Madhya Pradesh High Court
Kavita vs Raju on 11 February, 2025
NEUTRAL CITATION NO. 2025:MPHC-IND:3768
1 MA-657-2016
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE GAJENDRA SINGH
MISC. APPEAL No. 657 of 2016
KAVITA
Versus
RAJU AND OTHERS
Appearance:
Shri Vikas Rathi - advocate for the appellant.
Ms Rachana Zamindar - Advocate for the respondent No.1.
Reserved on :- 06.11.2024
Posted on :- 11.02.2025
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JUDGMENT
This miscellaneous appeal under Section 30 of the Employees Compensation Act, 1923 is preferred being aggrieved by the award dated 11.02.2016 passed by the Commissioner for Employees Compensation Dhar, Camp at Pithampur in Case No. 9/WC NF/2014, wherein the Labour Court has partially allowed the claim application of the respondent No.1 and awarded a sum of Rs. 4,07,484/- with interest @12% per annum with 50% of the awarded amount towards penalty to the claimant to be satisfied by appellant and respondent No.2 jointly or severally seeking a relief that he be exempted for satisfying the awarded amount.
2. The facts in brief are that respondent No.1/claimant Raju filed a Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 2 MA-657-2016 claim under Section 4 of the Employees' Compensation Act, 1923 before Labour Court, Dhar Camp, Pithamapur alleging that on 11.08.2011 he was employed by the appellant/non-applicant No.1 to work at the direction of respondent No.2/ non-applicant No.2 Mahesh. He was working since six months at the wages of Rs.100/- per month and on the date of incident i.e. 11.08.2011 he was working at the under construction house of appellant for digging a chair for electricity fittings. Appellant and respondent No.2 instructed the respondent No.1/claimant to bring the ladder kept at the roof of the House. The respondent No.1 denied, but appellant and respondent No.2 make a pressure to bring the ladder. When respondent No.1 was bringing the ladder from the roof then labour came in contact with a electricity line which was crossing through the roof and claimant/respondent No.1 got electrocuted and his both hands were amputated and he sustained the injuries in his abdomen leg and chest due to the effect of electrocution. He was treated at Patidar Hospital, Dhar and thereafter referred to Vadodara where his hand were amputated. Now he is 100% disabled person and cannot even perform the daily routines. The appellant promised to pay Rs. 3,00,000/-, but later on denied. The respondent No.2 also denied the liability. He served notice, but no compensation was awarded and filed an application claiming compensation of Rs. 14,00,000/- under Section 4 of the Employees Compensation Act, 1923 .
3. Appellant/non-applicant No.1 denied the allegation against her in the claim application with additional relief that her husband has given a contract of Electrification fittings to respondent No.2. She is not aware with Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 3 MA-657-2016 whom respondent No.2 was performing the work, but she came to know that respondent No.2 had engaged the respondent No. 1 first time on 11.08.2011 and she was was not present at the place of incident. She is not aware which type of work the respondent No.1 was performing . She has not instructed the respondent No.1 for any work. She is not liable to pay any compensation to the respondent No.1. No reply was filed by the respondent No.2.
4. Commissioner for Employees Compensation, Labour Court, Dhar framed total five issues and recorded the evidence of claimant/respondent Raju as PW-1, non-applicant No.1 examined herself as DW-1.
5. Appreciating the evidence, Labour Court found proved that on 11.08.2011 the work of electricity fitting being performed was in the under construction house of appellant/non-applicant No.1 and appellant has assigned a work contract to respondent No.2 and in the direction of respondent No.2, the appellant was engaged as a Labourer for electrifying in the under construction work of appellant and respondent No.2 was paying the wages of Rs. 100/- per day to the respondent No.1/claimant and during the performance of his working he was bringing the iron ladder from the roof of the House and ladder came in contact with high tension electricity line crossing over the house of appellant and respondent No.1 came in contact of electricity current and electrocuted and sustained injuries which resulted in amputation of both the hands and concluded that appellant/non-applicant No.1 is the principal employer and the respondent No.2 is employer and are responsible to pay the compensation under Section 12 read with Section 3 of Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 4 MA-657-2016 Employees Compensation Act, 1923. Labour Court assessed the physical disability of applicant/respondent No.1 as 100 % and held responsible to satisfy the award of Rs. 4,07,484/- to claimant by appellant and respondent No.2, jointly and severally with interest of 12% simple interest from the date of incident till deposit of award and 50% penalty on the assessed compensation.
6. Owner of the House i.e appellant filed this appeal and the appeal has been admitted on the following substantial questions of law :-
"1. Whether the labour court has committed an error of law in fixing the liability on the appellant treating him to be principal employer without taking into account the requirement of Section 12 of the Act of 1923?
2. Whether in the facts and circumstances of the case, the appellant can be held liable to pay the compensation amount as the principal employer?"
7. Heard learned counsel for the parties and perused the record.
8. Learned counsel for the appellant has placed reliance upon Paragraph-18 of the judgment delivered in the matter of Shantabai Vs. Sahadeo and others reported in 1983 SCC Online Bombay 220 which is reproduced as under :-
Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34NEUTRAL CITATION NO. 2025:MPHC-IND:3768 5 MA-657-2016 "18. Shri Gordey for the respondent worker relied on Section 12(1) of the Workmen''s Compensation Act in the alternative. He submitted that even if it is assumed that Shantabai was the principal and Bhaurao was given the contract on her behalf, yet she is vicariously liable for compensation to the worker Sahadeo u/s 12(1) of the Workmen''s Compensation Act. I am unable to agree with the submission for the simple reason that Section 12(1) contemplates a case where a contract or sub-contract is given by a person in the usual course of his trade or business which he would have carried out himself. The said Section would not be applicable to a private citizen like Shantabai who is a house holder and who constructs a private house once in a life time. The Division Bench of our High Court, way back in 1929 has taken the same view. It was in the case of Rabia Md. v. G.I.P. Railway AIR 1929 Bom 179.
The same view has been followed by Single Judge of this Court in Garrison Engineer (Project) v. Guttamme Hanmantdas 1979 M.L.J. 653. Apart from this, the Division Bench of the Kerala High Court in the matter of Vijayarakhnavan v. Velu 1973 Lab. I.C. 1520 has taken the same view. It is held therein that:
The person must have engaged a sub-contractor Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 6 MA-657-2016 for work which he himself normally does not which is ordinarily part of his business. The work given on contract may be a work on his own account or on account of another. But, it must be such a work as a person employing a sub-contractor usually undertakes in the ordinary course of his trade or business. The principle behind this is that if a person substitutes another for himself to do that which is his own business he ought not to escape the liability which would have been imposed upon him if he had done it himself towards the workman employed in the business."
9. Heavy reliance has been placed on D r.B.Radhakrishna Vs. Smt Gouramma and others reported in 2000 SCC Online Karnataka 51 and relied upon Paragraph-4 :-
"4. Unless it is shown that the appellant is principal employer, he cannot be saddled with any liability. To fasten the liability, two things are required, namely that there was contract and he was principal employer. In the case on hand, of course the appellant had given contract not for the purpose for which he was carrying the trade. These two decisions make it clear that the appellant is not responsible to pay any compensation. Hence it goes without saying that the Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 7 MA-657-2016 direction of the Commissioner that the appellant is also responsible to the extent of 50% cannot sustain. This portion of the order is set-aside. Hence, the following order.
In the result, the appeal is allowed, the portion of the order that the appellant is also responsible to the extent of 50% is set aside. The respondent No.3 is also further directed to make good of this compensation to the respondents No.1 and 2. The amount that has been in deposit by the appellant shall be refunded to him."
10. Reliance has been placed upon Paragraph-6 in the matter of C. Mayinkutty and others Vs. Parayil Balan Nair and others reported in 2017 (5) KHC 189, which is reproduced as under :-
"6. Be that as it may, we also see that another issue is raised by the appellants themselves that Parayil Balan Nair, being the owner of the premises, he should be made liable. For one thing, Balan Nair cannot be treated as a person who has, in the course of or for the purpose of his trade or business, contracted with Sathyan. May be, Balan Nair was erecting a commercial building, to be put to commercial use. But, the activity of constructing such a structure by itself, going by the evidence on record in the case in hand, does not show that he was involved in any commercial activity, business or trade. He could, at best, on facts, be treated only as a commercial consumer of the activity of construction for which contracts were given to the second and third opposite parties, in so far as it related to putting up the structure and the laying of the marble slabs. The learned counsel for the appellants cited the Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 8 MA-657-2016 decision of the Division Bench of this Court in Payyannur Educational Society v. Narayani [1995(1) KLT 621]. The learned counsel for the first opposite party Balan Nair rightly points out that the Full Bench in Govindan Nair v. Janaki [2003(2) KLT 23 (FB)] later considered the effect of Narayani's case and held that Narayani was decided on the particular facts of that case after noticing that the society for whose property loan was being taken was repaying the amounts and such amounts were being credited to the suspicious account. This nice distinction has been drawn to point out that at least a trade or business is to be necessarily there, if it has to be one that would fall under Section 12 of the Workmen's Compensation Act. We are of the view that on the facts of the case in hand and going by the material evidence, there is no room to disagree with the findings of the learned Commissioner on any ground of law. "
11. Reliance has also been placed upon Paragraph-11 of the judgment passed in the matter of Sarjerao Unkar Jadhav Vs. Gurindar Singh reported in (1991) 1 ACC 64 which is reproduced as under :-
"11. Next question is whether respondent No. 2 is liable only for compensation or whether the liability extends to interest and penalty as well. For this purpose it is desirable to refer to the provisions of Sections 3, 4 and 4-A of the Workmen's Compensation Act. Section 3 of the said Act provides that if personal injury is cased to a workman by accident ... his employer shall be liable to pay compensation in accordance with the provisions of this chapter, i.e. Chapter II. Section 4 of the Act provides the manner and extent in and to which the amount of compensation is to be awarded vis-a-vis different kinds of injuries or loss of earning capacity. Section 4-A, on the other hand, provides for payment of composition under Section 4 as soon as it falls due. Sub-section (2) of Section 4-A provides for payment of admitted liability when there is some dispute. However, this court is not concerned with sub-section (2) of Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 9 MA-657-2016 Section 4-A in this case. Sub-section (3) of Section 4-A provides for payment of interest if the employer is in default in making the payment simpliciter and for payment of penalty to the extent of 50 percent if there is no justification for the delay in making the payment. It is, thus evident that the statute has recognised compensation, interest and penalty as three different concepts. The definition of the word 'compensation' in Section 2(1)(c) of the Act provides that 'compensation' means compensation as provided for by the said Act. This would mean and refer to compensation payable under Section 3 as awarded under Section 4. In the circumstances, the argument of Mr. Chandrachud to the extent that Section 12(1) of the Act makes the principal employer liable for compensation and compensation does not include interest and penalty appears to be correct. Accordingly, it is held that though the principal employer, i.e. the respondent No. 2, is liable for compensation under Section 12(1), it is not liable for interest and penalty. "
12. On the contrary, the respondent No.1 has placed reliance on the judgment passed in the case of Narendra S/o Tulsiram Vs. Prabhandhak and others reported in LAWS (MPH) 2023-10-130, the judgment passed by the apex Court in the case of Saberabibi Yakubbhai Shaikh and others Vs. National Insurance Company Ltd and others reported in AIR (2014) 1393, the judgment passed by the High Court of Judicature, Kerala in the case of Malankara Rubber and Produce Company Vs. Hameed and others reported in 2001 (4) LLN 373. In the case of State of M.P and another Vs. Dharmadevdas and others reported in 2006 (4) MPLJ 605 and Gazette Notification No. 45 of 2009 dated 22.12.2009 regarding the Workmen's Compensation (Amendment) Act, 2009 that omitted clause (9) in sub-section (1) of Section 2 and inserted the definition of "employee" through sub-clause Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 10 MA-657-2016 (dd) of Section 1 of Section 2.
13. Now Court is addressing the contention of the appellant that the activity of constructing a residential house in this case does not fall within the course of or for the purpose of trade or business and for this purpose firstly we are referring to the effect of the amendment of Workmen's Compensation Act by Workmen's Compensation (amendment) Act, 2000 and thereafter by Workmen's Compensation (amendment) Act, 2009.
1 4 . The definition of 'workman', as it originally existed in the Workmen's Compensation Act, 1923, excluded the workmen whose employment was of a casual nature and who were employed otherwise than for the purpose of employer's "trade" or "business". Section 2(1)(n) of the Workmen's Compensation Act, 1923 was amended by Workmen's Compensation (Amendment) Act, 2000 with effect from 8th December, 2000 whereby the words "other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business" in the definition of 'workman' in Section 2(1)
(n) were omitted.
15. Workmen' Compensation Act was again amended in 2009 by Workmen's Compensation (Amendment) Act, 2009 with effect from 18th January, 2010 whereby the words "workman" and "workmen", were substituted with the words "employee" and "employees". The Workmen's Compensation (Amendment) Act, 2009 omitted Section 2(1)(n) that defined "workman" and replaced it by Section 2(1)(dd) which defined "employee", Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 11 MA-657-2016 though the substance of the definition remained the same. The aforesaid amendment also changed the name of the Workmen's Compensation Act to Employee's Compensation Act.
16. It must also bear in mind the very fact that the Act was amended is itself a pointer to show that the Parliament intended to avoid a mischief which was prevailing.
17. So far as the interpretation of section 12 of the Act is concerned, the judgment of the Division Bench of Andhra Pradesh High Court in the case of Balla Mallamma -vs-Registrar, Osmania University, Hyderabad and Anr, 2001(2)T.A.C.182 (AP) is worth mentioning and the relevant paragraph of the same is reproduced as under:-
"15. This judgment reiterates a principle of interpretation and the principle is that the meaning of the word must be gleaned from the context in which it is used. Meaning assigned to a work in a particular Act may mean one thing and the meaning of the same term may give a different meaning when used in a different Act. Therefore, the word ='trade' or ='business' as used in this Act have to be understood in the context in which this Act has been enacted. Basically the Act has been enacted to provide compensation to the workers suffering during the course of employment. It is also the Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 12 MA-657-2016 purpose of the Act that they should get speedy remedies and it appears that the intention of enacting the Section 12 of the Act was only to ensure that compensation is paid by the principal expeditiously and if this purpose of the Act and the provision are kept in mind, then the word =trade' or =business' may not have the same meaning which it would have, for instance, when used in interpreting a taxing statute. If the plea of the University is accepted that they are engaged in imparting education, conducting examinations and conferring degrees only and cannot be termed to be doing any business or trade and hence they are not liable to pay compensation, then any person engaged for similar activity by any Government Department, any University, any hospital, if faced with an accident, would not be able to get compensation in terms of Section 12 of the Act although such a person would be a workman under the Act. Similarly if an individual who wants to construct a residential house of his own engages a person for construction of the house and if such a person faces an accident during the course of the building of the house, he would be remediless under the Act. Even otherwise the normal activity of the University is imparting education, conducting of Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 13 MA-657-2016 examinations and conferring degrees, this they cannot do without having proper buildings. In a similar case where PWD had engaged contractors for the purpose of construction of bridges and roads and an accident occurred and a worker died, the contentions raised before the Jammu and Kashmir High Court in Public Works Department -vs-Commissioner, Workmen's Compensation, 1981 LAB IC 493, were also raised before this Court. Para 7 of the judgment is reproduced below:
"The only object behind the provisions of Section 12 appears to be to secure speedy payment of compensation resulting from injuries to a workman. The Legislature intended to make doubly sure payment of such compensation to the workman, or to his dependents in the event of his death, as it could not exclude the possibility of the contractor being in some cases a man of straw, whose straitened circumstances might jeopardize the changes of recovery of such compensation. If, therefore, a restricted meaning is given to the word "business" so as to imply an activity with the object of earning profit only, the object behind Section 12 is likely to be defeated. Not only to speak of the Government performing its various functions of a Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 14 MA-657-2016 welfare State, even many other persons may have to be kept out of the purview of Section 12 by assigning such a limited meaning to the word "business" occurring in it. Such an interpretation would absolve from liability to pay compensation even a person who would appoint a contractor for building his residential house, as building one's residential house cannot be said to have the object of earning profit or gain behind it. It cannot, as such, be said to partake of "business" or "trade" in commercial sense. Merely because the word "business" is clubbed with the word "trade" in Section 12, it should not be inferred that it has been used in simple commercial sense. Both these words have to be read disjunctively and not conjunctively. Similarly, the doctrine of immunity attached to sovereign acts of State cannot be extended to acts like constructing roads or bridges, as such acts are not of such a nature as cannot be done by a private person. Viewed thus, the word "business"
occurring in Section 12 has to be given an extended meaning, so as to include even an activity which engages time, attention, or labour as a principal serious concern or interest of the Government or an individual without an element of profit in it. It is one of the meanings given to the word "business" in dictionary.
Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34NEUTRAL CITATION NO. 2025:MPHC-IND:3768 15 MA-657-2016 Construction of roads being one of the principal concerns of the Public Works Department of the Government inviting its serious attention, it is "business" within the meaning of Section 12 and the appellant was thus the principal employer vis-à-vis the deceased labourers. With utmost respect to the learned Judge, if I may say so, I am unable to agree with the view taken by him in Y. Srivastava Rao's case (1972 ACJ 398) that "business" means and includes only that activity which is aimed at earning profit. Such an interpretation, as already observed, is bound to destroy the very raison d'etre of Section 12. On the other hand, I am in respectful agreement with the view taken by the High Court of Punjab in M/s. Sardara Singh v. Sub Divisional Officer, Chanpur, AIR 1963, Punj. 217, and Gopal Singh and Sundar Singh -vs-Punjab State and others, AIR 1955 NUC (Punj.) 4976, that in such cases even Government can be made liable to pay compensation as principal employer under Section 12. To this extent, therefore, the impugned award is not open to question."
18. Delhi High Court in Govind Goenka vs Dayawati & Ors passed by the Delhi High Court reported in (2013) ACJ 1897 considered the issue and held that after the amendment, the workman whose employment is of Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 16 MA-657-2016 casual nature and who is a employed otherwise then for the purpose of employer trade or business would also be covered within the definition of "workman".
19. Delhi High Court discussed the issue in Marolo or Fab Gold Vs. Arvind (2022) 10 DEL CK 0047 referring Brijesh Kumar Verma Vs. Aurangjeb and another, reported in (2017) SCC Online DEL 12513 and held as below :-
"Applying the rules of liberal and purposive interpretation, superior purpose and felt necessity, the word "business" occurring in Section 12 is given an extended meaning, so as to include even an activity which engages time, attention, or labour. Hence, construction of a residential house would be covered in Section 12. If the person who employs contractor is allowed to evade his liability by raising the defence that only the contractor or the intermediary should pay the compensation, then Section 12 will become redundant. This Court agrees with the view taken by the different High Courts in the judgments discussed herein above."
20. In the cases relied on by the appellant the neither amendment in Section 2(1) (n) vide Amendment Act of 2000 was considered nor the omission of Clause-n and insertion of Clause 2 (1) (dd) vide Workmen's Compensation (amendment) Act, 2009 was considered. Accordingly, none of the judgment relied upon by the learned counsel for the appellant give benefit to the appellant and the appellant/house owner would fall within the definition of 'employer' and would be liable to satisfy the award.
21. In light of the above discussion, both the substantial questions of Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34 NEUTRAL CITATION NO. 2025:MPHC-IND:3768 17 MA-657-2016 law are answered against the appellant and consequently the appeal being devoid of merits is hereby dismissed.
No order as to costs.
(GAJENDRA SINGH) JUDGE rashmi Signature Not Verified Signed by: RASHMI PRASHANT Signing time: 13-02-2025 11:08:34