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1972 Supreme(AP) 8
Andhra Pradesh High Court
Judges : PARTHASARATHI
Y.Srinivasa Rao - Appellant
Versus
Commissioner for Workmens Compensation and Assistant Commissioner of Labour - Respondent
Decided On : 01-24-72
The construction of an irrigation project by the Government does not constitute a trade or business activity, and therefore the Government cannot be considered a principal employer under section 12(1) of the Workmen's Compensation Act, 1923. Additionally, the Government's claim for indemnity from the employer under section 12(2) is subject to an adjudication by the Commissioner, and the procedure prescribed under Rule 39 must be followed.
Headnote:
WORKMEN'S COMPENSATION - PRINCIPAL EMPLOYER - SECTION 12(1) - STATE GOVERNMENT NOT PRINCIPAL EMPLOYER - INDEMNITY - PROCEDURE UNDER RULE 39 TO BE FOLLOWED.
Fact of the Case:
An accident occurred during the execution of work connected with the excavation of channels under the Nagarjunasagar Project, resulting in injuries and fatalities among workers employed by the petitioner, a contractor. The Executive Engineer notified the petitioner of the compensation awarded by the Commissioner for Workmen's Compensation without providing an opportunity for representation. The petitioner challenged the validity of the award, arguing that it was made without notice and violated principles of natural justice.
Finding of the Court:
The court held that the State Government could not be considered a principal employer within the meaning of section 12(1) of the Workmen's Compensation Act, 1923, as the construction of an irrigation project did not fall within the purview of the Government's trade or business. The court also found that the Government's right to claim indemnity from the petitioner under section 12(2) was subject to an adjudication by the Commissioner, and that the procedure prescribed under Rule 39 had not been followed.
Issues: 1. Whether the State Government could be considered a principal employer under section 12(1) of the Workmen's Compensation Act, 1923, in relation to the construction of an irrigation project? 2. Whether the Government could enforce its claim for indemnity from the petitioner without following the procedure prescribed under Rule 39.
Ratio Decidendi: 1. The court interpreted section 12(1) of the Workmen's Compensation Act, 1923, and concluded that the words "trade or business" used in the provision did not encompass the sovereign or governmental function of constructing irrigation projects. The court emphasized that the liability of the principal employer under section 12(1) was contingent upon the assignment of a part or whole of the contractual obligation or function relating to the principal's trade or business. 2. The court held that the Government's right to claim indemnity from the petitioner under section 12(2) was subject to an adjudication by the Commissioner, and that the procedure prescribed under Rule 39 had to be followed. The court noted that the petitioner had disputed his liability to indemnify the Government, and that an opportunity to show cause against the enforcement of the liability was necessary.
Final Decision: The court allowed the petitioner's alternative prayer and made the rule nisi absolute in terms of the alternative prayer as per W. P. M. P. No. 438 of 1972. The petitioner was awarded costs, with advocate's fees of Rs. 100.
( 2 ) THE Executive Engineer-in-charge of the Division notified the petitioner on 14th October, 1969,that the Commissioner for Workmen s Compensation, Hyderabad, awarded a sum of Rs. 4,800 as compensation in respect of each of the deceased workmen. The Executive Engineer also intimated the petitioner that the payment of the compensation was intended to be made from out of the amounts payable by the department to the petitioner. The petitioner alleges that no opportunity was given to him to make any representation to the Commissioner for Workmen s compensation and that the decision or award cf the latter was given without notice to the petitioner. It would appear that the Commissioner had decided the matter solely on the basis of a statement made by the Executive Engineer.
( 3 ) THE petitioner then made representations to the Commissioner for Workmen s compensation, who is cited in this proceeding as the first respondent. It was pointed out by the petitioner that a decision had been made without notice to the party affected thereby and that no order could be made prejudicial to his interest without hearing him. The order was made in contravention of the provisions of law which make notice to the affected paity and hearing imperative. The petitioner also submitted to the Commissioner that the decision did not accord with the principles of natural justice and that the order was liable to be set aside. The commissioner, however, did not accede to the request of the petitioner. The reply of the Commissioner negativing the request of the petitioner was dated 25th February, 1970. The petitioner impugnes the validity of the proceeding. It may be mentioned that the compensation in respect of each deceased worker was enhanced from Rs. 4,800 to Rs. 6,000.
( 4 ) THE counter-affidavit of the Executive engineer, impleaded herein as the second respondent, alleges inter alia that the petitioner was appraised by a letter, dated 14th October, 1969, that the amount of compensation was calculated in accordance with law and that the amount so fixed was being paid by debiting the amount to the petitioner s account. The amount was subsequently deposited with the Commissioner of Workmen s Compensation on 16th December, 1969. The respondent urges that the fixation of the compensation and the deposit made with the Commissioner were made strictly in conformity with the provisions of section 12 of the Workmen s Compensation Act, 1923. It is pointed out that the petitioner did not lodge any protest either in writing or verbally regarding the determination of the amount of compensation and the deposit made by the second respondent. The counter- affidavit repudiates the allegation that the quantum of compensation was fixed without the knowledge or behind the back of the petitioner. On their application, five persons who are the legal representatives of the deceased workers, were impleaded as respondents by order of this Court, dated 1st February, 1971.
( 5 ) THE third section of the Act provided that if personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of chapter II. Under section 4 the amount of compensation payable in the case of death or disablement has to be computed in the manner specified in clauses (a) and (b) thereof. The liability to pay compensation is cast on the employer which expression is defined by clause (e) of section 2.
( 6 ) IT is beyond dispute that it is the petitioner that employed the workmen who sustained fatal injuri
