryptic and perfunctory order and allowed claim of indemnity against the Appellant without applying his mind to the facts of the case. He implicitly adopted the solitary finding recorded by himself in the earlier proceedings and assumed that it was sufficient to dispose of the later proceedings. He does not appear to have been alive to the fact that the earlier order itself was vitiated by an omission to record all the findings necessary for adjudication under that provision, as explained by me earlier. Much less did he realise that at all events he could have still passed a valid and legal order if he had independently examined the entire material before him in the later proceedings and arrived at his conclusions independently He seems to have laboured under the misapprehension that an order u/s 12(1), even though it may suffer from a profusion of omissions and illegalities, is something like a preliminary decree from which the final decree follows as a matter of course. I find it difficult to conceive of a more arbitrary, erroneous and perverse order than the one passed by Sri O. N. Vaid, Commissioner, Workmen's Compensation, Etah in the instant case. Such orders underline the inherent danger which lurks in conferring judicial powers on purely executive officers. 8. In my opinion the order under appeal is unsustainable. It was suggested by the learned Counsel for the Respondents that the case may be remanded for fresh adjudication. Such orders underline the inherent danger which lurks in conferring judicial powers on purely executive officers. 8. In my opinion the order under appeal is unsustainable. It was suggested by the learned Counsel for the Respondents that the case may be remanded for fresh adjudication. It was stated at the Bar that the full amount of compensation awarded to the claimant had already been paid by the present Appellant and the fault of not claiming a relief for indemnification in the earlier proceedings and pleading a clear cut case against the contractor but instead side-tracking the issue by raising irrelevant pleas was entirely that of the present Appellant. The predominant object of the Workmen's Compensation Act is to provide for payment by certain employers to their workmen compensation for injuries caused by accident, it is not to decide the disputes between the employers inter se. The provisions relating to the latter incorporated in the Act are merely incidental and ancillary. As far as the workman is concerned, his claim for compensation had been fully adjudicated in the proceedings u/s 12(1) and he has already received the full amount of compensation. In these circumstances it would not be consistent with the ends of justice that the matter be reopened for the purpose of allowing the principal to have a second opportunity of adducing better evidence in order to prove its claim to be indemnified by the Appellant. 9. For these reasons, this appeal succeeds and is allowed with costs. The order dated 1-5-1973 passed by the Commissioner, Workmen's Compensation u/s 12(2) of the Act is set aside. 10. The Registrar is directed to send a certified copy of this judgment to the Chief Secretary, Government of Uttar Pradesh.