JUDGMENT 1. Heard. 2. Admit. Record and proceeding received. Heard finally by consent of learned counsel. 3. The Municipal Council, Latur assails the award of compensation of Rs.1,99,433/- with interest @ 12% p.a. recorded by the learned Commissioner for Workmen's Compensation, Latur, by order dated 3.11.2011. 4. The original claimant (respondent No.1) served, however, absent. 5. The claimant was serving with respondent No.2 as labour. Construction of shopping complex of Municipal Council, Latur was in progress at Gandhi Maidan, Latur under a agreement with respondent No.2, as a contractor. On 3.9.2001, he was watering slab and owing to fall from slab, the claimant has suffered grievous injuries. He was required to be admitted in Vivekanand Hospital, Latur. Offence vide Crime No. 39 of 2002 was registered. Respondent No.1 (claimant) asserted that he was getting Rs.100/- per day and at the time of accident, he was 20 years old. He became disable and unable to work in the same spirit, as he was doing and filed the proceeding. 6. The factual scenario of the accident and injuries suffered by respondent No.1 is not in controversy. The moot substantial question raised by the Municipal Council is about its contractual obligation to release compensation jointly and severally with the contractor/respondent No.2. 7. Learned counsel invited my attention to Section 2(2) and also section 12 of the Workmen's Compensation Act 1923. In order to impress his point, he has placed reliance on the judgment reported in 1979 (0) BCI 85 in the matter of Garrison Engineer (Projects) vs. Guttamma Hanmantdas. He says, in the light of Section 2(2), the activities of construction of shopping complex could not be treated as regular business activities of the Municipal Council and hence, the provisions of Workmen's Compensation Act 1923 would not be applicable to face the liabilities. 8. Mr. Rodge, learned counsel for respondent No.2/contractor says, there is no controversy of agreement entered into between the contractor and the Municipal Council on 22.6.2000. He also does not dispute indemnity clauses, particularly clause No. 22.1 and 24.1. He has relied upon the judgment of this court in the matter of SarjeraoUnkar Jadhav vs. Gurindar Singh & Anr-1990 ACJ 719 and also to the judgment in the matter of Panditrao Shamrao Bhongade vs. Sunanda Nagesh Dongre – (2000) ACC 522. He reinforced the contention, that liability would equal to be shared by the appellant Municipal Council. He has relied upon the judgment of this court in the matter of SarjeraoUnkar Jadhav vs. Gurindar Singh & Anr-1990 ACJ 719 and also to the judgment in the matter of Panditrao Shamrao Bhongade vs. Sunanda Nagesh Dongre – (2000) ACC 522. He reinforced the contention, that liability would equal to be shared by the appellant Municipal Council. He does not dispute the spirit and legal implications arising out of section 12(2) of the said Act. 9. There cannot be a contest between the parties to the terms of agreement dated 22.6.2000. Clause 22.1 provides damage to a person and property. It reflects, the contractor shall, except if and so far as the contract provides otherwise, indemnify the employer against all losses and claims in respect of injuries or damages to any person or material of physical damage. Clause 22(c) provides injuries or damage to persons or property which are the unavoidable result of the execution or maintenance of the works in accordance with the contract. Clause 24 (i) deals with accident or injury to workmen. It indicates that the employer shall not be liable for or in respect of any damages or compensation payable at law in respect or in consequence of any accident or injury to any workman or other person in the employment of the contractor or any sub-contractor, save and except an accident or injury resulting from any act or default of the Employer, his agents, or servants, the contractor shall indemnify and keep indemnified the Employer against all such damages and compensation........ 10. Conjoint reading of these two clauses eloquently establish that the contractor has undertaken liability to indemnify the employer-Municipal Council and also to independently take care of claims of his employees suffering accident. 11. The import given to effect of Section 2(2) by the learned counsel for the appellant, by relying on judgment in the matter Garrison Engineer (Projects) will not be applicable. In the matter of Garrison, the Navy department wanted to abolish its barracks situate at Colaba. For that purpose, they entered into an agreement with the firm of auctioneers called ‘Gandhi and Co.’ One Padmanabhan, being the highest bidder, started demolition of buildings. Padmanabhan had engaged a labour, who expired in the accident. It was admitted by the widow of labour and brother of the labour that they were employed by Padmanabhan and were being paid their wages by Padmanabhan. Padmanabhan had engaged a labour, who expired in the accident. It was admitted by the widow of labour and brother of the labour that they were employed by Padmanabhan and were being paid their wages by Padmanabhan. It was also submitted, neither the deceased nor the brother was employed by Garrison Engineer. It was informed that Padmanabhan was sub contractor. In the scenario of the matter, the learned Single Judge of this court gave effect to provisions of Section 2 (2) and 12(1) of the Act. The work of abolition of construction or its demolition was treated to be not regular business activities in view of Section 2(2) of the said Act. There could not be a contest in the facts of the said case, thus, it will not be applicable to the events indicated herein before. 12. In the present transaction, the effect to liability will basically flow from the agreement dated 22.6.2000. This will have to be read in consonance to Section 12(1) or Section 2(2) of the Act. Section 2(2) and 12(1) of Workmen’s Compensation Act reads as under:- “2(2) The exercise and performance of the powers and duties of a local authority or of any department [acting on behalf of the Government] shall, for the purposes of this Act unless a contrary intention appears, be deemed to be the trade or business of such authority or department. Section 2(2) and 12(1) of Workmen’s Compensation Act reads as under:- “2(2) The exercise and performance of the powers and duties of a local authority or of any department [acting on behalf of the Government] shall, for the purposes of this Act unless a contrary intention appears, be deemed to be the trade or business of such authority or department. 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 contractors 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 [employees] employed in the execution of the work any compensation which he would have been liable to pay if that [employee] 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 [employee) under the employer by whom he is immediately employed.” The basic liability to pay loss to the employees is of the contractor in terms of Section 12(1). The contractor was engaged for the purpose of effecting shopping complex, it cannot be, therefore, said to be a trade or business of the authorities or of the Municipal Council, even if the Municipal Council desired to generate revenue. The contractor in the situation was responsible and liable for payment of compensation under section 12(1) of the Workmen’s Compensation Act. 13. The purpose and effect of sub-Section 2 of Section 12 is that the principal, who is made primarily liable for payment of compensation, shall be entitled to be indemnified by the contractor, who has engaged employee or the workmen. 14. Thus, the provisions will have to be read in tune with agreement dated 22.6.2000. Agreement elaborately illustrate, it would be the responsibility of contractor to make payment for loss suffered by the employee and if the amounts are paid by the Municipal Council to indemnify the same. 15. 14. Thus, the provisions will have to be read in tune with agreement dated 22.6.2000. Agreement elaborately illustrate, it would be the responsibility of contractor to make payment for loss suffered by the employee and if the amounts are paid by the Municipal Council to indemnify the same. 15. Learned Commissioner had oblivious, to the above situation of law, held joint and several responsibility of Municipal Council with the contractor. It was expected that he should have fasten the liability to the contractor and if the amounts are paid by the employer i.e. Municipal Council the contractor to indemnify or entitlement of Municipal Council to recover the same. 16. Conspectus of facts disclose, the order under challenge calls for interference. The award for Rs.1,99,233/- with interest @ 12% p.a. is not disturbed, however, the liability to pay would be of the contractor (respondent No.2 in the appeal) and thereafter it would be against the employer, Chief Officer, Municipal Council, Latur. 17. Appeal is partly allowed qua the appellant. No costs. The amount deposited by the Municipal Council on 30.11.2011 to be withdrawn after 17.4.2014. 18. Civil application No. 40 of 2013 disposed of.