Sarjeras Unkar Jadhav vs Gurindar Singh and another

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1990 Supreme(Bom) 54

IN THE HIGH COURT OF BOMBAY
T.D. Sugla, J.
Sarjeras Unkar Jadhav .... Appellant.
Versus
Gurindar Singh and another .... Respondents.
First Appeal No. 931 of 1984, decided on 16-2-1990.
Advocates appeared :
C.S. Bhandari, for the appellant.
D.Y. Chandrachud i/by Crawford Bayley Co., for respondent No. 2.
G.S. Kalsokar, for respondent No. 1.

Headnote:Sections 12 and 4-Contract of painting given by B.E.S T. undertaking to a contractor-Contractor appointed partners for the job-Such painter injure In course of his work was incapacitated-Whether principal employer D.E.S.T. undertaking liable to pay compensation.
       Held, the safer test would be that if it is ordinarily a part of business of the principal to execute certain work, then ordinarily he will do that work by his own servants and he cannot escape the liability for accident that takes place merely because he bas engaged a contractor. Now, in the present case, the trade or business of respondent No. 2 is to supply electricity. One cannot supply electricity without having electric poles. Electric poles are not one or two in number. They are hundreds and thousands having regard to the area of operation of respondent No.2. In Bombay climate the poles are likely to get rusted unless painted frequently. It will thus be an ordinary part of respondent No. 2s business to paint the poles if it is interested in supplying electricity continuously and properly. It is for this reason that court is inclined to hold that the contractor was engaged not only for the purpose of respondent No. 2s trade or business, but the activity in which the workman was engaged was ordinarily a part of its trade or business. Accordingly court further holds respondent No.2 responsible and liable for compensation under Section 12 (I) of the Workmens Compensation Act.
       Sections 12 (1) and 4-A (3)-Compensation-Interests and Penalty bas recognised by statute-Whether principal employer liable for all or only for compensation.
       Held for this purpose it is desirable to refer to the provisions of Sections 3, 4 and 4-A of the Workmens Compensation Act, Section 3 of the said hot provides that if personal injury is caused to a workman by accident ...... his employer shall be liable to pay compensation in accordance with the provisions of this Chapter, i.e. Chapter II. Section 4 of the Act provides the manner and extent in and to which the amount of compensation is to be awarded vis-a-vis different kinds of injuries or loss of earning capacity. Section 4-A on the other hand, provides for payment of compensation under Section 4 as soon as it falls due. Sub-section (2) of Section 4-A provides for payment of admitted liability when there is some dispute-However this Court is not concerned with sub-section (2) of Section 4-A in this case. Sub-section (3) of Section 4-A provides for payment of interest if the employer is in default in making the payment simpliciter and for payment of penalty to the extent of 53 percent if there is no justification for the delay in making the payment. It is, thus evident that the statute has recognised compensation interest and penalty a. three different concepts. The definition of the word "Compensation" in Section 2 (1) (c) of the Act provides that "compensation" means compensation as provided for by the said Act.
       This would mean and refer to compensation payable under Section 3 as awarded under Section 4. In the circumstances the argument of Shri Chadrachud to extent that Section 12 (1) of the Act makes the principal employer liable for compensation and compensation does not include interest and penalty appears to be correct. Accordingly, it is held that though the principal employer i.e. the respondent No.2 is liable for compensation under Section 12 (1) it is not liable for interest and penalty.

JUDGMENT - T.D. SUGLA, J.:---The appellant is the original applicant. He has challenged the judgment and order dated 10th May, 1984 in Application No. (WCA) 659/C. 118 of 1979 passed by the Commissioner for Workmen's Compensation, Bombay.

2. Main grounds of challenge are : (1) loss of earning capacity estimated by the Commissioner at 20 percent is very much on the low side. The loss of earning capacity should have been judged not with reference to physical incapacity but with reference to the loss of earning capacity and that too in the context of the nature of the job he was engaged in. In support of the contention, reliance was placed on a Supreme Court decision in the case of (Pratap Narain Singh Deo v. Shrinivas)1, A.I.R. 1976 Supreme Court 222.

(2) Penalty of Rs. 250/- awarded was grossly inadequate. The defence put up his immediate employer, i.e. The Contractor, respondent No. 1 herein and opposite party No. 1 before the Labour Court, was not bona fide. Reliance in this regard was placed on the Supreme Court decision (supra) and the decision of this Court in (Parvatiammal Dharamlingam v. Divisional Superintendent, Central Railway)2, 1988 A.C.J. 752; and,

(3) The Commissioner was not at all justified in exonerating respondent No 2 herein and opposite party No. 2 before the Labour Court from its liability to pay compensation in terms of section 12(1) of the Workmen's Compensation Act.

3. None appeared on behalf of respondent No. 1 Contractor, Shri Chadrachud, the learned Counsel appearing for respondent No. 2, supports the order of the Commissioner. It was pointed out that respondent No. 2 was admittedly not an immediate employer of the workman. The liability could be fastened on it if at all under section 12(1) of the said Act only. That sub-section Inter alia provided that a person to be liable under section 12(1) has to be a person who is carrying on trade or business as principal and, in the course of or for the purposes of his trade or business as principal, and, in the course of or for the purposes of his trade or business, engages a contractor to execute the work who employs the workmen and the work is ordinarily a part of the trade or business of the principal. It is stated that the workman was employed by the contractor for painting electric poles. The business of respondent No. 2 was to supply electricity. It was certainly not painting the electric poles. Therefore, though the contractor was engaged for the purpose of the business which was carried on, the work of painting was not and could not be held to be a part of that business. Under sub-section (2) of section 12 of the said Act, Shri Chandrachud further stated the respondent No. 2 was indemnified so much so that the liability became exclusively that of the contractor and not of the principal. In support of his contentions Shri Chandrachud relied on Calcutta High Court decisions in (S.M. Ghose v. National Sheet Metal Works) 3, A.I.R. 1950 Calcutta 548 (paras 11-15 pages 549.550), (New India Tennis v. Aurora Singh)4, A.I.R. 1957 Calcutta 613, (Para 15 page 616), and (Carrison Engineer v. Guttamna Hanmantdas) 5, 1978 Lab.I.C. 878 (paras 11-14 page 880). Alternatively, Shri Chandrachud contended that assuming that the respondent No. 2 was liable for interest and penalty. For this purpose reference was made to the provisions of section 2(1)(e) and section 4-A of the Act to show that the legislature had in its wisdom recognised the difference between the words compensation, interest and penalty. Liability under section 12(1) was fastened with regard to compensation only. Therefore, even if it was held that respondent No. 2 was liable for compensation, it would certainly be not liable for penalty and interest.

4. In reply to an objection taken on behalf of the appellant that respondent No. 2 having not filed an appeal nor cross-objections, it was not open to it to resist the claim on the grounds urged before this Court for the first time. Shri Chandrachud stat

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