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IN THE HIGH COURT OF GUJARAT
A.D. DESAI, N.H. BHATT, JJ.
The Municipal Commissioner, Baroda – Appellant
Versus
Patel Engineering Co. Ltd. and Others – Respondents
F.A. Nos. 618, 619, 620 of 1970
Decided On : 24-11-1975
WORKMEN'S COMPENSATION - CONTRACTOR'S LIABILITY - INDEMNITY - SECTION 12 OF THE WORKMEN'S COMPENSATION ACT, 1923 - INTERPRETATION - EMPLOYEES OF CONTRACTOR RECEIVING TRAINING FROM CONTRACTOR - NOT EMPLOYEES OF PRINCIPAL - PRINCIPAL NOT ENTITLED TO INDEMNITY - INTEREST ON COMPENSATION - SECTION 4-A OF THE WORKMEN'S COMPENSATION ACT, 1923 - INTERPRETATION - EMPLOYER LIABLE TO PAY INTEREST ON COMPENSATION FROM DATE OF INCIDENT TO DATE OF PAYMENT.
Fact of the Case:
Three employees of the Baroda Municipal Corporation died in an accident while receiving training from a contractor engaged by the Corporation to construct a sewage treatment plant. The Corporation claimed compensation from the contractor under section 12 of the Workmen's Compensation Act, 1923, arguing that the deceased were the contractor's employees. The contractor denied liability, arguing that the deceased were the Corporation's employees and that the Corporation was not entitled to indemnity under section 12. The Commissioner for Workmen's Compensation awarded compensation to the deceased's heirs, but did not award interest on the compensation amount. The Corporation and the deceased's heirs appealed.
Finding of the Court:
The court held that the deceased were not the contractor's employees, but were the Corporation's employees receiving training from the contractor. Therefore, the Corporation was not entitled to indemnity from the contractor under section 12 of the Act. The court also held that the Corporation was liable to pay interest on the compensation amount from the date of the incident to the date of payment, as required by section 4-A of the Act.
Issues: 1. Whether the deceased were the contractor's employees or the Corporation's employees. 2. Whether the Corporation was entitled to indemnity from the contractor under section 12 of the Workmen's Compensation Act, 1923. 3. Whether the Corporation was liable to pay interest on the compensation amount.
Ratio Decidendi: 1. The court interpreted section 12 of the Workmen's Compensation Act, 1923, and held that the principal is liable to be indemnified by the contractor only if the principal has to pay compensation to any workman employed by the contractor. 2. The court held that the deceased were not the contractor's employees, but were the Corporation's employees receiving training from the contractor. Therefore, the Corporation was not entitled to indemnity from the contractor under section 12 of the Act. 3. The court interpreted section 4-A of the Workmen's Compensation Act, 1923, and held that the employer is liable to pay interest on the compensation amount from the date of the incident to the date of payment.
Final Decision: The court dismissed the Corporation's appeals and allowed the deceased's heirs' appeals. The court modified the trial court's decree to award interest on the compensation amount to the deceased's heirs.
JUDGMENT :
A.D. DESAI, J.
1. All these 6 appeals are directed against the judgment and award passed by the Commissioner for Workmen's Compensation, Baroda, allowing the compensation claims in full except in respect of interest made by the heirs of 3 deceased employees of the Baroda Municipal Corporation (hereinafter referred to as the Corporation), who died in an accident which took place on November 26, 1967 at the main pumping station at Sewage Disposal Works of Baroda Municipal Corporation at Altadra.
2. To state shortly the facts are that the Corporation entered into a contract on March 12, 1965 with Patel Engineering Co. Ltd. (hereinafter referred to as the Contractor) for supply of Sewage Treatment Plant which was to be erected for the Corporation at village Altadra. In respect of the Sewage Treatment Plant tenders were invited and the tender of the Contractor was accepted by the Corporation. According to the Corporation the Contractor was under the terms of the agreement bound to hand over the Corporation a complete Sewage Treatment Plant at Altadra and from the date of commencement of the plant till the plant was completely handed over, the Contractor was fully responsible for any damage, loss or injury to the works or any part thereof. The contract also provided that the Contractor shall indemnify and keep indemnified the Corporation against all damages, losses and claims for injuries to any person or property whatsoever which might arise out of or in consequence of the construction and maintenance of the works and against all claims, demands, proceedings, damages costs charges and expenses whatsoever in respect thereof or in relation thereto. As the Contractor was under the obligation to maintenance of plant the installation was complete, the Corporation sent 23 employees for the purpose of training. On November 6, 1967, Somabhai Haribhai, Ramanbhai Ishwerbhai and Ambalal Somabhai were the persons who were receiving training from the Contractor. In working the plant on that date chains of float switches got entangled. Ramanbhai Ishwarbhai, Somabhai Haribhai and Ambalal Somabhai at the instance of C.V. Patel, an engineer of the Contractor, had got down and due to poisonous gas became unconscious and subsequently died. Somabhai Kalabhai and Ratanben, Somabhai, father and mother of deceased Ambalal Somabhai filed workmen's compensation Case No. 6 of 1963 before the Commissioner for Workmen's Compensation, Baroda against the Corporation to recover the compensation amount of Rs. 7,000/- and interest and costs in respect of the death of their son Ambalal which took place during the course of employment. Bai Deviben Somabhai widow of the deceased was joined as opponent at the instance of the Corporation. Ishwarbhai Shankerbhai, Dariyaben Ishwarbhai and Bhikhiben Ramanbhai filed workmen's compensation Case No. 7 of 1968 before the same office and against the Corporation to recover compensation amount of Rs. 6,000/- plus interest and costs. Ishwarbhai Shankerbhai and Dariyaben Ishwarbhai are the father and the mother of the deceased Ramanbhai Ishwarbhai and Bhikhiben Ramanbhai is the widow of the deceased. Workmen's compensation Case No. 13 of 1968 was filed against the Corporation by Jasubhai Somabhai Solanki and Maniben Somabhai Solanki, the son and the widow of deceased Somabhai Haribhai claiming compensation of Rs. 6,000/- plus interest and costs. The Corporation filed a written statement contending that the deceased were casual labourers and, therefore, not entitled to any compensation, that the persons claiming compensation were not dependents and legal heirs of the deceased, that the accident had happened due to carelessness of the deceased that Patel Engineering Co. Ltd. was a necessary party and that in any case the Corporation was entitled to be reimbursed by Patel Engineering Co. Ltd. in respect of the awarded amounts as per the provisions of section 12 of the Workmen's Compensation Act, 1923 (hereinafter referred to
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