Kerala High Court
K. Koodalingam vs Supt. Engineer And Ors. on 20 July, 1994
Equivalent citations: 1995ACJ282, (1995)ILLJ334KER
JUDGMENT Ramakrishnan, J.
1. A Common question of law arises for consideration in these two appeals filed against a common order passed by the Court of the Commissioner for Workmen's Compensation, Kozhikode (for short "the Court") in two separate proceedings, namely W.C. No. 97 of 1984 and W.C. No. 98 of 1984 arising out of a single accident in which Thirumurthy, W/o, applicant in W.C. No. 97 of 1984 and Vasantha, D/o. applicant in W.C. No. 98 of 1984 lost their life being buried alive under earth as a result of a landslide. As such we are disposing of the appeals by this common judgment.
2. Relevant facts are not in dispute and are thus: Both cases, namely W.C. Nos. 97 and 98 of 1984 were applications filed under Section 100 of the Workmen's Compensation Act, 1923 (for short "the Act") claiming compensation for the death of workmen admittedly employed by the second opposite party in both cases as contractor engaged by the first opposite party for the purpose of getting a project undertaken by the Public Works Department in the course of its business. The first opposite party is the Superintending Engineer, Project Circle, P.W.D., Kozhikode. The main project undertaken by the first opposite party was the Kuttiadi Irrigation Project. The work entrusted to the second opposite party by the first opposite party was the construction of a canal forming part of the main project. The deceased were engaged in the work of removal of earth from the work site. On January 18, 1977 when the land at a high elevation slided down they got buried alive and breathed their last under the debris. The applicant in W.C. No. 97 of 1984 is the husband of deceased Thirurnurthy and the applicant in W.C. No. 98 of 1984 is the father of deceased Vasantha.
3. First opposite party alone filed written statement and contested the claim. Second opposite party in spite of notice remained ex parte. In the written statement filed by the first opposite party, the Superintending Engineer has categorically admitted that the deceased were employed by the second opposite party in the construction of irrigation canal for the main project and that they died as a result of the accident which arose out of and in the course of their employment at the work site as averred by the applicants in their applications. The rates of monthly wages claimed in the applications were also not disputed. The only contention raised in the written statement was that the PWD is not liable to pay the compensation as claimed in the applications since the workmen were employed by the second opposite party who was entrusted with the execution of the work as per the terms and conditions contained in the agreement in which it has been specifically provided that the contractor (second opposite party) alone will be responsible for the protection of the workmen and that any payment towards compensation under the Act will be to his credit.
4. The court, in the light of the evidence contained in the written statement, found that the deceased were persons employed as workmen as defined in Section 2(1) (n) of the Act read along with entry (viii) (c) of Schedule II of the Act and they died as a result of the accident that arose out of and in the course of their employment at the work site. It was also found that the second opposite party had actually engaged them as workers for performing the work undertaken by him and entrusted by the fist opposite party. The Court, however, found on basis of an interpretation of Clause (15) of Ext. R1 agreement entered into between the two opposite parties that the liability to pay compensation in regard to the deceased workmen rests 'squarely' on the second opposite party. On the basis of the above finding the Court directed the second opposite party to deposit with the Court a sum of Rs. 19,200/- in each case totalling to Rs. 38,400/- as compensation payable to the dependents of the deceased workmen within 30 days from the date of receipt of the order. In default the Court directed payment of simple interest at the rate of 5% per annum from the date of the order till realisation or recovery as the case may be. It is the order so passed which is under challenge in these appeals. The only question to be considered is whether the first opposite party is also liable to pay the compensation as awarded by the Court and if so, whether the first respondent -first opposite party is entitled to get an order in the two cases for recovery of such sums from the second opposite party in the light of the provisions in Section 12(2) of the Act.
5. On behalf of the appellants Mr. Rama krishnan, learned counsel, has contended that Section 12 of the Act squarely applies to the facts of the case and as such the Court ought to have made the first opposite party also liable to pay the compensation determined as due to the applicants-appellants in both cases. Learned counsel also submitted that when the first opposite party is made liable to pay compensation under Section 12 of the Act, the first opposite party shall be entitled to be indemnified by the second opposite party treating the opposite parties as Principal and Contractor for the purpose of Section 12 of the Act. In answer to the above contention, learned Government pleader submitted that in the light of Clause (15) of the agreement entered into between the two opposite parties Section 12 of the Act may not have any application to the facts of the case and as such the Court was perfectly justified in making the second opposite party alone liable for payment of the compensation. There is nothing in the provisions of Section 12 of the Act to indicate that the said Section will have application notwithstanding the specific agreement or contract entered into between the two opposite parties in this case whereby the liability to pay compensation under the Act is exclusively made the responsibility of one of the parties, namely the second opposite party. The specific term contained in the agreement entered into between the two opposite parties, the Principal (first opposite party) and the Contractor (second opposite party) cannot be ignored altogether while determining the liability to pay compensation under the Act. The provisions of Section 12 of the Act can reasonably have application only in cases where there is no specific agreement or contract entered into between the principal and the contractor regarding their liability to pay compensation under the Act. In the circumstances it was contended that no interference is called for with the order passed by the Court which is under challenge in these appeals.
6. Section 12 the Act is thus;
"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 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 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."
7. Interpreting the provisions of Section 12 of the Act, this Court has held in the decision reported in Vijayaraghavan v. Velu (1973 Lab IC 1520) that 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 of 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."
8. The unchallenged findings recorded by the Court in its order would show that conditions 1, 3, and 4 are satisfied in this case. As regards condition No. 2 also there cannot be much dispute. The work for which the deceased workmen were engaged and in the course of which they lost their life is the work of construction of irrigation canals as part of the Kuttiadi Irrigation Project undertaken by the PWD of the State Government. Construction of irrigation canals as part of a major irrigation project is certainly one of the principal concerns of the PWD of the State Government. As such the work in question can only be treated as part of the business of the first opposite party. The view which we take in this mater is supported by the decisions reported in PWD v. Commissioner, Workmen's Compensation (1981 Lab IC 493) (J&K) and Sardara Singh v. Sub Divisional Officer (AIR 1963 Punj. 217) wherein construction of road by the Public Works Department of Government and the construction of irrigation canals by the Irrigation Department were respectively held to be business of the principal, namely the respective Departments of the Government. In the circumstances, we are of the view that in this case the second condition is also satisfied and as such Section 12 would apply to the facts of this case.
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, from 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 has 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.
11. We do not think that there is any merit in the contention of the learned Government Pleader that in the light of the contract entered into between the two opposite parties regarding the liability to pay compensation under the Act. Section 12 cannot be applied in the case to fasten liability for payment of compensation under the Act on the first opposite party. The avowed object with which Section 12 was enacted as part of the Act as seen from the Report of the Select Committee 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. The Report of the Select Committee would also show that while finalising the provision the Committee has eliminated the provision which in the Bill as introduced exempted the Government and local authorities from liability imposed by this clause. The Committee has observed that these authorities are liable just in the same manner as private individuals. If these were the avowed objects with which Section 12 of the 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. So long as the Section has not been made specifically subject to any contract to the contrary, the Section would have application in all cases where the conditions specified in the Section are satisfied. The fact that no non obstante provision is used in the Section may not be a sufficient reason to exclude the application of the Section to cases where the conditions are satisfied. 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 stipulating the liability under the Act. Accordingly, we would reject the contention of the learned Government Pleader.
12. For the reasons stated above, we would allow the appeal and modify the order passed by the Court by making the first respondent-first opposite party also liable to pay the compensation amount to the claimants in W.C. Nos. 97 and 98 of 1984, who are the appellants in the two appeals. We would also declare that the first opposite party will be entitled to recover from opposite party No. 2 such amounts paid to the appellants in the two appeals (Claimants in W.C. Nos. 97/84 and 98/84) by way of indemnity in view of the provisions in Section 12(2) of the Act and condition No. 15 of the agreement entered into between the two opposite parties, by executing this order itself.
13. The appeals are thus allowed. The parties will bear their respective costs.