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Madhya Pradesh High Court · body

2000 DIGILAW 314 (MP)

SOUTH EASTERN COALFIELDS LTD v. ASHA MADAN

2000-03-28

V.K.AGRAWAL

body2000
V. K. AGRAWAL, J. ( 1 ) THIS misc. appeal is directed against the order dated 17. 3. 1999 in Case No. 45/wca/88 (F), whereby the application under section 10 of the Workmen's Compensation Act, 1923 (hereinafter referred to as 'the Act') read with rule 12 of the Workmen's Compensation (M. P.)rules, 1962 (hereinafter referred to as 'the rules'), was dismissed by the Commissioner for Workmen's Compensation, bilaspur (hereinafter referred to as 'the commissioner'), stating that the applicant, the principal, should recover the amount of compensation, etc. , paid by it to the claimant, from the contractor by pursuing his remedy in the civil court. ( 2 ) THE relevant facts leading to the present appeal stated in brief are that the appellant was the principal while respondent no. 5 was his contractor within the meaning of section 12 of the Act. The deceased ghanshyam Madan was engaged by contractor, the respondent No. 5. Ghanshyam madan sustained fatal injuries on 12. 3. 88 by accident which arose out of and in the course of his employment with the contractor, respondent No. 5. The claimantsrespondent Nos. 1 to 4 filed an application purportedly under section 10 of the Act read with rule 12 of the Rules praying that the non-applicants, i. e. , the appellant and respondent Nos. 5 and 6 of this appeal, may be directed to pay compensation as well as penalty. The Commissioner passed an order on 29. 1. 1988 allowing the applicati on of claimants-respondent Nos. 1 to and fastened the liability jointly and severally on the appellant and respondent no. 5, for payment of compensation of rs. 67,776 besides penalty and interest. ( 3 ) THE appellant principal then filed an application under section 12 (2) of the Act. In the said application it was stated that the appellant is entitled for reimbursement of the amount of compensation paid by the appellant to the claimants, from respondent no. 5, the contractor. It was, therefore, prayed that the said amount be recovered by issuance of RRC. By the impugned order, the learned Commissioner refused to accept the said prayer and directed that the recovery of the said amount be made by the principal, the appellant by pursuing his remedy in civil court. It was observed in the impugned order that the Commissioner had no jurisdiction to issue RRC on the application of the principal, the appellant. By the impugned order, the learned Commissioner refused to accept the said prayer and directed that the recovery of the said amount be made by the principal, the appellant by pursuing his remedy in civil court. It was observed in the impugned order that the Commissioner had no jurisdiction to issue RRC on the application of the principal, the appellant. The application under section 12 (2) of the Act filed by appellant was, therefore, dismissed by the impugned order. ( 4 ) LEARNED counsel for the appellant has urged that as envisaged in section 12 (2) of the Act the appellant (principal) was initially required to pay the compensation to the claimants-respondent Nos. 1 to 4. However, the appellant was entitled to be indemnified by the contractor, the respondent No. 5. It was further submitted that in view of explicit provision in section 12 (2) of the Act, the Commissioner had the jurisdiction to decide and settle all questions as to the right to and the amount of any such indemnity. It was also submitted that the Rules have been framed by the state Government in exercise of the powers conferred by section 32 of the Act. It has been submitted that rule 39 of the said rules specifically provides for the procedure where indemnity is claimed under section 12 (2) of the Act. It has, therefore, been submitted by the learned counsel for appellant that the trial court was not justified in directing the appellant to pursue his remedy for recovery and reimbursement of the amount of compensation in the civil court. ( 5 ) THEREFORE, the question that arises for consideration is: as to whether the Commissioner was justified in holding that he could not issue RRC on the application by the appellant, the principal, and in directing that the appellant should pursue his remedy in the civil court? ( 6 ) IT may be noticed that the Act is a code for providing remedy of compensation to the workmen vis-a-vis the employer. Section 3 of the Act provides that if personal injury is caused to a person by accident arising out of and in course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II of the Act. Section 3 of the Act provides that if personal injury is caused to a person by accident arising out of and in course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II of the Act. Section 10 of the Act prescribes the procedure and manner for filing a claim petition and the limitation thereof and lays down that no claim for compensation shall be entertained by a Commissioner unless notice of the accident has been given as soon as practicable, after the accident occurred. ( 7 ) SECTION 12 of the Act reads: "12. Contracting. (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 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, this act shall apply as if references 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. (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. " ( 8 ) A reading of section 12 as above discloses that in order to make the principal employer liable to pay compensation to a workman not engaged by him, the following essentials must be satisfied: (i) That the person (called the principal) is carrying on a trade or business and, in the course of or for the purpose of that trade or business, engages a contractor to execute the work. (ii) That work is ordinarily a part of the trade or business of the principal. (iii) The accident which gives rise to the liability for compensation must have occurred on, in or about the premises on which the principal has undertaken, or usually undertakes to execute the work or which is in his control or management. (iv) The accident must have occurred while the workman was in the course of his employment in executing the work. ( 9 ) IT would also appear that sub-section (2) of section 12 of the Act provides that where the principal is required to pay under that section, he shall be entitled to be indemnified by the contractor. It further provides that all questions as to the right to and the amount of, any such indemnity shall, in default of agreement, be settled by the Commissioner. ( 10 ) FURTHER rule 39 of the Rules prescribes the procedure where indemnity is claimed under section 12 (2) of the Act. The said rule 39 reads: "39. Procedure where indemnity claimed under section 12 (2 ). ( 10 ) FURTHER rule 39 of the Rules prescribes the procedure where indemnity is claimed under section 12 (2) of the Act. The said rule 39 reads: "39. Procedure where indemnity claimed under section 12 (2 ). (1) Where the opposite party claims that if compensation is recovered from 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 K. (2) If any person served with a notice under rule (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; and 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. (3) If any person served with a notice under sub-rule (1), whether or not he desires to contest the applicant's claim for compensation or the opposite party's claim to be indemnified, claims that being a contractor he is himself a principal and is entitled to be indemnified by a person standing to him in the relation of a contractor from whom the workman could have recovered compensation, he shall on or before the date fixed in the notice under sub-rule (1) 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 L. (4) If any person served with a notice under sub-rule (3) desires to contest the applicant's claim for compensation, or the claim under sub-rule (3) to be indemnified, he shall appear before the commissioner on the date fixed in the notice in Form L 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 original opposite party or the person served with a notice under sub-rule (1)and to admit his own liability to indemnify the party against whom such award is made 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 all parties on the record, 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. (5) In any proceeding in which a notice has been served on any person under sub-rule (1) or sub-rule (3) the Commissioner shall, if he awards compensation, record in his judgment a finding in respect of each of such persons, whether he is or is not liable to indemnify any of the opposite parties, and shall specify the party, if any, whom he is liable to indemnify. " ( 11 ) CLEARLY, therefore, rule 39 of the rules prescribes the procedure, where indemnity is claimed by the principal under section 12 (2) of the Act. " ( 11 ) CLEARLY, therefore, rule 39 of the rules prescribes the procedure, where indemnity is claimed by the principal under section 12 (2) of the Act. It provides the manner of dealing with and procedure to be followed when an application is filed by the principal, under section 12 (2) of the act. It further provides that the Commissioner shall record in his judgment, a finding as to whether the person against whom indemnity is claimed, is liable to indemnify or not? ( 12 ) OBVIOUSLY, therefore, the above provisions in the Act and the Rules clearly indicate that the principal can seek indemnity of the amount of compensation paid by him to the claimants, from the contractor, under section 12 (2) of the Act. On the principal making such a prayer, the Commissioner is to act in accordance with the procedure under the Rules and specifically under rule 39 of the Rules. ( 13 ) THEREFORE, the observation in the impugned order that the principal should take recourse to the civil court for his prayer of indemnification, appears to be erroneous, and the same is not in keeping with the above provisions of the Act and the Rules. ( 14 ) HOWEVER, it may be noticed that the principal, the appellant, is not free from blame in the instant case. He has filed an application apparently under section 12 (2)of the Act with the prayer that RRC be issued for recovery of the amount of compensation paid by him to the claimantsrespondent Nos. 1 to 4 against the contractor. Therefore, by making such a prayer the appellant does not appear to have followed the provisions and procedure as prescribed under rule 39 of the Rules. He should have made a proper prayer as prescribed therein, whereupon the Commissioner would have proceeded to make an enquiry into the matter and would have been required to record a finding in the above regard. Learned counsel for the appellant states at this stage that he would be filing an appropriate application for amendment or a fresh application before the Commissioner keeping in view the provision of section 12 (2) of the Act, as also of rule 39 of the Rules. ( 15 ) IN view of above, the impugned order is set aside, insofar as it directs the appellant to pursue the remedy before the civil court. ( 15 ) IN view of above, the impugned order is set aside, insofar as it directs the appellant to pursue the remedy before the civil court. In case the appellant suitably amends his application filed before the commissioner or files an application afresh under section 12 (2) of the Act, the same shall be enquired into and decided in accordance with law, in the light of observations made above. The costs of this appeal shall be borne by the parties, as incurred, in the circumstances, of the case. Appeal allowed. .