JUDGMENT Deepak Gupta, J. 1. By this judgment two appeals being FAO (WCA) No. 404 of 2003 and FAO (WCA) No. 425 of 2003 are being disposed of Cross Objections No. 512 of 2003 are also being disposed of by this judgment. 2. Briefly stated the facts of this case are that claimants Daultu Devi and Shishana Devi, claiming themselves to be the widow and daughter of deceased Chanalu, filed a petition under the Workmen's Compensation Act for grant of compensation. The allegations in the claim petition were that the deceased Chanalu was engaged by Surinder Pal as wood cutter for cutting and removing trees from the forest. It is further alleged that Surinder Pal was engaged as a Contractor by the H.P. Forest Corporation and therefore, the Forest Corporation being the Principal employer was also liable to pay compensation. 3. The facts as alleged in the claim petition were that on 6.8.1992, during the course of employment, one log of wood fell on the legs of Chanalu Ram. He was immediately shifted to the hospital at Mandi where he was treated. From Mandi, he was referred to Indira Gandhi Medical College, Shimla and on the next day, he was referred to PGI, Chandigarh. At PGI, Chandigarh, both his legs were amputated. After the amputation of his legs, Chanalu Ram was brought home. However, there was some problem in his legs and he was again taken to the district hospital, Mandi and he remained in the hospital at Mandi upto 14th October, 1992, where the remaining portion of his legs was also amputated. He was taken back to home, but his condition did not improve and ultimately, he expired on 1.11.1992. 4. Surinder Pal filed a reply stating that the petition was not maintainable as he (Surinder Pal) was not the principal employer and that no relationship of employer and employee existed between him and the deceased. In reply to para-1, it was stated by Surinder Pal that para-1 of the application is admitted to the effect that deceased's services were taken on contract basis, however, the case of Surinder Pal was that since the work was to be executed by respondents No. 2 and 3, only they were liable to pay compensation. In reply to para-1, it was stated by Surinder Pal that para-1 of the application is admitted to the effect that deceased's services were taken on contract basis, however, the case of Surinder Pal was that since the work was to be executed by respondents No. 2 and 3, only they were liable to pay compensation. In reply to the allegation, Surinder Pal has stated as follows: That in reply to para-2 of the application, it is submitted that the accident has not occurred in the course of employment, as such the petition/application under Workmen Compensation Act is not maintainable. Rest of the averments contained in this para are denied for want of knowledge and the applicants be put to strict proof of the same, if during the enquiry, it is found that the petitioners/applicants are entitled for compensation, in that event it is the respondents No. 2 and 3 who are liable to indemnify the claim being a principal employer. 5. The Forest Corporation in its reply admitted the accident and also admitted the fact that the deceased Chanalu Ram had died due to the accident, but according to it, he was not an employee of the Forest Corporation and was doing the work of cutting and felling of trees which work had been awarded to Surinder Pal-respondent No. 1. According to the Forest Corporation, Respondent No. 1-Surinder Pal was liable to pay compensation. The Forest Corporation in its reply quoted Clause No. 20 of the Agreement, executed between it and Surinder Pal, which reads as follows: The Contractor(s)/Labour Supply Mate and not the H.P. State Forest Corporation Ltd. shall be liable to pay any compensation to the labour employed by him/them under the Workmen Compensation Act and the rules framed there under and also agrees/agree to bear all the liabilities as a result of implementation of the labour laws. 6. Parties led evidence and the learned Commissioner, Workmen's Compensation awarded compensation of Rs. 1,26,670/- in favour of the claimants. The Commissioner, Workmen's Compensation held that the Forest Corporation being the principal employer was liable to pay compensation to the claimants by virtue of Section 12 (1) of the Workmen's Compensation Act. However, the Forest Corporation was held entitled to recover the amount from respondent No. 1 in view of the provision of Section 12 (2) of the said Act. 7. However, the Forest Corporation was held entitled to recover the amount from respondent No. 1 in view of the provision of Section 12 (2) of the said Act. 7. FAO No. 404 of 2003 has been filed by the Forest Corporation. According to the Forest Corporation, it is not liable to pay any amount. The appeal of the Forest Corporation was admitted on the following questions of law: (D) Whether the award could be passed against the Appellant contrary to the Clause 20 of the agreement entered in between the Appellant and Respondent No. 1? In this appeal, the claimant have also filed cross objections claiming that the Workmen's Compensation Commissioner has gravely erred in not awarding interest, in their favour from the date of accident. 8. FAO No. 425 of 2003 has been filed by Surinder Pal, the Contractor. This appeal has been admitted on the following questions of law: (a) Whether the Commissioner below is right in law to award the compensation under the Workmen's Compensation Act, without there being any legal evidence to show that deceased Chanalu Ram died of the injuries sustained by him? (b) Whether in the facts and circumstances of the case, the Commissioner below is right in law to hold that there was any relationship of employer and employee between the appellant and deceased Chanalu Ram? (c) Whether the award of the Commissioner can be sustained against the appellant particularly when he has held the respondents 3 and 4 to be Principal Employer? (d) Whether the Commissioner below is right in law to rely upon any clause in the Agreement which has not been proved in accordance with law? 9. First taking the appeal of the Forest Corporation. Mr. Rakesh Jaswal appearing on behalf of the Forest Corporation has submitted that in view of the Clause 20 of the Agreement quoted hereinabove, the Forest Corporation could not have been held liable to pay compensation, since the parties, i.e. the Forest Corporation and the contractor Surinder Pal had entered into an agreement whereby the liability to pay the compensation to any workmen under the Workmen's Compensation Act would be that of contractor (Surinder Pal) alone. This contention of Mr. Jaswal cannot be accepted. Section 12 (1) of the Workmen's Compensation Act reads as follows: 12(1). This contention of Mr. Jaswal cannot be accepted. Section 12 (1) of the Workmen's Compensation Act reads as follows: 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 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 principals 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. 10. The legislature in its wisdom with a view to protect the rights of the workmen and their families who file claims under the Workmen's Compensation Act. Even if the principal employer gets the work done through a contractor then also it is the principal employer who shall be liable to pay compensation even though the employee who suffers injuries or dies is an employee of the contractor and not of the principal employer. There can be no valid agreement contrary to such legal provision. Further more,. such an agreement entered into between an employer and employee may govern their rights inter se, but cannot in any manner take away the rights of a third party, i.e. the victim, who applies for compensation under the Workmen's Compensation Act. This would negate and frustrate the provisions of the Workmen's Compensation Act. While taking the above view, I am fortified by a Division Bench judgment of Kerala High Court, reported in K. Koodalingam v. Superintending Engineer, Project Circle, Public Works Department and Anr. 1995 LAB I.C. 153, wherein it has been held as follows: Where the conditions in Section 12 of the Act are fulfilled, the principal could not escape liability to pay compensation, by invoking an agreement fastening liability only on the contractor. 1995 LAB I.C. 153, wherein it has been held as follows: Where the conditions in Section 12 of the Act are fulfilled, the principal could not escape liability to pay compensation, by invoking an agreement fastening liability only on the contractor. The avowed object with which Section 12 was enacted as part of the Act as seen from the Report of the Select Committee is to enable the workmen or the dependants of the workmen to proceed against the contractor or against the principal or both and to make the contractor liable to indemnify the principal in all cases in the absence of any agreement to the contrary. The Report of the Select Committee would also show that while finalizing the provision the Committee has eliminated the provision which in the Bill as introduced exempted the Government and local authorities from liability imposed by this clause. Hence, the provisions in Section 12 (1) would apply notwithstanding the agreement or contract entered into between the principal and contractor regarding their liability for payment of compensation under the Act. The fact that no non-obstante provision is used in the Section may not be a sufficient reason to exclude the application of the Section to cases where the conditions are satisfied. At best agreements or contracts entered into between the principal and contractor can govern only their inter se rights and liabilities and cannot affect the right of the workmen or their dependents to get compensation either from the principal or from the contractor at their option. Right to get indemnified from the contractor specifically conferred on the principal Under Section 12 (2) of the Act sufficiently safeguards the interest of the principal who has entrusted the work to the contractor stipulating a term in the Agreement entered into between them regarding the liability under the Act. 11. In view of the above position, the appeal of the Forest Corporation is bound to be dismissed. 12. Coming to the FAO No. 425 of 2003 filed by the Contractor Surinder Pal, the first question to be decided is substantial question of law (b) raised above. The question raised is whether any relationship of employer and employee existed between the appellant and deceased Chanalu Ram. 12. Coming to the FAO No. 425 of 2003 filed by the Contractor Surinder Pal, the first question to be decided is substantial question of law (b) raised above. The question raised is whether any relationship of employer and employee existed between the appellant and deceased Chanalu Ram. Claimants examined PW-1 Hari Chand, who stated that Surinder Pal was a contractor with the Forest Corporation and that he had engaged both Hari Chand and deceased Chanalu Ram on daily wages of Rs. 50/- per day. According to this witness, these wages were paid by Surinder Pal himself. This witness has denied the suggestion put to him that he and the deceased were further engaged on contract basis and they were being paid on cubic meter basis. It would be pertinent to mention that there is no suggestion put to this witness that he and the deceased were not the employees of Surinder Pal or that their wages were being paid by the Forest Corporation. To the similar extent is the statement of PW-2 Jassa Ram, who has also stated that he and the deceased had been engaged by Surinder Pal on daily wages of Rs. 50/- per day. In cross-examination, he stated that there were 5-6 persons who had been engaged by Surinder Pal, who was contractor with the Forest Corporation. A suggestion has been put to him which he has admitted that they were engaged by the contractor on the asking of the Corporation. Even if this fact is accepted then also the suggestion shows that they were employed by the contractor and were being paid by him. He had denied the suggestion that they were being paid on cubic meter basis by the Forest Corporation. Surinder Pal in his statement states that he was only a labour contractor and had supplied the labour and that the work was being got done by the Corporation only. According to him, he never used to make any payment to the labour and he had not engaged any labour. He further states that he is not liable to pay the compensation. The Forest Corporation examined one Surender Kumar, who was the Division Manager of the Mandi Division of the Corporation. He initially produced a certified photostat copy of the agreement entered into between the Forest Corporation and Surinder Pal, which was exhibited as Ext. He further states that he is not liable to pay the compensation. The Forest Corporation examined one Surender Kumar, who was the Division Manager of the Mandi Division of the Corporation. He initially produced a certified photostat copy of the agreement entered into between the Forest Corporation and Surinder Pal, which was exhibited as Ext. DW1/A. An objection was raised on behalf of Surinder Pal to its exhibition. Thereafter, Surender Kumar was again examined on 3.9.2002, when he produced original of Ext. DWl/A. 13. Even Surinder Pal admits that he had entered into an agreement with Forest Corporation. The witnesses have clearly stated that they and the deceased were employees of Surinder Pal. There is no reason to disbelieve this testimony. It is clear from all these facts as well as from Clause 20 of the agreement that the deceased was an employee of Surinder Pal and not of the Forest Corporation, though the Forest Corporation was liable being the principal employer. 14. The next question to be decided is Question (a) as to whether deceased Chanalu Ram died of the injuries sustained by him. Mr. B.K. Malhotra, learned Counsel has vehemently argued that claimants led no evidence to show that the deceased Chanalu Ram received injuries during the course of employment or that he died as a result of injuries sustained in the accident. Mr. Malhotra, contends that even if it is assumed that Chanalu Ram suffered injuries then also there is no medical evidence to show that the death was a result of such injury. 15. This contention also is without any merit. If reference is made to the reply filed by the respondent No. 3, it is clear that the Forest Corporation admitted that the deceased died in an accident. However, according to them, since the work of cutting and felling trees was awarded to Surinder Pal, it was he who was liable to pay compensation. Even Surinder Pal, in his reply does not specifically deny the accident. All that is stated in the reply was that the accident did not occur in the course of employment. PW-1 Hari Chand and PW-2 Jassa Ram in clear and unequivocal terms have stated that the deceased Chanalu Ram suffered injuries while working. According to them, when he was cutting a log of wood, then one big log suddenly fell from the upper side on both his legs. PW-1 Hari Chand and PW-2 Jassa Ram in clear and unequivocal terms have stated that the deceased Chanalu Ram suffered injuries while working. According to them, when he was cutting a log of wood, then one big log suddenly fell from the upper side on both his legs. These statements of Hari Chand and Jassa Ram have not been shattered in cross-examination. In fact in the cross-examination, there is a suggestion put to Hari Chand (PW-1) that the Chanalu Ram was injured by a log. Since I have already held that the deceased was engaged by Surinder Pal for cutting of wood and since the accident had occurred while deceased was actually cutting the wood, it can be held without any matter of doubt that deceased suffered injuries during the course of employment. 16. It is next contended by Mr. B.K. Malhotra, learned Counsel for the appellant that there is nothing to connect the injuries with the death. According to him, the claimant should have led medical evidence to prove that the death was the result of injuries suffered. In my view, this is an argument of desperation. There is sufficient evidence on record in the shape of the statements of the widow (PW-3) and the witnesses, especially PW-1 that immediately after the accident, the injured was taken to the hospital at Mandi. He was then taken to Indira Gandhi Medical College, Shimla. From Indira Gandhi Medical College, Shimla, he was referred to PGI, Chandigarh, where both his legs were amputated and he came home. Thereafter, Chanalu Ram developed some problem in the legs and was again taken to the hospital at Mandi where the remaining portion of his legs were also removed. Within 10-12 days thereafter, he died. From the above evidence the death, in my opinion, is directly attributable to the accident and injuries sustained thereon. In fact, the defence raised by the appellant is not only false, but is immoral. Here is an employer who denies the fact that the deceased was an employee. He denies the accident. He also has the temerity and audacity to even deny the agreement entered into between him and the Forest Corporation. He does not want to pay even a single paise to his employee, who has suffered serious injuries. Here is an employer who denies the fact that the deceased was an employee. He denies the accident. He also has the temerity and audacity to even deny the agreement entered into between him and the Forest Corporation. He does not want to pay even a single paise to his employee, who has suffered serious injuries. It was his duty both as an employer and as a human being to have help to his employee in his hour of need. In fact in case Chanalu Ram had not denied, the appellant would have been liable to pay the compensation for hundred per cent disability, which would have been higher than the amount payable for death. 17. Questions (c) and (d) raised by the claimants are inter-linked and can be decided together. As far as the validity of the agreement is concerned, Surender Kumar, Divisional Manager of the Forest Corporation has proved certified copy of the agreement and thereafter produced the original agreement also and the certified copy thereof was exhibited in evidence. The proceedings under the Workmen's Compensation Act are not governed by the strict rules of evidence or the procedure prescribed in the Code of Civil Procedure. The Workmen's Compensation Act is a beneficial piece of legislation and the procedure to be followed by the Commissioner should be just and reasonable, as laid down by the State Government by making appropriate rules. In this case, the Commissioner saw the original agreement entered into between Surinder Pal and the Forest Corporation through a senior official (Divisional Manager) of the Forest Corporation proved the same. Surinder Pal admits that he had supplied labour to the Forest Corporation and had entered into an agreement. The Corporation had specifically quoted Clause 20 of the agreement in its reply. Despite this, Surinder Pal did not specifically admit or deny this averment. Even while appearing in the witness box, Surinder Pal has not stated that he had not entered into an agreement. His whole case is that his role was to supply the labour and thereafter it was the Corporation who took the work from the labourer. This is obviously false, since all the witnesses including his workers have stated that it was Surinder Pal, who was paying daily wages. His whole case is that his role was to supply the labour and thereafter it was the Corporation who took the work from the labourer. This is obviously false, since all the witnesses including his workers have stated that it was Surinder Pal, who was paying daily wages. A perusal of the agreement shows that Surinder Pal was given the work of felling the marked trees and converting of the felled and uprooted trees into timber of various categories, such as scants, round ballies, dimdimas, logs, pulp wood, fire wood and also to prepare charcoal, if ordered by the Divisional Manager. Therefore, it cannot be said by any stretch of imagination that the work of the contractor was only to supply the labour. He was awarded contract for conversion of trees to timber, fuel wood etc. Clause 20 of the agreement quoted above, clearly shows that the Contractor was to pay compensation, if any, payable under the Workmen's Compensation Act. Therefore, in my opinion, the Commissioner has rightly held that though the Forest Corporation was liable to deposit the compensation being principal employer, it was entitled to recover the same from the contractor in terms of the agreement. 18. Even assuming for the sake of argument without accepting that the agreement has not been proved in accordance with law, then also in terms of the provisions of Section 12 (2) of the Workmen's Compensation Act, the principal employer would be entitled to recover the amount and would be entitled to be indemnified by the contractor, since it has paid compensation on behalf of the contractor, who himself is liable to pay compensation. Section 12 (2) of the Workmen's Compensation Act reads as follows: 12(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. 19. 19. From bare perusal of the aforesaid provision, it is clear that the principal employer pays compensation only on behalf of the contractor and unless there is contract to the contrary, he is entitled to recover this compensation from the contractor and this dispute has to be settled by the Commissioner. Therefore, whether it is the agreement or the bare provision of the Act which are followed, the principal employer, i.e. the Forest Corporation in the present case, is entitled to recover the amount deposited by it from the Contractor, i.e. Surinder Pal, in the present case. 20. The claimants have filed cross-objections that interest has not been awarded to them and interest should be awarded. The learned Workmen's Compensation Commissioner has directed that the respondents should deposit the award amount within 30 days from the date of award, failing which they would be liable to pay penalty and interest at the rate of 12% per annum. Mr. M.S. Guleria, learned Counsel appearing for the claimants contends that the Workmen's Compensation Commissioner has no discretion in the matter and is bound to award interest in case the amount is not deposited within one month from the date of the accident. On behalf of the appellant, it is contended that cross-objections are not maintainable. I need not to go into the matter, since in my opinion, any Court seized of a matter under the Workmen's Compensation Act has to ensure that the compensation is paid in terms of the provisions of the Workmen's Compensation Act. Section 17 of the Act provides that even a workman cannot relinquish any of its rights of compensation and any agreement to the contrary would be null and void. Therefore, it is the duty of every Court to ensure that the compensation is paid strictly in accordance with the terms of the Act. Section 17 of the Act provides that even a workman cannot relinquish any of its rights of compensation and any agreement to the contrary would be null and void. Therefore, it is the duty of every Court to ensure that the compensation is paid strictly in accordance with the terms of the Act. Section 4-A(3) of the Act reads as follows: 4-A(3) Where any employer is in default in paying the compensation due under this 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 six 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 sum not exceeding fifty per cent of such amount, be recovered from the employer by way of penalty. 21. A bare perusal of the aforesaid provision clearly shows that if compensation is not paid within one month from the date it fell due (i.e. the date of accident), the Commissioner has jurisdiction to award interest at the rate of six per cent per annum and also award penalty. It is well settled law that the claimant should not be deprived of interest, unless he himself delayed the proceedings. The accident in this case took place on 6.8.1992. The claim was institued on 21.5.1993 and dragged on for more than 10 years and was finally decided on 28.6.2003. Why should poor claimant be deprived of the interest on the amount which was due and payable to them within one month of the date of the accident or of the date of death. In fact the Forest Corporation and Surinder Pal should on or before 6.9.1992 have deposited the amount payable to "the deceased Chanalu Ram on account of hundred percent disability, since both of his legs had been amputated. They did not do so. The Forest Corporation being the principal employer should have deposited the amount, but it failed to do so. In fact Surinder Pal took up false and frivolous pleas. His defence was totally false and immoral. There was no reason why the claimants should have been deprived of interest due and payable to them. I, therefore, hold that the claimants on the amount of compensation, i.e. Rs. In fact Surinder Pal took up false and frivolous pleas. His defence was totally false and immoral. There was no reason why the claimants should have been deprived of interest due and payable to them. I, therefore, hold that the claimants on the amount of compensation, i.e. Rs. 1,26,670/- are entitled to interest at the rate of six per cent per annum w.e.f. 1.11.1992, the date of death of Chanalu Ram, till the payment of the entire amount. 22. Before parting with the case, I must observe that this was a fit case where penalty should have been imposed. However, there was no claim made in this behalf before the Commissioner and even in the Cross-objections, the claimants did not claim penalty. Before awarding penalty, some opportunity to the other side had to be granted and I do not want to delay the proceedings any longer. Therefore, only interest is being awarded and not the penalty. 23. Both the appeals are accordingly dismissed and the Cross-objections are allowed and it is held that the claimants are entitled to compensation of Rs. 1,26,670/- alongwith interest at the rate of 6% per annum from 1.11.1992 till the date of deposit of amount. The FAO (WCA) No. 404 of 2003 filed by the Forest Corporation is dismissed with costs assessed at Rs. 2,000/- to be paid to the claimants. Himachal Pradesh State Forest Corporation, being the principal employer is directed to deposit the amount of interest and costs in the Registry of this Court within 12 weeks from today. It is made clear that the H.P. State Forest Corporation can recover the amount of interest deposited by it from Surinder Pal-contractor by filing necessary execution proceedings before the Workmen's Compensation Commissioner. The decision of the present appeal shall be deemed to be an adjudication of the dispute between H.P. State Forest Corporation and Surinder Pal and the Forest Corporation need not file separate proceedings in this regard. 24. Appeal No. 425 of 2003 filed by Surinder Pal is also dismissed with exemplary costs of Rs. 5,000/- to be deposited by Surinder Pal within 12 weeks from today in the Registry of this Court. Exemplary costs of Rs. 5,000/- have been imposed since totally false and frivolous pleas have been raised by the appellant in this case.