Himachal Pradesh High Court
H.P. State Forest Corporation Ltd. vs Vimla Devi And Ors. on 30 September, 1999
Equivalent citations: (2000)IILLJ500HP
Author: Lokeshwar Singh Panta
Bench: D. Raju, Lokeshwar Singh Panta
JUDGMENT Lokeshwar Singh Panta, J.
1. The above appeal by the Himachal Pradesh State Forest Corporation Ltd. (for short 'appellant-Corporation') under Section 30 of the Workmen's Compensation Act, 1923 is directed against the order dated March 31, 1992 of Commissioner under Workmen's Compensation Act, Sundernagar, District Mandi in case No. 5 whereunder the claim of claimants 1 to 3 for compensation for the death of workman Krishan Lal was allowed to the tune of Rs. 63,385.26 p.
2. Briefly stated the facts of the case are that Krishan Lal was drowned on March 6, 1988 under glacier while working with the appellant-Corporation and respondent No. 4 Achhar Singh Bhag Singh Timber Contractor. The legal representatives/heirs of deceased Krishnan Lal made a claim before the Commissioner below for compensation on account of the death of their sole breadearner who died while working with the appellant-Corporation and respondent No. 4 as their employee. The claimants alleged that Krishan Lal was employed at the rate of Rs. 1000/- per month at the relevant time by his employers and the notice of the accident was given to the appellant-Corporation and respondent No. 4 by the claimants in time but the employers have not settled their claim and hence the necessity of filing the claim petition had arisen to them.
3. The appellant-Corporation and respondent-contractor have not accepted the claim of the claimants. The respondent-Contractor in his reply denied that deceased Krishan Lal before his death was getting Rs. 1000/- per month as wages and according to him the deceased was earning Rs. 720/- per month at the time of death and the claimants have been paid Rs. 21000/- and in addition to the said amount the appellant-Corporation had got him insured and therefore, the liability to pay compensation was said to be that of the appellant-Corporation. The appellant-Corporation in its written statement denied its responsibility to pay the amount of compensation.
4. On the controversial pleadings of the parties the Commissioner below framed the following issues:-
"i) Whether applicant was workman? If the above is yes then,
1. Who will pay compensation for the death of the workman?
2. For the purpose of amount of compensation of Workman's.
i) Age.
ii) Pay which workman is receiving
iii) Others."
5. Against issue No. 1, the Commissioner recorded finding that Krishan Lal at the time of his death was on the same work for which he was engaged. The Commissioner below came to the conclusion on the basis of the evidence adduced by the parties that respondent- Contractor was engaged by the appellant-Corporation as per departmental procedure documents Exhibits D-1 to D-7. A copy of the agreement Ext. D-8 has been produced on record. The Commissioner below on the basis of the provisions of Clause 16 of the agreement Ext. D-8 came to the conclusion that the deceased was got insured by the appellant-Corporation and the appellant-Corporation has failed to prove that under which part of Clause 16 of the contract the deceased was engaged as labourer by the respondent-Contractor. On the basis of the appreciation of the evidence, the Commissioner held that the responsibility under Section 12(-1) of the Workmen's Compensation Act, was on appellant-Corporation to pay the amount of compensation to the claimants and the age of me deceased was about 23 years and his wages have been fixed at Rs. 720/- per month. Consequently, the claim petition was allowed and compensation of Rs. 63,345.26 p came to be awarded by the Commissioner to the legal heirs- claimants for the death of Krishan Lal.
6. The appellant-Corporation feeling aggrieved and dissatisfied against the order of the Commissioner below has filed the present appeal.
7. We have heard learned counsel on either side.
8. Mr. Neel Kamal Sood, learned counsel for the appellant- Corporation has vehemently contended that Krishan Lal was employed as workman by respondent-Contractor who was responsible for paying the wages of all the workmen and that under Clause 16 of the Agreement Deed the labour was to be employed by the Mate/Corporation. According to the learned counsel, the Commissioner below erred in holding that the payment to the labour was made by the Appellant-Corporation and if any compensation has to be paid for the death of a labourer, it was the liability of the respondent-Contractor to compensate the legal representatives/heirs of the deceased and not that of the appellant-Corporation and therefore, finding to the contrary recorded by the Commissioner below is not legal and sustainable and is liable to be set aside.
9. On the other hand learned counsel for the respondents have sought to support the finding and conclusion of the Commissioner below.
10. In order to appreciate the rival contentions of the learned counsel for the parties, we have re-appraised the entire evidence on record more particularly the terms and conditions of the Agreement entered into between the appellant-Corporation and respondent-Contractor and the relevant provisions of the Act. The appellant-Corporation and respondent-Contractor entered into an agreement copy which was placed on record and marked as Ext. D.-8 for floating of timber of lot No. 1/83-87, 2/83-88 and 1/84-87 for Pandi division for the year 1986-87 and the estimated value of the work was fixed at Rs. 14,95,000/-. The agreement came to be executed on May 28, 1986 between the parties. In Clause 13 of the agreement a stipulation has been incorporated that the contractor or Mate will make a Roll Call Register to mark the daily attendance of the labour force present on the works and would produce the same on demand to the Divisional Manager or the official Incharge of the work as and when required to do so. The relevant clause which is made applicable in the present case is Clause 16 which reads as under:-
"16, That in case compensation under the Workmen's Compensation Act, is payable to the labour employed for departmental works through the mate(s) the same shall be paid by the H.P. State Forest Corporation whereas in case of labour employed by mate such compensation will be paid by the mate himself."
11. The appellant-Corporation has relied upon this clause to urge that the deceased Krishan Lal was employed by respondent Contractor, therefore, the compensation to the claimants has to be paid by the respondent Contractor and not by the appellant Corporation. The respondent-Contractor in his written statement stated that he was merely the labour supply mate of the appellant-Corporation on commission basis and it was the appellant-Corporation alone who was the employer of the labour and therefore, Krishan Lal was the employee of appellant- Corporation being a principal employer.
12. Mr. Neel Kamal Sood submitted in the light of Clause 16 of the agreement entered into between two opposite parties, Section 12(1) of. the Act may not have any application to the facts of the case and as such the Commissioner was not justified in making the appellant- Corporation alone liable for the payment of compensation.
13. Now, we consider it appropriate to extract the provisions of Section 12 of the Act which read as under: -
"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 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 reference 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 than 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."
14. Interpreting the provisions of Section 12 of the Act, four essential conditions have to be satisfied before Section 12 can be applied. The four conditions are thus:-
"(i) That the person (called the principal) is carrying on a trade or business and, in the course of or for the purpose of that trade or business, engages a contractor to execute the work.
(ii) That work is ordinarily a part of the trade or business of the principal.
(iii) The accident which gives rise to the liability for compensation must have occurred on, in or about the premises on which the principal has undertaken, or usually undertakes, to execute the work or which is in his control or management.
(iv) The accident must have occurred while the workman was in the course of his employment in executing the work."
15. The findings recorded by the Commissioner in his order would go to show that the above conditions are satisfied in this case. The employee Krishan Lal was doing the work of lifting the timber and floating the same in a Ghall which work was assigned to respondent-Contractor by appellant-Corporation and therefore, the appellant-Corporation was the principal employer of the deceased.
16. In the circumstances, we are of the view that Section 12 of the Act is applicable to the facts of the case on hand and there cannot be any doubt about the legal position that the second opposite party i. e. appellant-Corporation is also liable to pay compensation payable under the Act to the workman even if workman was engaged actually only by the second opposite party i.e. respondent-Contractor.
17. 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 second opposite party-appellant Corporation as principal: employer will be entitled to be indemnified by the respondent-Contractor by virtue of Section 12(2) of the Act. We say so because in this case the second opposite party appellant-Corporation has specifically contended that as per Clause 16 of the agreement entered into between the Corporation and the contractor, the contractor has expressly undertaken the responsibility for payment of compensation to the labour employed by him.
18. In the circumstances we would hold that the appellant- Corporation is entitled to recover the amount if any paid to the claimants in this case from respondent-Contractor by way of indemnity.
19- We do not think that there is any merit in the contention of the learned counsel for the appellant-Corporation that in the light of the contract entered into between the two opposite parties regarding the liability to pay compensation as per Clause 16 of the agreement and that clause will override the provisions of Section 12. The avowed object with which Section 12 was enacted as part of the Act as seen is to enable the workmen or the dependents 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. If these were the avowed objects with which Section 12 of this Act was incorporated in, an enactment which itself is a beneficial legislation intended to confer benefits on the workmen, we are of the view that 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. 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.
20. For the reasons stated above, we would allow the appeal in part and modify the order passed by the Commissioner by making the appellant-Corporation and respondent-Contractor also liable to pay compensation amount to the claimants in this appeal. We would also declare that the second opposite party appellant- Corporation will be entitled to recover from opposite party No. 2 - Contractor such amount paid to the claimants by way of indemnity in view of the provisions of Section 12(2) of the Act and Clause 16 of the agreement entered into between the two opposite parties, by executing this order itself.
21. We are supported in our views and observations by two judgments of the Bombay and Kerala High Courts in Sarjerao Unkar Jadhav v. Gurinder Singh 1990 Acc CJ 719: and Koodalingam v. Superintending Engineer, (1995-I-LLJ-334) (Ker-DB). In both these judgments the learned Judges of the High Courts held that if death arose out of and in the course of business of the principal and on the basis of the agreement the liability to pay compensation in regard to the deceased-workmen will rest squarely on the contractor in such cases Section 12(1) of the Act will be applicable notwithstanding the agreement and the principal was entitled to recover from the contractor the amount of compensation paid to the claimants by way of indemnity.
22. In the result we allow the appeal in part and modify the order of the Commissioner below to the extent indicated above. Costs on parties.