M/s. Vidul Exports vs Shanti Devi and Others

Rakesh Kumar Garg, J.—One Om Parkash, who was working as Chowkidar with the appellant, died on 15.6.2007 due to accident in the course of his employment. Respondents No. 1 and 2 moved an application for claiming compensation on account of his death before the Commissioner Circle-1, Panipat under Workmen''s Compensation Act 1923. Upon notice, appellant had contested the aforesaid claim application denying the relationship of employee and employer and submitting further that the deceased employee, namely, Om Parkash was employed by him through contractor i.e. respondent No. 3 in this appeal. Respondent No. 3 refused to accept the summon and therefore, was proceeded against ex parte before the Commissioner.

On the basis of the pleadings of the parties, the following issues were framed:--

Whether there was relationship of master and servant in between the respondents and deceased Om Parkash? If so, what its effect?

Whether the claimants are entitled to the compensation from the respondents? If so, up to what amount and from whom?

Relief.

The Commissioner under Workmen''s Compensation Act vide impugned order 30.12.2010 held that Om Parkash was employed in the factory at the time of his death and the claimants were entitled to the compensation including interest for a total amount of Rs. 3,80,249/-. However, while passing the aforesaid order the Competent Authority held that appellant was liable to pay the compensation to the claimants.

So far as award to the extent of granting compensation to respondents No. 1 and 2 is concerned, the same has become final. In fact, they have been released due compensation and no challenge has been raised in this appeal, thus, appeal qua them is dismissed.

Challenging the impugned order, learned counsel for the appellant has vehemently argued that the Competent Authority while holding that the appellant was liable to pay the compensation to the claimants has erred in taw while not imposing the said liability upon respondent No. 3 as there was enough evidence on record produced by the appellant to prove and establish that the deceased employee was hired by the appellant-company through the contractor i.e. Respondent No. 3 and in view of Section 12, the said hiring agency was liable to pay the compensation and thus, was liable to indemnify principal employee.

Learned counsel representing respondent No. 3 has vehemently opposed the argument raised and has argued before this Court that vide impugned order respondent No. 3 has been absolved of its liability and keeping in view the facts and circumstances of the case, no error can be found in the impugned order and no substantial question of law arises in this appeal and therefore the same is liable to be dismissed.

I have heard learned counsel for the parties and perused the impugned order.

At this stage, it is useful to refer to Section 12 of the Act, which reads thus:--

Contracting - 1. Where any person (hereinafter in this section referred to as the principal) in the course of or for the purpose 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.

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.

Nothing in this section shall be construed as preventing a workman from recovering compensation from the contractor instead of the principal.

This section shall not apply in any case where the accident occurred elsewhere that 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.

A perusal of Sub Section 2 of Section 12 of the Workmen''s Compensation Act shows that where principal is employer and is liable to pay compensation under the provisions of this Act, he shall be entitled to be indemnified by the contractor or any other person from whom the workman could have recovered compensation and in case 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 relation of a contractor from whom the right to and the amount of any such indemnity shall, in default of agreement be settled by the Commissioner.

However, a perusal of the impugned order would show that Competent Authority has failed to discuss the issue involved as raised before this Court and has imposed the liability to pay compensation only upon appellant without considering the documents placed on record or arguments raised.

Thus, in these circumstances, this Court is of the view that there arises the following substantial question of law in the instant appeal:--

Whether the impugned order suffers from illegality as the Competent Authority has failed to decide the issue of indemnification of the appellant by the contractor as provided u/s 12(2) of the Act.?

Thus, the instant appeal is allowed to the aforesaid extent and the impugned order is set aside to the extent of deciding the question inasmuch as the liability of respondent No. 3 to pay the compensation and the matter is sent back to the said Authority for deciding the aforesaid question between the parties, on the basis of the material placed on record or any other material which the parties may produce before the said Authority.

Let the parties to appear before the said Authority on 30.09.2013.

Needless to say, the Competent Authority shall dispose of the matter as expeditiously as possible but not later than 03 months from the date of appearance. Needless to say, claimants need not be summoned/present.