1. This is an appeal by a con-tractor who was made liable to indemnify the respondent No. 1 who had been made liable to pay compensation under the Workmen's Compensation Act.
2. The matter arose in this way. One Ezad Baksh, a Painter Mistri, sustained injury as the result of an accidental fall from scaffolding, whilst he was painting a factory shed which formed part of the premises occupied by responded No. 1 as their place of business. It appears that the workman's left knee was injured and an operation became necessary and some bones or pieces of bone were extracted. There was evidence that the incapacity which resulted from this accident amounted to fifty per cent.
3. Ezad Baksh was employed as a painter by the appellant who was opposite party No. 2. That seems to be clear. He however did not claim compensation against his immediate employer, but claimed it against the National Sheet and Metal Works Ltd., opposite party No. 1 who had employed opposite party No. 2 as a contractor to do the painting work to their factory shed.
4. It seems to have been conceded that the accident arose out of and in the course of the employment and therefore the applicant was entitled to compensation which was assessed at Rs. 1,470 and no point has been taken as to the correctness of this amount.
5. The only question which was agitated in the Court below was whether or not the contractor, opposite party No. 2, was liable to indemnify opposite party No. 1, whose shed was being painted.
6. The Commissioner for Workmen's Compensation held that the case came within Section 12(2), Workmen's Compensation Act and that the appellant, opposite party No. 2, was liable to indemnify opposite party No. 1, the respondent National Sheet and Metal Works Ltd.
7. The right of indemnity arises under Sub-section (2) of Section 12, if the case falls within Sub-section (1) of Section 12. That sub-section is in these terms:
'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 of 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.'
8. It will be seen that this sub-section gives the workman in certain circumstances a right to recover compensation not from his immediate employer but from a person who had employed the workman's employer to carry out certain work. Normally, a workman can only recover compensation from his employer, but this subsection is an exception and gives the workman a right to proceed against the person who has entered into a contract with the workman's immediate employer by which the latter was to do certain work. If the workman has a right to recover from the person who has employed the workman's employer to do certain work then Sub-section (2) comes into play and the person who is known as the principal who has employed the contractor can recover from the contractor by way of indemnity. The question of indemnifying however only arises if the case falls within Sub-section (1).
9. To bring the case within Sub-section (1) it must be shown that the person known as the principal has in the course of or for the purposes of his trade or business contracted with another person for the execution by the contractor of certain work and further that the work which the contractor has undertaken to perform is work which is ordinarily part of the trade or business of the principal. In other words, the section contemplates a person subcontracting for work which he himself normally does and which is part of his business. For example, if A engages a contractor B to paint his house and B enters into a contract with C by which the latter is to do the work for B, a workman of C who is injured can recover from B as the case clearly falls within the section because B had in the course and for the purpose of his business entered into a contract with C by which C was to perform work which ordinarily formed part of the work or trade or business carried on by B. However, if the subject-matter of the contract is not work ordinarily or normally carried on by the principal then Section 12 can have no application at all.
10. An example of a case which does not fall within Sub-section (1) of Section 12 is the case of Rabia v. Agent, G I. P. Rly., 53 Born. 203 : (A. I. R. (16) 1929 Bom. 179). In that case the G. I. P Railway entered into a contract with a company under which the latter was to construct a transmission line to carry electric power to various sub-stations on the railway. The deceased was employed by the contractors as a fitter whose work was to assist in the erection of steel towers to carry the overhead cable. These towers were not erected on the railway track, but on land adjacent thereto. While carrying materials from the Store near a Station to the site of the work he was knocked down by a train and killed. The mother as a dependant of the deceased applied for compensation from the G. I. P. Railway under Section 12 of the Workmen's Compensation Act. The Commissioner referred the matter to the High Court under Section 27 of the Act. A Bench of the High Court held that the setting up of an overhead electric cable for the purpose of transmitting electrical power to the railway was not ordinarily part of the trade or business of the principal, namely, the G. I. P. Railway.
11. It is to be observed that the G. I. P. Railway were actually engaged in carrying out this work and had employed contractors to effect that purpose. Nevertheless, the Court held that the G. I. P. Railway was not liable because the work which the contractors had contracted to do was not work which ordinarily was part of the trade or business of the railway. The Bench pointed out that the trade or business of the railway consists in carrying persons and goods and that erecting power stations or transmission lines is not ordinarily a past of their business and therefore where they had contracted with another to do that work, the workman working under the contractor could not recover compensation from the railway.
12. The reason for such a provision obviously 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. On the other hand, where a person enters into a contract with another by which that other does work which ordinarily forms no part of the principal's business then there is no reason at all why the principal should be made liable for compensation for an accident received by and workman in the contractor's employment.
13. In the present case, the workman offered no evidence at all as to the nature of the work of the National Sheet and Metal Works Ltd. It was not suggested that painting work ordinarily formed the whole or part of their business and indeed the name 'National Sheet and Metal Works Ltd.' does not suggest a company which was engaged ordinarily in painting work. Learned advocate for the appellant states that the National Sheet and Metal Works Ltd., make buckets and such like. But there is no evidence as to the precise nature of their employment. It must be remembered that the National Sheet and Metal Works Ltd. applied to the Court to add the appellant as a party and claimed the tight of indemnity against the appellant. It was not for the appellant to prove that the work which he contracted to do was not ordinarily the kind of work performed by the National Sheet and Metal Works Ltd. The onus rested in the first place upon the workman to prove that the work done by the appellant under the contract was work which ordinarily formed the whole or part of the National Sheet and Metal Works Ltd's business, That fact having been established, a right of indemnity would arise. But it appears to me that the Court could not possibly hold in this case that Section 12 applied at all.
14. The Commissioner in his judgment disposes of the point in a somewhat summary manner. He observes in his judgment as follows :
'Opposite party No. 2 admits that he accepted a contract for painting the factory shed, but at a later stage his pleader files a petition to the effect that the contract was not in the course of or for the purpose of opposite party No. 1's trade or business as laid down in Section 12(1) of the Act.'
The learned Commissioner then proceeds :
'This is not only a brain wave after five months of meditation, but a wrong interpretation as well. A factory shed is constructed certainly for the purposes of the owner's business. The contract-was clearly as contemplated under Section 12(1).'
15. In order to come within Section 12(1) the workman, as I have stated, must prove two things. Firstly, that the principal in the course of and for the purposes of his trade or business entered into a contract with the contractor and secondly, that the work, the subject-matter of the contract with the contractor, was work which ordinarily formed the whole or part of the trade or business of the principal. The learned Commissioner has only considered whether this contract was made in course of or for the purposes of the principal's trade or business. Quite obviously, it was because making arrangements for painting part of the factory premises is obviously an act in the course of the business of the factory owner. What the learned Commissioner failed to consider was whether the subject-matter of the contract, namely, painting a shed, could be described as ordinarily forming part of the principal's trade or business. There is no suggestion that painting a shed or anything else formed any pact of the trade or business of the National Sheet and Metal Works Limited and that being so, the contract which they gave to the appellant to do painting work could not give the workman a right to recover compensation as against the National Sheet and Metal Works Limited. That being so, no question could arise of the right to claim an indemnity against the appellant.
16. Unfortunately for the National Sheet and Metal Works Limited, they seem to have assumed that they were liable as principals and claimed an indemnity against the appellant. The Commissioner for Workmen's Compensation finds that the National Sheet and Metal Works Limited were liable. He states:
'Where the compensation is claimed from the principal and the principal is liable under this section, he shall be entitled to be indemnified by the contractor. In this instance, the principal is opposite part No. 1. He is liable to pay Rs. 1470 with costs and pleader's fee to applicant. He is entitled to be indemnified by the contractor, opposite party No. 2.'
17. There it will be seen that there is an express finding that the respondents, the National Sheet and Mutal Works Limited, were primarily liable and an order was made against the appellant indemnify them to the extent of Rs. 1470. In my judgment no question of indemnity could ever arise in this case because the case did not fall within Section 12(1), and therefore no order could be made against the appellant under Sub-section (2) of that section to indemnify any one.
18. That being so, this appeal must be allowed and the order of the learned Commissioner directing the appellant to indemnify the National Sheet and Metal Works Ltd. is set aside.
19. Learned Advocate for the National Sheet sand Metal Works Limited contended that the Court below was wrong in holding that the National Sheet and Metal Works Limited were liable as principals to the workman. The Commissioner I think was clearly wrong in arriving at the finding be did. But unfortunately for the National Sheet and Metal Works Limited they had not challenged that finding. Indeed they accepted the position that they were liable throughout the proceedings and only claimed that they were entitled to an indemnity. It is quite impossible to interfere with the order for compensation made by the Commissioner against the respondents, the National Sheet and Metal Works Limited. As no appeal was preferred from that order we cannot interfere. However, as I have said the order making the appellant liable to indemnify the National Sheet and Metal Works Ltd. must be set aside as Section 12 has no application whatsoever to the case.
20. The appeal of S. M. Ghose, the contractor, therefore succeeds and the order relating to indemnity is set aside. The appellant is entitled to the costs of the proceedings as against the respondent, the National Sheet and Metal Works Limited, in this Court and in the Court below. The hearing-fee in this Court is assessed at three gold mohurs.