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Gujarat High Court · body

2009 DIGILAW 489 (GUJ)

UNION OF INDIA v. BHOJRAJ ALIAS POOJRAJ VACHHA

2009-07-22

H.K.RATHOD

body2009
ORAL JUDGMENT 1. Heard learned Advocate Mrs. Vasavdatta Bhatt for appellants and learned Advocate Mr. YK Gadhia for respondent no.2. 2. Appellants have challenged order passed by Workmen's Compensation Commissioner Kachchh at Gandhidham in WC Application (NF) NO. 142 of 1996 dated 16.2.2006 wherein WC Commissioner has directed opponents no.2 and 3 to pay amount of compensation of Rs.1,09,475/- with 50 per cent penalty and 12 per cent interest with costs of Rs.500.00 to claimant and thereafter to recover whole such amount from opponent no. 1. 3. Learned Advocate Mrs. Vasavdatta Bhatt for appellants submitted that original applicant means claimant was not an employee of appellants but he was an employee, engaged by opponent NO.1, Ansari Builders as contractor. She further submitted that during course of employment, if any accident occurred and employee received injury, then, it is liability of his immediate employer and not that of present appellants. She also submitted that there is agreement between opponent NO.1 Ansari Builders and appellants which has been quoted at page 4 which is reproduced as under: Condition No. 26 of General Conditions of Contracts for Lump Sum Contracts (I.A.F.W.-2159), Term Contracts for Artificers' Work (IAFW-1821) and Measurement Contracts (I.A.Fs.W-1779-A) under Military Services reads as under: '26. Labour.- The contractor shall employee labour in sufficient number to maintain the required rate of progress and of quality to ensure workmanship of the degree required by the Specifications and to the satisfaction of the Engineer-in-Charge. The contractor shall remain liable for the payment of all wages or other moneys to his work people or employees under the Payment of Wages Act, 1936, Minimum Wages Act, 1948, Employer's Liability Act, 1938, Workmen's Compensation Act, 1923,or any other Act or enactments relating thereto and rules framed thereunder from time to time. The Contractor shall work only on and during the hours of a working day unless he obtains the prior written approval of the Engineer in Charge to do otherwise. If such approval is given no liability in respect of any excess cost arising therefrom shall be incurred by Government. The contractor shall furnish to the Engineer in Charge everything, a distribution return of the number and description by trades of his work people employed on the works. If such approval is given no liability in respect of any excess cost arising therefrom shall be incurred by Government. The contractor shall furnish to the Engineer in Charge everything, a distribution return of the number and description by trades of his work people employed on the works. The Contractor shall during the progress of the Works comply at his own expense with all the rules and provisions contained in the MES Model Rules for the protection of health and sanitary arrangements for workers employed by contractors (appended hereto as Annexure C to these Conditions) and shall at his own expenses provide for all facilities in connection therewith to the satisfaction of the Engineer in Charge and on his failure to do so, the Garrison Engineer shall be entitled to provide the same and recover the cost thereof from the contractor. The contractor shall not employ in connection with the works any person who has not completed his fifteenth year of age. The contractor shall at his own expense arrange for all the safety provisions as per the MES Safety Code (appended to these Conditions as an Annexure 'B') and shall at his own expense provide for all facilities in connection therewith to the satisfaction of the Engineer in Charge and on his failure to do so, the GE shall be entitled to provide the same and recover the cost incurred in that behalf from the Contractor. Provided further that in case of failure to arrange for the safety provisions as above, the contractor should in addition be liable to pay a penalty of Rs.50 for each default. 4. Relying upon aforesaid condition, it is submitted by learned Advocate Mrs. Bhatt that it is liability accepted by contractor that in case if accident occurs, then, whatever compensation is required to be paid, same has to be paid by contractor respondent no.2 and it is not liability of appellant. Thus, as per her submission, it is not liability of appellant for payment of compensation with penalty and interest but it is liability of respondent no.2 contractor and WC Commissioner has committed gross error in not considering that aspect of matter in its proper perspective. 5. Learned Advocate Mr. Thus, as per her submission, it is not liability of appellant for payment of compensation with penalty and interest but it is liability of respondent no.2 contractor and WC Commissioner has committed gross error in not considering that aspect of matter in its proper perspective. 5. Learned Advocate Mr. Gadhia appearing for respondent no.2 submitted that WC Commissioner has directed opponent no.2/3 to pay compensation with penalty and interest to claimant and then to recover same from opponent no.2 Ansari Builders who is immediate employer of workman. He submitted that award made by WC Commissioner has not been challenged by Ansari Builders before higher forum. He further submitted that earnest money is lying with appellant which has been deposited by respondent no.2 and, therefore, they can adjust such amount from earnest money deposited by Ansari Builders. 6. In view of this back ground, award is not challenged by immediate employer and direction issued by WC Commissioner is for payment of compensation with penalty and interest by appellant to claimant and then appellant has to recover it from opponent no.1. Section 12 of WC Act is relevant, therefore, same is reproduced as under: 12. Contracting.- (1) Where any person (herein after 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 (herein after 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 re ferences 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 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 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 that 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. 7. As per sub section (2) of sec. 12 of WC Act, when principal is liable to pay compensation under this section, he shall be entitled to be indemnified by 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 relation of a contractor from whom the workman could have recovered compensation and all questions as to the right to and amount of any such indemnity shall, in default of agreement, be settled by Commissioner. As per sub sec. (3) of sec. 12, nothing in this section shall be construed as preventing a workman from recovering compensation from contractor instead of Principal. Principal employer cannot escape from his liability to pay compensation as per decision in case of Surjeras Unkar Jadhav v. Gurinder Singh (1991) 62 FLR 315 (Bombay). 8. In JDP Associates Chennai and K.Malarkodi and Another, 2001-II-LLJ 535, this aspect has been considered by Madras High Court. Relevant observations made by Madras High Court in para 12 to 18 are reproduced as under: 12. We now come to the question of lack of pleadings. 8. In JDP Associates Chennai and K.Malarkodi and Another, 2001-II-LLJ 535, this aspect has been considered by Madras High Court. Relevant observations made by Madras High Court in para 12 to 18 are reproduced as under: 12. We now come to the question of lack of pleadings. It is true that the application did not contain any averment regarding dependency. But the appellant raised it as a defence. In the evidence the respondent have demonstrated their dependency. There is no reason to disbelieve the evidence. In Welfare legislation which are enacted to compensate such poor families for the death or injury caused during and in the course of employment, the Court cannot adopt a nit-picking attitude to defeat the object of the Act. The appellant has not been taken by surprise, they knew the statutory provisions, they raised the defence, the respondents met this with convincing evidence, so the appellant cannot complain. Therefore, the respondents are definitely dependents within the meaning of the Act. 13. The next question is non joinder of the contractor. Sec. 12(2) of the Act reads as under: '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 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 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. ' 14. The report of the Select Committee stated that the Workman can thus proceed against the employer or contractor and the contractor is liable to indemnify in all cases. The Scheme of Section 12 indicates that though the liability for compensation is that of contractor, the workman is entitled to recover it from principal and principal has the right of indemnity but it is the principal who will have to prove that the deceased was working under a particular contractor and claim that he must be indemnified by him. The Scheme of Section 12 indicates that though the liability for compensation is that of contractor, the workman is entitled to recover it from principal and principal has the right of indemnity but it is the principal who will have to prove that the deceased was working under a particular contractor and claim that he must be indemnified by him. If section 12 (2) is read properly, it is seen that the Act indents to secure to the workman compensation from the principal, who may have employed contractors to do certain work which ordinarily the principal would have carried out through their own servants. The section does not require the workmen or the dependents to prove, that in addition to the principal, there was also a contractor immediately above him. 15. In Mulla Madina Saheb v. Province of Madras, AIR 1946 Mad 113 , the contractor was not a party, the Commissioner ordered the Government the principal to pay the compensation. The Government withheld the contractor's dues after paying the compensation, on the ground it had an absolute right to be indemnified by the contractor. Justice RAJAMANNAR (as he then was) rejected this contention held: 'Section 12(2) gave the commissioner jurisdiction to decide all cases of disputed right to indemnity. The dispute between the Government and contractor came within section 12(2) and as it was the Government which claimed a right of indemnity it was for the Government and not the contractor to ; move the Commissioner to have the right adjudicated upon under sec. 12(2); as the Government failed to obtain a decision from the Commissioner on its right of indemnity under section 12(2) what section 19 barred was not the suit by the contractor but the defence of the Government based upon their right to indemnity;' 16. In this case the appellant has neither named the contractor nor has any claim been made regarding the right of indemnity. T he section clearly says that all questions arising out of the right to indemnity and quantum shall be settled by the Commissioner who authorized to do so in the Act. Of course if there is an agreement between the parties that will govern them. 17. T he section clearly says that all questions arising out of the right to indemnity and quantum shall be settled by the Commissioner who authorized to do so in the Act. Of course if there is an agreement between the parties that will govern them. 17. In Executive Engineer, Public Works Department, Dindigual v. V. Subbiah Naicker and another, 1983 II LLJ 320 (Mad-DB), the Division Bench of our court had held that merely because section 12(2) of the Act contemplates the principal being indemnified by the contractor in case the liability fixed on the principal employer, he cannot be heard to say that no award can be passed against the principal employer. Such an argument according to the Division Bench would run counter to this scheme of the Act in 1983 II LLJ 320 at p.321: '4. When the Legislature has specifically provided that an award for compensation is to be passed directly against the principal employer and the principal employer is given a right of indemnification as against the contractor the additional Commissioner is entitled to pass an a ward granting compensation either in full or in part directly against the principal employer on condition that the principal employer will get indemnified by the contractor.' 18. That was a case where the principal employer, had claimed the right of indemnity and had assailed the award stating that when the claim for indemnity had been made no award should be passed against the principal employer. In this case even that claim has not been made. In fact, section 12 has been enacted only to protect a workman to get his compensation by a speedy process. If the person who employs a contractors in his business is allowed to evade his liability on the ground that only the contractor or the intermediary should pay the compensation, then the purpose of the Act will be defeated. It may very well turn out that the contractors are not men of means who can pay the compensation. So while section 12 indicates that the liability for compensation is ultimately that of the contractor, as far as the workman is concerned, he can recover the compensation from the principal employer. But the principal employer in turn has the statutory right to be indemnified by the contractor. Therefore, the claim of the respondent cannot be turned down because they did not impleaded the contractor. But the principal employer in turn has the statutory right to be indemnified by the contractor. Therefore, the claim of the respondent cannot be turned down because they did not impleaded the contractor. If indeed there is a contractor under whom the workman was employed it is for the principal employer to name him and also claim the right to be indemnified. The evidence of RW 1 is that they had a contractor called Raju who is not their employee. At the same time when RW 1 was cross examined about PW 2, one Raju, he does not even say it is this Raju who is the contractor. He also says that there was one raju who did painting, there was one Raju, carpenter, who is PW 2 and he also says that he does not know whether Raju directly works or merely supervises. He admits that there is no written argument between PW 2 and himself. A suggestion is also put to him that Exh.B2 and B3 were prepared for Raju, painter and iti s now made out as if they have prepared for Raju, who is PW 2 The counter statement made by the appellant herein does not also categorically say under which contracts the deceased worked and that the contractor under whom the deceased worked is liable to indemnify the appellant in respect of the amount paid as compensation. In the absence of these materials I am unable to accept the submissions made by the learned counsel for the appellant that the application is bad for non joinder of contractor. This is also especially because it is the specific case of the respondents that the deceased worked directly under the appellants and not under the appellants and not under any contractor. The evidence of PW 3 wherein the mother says that '(Vernacular matter omitted) and which was pointed out by Mr. MR Raghavan cannot be construed to mean that the Raju Maistry was the contractor. In fact she denies the suggestion that her son works under Raju Maistry. 9. This aspect has also been examined by Karnataka High Court in Thirthamurthy v. Smt. Radha, 2002 LAB IC 1983. MR Raghavan cannot be construed to mean that the Raju Maistry was the contractor. In fact she denies the suggestion that her son works under Raju Maistry. 9. This aspect has also been examined by Karnataka High Court in Thirthamurthy v. Smt. Radha, 2002 LAB IC 1983. In para 15 of said judgment, it is observed as under: The question as to whether the deceased was an employee or not is essentially a question of fact though based on material on record and may be some time become a mixed question of facts and law. In the instant case, there is sufficient material on record in the form of oral evidence of the claimant and co worker by name Siddalah who had been examined by the applicant to infer that the deceased was employed under the respondent as a coolie and was working for the past more than 4 years. However, the documents namely Exh. P1, Exh.P2 and Ex. P3 go to show that the incident had taken place and that the person died due to the accident. Based on such evidence of the Commissioner concluded that the deceased was not only an employee of the appellant but the accident also took place while he was working in the estate as an employee. Id o not find that this finding can be characterized either perverse or totally an impossible inference. In fact on the other hand the finding that the respondent is an employer of the deceased evolves a most possible and probable finding with the evidence on record. It is the stand of the employer that he had given work on contract for cutting the trees etc., and the accident took place because of the negligence of the contractor, in no way absolve the employer of his liability as the finding is that the deceased was an employee under the owner respondent. The submission of the learned Counsel that non impleading of the contractor is fatal to the proceedings initiated by the applicant is not tenable for the reason that under the provisions of section 12 of the Act the principal employer can only seek for indemnification by the contractor in respect of the liability arising out of a claim made by a person engaged by a contractor. The claim can be proceeded either against the principal employer or against the contractor or against both. The claim can be proceeded either against the principal employer or against the contractor or against both. The only effect in not impleading the contractor is that the claimant cannot seek compensation from a person who has not been impleaded as party to the claim application but it will not render bad claim application itself. In the instant case, it is not in dispute that the accident took place because of the falling of the tree which had been grown in the estate of respondent owner and in the course of cutting and removing of that tree by a person auhtorized by the owner. The owner is basically liable. In respect of any claim arising out of such incident. In any view of the matter, the owner is not exonerated of his liability. If at all he can establish that the accident has taken place due to the negligence of the contractor to whom he has entrusted or sold the timber he can claim reimbursement of the compensation amount which he is liable to make good to the claimant and nothing beyond. 10. Before WC Commissioner, reply was filed by opponent No.1 Ansari Builders denying averments made in application. Before WC Commissioner, vide Exh. 28, deposition of applicant was recorded on oath. Affidavit of Dr. YB Ghoda is filed at Exh. 34. Written arguments were submitted on behalf of claimant and opponent which were considered by WC Commissioner. Evidence of applicant Exh. 28 was cross examined by other side and it was supported by his witness Arjun Mepa Chauhan wherein it was stated that claimant received injury during course of employment. On 19.1.91, work of gutter was going on at opponent no.1 and he had fallen in ditch of depth of 30 to 40 ft. and received serious type of injuries on the part of his back. Nothing to contrary was pointed out by opponent and, therefore, WC Commissioner held that applicant was workman of opponent no.1 and received injuries in accident during course of employment. and received serious type of injuries on the part of his back. Nothing to contrary was pointed out by opponent and, therefore, WC Commissioner held that applicant was workman of opponent no.1 and received injuries in accident during course of employment. Thereafter, WC Commissioner considered salary of Rs.1000.00 also considered Schedule 4 attached to WC Act and considering 23 years age, applied relevant factor 219.95 and considering permanent disability suffered by applicant, held that claimant is entitled to receive compensation of Rs.1,09,975.00 with 50 per cent penalty as no compensation was paid by opponents inspite of service of notice and interest at rate of 12 per cent per annum from date of application till realization as well as costs of application of Rs.500.00. Therefore, according to my opinion, WC Commissioner has rightly examined matter considering evidence of claimant Exh. 28 and evidence of Arjun Chauhan Exh. 36 against which no evidence was led by immediate employer and therefore, commissioner has rightly calculated compensation for claimant and WC Commissioner has rightly directed opponents no.2 and 3 first to satisfy his order by paying compensation of Rs.1,09,975.00 with penalty and interest as well as costs and then to recover same from opponent no.1 Ansari Builders. According to my opinion, considering Agreement between opponents herein as referred to above and also considering section 12(2) of WC Act, WC Commissioner has rightly issued such directions and in doing so, no error has been committed by WC Commissioner. 11. In view of aforesaid discussion, order made by WC Commissioner does not call for any interference of this Court. Therefore, after satisfying impugned award of WC Commissioner in toto, it is open for present appellants to recover same from original opponent No.1 Ansari Builders in accordance with Agreement between them as referred to above and as per section 12 of WC Act. Therefore, it is directed to appellants to deposit amount of 50 per cent penalty and 12 per cent interest as directed by WC Commissioner, before WC Commissioner Katchh at Gandhidham within eight weeks from date of receiving copy of this order. It is made clear that after amount is deposited by appellants before WC Commissioner, appellants are entitled to recover same from Ansari Builders in accordance with law and Agreement as referred to above. It is made clear that after amount is deposited by appellants before WC Commissioner, appellants are entitled to recover same from Ansari Builders in accordance with law and Agreement as referred to above. It is directed to respondent no.2 Ansari Builders to pay amount of compensation with penalty and interest as directed by WC Commissioner, as per aforesaid Agreement and as per sec. 12 of WC Act within three months from date of receiving copy of said orders. 12. In view of aforesaid discussion, there is no substance in this appeal and same is required to be dismissed. Same is, therefore, dismissed with no order as to costs. Amount, if any, deposited by appellants in registry of this court be transmitted to WC Commissioner concerned. 13. It is directed to WC Commissioner Kachchh at Gandhidham to disburse Rs.1,09,975.00 (rupees one lakh nine thousand nine hundred seventy five only) to claimant herein by way of an account payee cheque drawn in his favour immediately without delay. After amount of 50% costs and interest at rate of 12 per cent is deposited by appellants before WC Commissioner Kachchh at Gandhidham, it is further directed to WC Commissioner Kachchh at Gandhidham to pay same to claimant by way of an account payee cheque after proper verification without any delay.