Bharat Earth Movers Ltd. vs Bhagyamma by Legal Representative and Another

Nesargi, J.—This appeal is filed u/s 30 of the Workmen''s Compensation Act, 1923 (hereinafter referred to as the Act).

One George was an employee of Kaveri Structural, Structural Engineers, Tbiruchirapalli, i.e., Respondent 2, in this appeal. The Appellant-Bharat Earth Movers Ltd., wanted to get a building constructed and entered into a contract with Respondent 2 for that purpose. While the building was in the course of construction, George touched a live electric wire and died the next day. Bhagyam, his mother, filed a claim in the Court of the commissioner for Workmen''s Compensation, Kolar Dist (hereinafter referred to as the Court), in Case No. FC. 10 of 1969 as against the Appellant and Respondent 2. The Appellant contended that George was not at all a workman for whose injuries the Appellant was liable to compensate. Respondent 2 contended that the ''principal'' was the Appellant and he was liable to compensate. It so happened that when the proceedings were pending in the Court, Bhagyam expired and one Thangaraj, who is now Respondent 1, got himself impleaded as the legal representative of Bhagyam on the ground that he was her brother. The Appellant and Respondent 2 contended that Thangaraj could not be impleaded as legal representative of Bhagyam and the Court had no jurisdiction to decide whether he was or not a legal representative of Bhagyam. The Court held that the Appellant was liable to pay compensation as per Schedule-I of the Act in view of Section 12(1) of the Act and that Thangaraj, Respondent 1, was the legal representative of Bhagyam and he was entitled to receive the compensation. It directed the Appellant to deposit an amount of Rs. 4,800 within two months from the date of its judgment. It is this judgment that is challenged in this appeal.

It is an undisputed fact that George was not employed by the Appellant. He was an employee of Respondent 2. One of the contentions of Respondent 2 was that George was not a workman employed by them, but he had taken a sub-contract from them. That contention has been negatived by the Court and there is no material before us to hold that that contention of Respondent 2 is substantiated. Another undisputed fact is that the Appellant had entered into a contract with Respondent 2 for the construction of a building of which they were in need, and Respondent 2 were constructing that building during the course of which construction, George sustained a shock as he happened to touch a live electric wire and succumbed to that shock the next day.

Mr. S.G. Sundaraswamy, learned Advocate appearing on behalf of the Appellant, urged that Section 12(1) of the Act has been wrongly interpreted by the Court and the correct interpretation of that section would show that the Appellant would not be the ''principal'' within the meaning of that provision and, therefore, would not be liable to pay any compensation to the dependant or dependants of George, the workman.

''Workman'' is defined in Section 2(n) of the Act. Both the sides agree that George was not a ''workman'' of the Appellant within this definition. The contention on behalf of Respondent 1 is that it is in view of Section 12(1) of the Act that the Appellant became the ''principal'' and therefore, liable to pay compensation in this case.

Section 12(1) of the Act reads as follows.

It is plain that this provision consists of two principal parts. The first part deals with contracting with any contractor. It lays down that for application of this section, a person has to enter into such contract with another person in the course of or for the purposes of the trade or business of the former. So far as this part of Section 12(1) of the Act is concerned, it has to be held that the Appellant did enter into a contract with Respondent 2 and this was in the course of or for the purposes of the trade or business of the Appellant. This aspect of the matter has not been disputed by the Appellant at any stage in this proceeding. The other part is in regard to the nature or type of the contract entered into. For application of this part of this section, it is necessary that the work, the execution of which is entrusted to the contractor, has to be in the whole or in any part ordinarily a part of the trade or business of the former. It is only when this part of Section 12(1) of the Act is satisfied that the former will become the ''principal'' within the meaning of this provision. This is exactly what has been also held by the Calcutta High Court in New India Tannis Ltd. Vs. Aurora Singh Mojbi and Another,

Mr. Sundaraswamy contended that the contract that was entered into between the Appellant and Respondent 2 was in regard to construction of a building and that construction of buildings was not ordinarily a part of the trade or business of the Appellant because the ordinary business of the Appellant was to manufacture earth-moving machinery. He contended that, in view of this aspect of the matter, the Court was wrong in applying the provisions of Section 12(1) of the Act and holding that the Appellant was the ''principal'' within the meaning of this section and hence liable to pay compensation.

Mr. P. Srikantappa, learned Advocate appearing on behalf of Respondent 1, contended that that would not be the correct position in law. He urged that the Appellant could not escape his liability by entrusting the job to a contractor because if the Appellant himself had taken up construction of this building and had engaged workers for that purpose, he would have been liable to pay compensation to such of the workers who sustained injuries within the meaning of the Act.

We find lot of force in the contention of Mr. Sundaraswamy, in view of the plain provisions of Section 12(1) of the Act. It will have to be held that construction of a building is not ordinarily a part of the trade or business of the Appellant, as it is an undisputed fact that the business of the Appellant is to manufacture earth-moving machinery. Hence, it is clear that the work that was to be executed by Respondent 2 for the Appellant, was not ordinarily a part of the trade or business of the Appellant. In this view of the matter, it follows that the second part of Section 12(1) of the Act is not satisfied. Same is the view expressed in Robin Mahomed Tahir v. GIP Railway AIR 1929 Bom. 179 . This decision has been followed by the Calcutta High Court in S.M. Ghose Vs. National Sheet and Metal Works Ltd. and Another, . These two decisions have been followed by the Mysore High Court in Muninanjappa v. Agneesamma AIR 1951 Mys. 113 . The latest decision that we could lay our hands on, is reported in Municipal Board, Almora Vs. Jasod Singh and Another, We respectfully agree with these decisions. We, therefore, hold that the Court was wrong in making the Appellant liable to pay compensation, by applying the provisions of Section 12(1) of the Act.

Hence, we allow this appeal and set aside the award passed by the Court of the Commissioner for Workmen''s Compensation, Kolar Dist, in Case N.F.C. 10 of 1969.

The next question that falls for consideration is the failure on the part of the Court to consider the claim of Respondent 1 as against Respondent 2 Kaveri Structural. It is noticed that Bhagyam filed her claim as against both the Appellant and Respondent 2. A perusal of the judgment passed by the Court shows that in view of its finding that the Appellant was the ''principal'' by virtue of Section 12(1) of the Act, it held that the Appellant was primarily liable to pay compensation to Respondent 1 and was entitled to be indemnified by the contractor, viz., Respondent 2. This shows that in case the Court had come to the conclusion that the Appellant was not primarily liable, it might have, on the basis of the very same reasoning offered by it, fastened the liability on Respondent 2. Now that we have taken the view that the Appellant does not become the ''principal'' within the meaning of Section 12(1) of the Act, the question whether the liability has or not to be fastened on Respondent 2, so as to see that Respondent 1 is not left without a remedy for no fault of his, has to be gone into. We, therefore, direct the Court of the Commissioner for Workmen''s Compensation, Kolar Dist., to go into this question so far as the claim of Respondent 1 against Respondent 2 is concerned and dispose of the matter according to law, after affording reasonable opportunity to both sides to adduce any more evidence if they choose to adduce.

No costs under the circumstances of the case.

The amount deposited by the Appellant is directed to be returned to the Appellant.