The main legal point established in the judgment is the determination of the relationship of employer and employee, calculation of compensation, and imposition of penalty under the Employee's Compensation Act.

Surinder Singh, J.

Both the above titled appeals, one filed by M/s Sintex Industries and another by the workman, are arising from the judgment passed, on 17.8.2011 in Claim Application No.7/2 of 2001/2007, by the learned Commissioner under the Employee’s Compensation Act, 1923, in short “the Act” whereby Phool Kumar Workman hereinafter to be referred as “the claimant” has been held entitled to the compensation of `.4,88,981 with interest @ 12% p.m. from the date of accident till its deposit by M/s Sintex Industries Limited, referred as “the respondent”.

2. The claimant claims that he was employed about 8 days prior to the accident, as helper/ labourer @ `.120/- per day in the factory premises at Baddi on 7.3.2006.

(ii) According to him, on 7.3.2006 at about 12.30 p.m., Supervisor of the respondent directed him and other labourers, namely Har Kishore etc. to push the ladder. While doing so, the ladder touched high tension wires running over the factory. He got electrocuted and sustained burn injuries and other labourers also sustained injuries. The respondent took him to ‘Bhardwaj Hospital’, Baddi, where he was given first-aid, from there he was referred to CHC Nalagarh and then to PGI Chandigarh; where he remained hospitalized for 19 days w.e.f. 25.3.2006 to 12.4.2006. His right leg could not be cured as such it was amputated beyond thigh rendering him 100% disabled, thus lost his future earning and claimed `.6 lacs as compensation.

3. In reply, the respondent denied relationship of the employer and employee and also denied the accident in factory premises. It is further contended that Employees’ State Insurance Act, 1948 applies to the industrial establishments which covers its workers and denied their liability to pay compensation.

4. The final shape of controversy was summed up by forming following issues by the learned Commissioner:-

“1. Whether the applicant was employee of the respondent and employed as Labourer/ Helper by the respondent at Baddi in the Factory Premises, as alleged? …OPA.

2. Whether the applicant suffered injuries during the course of employment of respondent, as alleged? …OPA.

3. Whether the applicant is entitled for compensation, if so, what amount? …OPA.

4. Whether the application is not maintainable, as alleged? …OPR.

5. Relief.”

5. Both the parties led their evidence. The learned Commissioner after hearing the parties decided all the issues is favour of the claimant, thus awarded compensation to the tune of `.4,88,981/- with interest @ 12% per annum, which has been challenged by the respondent concern by filing present FAO (ECA) No.378 of 2011 and admitted for hearing prima-facie on the following substantial questions of law:

“1. Whether the Commissioner, Employees Compensation has erred in law in not appreciating Section 2(e), 2 (n) and Section 4, Schedule 1 part 2 of Workmen Compensation Act and thus resulting in error of law apparent on face of record. If so its effect?

2. Whether the Commissioner Employees Compensation has erred in law in not appreciating that there existed no relation of employer and employee between appellant and respondent and also brushed aside the statement of respondent that no evidence can be produced regarding employment with appellant thus resulting in wrong findings. If so its effect?

3. Whether the Commissioner, Employees Compensation has erred in law in taking 120/- as wages per day and brushing aside notification of Government of Himachal Pradesh in respect of minimum wages for unskilled workers during the said period 80 per day and thus resulting in wrong finding and error of law apparent on face of record. If so its effect?”

6. The claimant also felt aggrieved by not awarding penalty as such filed FAO (WCA) No.40 of 2012, which was admitted on the following substantial question of law:-

“Whether the learned Commissioner below is right in not awarding the penalty to the extent of 50% in favour of the appellant, especially when there is no justification in n