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2020 Supreme(Del) 522
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M Singh, J.
Five S Manpower Services Pvt Ltd - Appellant
Versus
Commissioner, Under Employees Compensation Act, 1923 & Ors. - Respondent
First Appeal From Order No. 197 of 2020; Civil Miscellaneous Application No. 27497 of 2020, 27498 of 2020, 27499 of 2020
Decided On : 04-11-2020
Siju Thomas, Advocate, Vivek Paul, Advocate, Saurav Bhargavan, Advocate, Satyakam, Advocate
The main legal point established in the judgment is the liability of the principal employer to pay compensation under Section 12 of the Employees Compensation Act, which takes precedence over inter-se arrangements between the principal employer and the contractor.
Headnote:
Employees Compensation Act - Liability of Principal Employer - Section 12 - FAO 197/2020 & CM APPL. 27497/2020 - Section 12 of the Employees Compensation Act imposes the liability of payment of compensation on the principal with right to recover the same from the contractor. The Act stretches the contours of the word 'employer' wider to include the person contracting with another person for carrying out the work of the former. The liability of the principal employer to pay compensation is the settled legal position, and inter-se arrangements between the principal employer and the contractor do not affect the liability. The Commissioner's orders were set aside, and the matter was remanded for fresh consideration in accordance with the law as set out in the judicial pronouncements.
Fact of the Case:
The appeal challenged orders directing payment of compensation due to the death of a workman to his legal heirs/dependents. The Appellant, a contractor, argued that the liability to pay compensation should be on the principal employer, who had already deposited the compensation amount. The Commissioner's orders were challenged based on the settled legal position regarding the liability of the principal employer under Section 12 of the Employees Compensation Act.
Finding of the Court:
The Court found that the liability to pay compensation is on the principal employer, as per the settled legal position and judicial pronouncements. The Commissioner's orders were set aside, and the matter was remanded for fresh consideration in accordance with the law as set out in the judicial pronouncements.
Issues: The primary issue was the liability to pay compensation for the death of a workman, with the Appellant arguing that the liability should be on the principal employer, who had already deposited the compensation amount.
Ratio Decidendi: The ratio decidendi was that Section 12 of the Employees Compensation Act imposes the liability of payment of compensation on the principal employer, and the settled legal position establishes the primary responsibility of paying the compensation on the principal employer, regardless of inter-se arrangements between the principal employer and the contractor.
Final Decision: The Commissioner's orders were set aside, and the matter was remanded for fresh consideration in accordance with the law as set out in the judicial pronouncements.
JUDGMENT
Prathiba M. Singh, J. - This hearing has been done by video conferencing.
CM APPL. 27499/2020(for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
CM APPL. 27498/2020(for condonation of delay)
3. This is an application for condonation of delay in filing the appeal qua impugned order dated 4th August, 2020. The delay of 17 days is condoned. Application is disposed of.
FAO 197/2020 & CM APPL. 27497/2020(for stay)
4. The present appeal challenges two orders dated 4th August, 2020 bearing F.No.Misc/EE/01/ND/2020/740 and 24th August, 2020 bearing F.No.Misc/EE/01/ND/2020/824 and letter dated 29th September, 2020 bearing F.No.Misc/EE/02/ND/2020/1078 passed by the Commissioner under the Employees Compensation Act, 1923 (hereinafter, "Act"). Vide the impugned orders, the Commissioner has directed payment of a sum of Rs.12,93,900/- as compensation due to the death of Respondent No.3, i.e. the deceased workman, to his legal heirs/dependents.
5. The submission of ld. counsel appearing for the Appellant is that the Appellant was merely a contractor at the site and the compensation amount has already been deposited by the principal employer. Despite this fact being in the knowledge of the Commissioner, the same appears to have not been considered by the Commissioner. Mr. Satyakam, ld. counsel appearing for Respondent No''s 1 and 4 submits that the ld. Commissioner, on a reading of the impugned orders, appears to have over-looked the said issue.
6. Heard counsels for the parties. The contention of the Appellant is that since the principal employer is liable in case of any death to pay the compensation, the liability could not have been fastened on the contractor. A perusal of the definition of ''employer'' under Section 2(e) of the Act as also Section 12, shows that the liability to pay compensation would be on the principal employer. In fact, this is also evident from the note of the Labour Welfare Inspector who notes that if the contractor fails to pay the compensation amount, the principal employer will deposit the same. The extract of the said note reads as under:
"Principal employer may kindly be requested to direct the contractor to deposit the compensation amount on or before 23/07/2020, failing which the Principal Employer will deposit the same with penalty and penal interest."
It is not in dispute that the Principal employer has deposited the compensation amount. The Commissioner could not have directed the deposit of the amount twice over, once by the Principal employer and secondly by the contractor. Thus, the Commissioner is clearly in error.
7. Further, under the provisions of the Act, it is the settled legal position that the primary responsibility of paying the compensation is upon the principal employer. The inter-se arrangements between the principal employer and the contractor would not affect the liability qua the deceased or his/her family. This is settled in several judicial pronouncements. In Shri Krishan v. Jasoda Devi & Ors. [FAO 135/2016, decided on 27th September, 2017. a ld. Single Judge of this Court has reiterated and summarised the various principles governing Section 12 of the Act as under:
"Liability of the principal under Section 12 of the Employee''s Compensation Act
8. Section 12 of the Employee''s Compensation Act imposes the liability of payment of compensation on the principal with right to recover the same from the contractor in respect of work being carried out by the contractor. Section 12 of the Employee''s Compensation Act is reproduced hereunder:
43. Summary of Principles
43. - 43.4 ............
43.5. The intention of the Legislature in enacting Section 12 provision appears to be that the injured employee or the dependent of a deceased employee who has been awarded compensation by the Commissioner, should not be put to any difficulty in realising such amount of compensation on account of any recalcitrance of the employer or on account of the vicissitudes of
