Kerala High Court
The General Manager vs P.J.Saramma (Died) on 29 February, 2012
Author: P.N.Ravindran
Bench: P.N.Ravindran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN
&
THE HONOURABLE MR.JUSTICE K.RAMAKRISHNAN
TUESDAY, THE 28TH MARCH, 2017/7TH CHAITHRA, 1939
MFA.No.186 of 2012 () [C.R.]
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(AGAINST THE ORDER IN WCC 69/2008
of W.C.C., KOTTAYAM DATED 29-02-2012)
APPELLANT(S)/APPELLANT/2ND OPPOSITE PARTY:
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THE GENERAL MANAGER, TELECOM,
BSNL, KOTTAYAM.
BY ADV. SRI.MATHEWS K.PHILIP
RESPONDENTS/APPLICANT/1ST OPPOSITE PARTY:
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1. P.J.SARAMMA (DIED), PALLIVATHUKKAL HOUSE,
KALVARY MOUNT, DOUBLE CUTTING,
NARAKAKKANANAM, IDUKKI DISTRICT.
2. P.A.JOHN @ JOHNY, MALIKAYIL, MANNATHUR P.O.,
PAMPAKUDA (VIA),
MOOVATTUPUZHA, ERNAKULAM DIST.
ADDL.R3. SOJAN, PALLIVATHUKKAL HOUSE,
KALVARY MOUNT, DOUBLE CUTTING,
NARAKAKKANANAM, IDUKKI DISTRICT.
ADDL.R4. SHERLY, PALLIVATHUKKAL HOUSE,
KALVARY MOUNT DOUBLE CUTTING,
NARAKAKKANANAM, IDUKKI DISTRICT.
(LEGAL HEIRS OF THE DECEASED FIRST REPONDENT ARE IMPLEADED AS ADDL.R3
AND ADDL.R4 AS PER ORDER DATED 6.11.2014 IN I.A.NO.2510/2014 IN
M.F.A.(W.C. ACT) 186/2012)
R2 BY ADV. SRI.O.D.SIVADAS
ADDL.R3 & R4 BY ADV.SRI.S.MANU
THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 29-06-2016,
THE COURT ON 28.03.2017 DELIVERED THE FOLLOWING:
ss
P.N.RAVINDRAN & 'CR'
K.RAMAKRISHNAN, JJ.
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M.F.A. (W.C. Act) No.186 of 2012
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Dated this the 28th day of March, 2017
JUDGMENT
K.RAMAKRISHNAN, J The second opposite party in W.C. case No.69 of 2008 on the file of the Commissioner for Workmen's Compensation (Deputy Labour Commissioner), Kottayam is the appellant herein. The mother- dependant-legal heir of deceased Shaji filed the claim for compensation for the death of her son Shaji occurred on 4.12.2005 while he was employed under the opposite party. The first opposite party was a contractor under the second opposite party. The second opposite party was the principal employer who had entrusted the first opposite party/contractor, the work of digging cable trench at Manimala. The first opposite party employed deceased Shaji for that purpose. On 4.12.2005 at about 3 p.m. after completion of his work, deceased Shaji went with other workers to the nearest Manimala River for taking bath and cleaning cloths and while taking bath in the river, he drowned and died. The body was recovered from the river on the next day. The death occurred during the course of employment under the first opposite party. The first opposite party provided accommodation to the deceased and the other workers for stay after M.F.A. (W.C. Act) No.186 of 2012 2 their work, but for the employment under the first opposite party, he would not have reached that place. So the doctrine of notional extension of employment is applicable in this case. The deceased was aged 30 years and drawing 300/- per day as daily wages. The claimant claimed 4,15,960/- as compensation.
2. After conducting preliminary enquiry, the commissioner found that there was prima facie case and the delay in filing the application was condoned as it was within the time limit and the applicant was temporarily exempted from remitting court fee and decided to proceed with the case and issued notice to the opposite parties.
3. Though notice was served on the first opposite party, he did not appear and remained absent.
4. The second opposite party entered appearance and filed written statement denying the allegations. They contended that first opposite party was an independent contractor and employed workers of his choice and there was no employer-employee relationship between the second opposite party and the deceased and there was no nexus with the employment and the cause of death. So there is no notional extension of employment. They are not liable to pay any compensation. They prayed for dismissal of the application. M.F.A. (W.C. Act) No.186 of 2012 3
5. AWs 1 to 3 were examined and Exts.A1 to A8 were marked on the side of the claimant. AW1 was the claimant and AW2 and 3 were two co-workers of the deceased. No oral or documentary evidence adduced on the side of the opposite party.
6. After considering the evidence on record, the commissioner found that the death occurred in the course of and arising out of an employment under the first opposite party who is a contractor of the second opposite party and second opposite party being the principal employer under Section 12 of the Workmen's Compensation Act, 1923 is liable to pay compensation and fixed the compensation payable as per the Schedule as 4,19,800/- and directed the second opposite party to pay the amount with 12% simple interest with effect from 4.12.2005 within 30 days from the receipt of the order along with funeral expenses of 2,500/-, failing which the amount will be realised with 30% of such amount towards penalty. Aggrieved by the same, the above appeal has been preferred by the second opposite party, the appellant herein.
7. Heard Sri.Mathew K.Philip, learned counsel for the appellant, Sri.O.K.Sivadas, learned counsel for the second respondent who was the first opposite party before the authority below and Sri.S.Manu, learned counsel for the additional respondents 3 and 4 as M.F.A. (W.C. Act) No.186 of 2012 4 they were impleaded as legal heirs of the original first respondent/ the claimant before the authority below, since she died during the pendency of the appeal.
8. Earlier the case was disposed of by oral judgment by dictating the judgment in open court, but before signing the judgment since some clarification was required, the order was recalled and the case was reopened and posted for further hearing.
9. After re-opening the case, the appellant filed I.A.No.2206/2016 to receive the additional written statement and the same was received after notice to the other parties appearing in the appeal. In the additional written statement, they have contended that without prejudice to their contentions raised in the original statement before the authority below, it is submitted that, if any amount is found liable to be paid by this respondent, they are entitled to get back the same from the first opposite party on the basis of the agreement entered at the time of awarding the contract and on the basis of undertaking given by him. This respondent being the principal employer, they are entitled to be indemnified by the contractor/first opposite party and such question as to the right to and amount of any such indemnity is to be settled. So the compensation if any paid by this respondent has to be indemnified to this respondent by the first M.F.A. (W.C. Act) No.186 of 2012 5 opposite party as per Section 12(2) of the Workmen's Compensation Act.
10. They also filed I.A.No.2205/2016 to receive additional evidence and both these applications were allowed and the additional written statement was received and the original bid document and agreement entered into between the first opposite party and the second opposite party were received and marked as Ext.B1 to B3 on the side of the appellant.
11. The questions of law that have been raised for consideration are:
(i). Whether the finding of the employer-employee relationship entered into by the Commissioner for Workmen's Compensation in the absence of any documentary proof is sustainable in law when the deceased and first opposite party are mother and son?
(ii) Whether the impugned order of the Commissioner for Workmen's Compensation, directing the appellant to deposit the compensation together with 12% interest from the date of accident is correct in the light of the dictum laid down by the Apex Court in National Insurance Co. Ltd. v. Mubasir Ahmed & Another (2007) 2 SCC 349) and followed in Kamala Chathurvedi v. National Insurance Company [2008(4) KLT 862 (SC)] and Oriental M.F.A. (W.C. Act) No.186 of 2012 6 Insurance Company Ltd., v. Mohd Nasir and Another (2009(6) SCC 280) and Palraj v. The Divisional Controller N.E.K.R.T.C. (C.A.No. 7430/2010) dated 7.9.2010, which arose from SLP(C) 10416/2008.
12. The additional question of law that has been raised by this court after receiving the additional written statement and marking documents is "whether the Commissioner for compensation was justified in not granting the right of indemnification as provided under section 12(2) of the Act to the appellant to be recovered from the first opposite party".
13. The fact that the first opposite party is a contractor employed by the second opposite party for the purpose of digging trench in connection with their trade for laying cable and deceased Shaji was employed by the first opposite party for that purpose and he was an employee under the first opposite party are not in dispute. It is also an admitted fact that deceased Shaji died on 4.12.2005 at 3 p.m., while he was taking bath from the Manimala river situated near the place of employment along with his co-workers and while so he drowned in the river and died. The evidence of AWs 2 and 3 will go to show that after the work was over, they went for taking bath, at that time the unfortunate incident occurred. Then the question is whether M.F.A. (W.C. Act) No.186 of 2012 7 the death will be deemed to have occurred in the course or arising out of employment and according to the opposite parties since the incident did not occur at the time when he was engaged in doing work, it cannot be said that, there was any nexus between the death and the employment and as such that will not come under the purview of the provisions of the Workmen's Compensation Act. This question has been considered by this court in the decision reported in National Insurance Company Ltd., v. Padmavathy (2012(2) KLT 854) where it has been held that in a case where the driver had drowned when he had gone for a dip in the river after washing the vehicle, such situation cannot be excluded from the continuity chain of events in connection of the employment. So the doctrine of notional expenses of the employment will come under such circumstances and it cannot be said that there was no nexus between the employment and the death as contended by the opposite parties in the authority below. So the Commissioner for Workmen's Compensation was perfectly justified in coming to the conclusion that the application is maintainable and the death occurred arising out of and in the course of employment applying the doctrine of notional extension of employment and awarded compensation under that Act.
14. Then the next question is whether the Commissioner was M.F.A. (W.C. Act) No.186 of 2012 8 justified in awarding the interest from the date of accident. It is true that in the decisions reported in National Insurance Company Ltd., v. Mubasir Ahmed (2007 (3) KLT 26 (SC)], the Supreme Court has held that since the legislature has not used expression from the date of accident, the date of payment will be from the date on which it falls due and unless there is adjudication, the question of falling the amount due does not arise and the liability to pay interest will start only from the date of adjudication of the claim by the authority. But a Division Bench of this court in M.F.A.No.59/2011 dated 22.8.2011 (Oriental Insurance Company Ltd., v. Padmini. V and Another), considered all the decisions of this aspect, namely National Insurance Co. Ltd., v. Mubasir Ahmed and Another (2007) 2 SCC 349 = 2007(3) KLT 26 (SC), Kamala Chathurvedi v. National Insurance Company [2008 (4) KLT 862 (SC)] and Palraj v. The Divisional Controller NEKRTC JT (2010 (10) SC 94] and relying on the decisions reported in Pratap Narain Singh Deo v. Srinivas Sabata [(1976) 1 SCC 289], which is a judgment rendered by four judges of the Apex Court where the scope of Section 4(A) of the Workmen's Compensation Act has been considered and held that the amount is payable as soon as the personal injury was caused to the injured/workman and upheld the order of the commissioner directed him to pay interest from the date M.F.A. (W.C. Act) No.186 of 2012 9 of accident.
15. The same view has been reiterated by another Division Bench relied on by the Division Bench which decided M.F.A.No.59 of 2011 mentioned above namely Harrisons Malayalam Ltd., v. P.K. Asharf and Others [2009(1) KHC 799 (DB)]) and held that the liability to pay interest will accrue from the date of accident, if the amount is not paid within one month from the date on which the amount falls due. Relying on those decisions, the Division Bench in that case held that in view of the Larger Bench decision on this aspect of the Apex Court, the Commissioner was justified in ordering interest from the date of accident. Further in the decision reported in Kerala State Electricity Board and another v. Valsala K and another [AIR 1999 (SC) 3502], three Judges Bench of the Apex Court, overruling the decision reported in New India Assurance Company v. V.K. Neelakandan (Civil Appeal No.16904-16906 of 1996 dated 6.11.1996 and approving the Full Bench decision of this court in United India Insurance Company Ltd., v. Alain (1998 (1) KLT
951) held that relevant date for determining is the date of the accident and not date of adjudication of claim. The same question has come for consideration in Letchmi Estate v. Murugan (2012(3) KLT 84), where also another Division Bench of this court relying on the above M.F.A. (W.C. Act) No.186 of 2012 10 decision held that, the liability to pay interest runs from the date of accident and not from the date of adjudication. So there is no merit in the submission submitted by the counsel for the appellant, that the commissioner was not justified in ordering interest from the date of accident and the same is liable to be rejected. We do so.
16. The next contention is as to whether the appellant is entitled to get reimbursement or indemnity from the second respondent herein in view of Section 12(2) of the Act.
Section 12 of the Act reads as follows:
12. Contracting.-(1) Where any person (hereinafter in this section referred to as the principal) in the course of or for the purpose 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.
(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 undertake, a the case may be, to execute the work or which are otherwise under his control or management.
17. Section 12(2) gives a right for the principal employer to M.F.A. (W.C. Act) No.186 of 2012 11 collect the amount from the contractor. The appellant had now filed an additional written statement contending that even if ultimately they were made liable to pay the amount as principal employer they are liable to get indemnity from the first opposite party (second respondent herein) for the amount paid by them.
18. Rule 39 of the Kerala Workmen's Compensation Rules will not apply in this case as the procedure provided therein is to issue notice to the person who is not party to the proceedings, if a claim for indemnity had been made against the third party, in such cases as soon as the claim for indemnity has been made by one of the parties, then notice will have to be issued to the third party who is liable to pay the amount under Section 13 of the Act and then the Commissioner has to make an adjudication on that aspect.
19. In this case, there is no dispute regarding the fact that first opposite party in the lower court is the contractor employed by the second opposite party who is the appellant herein and as per the definition the second opposite party will be the principal employer and even if any liability to pay compensation falls on the contractor, the principal employer is liable to pay the amount and as per Section 12(2) of the Act, they will be entitled to get indemnity from the contractor of the amount which they were made liable to pay the amount. So in this M.F.A. (W.C. Act) No.186 of 2012 12 case, even there is no contention raised regarding indemnity, having found that the appellant is the principal employer and second respondent herein is the contractor, the Commissioner ought to have invoked Section 12(2) of the Act and granted the benefit of indemnity to recover the amount from the contractor to the appellant under Section 12(2) of the Act.
20. Now the appellant also produced Ext.B1 bid document, Ext.B2 the agreement executed by the second respondent herein in favour of the appellant and Ext.B3 the undertaking given by him regarding the indemnification of loss or any payment made by him. Being a party to the contract the second respondent is not entitled to challenge the same as he is bound by the agreement. So there is no necessity to remand the case to the authority below for considering this aspect.
21. The similar question was considered by this court in the decision reported in K. Koodalingams a v. Supt. Engineer & Others (1995 I LLJ 334), it has been held that when the employees of the contractor engaged by Public Works Department died while at work, the P.W.D as principal employer is liable to pay compensation and also entitled to be indemnified by the contractor. Contract between the principal and the contractor cannot affect the right of the M.F.A. (W.C. Act) No.186 of 2012 13 workman or the dependants to claim compensation from either of them at their option. While considering the same, the Division Bench judgment has held, in para 9 and 10 of the judgment which reads as follows:
9. If Section 12 of the Act is applicable to the facts of the case on hand there cannot be any doubt about the legal position that the first opposite party is also liable to pay compensation payable under the Act to the workmen even if the workmen were engaged actually only by the second opposite party. As such the Court ought to have made the first opposite party also liable to pay the compensation applying the provisions of Section 12 of the Act.
The Court while passing the impugned order has clearly committed an error in not noting the provisions of Section 12 and giving effect to it by making the first opposite party also liable to pay the compensation determined in the case.
10. Section 12(2) in unambiguous terms confers a right on the principal who is made liable to pay compensation under the said Section to get himself indemnified by the contractor. As such, we would hold that the first opposite party as principal will be entitled to be indemnified by the contractor by virtue of Section 12(2) of the Act and to recover the amount of compensation, if any paid to the workmen, whom the second opposite party in execution of the orders passed in the two cases itself. We say so because in this case the first opposite party as specifically contended that as per clause 15 of the agreement entered into between the department the contractor, the contractor has expressly undertaken the responsibility for payment of compensation under the Act and the court as per the impugned order has accepted the above contention and held the second opposite party exclusively liable to pay the compensation found due. Though notice was issued to the second opposite party, he has remained ex-parte before the court below and in this Court. In the circumstances, we would hold that the first opposite party is entitled to recover the amounts, if any, paid to the appellants in the two cases from opposite party No.2 by way of indemnity.
22. That was also a case where the principal employer and the contractor were made parties and in spite of notice issued, the contractor did not contest or appear, only the department contested M.F.A. (W.C. Act) No.186 of 2012 14 the case and the commission for workmen's compensation had made the contractor alone liable to pay the amount. The contractor who challenged the same in the appeal and while disposing the appeal, the Division Bench of this court has held that the first opposite party being the principal employer is liable to pay the amount along with second opposite party under Section 12(1) of the Act and the Commissioner ought to have granted a right of indemnity to recover the amount to the first opposite party from the second opposite party.
23. The same view has been reiterated in the decision reported in H.P. State Forest Corporation Ltd., Vimla Devi and Others (2000) II- LLJ 500) of the High Court of Himachal Pradesh. That was a case where the Workmen Compensation Commissioner had not considered the question of indemnity under Section 12(2) of the Act when the corporation filed the appeal, it was considered by the High Court of Himachal Pradesh and modified the order passed by the Commissioner making both the Corporation and the contractor liable to pay the amount to the claimant and granted the right of indemnification to the Corporation as it was held in the decision, the right of the principal to recover the amount from the contractor has been safeguarded by the statute by providing the indemnity clause under Section 12(2) of the Act.
M.F.A. (W.C. Act) No.186 of 2012 15
24. In the decision reported in Manager UCO Bank, Chennai v. A.Kumar, Chennai [(2009)2 MLJ 250], Madras High Court has held that, when there is no brevity of contract between the principal employer and the injured and the immediate employer is not made party to the proceedings in the claim for compensation, then the proceedings is vitiated and remanded the case to the commissioner to give an opportunity to the claimant to implead the immediate employer and consider the question of indemnity under Section 12(2) of the Act.
25. Since the contract has been produced before this court and the second opposite party in the lower court also entered appearance in this appeal, we do not think it is necessary to remand the case to the authority below for considering the question as to whether the appellant is entitled to get the right for indemnity from the second respondent herein as both the parties are available before this court and this court can consider those aspects as well.
26. In the decision reported in Kerala State Electricity Board v. Sudaram Estate [(1987) II LLJ 311 Ker.], it has been held that if a person being total stranger is responsible for the accident by which the injury was caused to a workman, the principal employer as indemnified is bound to pay compensation to the worker and recover M.F.A. (W.C. Act) No.186 of 2012 16 the same from the person who caused the injury by recourse to the Act. In the decision it has been held, the liability of the principal to pay compensation to the contractors/workman arises where he had in the course of or for the purposes of his trade or business engaged a contractor for execution of his work which is ordinary part of his trade or business and a workmen employed by the contractor for the execution of such work was injured by an accident which occurred in the principal's premises, an absolute liability is cast on the principal in such circumstances as if the workman was his immediate employee. Sub section (2) of section 12 however entitles the principal to be indemnified by the contractor. These two sub sections thus simultaneously impose a liability and confer a corresponding right upon the principal, such right and liability have to be worked out by recourse to the machinery provided under sub section (2) and not by any proceeding outside the Act. This means that in the absence of an agreement between the parties, the commissioner has exclusive jurisdiction to settle such questions. The scope of sub section (2) was considerably widened by Section 9 of Act 15 of 1933. As a result of this amendment, the principal is entitled to be indemnified not only by the contractor as was the pre-amendment position, but also by any other person from whom the workmen would have recovered M.F.A. (W.C. Act) No.186 of 2012 17 compensation. The Division Bench was considering the scope of Section 12 and 13 of the Act and held that, even if a third party was involved who is liable to indemnify the principal employer by virtue of Section 13 of the Act, that also can be considered while considering the right of indemnity to be given to the principal employer under Section 12(2) of the Act in the same proceedings and it cannot be delegated to another proceedings. The same view has supported by a decision of the Andrapradesh High Court as well reported in Larsen & Toubro Ltd. v. Bogalakshmin & Others [(2003) IV-LLJ (Suppl)- NOC-109], where it has been held that the commissioner should have passed appropriate orders to indemnify the principal employer as provided for in section 12 of the Act.
27. Clause 15 in Ext.B1 bid document deals with right of indemnity which reads as follows:
15.1 The contractor shall at all times hold the BSNL harmless and indemnify from against all action, suits, proceedings, works, cost, damages, charges claims and demands of every nature and descriptions, brought or procured against he BSNL its officers and employees and forthwith upon demand and without protect or demur to pay to the BSNL any and all losses and damages and cost (inclusive between attorney and dient) and all costs incurred in endorsing this or any other indemnity or security which the BSNL may now or at any time have relative to the work or the contractors obligation or in protecting or endorsing its right in any suit on other legal proceeding, charge or expense and liabilities resulting from or incidental or in connection with injury, damages of the contractor or damaging to property resulting from or arising out or in any way connected with or incidental to the operations caused by the contract documents. In addition the contractor shall reimburse the BSNL or pay to the BSNL forthwith on demand M.F.A. (W.C. Act) No.186 of 2012 18 without protect or demur all cost, charges and expenses and losses and damages otherwise incurred by it in consequences of any daim, damages and actions which may be brought against the BSNL arising out of or incidental to or in connection with the operation covered by the contractor.
15.2 The contractor shall at his own cost at the BSNL's request defend any suit or other proceeding asserting a claim covered by this indemnity, but shall not settle, compound or compromise any suit or other finding without first consulting the BSNL.
28. It is on this basis, Ext.B2 agreement was entered into between the appellant and the second opposite party to which the conditions in Exts.B1 and B2 are made part and also by Ext.B3 undertaking given by the second respondent, he had undertaken to indemnify any loss or damages payable by the appellant which the second respondent is liable to pay to the person affected while executing the contract. So in view of Section 12(2) coupled with the terms of the agreement between the appellant and the second opposite party, the commissioner should have held both the respondents liable to pay the amount and directed the appellant to pay the amount as principal employer and given the right of indemnity to recover the amount from the second respondent herein who was the second opposite party invoking the power under Section 12(2) of the Act.
So the appeal is allowed in part and the order of the Commissioner is modified as follows:
M.F.A. (W.C. Act) No.186 of 2012 19 The opposite parties are jointly and severally liable to pay the amount to the claimants and the second opposite party being the principal employer, is directed to pay the amount and recover the same from the second opposite party, the contractor under section 12 (2) of the Act in accordance with law. On all other aspects the order of the Commissioner is confirmed. The amount if any deposited by the appellant before the Commissioner, is permitted to be withdrawn by the supplimental respondents 3 and 4 herein on production of necessary proof document showing that they are the legal heirs of the deceased original claimant to the satisfaction of the Commissioner.
The original documents produced and marked as Exts.B1 to B3 before this court is directed to be returned to the appellant on substituting the same by certified copy taken from this court. Parties are directed to bear their respective costs in the appeal.
With the above modification of the order passed by the commissioner for Workmen's Compensation, the appeal is allowed in part and disposed of accordingly.
Sd/-
( P.N. Ravindran, Judge) Sd/-
(K. Ramakrishnan, Judge) //True Copy// P.A. to Judge ss