The liability of the principal employer under S.12 of the Workmen's Compensation Act and the interpretation of the policy's coverage for workmen in the employment of contractors performing work connected with the business or occupation of the insured.

1. This is an appeal by the Insurance Company from the order of the Commissioner under the Workmen's Compensation Act, 1923 holding the principal employer (the'insured') and the insurer jointly and severally liable to compensate the legal representatives of the deceased workman in the sum of Rs. 18,000/-. The principal employer has not challenged the order of the Commissioner.

2. The deceased was an employee of the contractor engaged by the principal employer. On 31-1-1976, while removing the shutter of the newly constructed bleaching plant of the principal employer, the employee fell down and died.

3. The only dispute which survives in this appeal is as regards the contention of the insurer (the appellant) that the deceased was not employed in work connected with the business and occupation of the insured so as to attract the policy covering the insured's liability to a workman in the employment of the contractor.

4. The policy dated 18-4-1975 issued by the insurer for the period from 1-4-1975 to 1-4-1976 contains the following term:

"It is hereby understood and agreed that the indemnity granted is extended to cover the legal liability of the Insured to workmen in the employment of Contractors performing work for the Insured while engaged in the business and occupation in respect of which the within policy is granted but only so far as regard claims under the W. C. Act 1923 and subsequent amendments of the said Act prior to the date of the issue of the policy the premium in respect of such extended insurance to be calculated on the total sums paid to such contractors by the Insured in respect of work executed during such period of insurance."

(emphasis supplied)

The policy covers the legal liability of the insured to the workmen in the employment of the contractors performing work connected with the business or occupation of the insured. S.12 of the Act clearly says that the principal employer is liable to compensate workmen employed by a contractor in the execution of work which is ordinarily part of the trade or business of the principal employer. It is this liability which is covered by the policy. S.12, in so far as it is material, reads:

"12. Contracting. (1) Where any person (hereinafter in this section referred to as the principal) in the course of or for the purposes of his trade or business contracts with any other person (hereinafter in this section referred to as the contractor) for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the trade or business of the principal, the principal shall be liable to pay to any workman employed in the execution of the work any compensation which he would have been liable to pay if that workman had been immediately employed by him; and where the compensation is claimed from the principal, this Act shall apply as if references to the principal were substituted for references to the employer except that the amount of compensation shall be calculated with reference to the wages of the workman under the employer by whom he is immediately employed.

(2)

(3)

(4) This section shall not apply in the case where the accident occurred elsewhere than on, in or about the premises on which the principal has undertaken, or usually undertakes, as the case may be, to execute the work or otherwise under his control or management."

5. Counsel for the insurer submits that the deceased was removing the shutter of the bleaching plant. Removal of a shutter, he says, is not done in the course of employment in connection with work which is part of the trade or business of the principal employer. We do not agree.

6. The employee was at the relevant time doing work in the premises of the principal employer. The bleaching plant, the shutter of which was removed by the employee before he fell down, is part of the principal employer's factory engaged in the production of his goods. Removal of a shutter was undoubtedly work connected with the trade or bu