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2026 Supreme(Ker) 656

IN THE HIGH COURT OF KERALA AT ERNAKULAM
S. MANU, J.
The Secretary, Kannur District Police Co-Operative Society Ltd. – Appellant
Versus
K. Kanchana W/o Late Anilkumar C.V. – Respondent
MFA (ECC) No. 95 of 2017
Decided On : 05-06-2026

Advocates Appeared:
For the Appellants : P.U. Shailajan, D.N. Nishani, M. Suresh Kumar
For the Respondents: C.P. Peethambaran, Neeraja Venugopal

The status of an employee is determined by whether the person performs work personally. An individual physically executing a contract, even if hired through a tender process or employing others, qualifies as a worker. Maintaining business premises is considered an integral part of an organization's trade or business.

Headnote:(A) Employees' Compensation Act, 1923 - Section 12(1) - Employer-employee relationship - Whether a contractor engaged through a tender process qualifies as a workman - Crucial test is personal involvement in the execution of work - If an individual agrees to work personally and actively participates in the task alongside others, the contractual nature of the engagement does not negate the status of an employee - A pedantic interpretation undermining the protective intent of beneficial legislation must be avoided (Paras 9, 10 and 11).

(B) Employees' Compensation Act, 1923 - Section 12(1) - Scope of 'trade or business' - Maintenance and repair of buildings hosting a business entity form an integral part of the 'business' - Statute aims to extend liability to the principal employer even in the presence of contractual intermediaries to ensure justice for victims (Para 13).

Facts of the case:
A dispute arose concerning the accidental death of an individual engaged for repair work on building premises. The principal entity contended that, because the deceased was selected through a competitive tender process to execute the work and had hired assistants, he functioned as an independent contractor. The claimants argued that the deceased was actively involved in the work and entitled to compensation as an employee.

Findings of Court:
The court observed evidence indicating the deceased was physically present and performing welding duties at the time of the incident. It concluded that personal execution of the assigned task satisfies the definition of an employee, notwithstanding the contractual mode of procurement. The court further clarified that maintenance of business infrastructure is essential to the conduct of business, thereby falling within the statutory provisions for liability.

Issues: The main issues were whether a person engaged via a tender process as a contractor can be classified as an employee and whether the maintenance of building premises qualifies as part of the trade or business of an entity for the purpose of awarding compensation.

Ratio Decidendi: The legal characterization of a worker relies on the physical execution of duties rather than the form of contract. An individual performing work personally retains the status of an employee despite hiring others to assist. Furthermore, work essential for the maintenance of business premises constitutes activity related to trade or business.

Result: Appeal dismissed.

JUDGMENT :

S. MANU, J.

1. The second opposite party in ECC No. 137/2014 of the court of the Industrial Tribunal and Employees Compensation Commissioner, Kozhikode is the appellant herein. Respondents 1 to 3 were the applicants before the Commissioner. Fourth respondent herein was the first opposite party.

2. The respondents 1 to 3 approached the Commissioner contending that the husband of the 1st respondent and father of respondents 2 and 3, Anil Kumar died of electrocution while he was engaged in the construction of iron roof sheeting work in the office building of the appellant society on 16.7.2011 at about 2 pm. While he was doing welding work an iron pipe came in contact with a high-tension line passing nearby and was thrown away by electric shock. Though he was immediately taken to hospital he succumbed to injuries. The claimants contended that the deceased was aged 45 years and his monthly wage was Rs.12,000/-. A total amount of Rs.10,36,640/- was claimed as compensation.

3. The appellant denied the claims of the respondents 1 to 3. Alleged employer-employee relationship was denied. It was contended that the deceased was an independent contractor for roofing work and the work was entrusted to him as he submitted the lowest quotation in response to the public notice inviting quotations for the roofing work. Further it was contended that Anil Kumar had employed some other persons and was not doing any work directly. According to the appellant, instructions to the employees the iron rod came in contact with the electric line and he got electrocuted. On sympathetic considerations, an amount of Rs.50,000/- was given to respondents 1 to 3 from the common benefit fund of the society.

4. The 1st respondent as AW1 and the Honorary Secretary of the appellant was examined as RW1. Exts.A1 to A5 were marked on the side of the respondents 1 to 3. Ext.B1, file pertaining to the roof construction was marked on the side of the appellant. The learned Commissioner, on appreciation of evidence, concluded that there was employer-employee relationship. It was found that the deceased himself was working under the appellant as a welder. The learned Commissioner adopted Rs.8,000/- as the monthly wages of the deceased for the purpose of calculating compensation. The compensation fixed the compensation at Rs.6,77,760/-. Interest at the rate of 12% from the date of accident was also granted. In addition, an amount of Rs.5,000/- was granted towards funeral expenses.

5. No question of law was formulated while admitting this appeal. In my view the following substantial question of law arises for consideration:

Whether the deceased can be considered as an employee for the purpose of Employees Compensation Act despite the fact that he was engaged through a tender process?

6. Heard the learned counsel for the appellant and the learned counsel for respondents 1 to 3.

7. The learned counsel for the appellant fervently pleaded that no employer-employee relationship was existing between the appellant and the deceased. The appellant issued public notice inviting quotations for construction of a sheet roof. The deceased submitted his quotation and the same being the lowest, the work was awarded to him. He was therefore a contractor and not a workman. She further submitted that he had engaged labourers and the work was executed through them. When he visited the site to supervise the work on the fateful day, he unfortunately got electrocuted. The learned counsel referred to Ext.B1 file in support of the contention. Further, the learned counsel submitted that the work undertaken by the deceased was the construction of a roof, which cannot be considered as part of the trade or business of the appellant. Therefore, she submitted that in any view of the matter the appellant is not liable to pay compensation to the dependents of the deceased.

8. Per contra, the learned counsel for the respondents 1 to 3 submitted that the deceased was actually an employee. She argued that the

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