1. The appellants herein are the widowed mother, 2 minor sons and a minor daughter of deceased Mahendrabhai Rathva, who died on 18th February, 1979 while he was working at Rami Irrigation Project Thagam, Taluka Chhota Udepur, District Baroda, while doing the excavation work. He was paid daily wages at Rs. 7-60 ps. The appellants claimed a sum of Rs. 18,000/- as compensation and Rs. 9,000/- as penalty under S. 4A of Workmen's Compensation Act, 1923 (hereafter-Act). The learned trial Judge held that the appellants were entitled to get the compensation at Rs. 18,000/- and Rs. 9,000/- as penalty with running interest at 6% per annum from the date of application till realisation. The learned Judge also held that the deceased was the employee of the Contractor who is respondent No. 2 herein. He also held that the respondent Nos. 1 and 3 i.e., Executive Engineer and the State of Gujarat were not liable to pay the amount awarded as compensation and penalty.
2. Mr. M. S. Shah, the learned counsel for the appellants has urged that the trial Court is not justified in holding that the present respondent Nos. 1 and 3 are not liable and that the present respondent No. 2 alone was liable to pay the amount awarded. Mr. Shah has relied upon the decision of this High Court in Executive Engineer, Kadana Dam and another v. Phebiben and others, reported in 1977, Accident Claims Journal, 104, wherein this question was fully considered. Mr. Shah relies on the following observations of this Court in the aforesaid decision :
'Having therefore, examined the case both on principle and authority, it is crystal clear that once the State Government decided to exercise its power of building a dam, through its Public Works Department, acting on behalf of the Government, activity for construction of the dam would be its trade or business activity but more especially business activity. It is not necessary in this connection to cut down the meaning of 'business' by referring to 'trade' which precedes it, as was sought to be urged. Both the words have been advisedly used in their wider connotation, and once construction of dam becomes business activity of the Public Works Department, as it is undertaken through that department, one has to ascertain what are the ordinary activities of the Public Works Department. Construction of all sorts of work indisputably is the ordinary activity of the Public Works Department and one such ordinary activity was sought to be carried out through the contractor. Therefore, all conditions for attracting S. 12 are satisfied and the Executive Engineer has been rightly held liable for the compensation claimed by the original applicants.'
This judgment was relied upon before the trial Court. The learned Judge, somehow held that it did not apply to the facts of this case. The learned Judge is not right in holding that the said decision squarely applies to this case. In fact, that decision squarely applies to this case. The learned Judge is not right in holding that it is not the trade or business of the Public Works Department. In the aforesaid decision, this Court has very clearly and distinctly held that the activity carried on by the Public Works Department is the business activity, although it cannot be regarded as trade. The work 'trade' means commercial activity but the word 'trade' means commercial activity but the word 'business' has a much wider connotation and covers activities which may not be commercial and may include the construction work carried out by the Public Works Department. The legislature has advisedly used the terms 'trade' and 'business' to cover not only commercial activity but also many other activities which would be covered under the term 'business'. Hence the decision of the learned trial Judge is clearly erroneous and deserves to be set aside. It is held that he present respondent Nos. 1 and 3 are also liable together with respondent No. 2. All the respondents are jointly and severally liable to pay compensation to the appellants.
3. Mr. M. H. Kadri, Asstt. G. P. has urged that the maximum penalty of 50% awarded by the trial Court is not justifiable. According to him, respondent Nos. 1 and 3 are being penalised for no fault of their own. This contention of Mr. Kadri is not tenable. Respondent Nos. 1 and 3 had completely disclaimed their liability. If they had accepted liability even partly and offered to pay the compensation for that part they would be justified in saying that maximum penalty should not be imposed. Having completely disclaimed the liability, they are liable to pay the maximum penalty of 50%. Hence the order of the trial Court awarding penalty of 50% is upheld. The law was declared by this Court as far back as in 1977. The said two respondents should have known that they cannot escape liability and therefore if they choose to disclaim liability, they must run the risk of paying the maximum penalty. Hence, the order of penalty imposed by the trial Court at 50% is upheld. The order of appointment made by the trial Court shall remain undisturbed.
4. Mr. Kadri has pointed out that a sum of Rs. 1,500/- has already been paid by the respondent No. 2 to the claimants. He has pointed out that the claimant No. 1 has admitted in her deposition that she has received the said amount. Hence the balance amount out of the award compensation of Rs. 18,000/- a sum of Rs. 16,500/- would be payable as compensation to the claimants. 50% penalty on the said amount will come to Rs. 8,250/- with interest at 6% per annum from the date of the application till the date of the realisation. It will be open to the respondent Nos. 1 and 3 to claim reimbursement under S. 12(2) of the Act from respondent No. 2 if they so desire.
5. The appeal is allowed with costs of this appeal as well as of the trial Court. The judgment and decree of the trial Court is modified to the aforesaid extent. Respondent Nos. 1 and 3 shall deposit in the trial Court the entire amount payable to the appellants under this order including costs within a period of 10 weeks from today. From the amount deposited in the trial Court, appellant No. 1 Bai Mani will be entitled to take away her 1/4th share without furnishing security. As regards the share of there minors i.e. 3/4th of the total amount awarded, will be invested in a scheduled bank in the joint names of appellant No. 1 and the Nazir of the Court initially for a period of five years and will be subsequently re-invested from time to time till the youngest child attains majority. The interest will be payable every six months to appellant No. 1 for the maintenance of the children. Appeal is allowed with costs throughout.