Madras High Court
The Dean, Agricultural College And ... vs Tmt. S. Sakilabanu, Thiru S. Mani ... on 26 September, 2003
Equivalent citations: (2004)ILLJ741MAD, (2003)3MLJ712
JUDGMENT E. Padmanabhan, J.
1. This appeal has been preferred by the Dean, Agricultural College and Research Institute challenging the award of compensation by the Commissioner of Workman Compensation (Deputy Commissioner of Labour) Madurai in W.C. Case NO: 169 of 1994 ordered on 7.4.1995.
2. Heard Mr. S.Jayaraman, learned counsel appearing for the appellant Mr. Umapathy for Mr. S.Silambannan for the first respondent and Mr. R.Parthipan, for the second respondent and Mr. N.Doraiswami for the third respondent. With the consent of counsel on either side the appeal itself is taken up for final disposal. For convenience, the parties will be referred as arrayed before the tribunal below.
3. The dependent of late Sikkandar moved W.C.No: 169 of 1994 claiming a compensation of Rs. 87, 388/= against N.Mani, Contractor and the Dean, Government Agricultural College respectively being opposite parties 1 and 2. It is the appellant's case that the opposite party No. 1 engaged the deceased Sikkandar in the construction of Ladies Hostel for the Government Agricultural College at Killikulam Tuticorin District. While working as Mason on 8.12, 1993 the deceased fell down from the scaffolding which was of the height of 12 feet and sustained head injury. On 15.12.1993 the deceased succumbed to injuries while in the hospital. It is claimed that the accident arose out of and in the course of employment resulting in the death of the workman. The age of the deceased on the date of accident, it is stated was 24 years and he was earning RS. 1500/= per month. The opposite parties 1 and 2 are liable to pay compensation in all aggregating Rs. 87, 388/=. At the instance of opposite party No. 2, one Sudalaimuthu, contractor was impleaded as opposite party No. 4. So also the Executive Engineer, P.W.D was impleaded as opposite party No. 3. All the four opposite Parties filed separate objections to the Claim Petition.
4. The second opposite party namely Dean, Government Agricultural College contended that the deceased was not engaged by the second opposite party and all the averments, the applicant has to prove including the employee sustaining head injuries in the course of employment as well as the quantum of compensation etc., The second opposite party contended that it has entrusted the civil construction work to the Executive Engineer, Special Division, PWD, Tuticorin, as a deposit work and it is only the PWD Engineer who entrusted the execution of work to the Contractor and Executive Engineer, PWD is a necessary party. The second opposite party is not liable in any manner and he is an unnecessary party and no petition is maintainable against the second opposite party under the Workmen's Compensation Act and if at all it is the other respondents who are liable to pay the compensation in the event of the applicant proving the claim.
5. At the instance of the second opposite party, the Executive Engineer, PWD was impleaded as opposite party No. 3. The Executive Engineer filed a separate statement of objections denying the liability and contended that he is not aware of the engagement of the deceased by the contractor and in any event, the third respondent is not liable to pay compensation.
6. The first opposite party contended that he is not a necessary party and denied the liability. It is admitted that the first opposite party is one of the registered contractors under the third opposite party, who entrusted the construction work to the first opposite party. The third opposite party Executive Engineer, PWD is the Principal Employer. The first opposite party engaged one Sudalaimuthu the 4th opposite party as sub-contractor to whom the sub contract work was entrusted by the first opposite party. The first opposite party has not exercised any control over 4th opposite party. The first opposite party, is in no way liable to the claimant. The deceased, if at all was engaged by the4th opposite party, Sudalaimuthu who alone is liable. The first opposite party further submitted that the Principal employer alone is liable and the Principal employer being the Dean, Government Agricultural College. It is pointed out that the Principal employer alone is liable to pay compensation if ordered to be paid and the first opposite party has no control whatsoever persons engaged by fourth opposite party.
7. On the basis of the said pleadings and on the basis of the evidence let in by either side both oral and documentary, the Commissioner for workmen's Compensation by order dated 7th April 1999, while holding that the accident occurred in the course of employment when the deceased was employed, in the construction and he has succumbed to injuries, the principal employer is the Dean, Government Agricultural College and the rest being contractors, directed payment of Rs. 87, 388/= with interest at 6% for the death of the said Sikkandar.
8. Challenging the same the present appeal has been preferred by the Dean, Government Agricultural College, one of the opposite party. Mr. S.Jayaraman, learned counsel appearing for the appellant in this appeal contended that the deceased was not engaged for the purpose of the appellant's trade or business and therefore the appellant is not liable to pay. Further, it is contended that in any event, the contractor being principal employer to whom the work has been entrusted or who has undertaken to execute the work, is the Principal employer and not the Dean Government Agricultural College and therefore the appellant is not liable to pay compensation.
9. Per contra, it is contended that it is the appellant who is liable to pay compensation and not other respondents. It is also contended on behalf of the Executive Engineer, PWD that it is only an agency which has been entrusted with the execution of work by the Dean, Government Agricultural College, and therefore it is neither an intermediary nor Principal employer. It is further contended that it is the 4th respondent who is the sub-contractor to whom the main contractor has entrusted the work and therefore it is the contractor who is the principal employer who is liable to pay.
10. Absolutely there is no dispute in this appeal that the deceased was engaged in the construction site of Ladies Hostel for the Government Agricultural College, he sustained head injuries and died in the hospital. There is no dispute that the deceased was a workman engaged in the construction site by the contractor to whom PWD entrusted the work. The deceased sustained employment injuries in the course of employment and at the place of employment and as a result of the accident arising out of and in the course of his employment, the deceased succumbed to injuries. There is no dispute about the quantum of wages which the deceased was being paid, nor there is any dispute as to the age of the deceased, nor there is any challenge with respect to the quantum of compensation arrived at by the tribunal below.
11. In this appeal, the points that arise for consideration are:-
(i) Who is the principal employer?
(ii) Who is liable to pay the compensation with respect to the claim of the first respondent in this appeal for the death of the workman who succumbed to injuries arising out of and in the course of his employment?
(iii)To what relief if any?
12. Mr. S.Jayaraman, learned counsel appearing for the appellant contended that the appellant is only a college established by the State Government and a hostel building for the lady students was being put up by the agricultural college and the execution of the hostel building was entrusted to the PWD. The PWD in turn entered into a contract with the registered contractor namely the first opposite party L.Mani, Contractor. It is contended that the contractor alone is the Principal employer and not the Dean, Government Agricultural College, nor the Executive Engineer (Special Buildings Division), PWD.
13. On the facts of the case it has to be examined as to who is the immediate employer and who is the principal employer. It is admitted that there cannot be more than one principal employer as well as more than one immediate employer. It is also admitted that the Government Agricultural College neither carries on a trade or business of construction, but it is a college and Research Institute established by the State. On the above admitted facts, the above points have to be decided.
14. The building is being put up for the purpose of the agricultural college alone and not for anyone else. Therefore it follows that even if the appellant is not engaged in the business of construction in the wider definition of the expression, it is the contractor who is the principal employer. There cannot be more than one principal employer. This legal position is admitted. Therefore, it follows that the first opposite party is the principal employer and his sub contractor is the immediate employer.
15. The appellant has entrusted the work of construction to the Public Works Department by depositing the money. PWD has in turn entrusted the execution of work to an independent contractor who had in turn entrusted the work to a Sub Contractor who had employed workmen and one of them died in the accident. So the immediate employer is the sub contractor and PWD contractor is the Principal employer. The expression "employer" is defined in Section 2(e) of The Workmen's Compensation Act, 1923 and it reads thus:-
"employer" includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him"
16. In the light of the above definition, it follows that the contractor to whom PWD has engaged the execution of the work is the Principal employer and the contractor will fall within the definition of "employer" in respect of the deceased workman. On the facts of the case, it s clear that PWD contractor to whom the work has been entrusted namely the second respondent herein is the employer of the deceased workman. The expression "workman" has been defiend in Section 2(n) of the Act and there is no dispute that the deceased is a workman.
17. There is no dispute as to the quantum of compensation payable under the Act and therefore we need not examine the question as to the quantum of compensation assessed by the Commissioner for Workmen's Compensation. The object of Section 12 being to secure compensation to the workman who cannot fight out his battle for compensation by a quick process. A person who employs others or entrust his work to others for execution in respect of his affairs or business or interest could very well be proceeded in terms of Section 12. Section 12 obviously include that the liability for compensation is ultimately of contractor or employer who engaged the workman. But, so far as the workman is concerned he is entitled to recover the same from the Principal employer. The principal employer has in turn a statutory right to indemnify himself by recovering the amount paid by it from the contractor. This position has been well settled by a Division Bench of this Court in Trustees of Port of Madras v. Bombay Company Ltd., . The same view was taken by a Division bench of Orissa High Court in Executive Engineer, National Highways v. Kamala Goundini, reported in 1980 (1) LLN 203. Thus, the contractor to whom the work has been entrusted by PWD, the executing agency is the employer. Section 12 of the Act provides that the principal who employes a contractor shall be liable to pay compensation to workman though he did not immediately employ, but employed through the contractor. In this case there is no dispute that the contractor who has engaged the workman is liable to pay the compensation.
18. To make the Principal employer liable, the following are required to be established:-
(i) The building is being constructed for the purpose of the appellant, it is part of its requirement.
(ii) The accident which gave rise to the liability for compensation has occurred in the building premises undertaken by the contractor and the accident has occurred only while the employee was in the course of employment in executing the work.
19. Therefore it is clear that the first opposite party is the principal employer which has to pay the compensation to the workman and it has to recover the same from the immediate employer, namely the sub-contractor.
20. Mr. S.Jayaraman, learned counsel contended that the construction of building is not the business or trade of the appellant and therefore no claim could be maintained against the appellant. It may be that the appellant is not carrying on the business of construction as a trade or business, but for the purpose of the institution the appellant has put up construction as part of the educational institution. Therefore even though it may not be a business or trade, the construction activity falls part of the affairs of the Agricultural College.
21. The counsel on either side cited number of pronouncements of various courts in support of their respective contentions. We need not dwell very deeply in view of the recent pronouncement of the Supreme Court in LAKSHMINARAYANA SHETTY v. SHANTHA & ANOTHER reported in 2002 (3) LLJ 523. In that pronouncement, while holding that the employment in that case did not fall within the four corners of the Act as it relates to painting of a residential house, the Supreme Court set aside the judgment of the High Court. It was held that the person undertaking the work of painting a house apparently under a contractor and dying while doing such work did not fall within the four corners of the Act and therefore, the compensation is not liable to be paid by the owner and the view taken by the High Court in this respect has been reversed.
22. In this case also, the construction put up by the Dean is not for his business and it is only an educational institution. However, construction has been entrusted to a building contractor through PWD and therefore it is the PWD Contractor, who is the principal employer under whom the workman was engaged and therefore it is the contractor, if at all, who is liable as the principal employer, and the sub-contractor under the immediate employer may also be proceeded. Considering the pronouncement of the Supreme Court to proceed against the Dean of the College m it has to be pointed out that the Dean may not fall within the four corners of the Workmen's Compensation Act and to bring it within the four corners the workman has to proceed only against the principal employer, namely, the PWD Contractor and the immediate employer, the fourth respondent herein as the case may be. The view taken by the Commissioner for Workmen's Compensation holding that the Dean is the Principal employer and against him a claim under the Act is maintainable cannot be sustained at all and it has to therefore be set aside. The Supreme Court in the said pronouncement held thus :-
"2. The respondents are the daughter and wife of the deceased Ramu who was engaged by the appellant to pain the house. While he was doing this work, he unfortunately fell down and died. The claim for compensation under the Workmen's Compensation Act was denied, but on a writ petition being filed the High Court has allowed the same.
3. No reasons have been given by the High Court for coming to the conclusion that this was a case which fell within the domain of the Workmen's Compensation Act.
4. There was apparently a contract between the appellant and Ramu whereby Ramu had undertaken the work of painting the house. Whether the action of the appellant by engaging a person in this manner makes him employee or a workman of the appellant was a question to be decided. The case did not fall within the four corners of the said Act and, therefore, the decision of the High Court was incorrect. We, therefore, allow the appeal and set aside the decision of the High Court."
All other pronouncements need not be considered and it is clear that so far as the Dean, the appellant herein, no proceedings could be initiated under The Workmen's Compensation Act. Insofar as the Dean of the College is concerned, the claim will not fall within the Act as construction activity is not part of his business. Hence, the order of the Commissioner for Workmen's Compensation is set aside insofar as the appellant, namely, the Dean of the Agricultural College is concerned and consequently the claim against the Dean of the Agricultural College is rejected as not maintainable.
23. However, it is made clear that it is the contactor, namely, the first opposite party, who is the principal employer, who is liable to pay and the said first opposite party may get it reimbursed from the immediate employer to whom he has entrusted the work. To this extent, the award of the Commissioner for Workmen's Compensation is modified.
24. In the result, the claim against the Dean, Agricultural College and Research Institute, Killipatty, is set aside as not maintainable and the award is modified holding that S.Mani, PWD Contractor, who is the principal employer, who is liable, who in turn could get it reimbursed from V.Sudalaimuthu, the immediate employer.
25. The appeal is allowed in the above tems. Excepting the above modification exonerating the appellant Dean Agricultural College in other respects the order passed by the Commissioner for Workmen's Compensation (Deputy Commissioner of Labour), Madurai is confirmed. The parties shall bear their respective costs. The amount deposited by the appellant in this appeal shall be refunded to the appellant forthwith.