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Vijayaraghavan Vs. Velu and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1973)ILLJ490Ker
AppellantVijayaraghavan
RespondentVelu and anr.
Cases ReferredNational Sewing Thread Co. Ltd. v. James Chadwick
Excerpt:
.....a reading of the above provision discloses that in order that a person can be made liable to pay compensation to a workman not engaged by him the following essentials must be satisfied :(i) that person (called the principal) is carrying on a trade or business and in the course of or for the purpose of that trade or business engages a contractor to execute the work. 1 and 4 are clearly satisfied. the question is whether the other essentials are satisfied in this case. we would have sent back the case to the commissioner to consider this question over again had it not been for the fact that the next essential required to be satisfied is totally absent in this case, i. in these circumstances, we are constrained to hold that the requirements of section 12 are not satisfied to make the.....g. viswanatha iyer, j.1. this is an appeal by opposite party no. 2 against the order of the workmen's compensation commissioner directing the payment by the appellant of a sum of rs. 3,600 as compensation under section 3 of the workmen's compensation act to the applicant. the applicant's son narayanan died on 12-7-1967 as a result of injury sustained by him by accident while employed at a quarry near mulloorkara. the appellant had entered into a contract to supply certain quantity of metal (granite stones) to the southern railway. the opposite party no. 1 had in turn entered into an agreement with the appellant to supply the required quantity of metal at a specified rate. he had engaged the deceased narayanan as a cooly to quarry the metal from a quarry at mulloorkara. it was while he was.....
Judgment:

G. Viswanatha Iyer, J.

1. This is an appeal by opposite party No. 2 against the order of the Workmen's Compensation Commissioner directing the payment by the appellant of a sum of Rs. 3,600 as compensation under Section 3 of the Workmen's Compensation Act to the applicant. The applicant's son Narayanan died on 12-7-1967 as a result of injury sustained by him by accident while employed at a quarry near Mulloorkara. The appellant had entered into a contract to supply certain quantity of metal (granite stones) to the Southern Railway. The opposite party No. 1 had in turn entered into an agreement with the appellant to supply the required quantity of metal at a specified rate. He had engaged the deceased Narayanan as a cooly to quarry the metal from a quarry at Mulloorkara. It was while he was working there that he met with the accident and died. The applicant who is the father of the deceased made a claim before the Commissioner for Workmen's Compensation against the opposite party No. 1 as well as the appellant. He alleged that the deceased Narayanan met with the accident and died while he was working for opposite parties Nos. 1 and 2 and, therefore, both of them are liable to pay the compensation under the Act. Opposite party No. 1 denied his liability to pay any compensation on the ground that the deceased was not a regular employee and also on the ground that the compensation claimed is excessive. The appellant contended that he had no employer-employee relationship with the deceased or with the opposite party No. I. According to him, he purchased the metal from opposite party No. 1 at specified rates and beyond that there was no other understanding between him and the opposite party No. 1 regarding the quarrying of stones from any particular place. The Commissioner found that the opposite party No. 1 was carrying on the business of of breaking stones from the quarry and the actual execution of the work was done independently of opposite party No. 2 and that the opposite party No. I was an independent contractor under opposite party No. 2. He also found that as opposite party No. 2 had in his written statement as well as in his testimony admitted that opposite party No. 1 was his sub-contractor, and opposite party No. 2 is his principal employer. On the basis of these findings and also on the finding that the deceased met with the fatal accident while working at the quarry in question, the Commissioner calculated the compensation at Rs. 3,600 on the basis of the monthly wages of the deceased and directed opposite party No. 2 to pay the amount. The latter was also held to be entitled to be indemnified by oppsite party No. 1 for the entire amount mentioned above. It is against that that opposite party No. 2 has filed this appeal.

2. If any workman suffers an injury as a result of an accident arising out of or in the course of the employment, the employer is liable to pay compensation to the workman under Section 3 of the Act. There must be an employer and employee relationship between the workman and the person against whom compensation is asked for. But, in many cases, persons who want to get work done try to avoid this liability by contracting with someone else to provide labour or to execute the work and then contend that as there is no employer and employee relationship between the workman who suffered an injury and themselves, they are not liable to pay any compensation. To prevent such escape from liability to pay compensation Section 12 has been enacted which reads as follows:

12. 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 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.

(3) Nothing in this section shall be cons-trued 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.

3. A reading of the above provision discloses that in order that a person can be made liable to pay compensation to a workman not engaged by him the following essentials must be satisfied :

(i) That person (called the principal) is carrying on a trade or business and in the course of or for the purpose of that trade or 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.

In this case essentials Nos. 1 and 4 are clearly satisfied. The question is whether the other essentials are satisfied in this case. The second essential condition contemplated by the section is that the person must have engaged a sub-contractor for work which he himself normally does and 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 workmen employed in the business. Thus it is always a question of fact in each case and the various decisions, viz., Rabia Md. v. G.I.P. Ry. A.I.R. 1929 Bom. 179, Karnani Indl v. Ranjan A.I.R. 1933 Cal. 63, New India Tannis v. Aurora Singh : (1957)IILLJ440Cal , and Periyakkal v. S. t. Railway A.I.R. 1935 Mad. 721, cited at the bar are not of any assistance in deciding the question involved in this case. The appellant had undertaken to supply metal to Southern Railway and agreed to deliver the same at particular places along the railway lines. His business consists of supply of metal. This metal is not generally a commodity available in the market. As and when the metal is required generally it is obtained by breaking stones in a quarry. Any person who undertakes to supply metal ordinarily gets the metal extracted from a quarry so that quarrying is really a part of the business of supply of metal. In almost all cases it is so inextricably connected with the supply of metal that it is very difficult to say that it is not part of the ordinary business of supply of metal. Though this is the nature of the business generally, it has to be shown in this case that this is also part of the business of this particular principal. It is not enough that this is the course of business adopted by all those who undertake to supply metal (see Kokilabai v. Keshavlal Mangaldas & Co. A.I.R. 1942 Bom. 18. The proof in this direction is wanting in this case. The Commissioner seems to have not addressed his mind to this question, for, the only matter which the Commissioner is seen to have considered is whether the opposite party No. 1 is a subcontractor of opposite party No. 2. This is rot enough. We would have sent back the case to the Commissioner to consider this question over again had it not been for the fact that the next essential required to be satisfied is totally absent in this case, i.e., the accident must have occurred on, in or about the premises on which the principal has undertaken or usually undertakes to execute the work.

4. In this case there is absolutely no evidence to show that the quarry which the opposite party No. t was working to take the metal was a quarry belonging to or taken by the appellant or it is the business premises of the appellant. It is also not shown in this case that the appellant had any control or management of the premises where the accident took place. In these circumstances, we are constrained to hold that the requirements of Section 12 are not satisfied to make the appellant liable for compensation.

5. In the light of our conclusion that all the ingredients of Section 12 are not satisfied in order to make the appellant liable for the compensation the further question is whether we can pass such orders which the Commissioner would have passed if he had not misdirected himself on the question of law involved in the case. When an appeal lies on a substantial question of law it has been held that the whole casa is before the High Court and the High Court can go into the question of law and fact. Further, when an appeal is permitted against the decision of the Workmen's Compensation Commissioner and the High Court comes to the conclusion that the basis of the decision and the law applied by the Commissioner are erroneous the High Court can independently go into this question and pass an order which the circumstances of the case warrant. In exercising that power the person who has not been made liable or who has been exonerated from liability can be made liable if he is a party to the appeal and he has been given an opportunity to show cause against it. This power to alter the decree by substituting the person liable is part of the appellate power. In ordinary civil cases this power is expressly conferred on the appellate Court, Order 41, Rule 33, C P.C., Of course, the exercise of that power is discretionary. But, if the circumstances warrant this discretion is generally exercised in passing a decree. An appeal under Section 30 of the Workmen's Compensation Act lies to the High Court. There is no express provision in the Act as to the practice and procedure which the High Court should follow in admitting the appeal or in deciding the appeal. Possibly no separate provision is made because when a statute prescribes that an appeal shall lie to an established Court the practice and procedure of that Court which that Court shall adopt in deciding an ordinary case shall be the practice and procedure which should be followed in deciding appeals under the statute. A similar question came up for consideration before the Supreme Court in a case reported in National Sewing Thread Co. Ltd. v. James Chadwick & Bros. Ltd. : [1953]4SCR1028 . That was a case of an appeal under the Trade Marks Act. There also the Act provides only that an appeal shall lie to the High Court. The practice and procedure to be adopted by the High Court in entertaining and deciding the appeal had not been provided for by the Act or the Rules. In such a situation the Supreme Court held as follows :

Obviously after the appeal had reached the High Court it has to be determined according to the rules of practice and procedure of that Court and in accordance with the provisions of the charter under which that Court is constituted and which confers on it power in respect to the method and manner of exercising that jurisdiction. The rule is well-settled that when a statute directs that an appeal shall lie to a Court already established then that appeal must be regulated by the practice and procedure of that Court. This rule was very succinctly stated by Viscount Haldane L.C. in National Telephone Co., Ltd. v. Postmaster-General [1913] A.C. 546, in these terms:When a question is stated to be referred to an established Court without more, it, in my opinion, imports that the ordinary incidents of the procedure of that Court are to attach, and also that any general right of appeal from its decision likewise attaches.

Their Lordships also stated that the principle is one of general application and is not confined to the facts involved in the case referred to by the Court. This is what the Supreme Court has again observed at page 360:

Though the facts of the cases laying down the above rule were not exactly similar to the facts of the present case, the principle enunciated therein is one of general application and has an apposite application to the facts and circumstances of the present case. Section 76 of the Trade Marks Act confers a right of appeal to the High Court and says nothing more about it. That being so, the High Court being seized as such of the appellate jurisdiction conferred by Section 76 it has to exercise that jurisdiction in the same manner as it exercises its other appellate jurisdiction and when such jurisdiction is exercised by a single Judge, his judgment becomes subject to appeal under Clause 15 of the Letters Patent there being nothing to the contrary in the Trade Marks Act.

This principle has been restated by the Supreme Court in Collector, Varanasi v. Gauri Shankar : [1968]1SCR372 , and this Court has followed it in Vareed v. Mary, 1968 K.L.T. 583. Following this principle we feel that in the exercise of the powers of the appellate Court we are competent to alter the decree and pass such decree which the facts and circumstances of this case warrant. It has been found by the Commissioner that the deceased was a workman of opposite party No. 1. It has also been found that the deceased met with the fatal accident on 12-7-1967 while working at the quarry In question at Mulloorkara and that the accident resulting in his death arose out of and in the course of his employment under opposite party No. 1. The opposite party No. 1 is liable to pay compensation to the applicant and Section 12(3) also enables the applicant to claim compensation from the contractor and the applicant has claimed relief against the opposite party No. 1 also. We gave an opportunity to opposite party No. 1, who has been made also one of the respondents in this appeal, to show cause against this claim and he has not been able to bring to our notice any circumstance which enables him to escape from the liability.

6. In the result, we set aside the order passed by the Commissioner and order that the applicant is entitled to realise a sum of Rs. 3,600 as compensation from opposite party No. 1. We further direct that this amount must be deposited by the opposite party No. 1 within two months from this date failing which recovery steps as provided for in this Act shall be taken by the Commissioner. In the circumstances of this case, we make no order as to costs.

Subramonian Poti, J.

1. I agree. Let me add a few words.

2. The scheme of Section 12 of the Workmen's Compensation Act, 1923 is intended to secure to a workman the right to claim compensation not only against his immediate employer who, in the Act, is referred to as a contractor, but also against the person who had employed such contractor to execute the work which is ordinarily part of the trade or business of such persons. The Act refers to him as the principal. There may be cases where the contractor may not be a man of means or it may be that wittingly or unwittingly he may possibly be part of an arrangement conceived by the principal to avoid confrontation directly with the workman engaged in the execution of the work. In either case the interests of the workman need to be protected and that Is what the provision secures to him. The principal can seek to be indemnified by the contractor if he has been made answerable for the payment of compensation. But to invoke the provisions of the section it is necessary the accident should have occurred on, in or about such premises on which the principal has undertaken or usually undertakes to execute the work or premises which are otherwise under his control.

3. We are concerned here with the claim against a principal who carries on the business of supply of metal to the Southern Railway. He has to supply this at particular places along the railway lines and for his supply he depends on the contractor. The workman met with the accident in the quarry while working for the contractor. Could it be said that blasting of rocks in the quarry and converting the rubble into metal was ordinarily part of the trade or business of the principal The answer depends on whether normally the metal in such quantities as the principal requires would have been available in the open market. If not, ordinarily the person who had contracted with the railway for the supply of metal would have arranged to take lease of the quarries and attend to such work as enabled him to collect metal. Instead of doing this directly he may enter into a contract with another for that purpose. If there was no scope for purchasing the goods he had to supply to the railway from the open market, then, even at the time he entered into the contract with the railway for the supply of metal, he would have been devising ways and means of getting at such metal. Even if the goods are supplied under a contract entered into for the purpose it could well be said that ordinarily the work, which in this particular instance had been undertaken by the contractor, was part of the principal's trade or business. When it is ordinarily the business of a person to do a certain work he will get it done through his employees or workmen. If, in the course of such work, any accident occurs he would be liable to the workmen. He does not escape such liability merely because hs chooses to interpose a contractor who does for him what he himself would have otherwise ordinarily done. This is evidently the logic behind Section 12. Hence I agree with my learned brother that though the workman concerned in this case was employed by the contractor he was carrying on the work which would have ordinarily been the work of the principal.

4. Chief Justice Marten in Rabia Md. v. G.LP. Rly. A.I.R. 1929 Bom. 179, was dealing with a case of liability of the G.LP. Railway for payment of compensation on account of an accident caused to a workman who was engaged in the work of erection of steel towers to carry overhead cables in connection with the electrification of the G.LP. Railway line beyond Kalyan. While carrying the material to the site of the work the workman was knocked down by a train and was killed. The work was being executed by a contractor. The question that was posed before the Court was whether the erection of the steel towers near the railway line was part of the business of the G.LP. Railway. The Court found that:

The ordinary business of this railway is the public carriage of passengers and goods by means of locomotives v and carriages or trucks over the railway line. The supply of motive power to these locomotives I agree is necessary. But I think that the construction of the original works which will be necessary to convey that power is not part of the ordinary trade or business of the G.LP. Railway. In other words, their ordinary business is that of public carriers of passengers and goods, and not that of electrical engineers or of contractors for power stations or towers or cables or the general electrification of a railway line.

I am referring to this decision particularly because this decision has been sometimes misunderstood as limiting the scope of the term 'ordinarily' in Section 12 of the Act. It was so pointed out by a Full Bench of the Bombay High Court in a later case in Kokilabai v. Keshavlal Mangaldas & Co. A.I.R. 1942 Bom. 18. There the workman who was engaged in removing bales of cloth from the godowns of the manufacturing company and stacking -them in the lorry met with an accident. The accident was found to arise out of and in the course of his employment. The transporting contractor by whom the workman was engaged was working for the selling agents whose business included removing of the goods from the mill to the shop of the selling agents. Such work was found to be not only part of selling agents' business but also an essential part of it and, therefore, the Full Bench found that the selling agents cannot escape liability. The case was referred to the Full Bench because the Commissioner for Workmen's Compensation had relied on the decision to which 1 have already adverted, namely, Rabia Md. v. G.I.P. Rly. A.I.R. 1929 Bom. 179, to limit the scope of the liability of the principal. As pointed out by the Full Bench the Court was in that case deciding a mere question of fact and on the facts it was found that the construction of original works cannot be said to be ordinarily the business of the railway. I do not think that for the purpose of this case it is necessary to make reference to the other cases cited at the bar. In fact a number of English decisions have been brought to our notice. We are not referring to them only because the corresponding section in the English Act is not in part materia with the provisions of the Indian Act. In fact the term 'usually undertakes' which is the relevant term for the purpose of the case before us is absent in the corresponding provision in the English Act.

5. As pointed out by my learned brother what we have found here is not sufficient to enable the workman to succeed. He has failed to show that the accident occurred on, in or about the premises where the principal has undertaken to do the work or usually undertakes to do such work. There is no case that in the quarry where the workman was working the principal had undertaken to do such work. Possibly if he was doing his work on his own he might have engaged workmen to work in some quarry but that need not have necessarily been this quarry and, therefore, it is not possible to say that the accident occurred at a place where the principal usually undertakes to execute the work. Of course, there is no case that the premises where such accident occurred were under the control or management of the principal. Therefore, the second opposite party escapes liability.

6. As to the scope of the appeal, I do not think that I should add to what my learned brother has said excepting to say that it is now well-settled that in exercise of the powers of a civil Court under Order 41, Rule 33 of the Code of Civil Procedure it is open to a Court of appeal while granting relief to the appellant to pass a decree in favour of a non-appealing respondent against another respondent in case the circumstances justify such a course, vide Pannalal v. State of Bombay : [1964]1SCR980 . It was so held earlier by the Federal Court in Hari Sankar v. Anath Nath A.I.R. 1949 F.C. 106. That this power could be exercised even where the appeal is not one under the Code of Civil Procedure but is an appeal provided under the provisions of a statute also appears to be now well-settled. The practice which must govern the appeal must be the practice of the Court to which the appeal lies unless it be indicated otherwise. If an appeal has been provided to the High Court in regard to any civil matter the provisions of the Code of Civil Procedure in regard to appeals so far as they are not repugnant to the provisions of the enactment which confers the right of appeal to the High Court may be applicable. This is no longer open to doubt in view of the decision of the Supreme Court in National Sewing Thread Co. Ltd. v. James Chadwick & Bros. A.I.R. 1953 S.C. 367. Hence we see no objection in the way of granting a decree against the opposite party No. 1 who is respondent in the appeal though the liability of opposite party No. 2 is vacated.


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