The main legal point established in the judgment is the liability of the principal employer under the Employee's Compensation Act and the application of indemnification provisions under Section 12(2). The court also clarified the tenability of compensation claims in the context of 'no fault' liability under the Motor Vehicles Act, 1988.

A.S. CHANDURKAR, J.

1. This appeal has been filed under Section 30 of the Employee's Compensation Act, 1923 (for short the said Act) challenging the judgment dated 2011-2001 passed by the learned Commissioner under the said Act. By said judgment, an amount of Rs.67,776/has been granted as compensation to the respondent nos. 1 & 2. The respondent No. 3 has filed cross objections challenging the direction issued by the learned Commissioner at Sr. No. 7 in its operative order with regard to reimbursement of the amount of compensation.

2. On 1751990, a truck carrying cement bags met with an accident. One Bandu who was working as a coolie was injured in said accident and he later succumbed to his injuries. He was aged about 45 years when the accident took place and according to the claimants, he was getting Rs.40/per day as wages. The respondent Nos. 1 & 2 herein filed application under provisions of Section 10 of the said Act seeking compensation of an amount of Rs.42,776/. In the said application, it was mentioned that the claimants had received an amount of Rs.25,000/on account of 'no fault' under Section 140 of the Motor Vehicles Act, 1988 (for short, the Act of 1988). The claim for compensation was initially filed against the appellant and the respondent No. 4.

3. The appellant filed its reply vide Exhibit12 and took the stand that the respondent No. 3 herein was the contractor who had undertaken the work of construction at the instance of the appellant. It was denied that the appellant was the principal employer. It was then pleaded that there was an agreement entered into between the appellant and the respondent No. 3 herein and as per clause 37 thereof, it was the contractor who was responsible for paying the amount of compensation under provisions of the said Act.

4. During pendency of the proceedings, the respondent No. 3 herein was joined as party in view of orders passed below Exhibit32. In the claim application, it was pleaded that the respondent No. 4 herein was the agent of the respondent No. 3 – Contractor. Though the respondent No. 3 herein was duly served, he did not contest the proceedings.

5. On behalf of the claimants, the respondent No. 1 was examined vide Exhibit47. In her deposition, she referred to various documents such as spot panchanama and postmortem report related to said accident. It was further stated that amount of Rs.25,000/was received towards no fault liability under Section 140 of the Act of 1988. In the cross-examination, it was stated that the deceased was doing the work of loading and unloading of cement bags under directions of the Engineer. Another witness examined was a colabourer at Exhibit53. On behalf of the appellant its Executive Engineer was examined vide Exhibit55. He referred to the agreement dated 15121989 at Exhibit56 and clause 37 thereof. In his cross-examination, he admitted that the appellant was the principal employer of the deceased.

6. On consideration of aforesaid evidence on record, the learned Commissioner found that said Bandu had expired during the course of employment and hence, the claimants were entitled for compensation. It was further held that the deceased was getting Rs.40/per day and on that basis, it was held that the claimants were entitled for total compensation of Rs.67,776/. An amount of Rs.25,000/which was already received towards 'no fault' liability was deducted and the balance amount of Rs.42,776/was directed to be paid as compensation. Being aggrieved, the principal employer has filed First Appeal No. 413 of 2002 while the contractor has filed cross-objections challenging the direction as regards reimbursement of the amount of compensation.

7. Shri P.B. Patil, learned Counsel for the appellant submitted that the learned Commissioner was not justified in holding that the appellant was the principal employer. It was submitted that the respondent Nos. 3 & 4 were the contractor and subcontractor respectively. In terms of clause 37 of the agreemen