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2017 DIGILAW 1085 (KER)

Chief Post Master General v. Lekha

2017-07-27

K.HARILAL, P.SOMARAJAN

body2017
JUDGMENT : P. Somarajan, J. 1. These are the two appeals preferred against the order passed by the Employees Compensation Commissioner, Idukki, Peermade in E.C.C.No.25/2014 (W.C.C.No.92/2002). M.F.A.No.31/2017 is filed by the first opposite party and M.F.A.No.4/2016 is filed by the opposite party Nos.2 and 3 respectively. The proceedings were initiated on the application made by the legal heirs of one deceased V.S.Venugopala Pillai, on account of his death while he was engaged in painting work in a Post Office building situated in Peermade. Admittedly, the second and third opposite parties entrusted the work with the first opposite party, who is a Contractor under the second and third opposite parties. While the painting work was going on, one of the workers/employees engaged by the first opposite party, fell down from the first floor of the said building and succumbed to the injuries, which has resulted in a compensation application by the legal heirs. 2. The Employees Compensation Commissioner, on consideration of the evidence adduced by both the parties, passed the impugned order by which Rs.3,62,740/-, besides Rs.2,500/- for meeting funeral expenses, with 12% interest per annum was granted to the legal heirs of the deceased by holding that opposite party Nos.2 and 3 are principally liable to compensate the legal heirs of the victim, with a rider that the second and third opposite parties can recover the said amount from the first opposite party. Aggrieved by the said order, the respective opposite parties came up with these two appeals. 3. The main contention raised by the second and third opposite parties is by disputing the status of the victim as an employee under them. It is submitted that he was not a departmental employee and as such, no liability can be cast upon the second and third opposite parties. But, at the same time, they admitted that the work of painting of the building, wherein the Post Office was functioning, was entrusted with the first opposite party on a contractual basis. The first opposite party also took a contention that the deceased was not an employee arranged or employed by the first opposite party, and, as such, no liability can be cast upon either the first opposite party or the second and third opposite parties. The first opposite party also took a contention that the deceased was not an employee arranged or employed by the first opposite party, and, as such, no liability can be cast upon either the first opposite party or the second and third opposite parties. It was also inter alia contented by the first opposite party that if at all any liability is found, the second and third opposite parties are principally liable to compensate the victim as they are the principal employers. 4. The main contention raised by the second and third opposite parties is based on the application of Section 12 of the Employee’s Compensation Act, 1923 (for short ‘the Act’), and it was submitted that Section 12 of the Act would come into play only when the employment, either directly or indirectly, is pertaining to the trade or business of the principal employer. Section 12 of the Employee’s Compensation Act, 1923, is extracted below for reference: “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 (employee) 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. (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 [employee] 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 [employee] 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 [an employee] 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.” (emphasis supplied) 5. A mere reading of Section 12 of the Act would show that the liability which can be fastened under that provision would come into play only when any person was employed for the purposes of “his trade or business”. Before going into that question, it is material to consider what is the legislative impact of Section 12 of the Act. It is really intended not to restrict the liability, but to extend the liability on the principal, by applying the principle that in so far as the incident which has resulted in injuries or death to victims, the principal employer is initially liable to compensate the victim, even though there is an intermediary by way of a contract or entrustment etc and violation of covenants agreed upon. While interpreting Section 12 of the Act, a beneficial construction which would promote the legislative intention has to be adopted and the expression or wording used therein has to be interpreted so as to advance justice and to promote the legislative intention to give benefit to the victim and not to reject it. While interpreting Section 12 of the Act, a beneficial construction which would promote the legislative intention has to be adopted and the expression or wording used therein has to be interpreted so as to advance justice and to promote the legislative intention to give benefit to the victim and not to reject it. So, the expression “trade or business” has to be understood under this context and the duty of the Court is to find out is there any nexus in between the employment of the person concerned with the ‘trade or business’ of the principal. The “trade” of a Post Office would be something different from that of maintaining a building wherein it was functioning. But, if the building is owned by the second and third opposite parties, the maintenance of the business place in a good and healthy condition would form part of their “business” and, if the matter is viewed under that perspective, employment of some person, either on contractual basis or otherwise, for maintaining the building/business place by conducting repairing work, painting work etc. would come under the expression “business” as incorporated under Section 12 of the Act. No distinction has been drawn with respect to any employee under Section 12 of the Act, based on the nature of engagement, whether it is direct or through a Contractor. There is a clear nexus in between the alleged accident and the employment of the victim, which would come under the purview of the expression “business” engrafted under Section 12 of the Act. So, there cannot be any escape for the second and third opposite parties from the initial liability to compensate the applicant (first respondent in the appeals). 6. What is imposed under Section 12(1) of the Act to the principal employer is only an “initial liability” to compensate the employee and it is well evident from sub section (2) of Section 12 of the Act that it casts a liability on the Contractor to indemnify the principal. A mere reading of sub section (2) of Section 12 of the Act would show that the question of indemnification would arise in relation to a Contractor under whom the employee was working 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. A mere reading of sub section (2) of Section 12 of the Act would show that the question of indemnification would arise in relation to a Contractor under whom the employee was working 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. It is really an enabling provision for the Principal to recover the amount of compensation, if any, paid or liable to be paid to the employee and all questions as to the right to and the amount of indemnity shall, in default of agreement, be settled by the Commissioner. The expression “in default of agreement” stands for the default of covenant agreed upon, if any, committed by the Contractor. In other words, when there is no default with respect to any contractual obligation, sub section (2) of Section 12 of the Act would not come into play. The contract entered into between the opposite parties is neither produced, nor let in evidence and the non-production of the said agreement is fatal to the claim, if any, under sub section (2) of Section 12 of the Act. But, it is left open for adjudication after discharging the initial liability on the Principal, the second and third opposite parties, as it is permissible to have a separate application for the relief under sub section (2) of Section 12 of the Act. It can be claimed either in the same application filed under Section 12(1) of the Act or by a separate application under Section 12(2) of the Act, after discharging the initial liability and there is no legal impediment or prohibition in maintaining a separate application under Section 12(2) of the Act. Hence, the direction issued by the Employee’s Compensation Commissioner directing the first opposite party to indemnify the second and third opposite parties is hereby set aside for the purpose of agitating the said issue as per the lex fori-lex locci. 7. It was also disputed by the second and third opposite parties regarding the status of the victim as an employee. A conjoint reading of Section 3 and the definition clause, Section 2(iii) schedule II (viii) of the Act, would clearly show that a person engaged by the Contractor, with whom the work was entrusted by the principal, would come under the purview of employee. 8. A conjoint reading of Section 3 and the definition clause, Section 2(iii) schedule II (viii) of the Act, would clearly show that a person engaged by the Contractor, with whom the work was entrusted by the principal, would come under the purview of employee. 8. It was submitted by the learned counsel for the second and third opposite parties that in order to bring a person within the sweep of employee, the principal should have control over him. Otherwise, there cannot be an employee-employer relationship. In support of the said argument, the decision drawn in Managing Director, Hassan, Co-operative Milk Producer’s Society Union Limited v. Assistant Regional Director, Employee’s State Insurance Corporation reported in (2011) 1 SCC (L&S) 85 = (2010) 11 SCC 537 is brought to our notice. The said decision was rendered by the Apex Court based on the definition given to the expression “employee” under Section 2(9) of Employee’s State Insurance Act, 1948. It is not pari materia with that of the definition given to the expression “employee” in the Employee’s Compensation Act, 1923. The expression “employee” is differently constructed and defined under the Employee’s Compensation Act, 1923, and the Employee’s State Insurance Act, 1948, and what is held by the Apex Court is by interpreting the word “employee” in reference to definition given under Section 2(9) of the Employee’s State Insurance Act, 1948, and it cannot be extended to the expression “employee” as defined under the Employee’s Compensation Act, 1923. 9. Regarding the allegation of contributed negligence by the victim, we are of the considered view that if the work entrusted with the employee is of the nature posing some threat to his life, or danger to his body, or if it is hazardous one, it would cast a duty on the principal employer or the intermediary/the Contractor, by whom the servant was employed, to take all safety measures or safeguarding measures to rule out all possibilities of danger to life or danger to the body of the victim. Of course, the default on the victim to use the preventive measures or equipments when provided would definitely bring the matter within the sweep of contributory negligence. Further, the employer should show and establish that such measures and preventive equipments were provided to the workers. Otherwise, no contributory negligence can be attributed to the victim, who was working at the top of first floor of the building. Further, the employer should show and establish that such measures and preventive equipments were provided to the workers. Otherwise, no contributory negligence can be attributed to the victim, who was working at the top of first floor of the building. Nothing was brought to our notice or let in evidence what are the equipments supplied or measures taken by the second and third opposite parties or the first opposite party so as to prevent the accidental fall of the victim from the working place. If that be so, at any stretch of imagination, no case of contributory negligence can be inferred. 10. The interest awarded at the rate of 12% per annum to the principal amount of compensation, which, according to us, is reasonable and no interference is required. In the result, both the appeals deserves only dismissal and we do so, but without costs.