The central legal point established in the judgment is that liability for compensation under the Workmen's Compensation Act rests with the principal employer, and insurance cover liability is only applicable under the Act.

JUDGMENT :

Chitra Venkataraman, J.—This matter arises under the Workmen's Compensation Act. The insurance company, the opposite party No. 3 before the Commissioner, is on appeal against the order of the Commissioner for Workmen's Compensation, wherein they figured as opposite party No. 3.

2. It is stated that the applicant's son was a security personnel selected by the Security and Detective Bureau Ltd., the opposite party No. 2 in the proceedings before the Commissioner and now the respondent No. 3 before this Court.

3. It is stated that deceased Anandhavelu was appointed by the opposite party No. 1, the respondent No. 2 before this Court through the respondent No. 3 herein. At the time of death, he was 22 years old. On 13.11.1994, while Anandhavelu was working in the second shift, he died in the course of his employment. The opposite party No. 1, the principal employer and the opposite party No. 2, the contractor, were liable to pay the compensation. Since the appellant herein was directed to indemnify the loss to the opposite party No. 1, the respondent No. 2 herein, the appellant has approached this Court under the provisions of the Workmen's Compensation Act.

4. In the counter-affidavit filed by Vanavil Dyes and Chemicals Pvt. Ltd., the respondent No. 2 herein, the principal employer had stated that the deceased was not earning a sum of Rs. 2,500 and that he was earning only a sum of Rs. 650 per month and it was paid by the opposite party No. 2, namely, the contractor and hence not liable to pay the compensation.

5. It is further stated that on 13.11.1994, two security guards, namely, A. Boopalan and A. Anandhavelu employed by opposite party No. 2, were posted in the second shift to work from 4 p.m. to 12 midnight. It was also stated that Anandhavelu had informed Boopalan that he was suffering from headache and stomach pain. At 7.20 p.m., when Boopalan requested the deceased to go for dinner, the deceased had requested Boopalan to go first. On his return, Anandhavelu was found dead. Immediately, the same was informed to the superiors.

6. In the contractor the respondent No. 3's counter-affidavit, it is stated that the deceased was paid a sum of Rs. 650 per month only and that there was no accident arising out of or in the course of employment. Since the deceased was employed by the opposite party No. 1, insured with the opposite party No. 3, the appellant herein, the opposite party No. 3 alone was responsible to pay the compensation.

7. Insurance company filed its counter-affidavit wherein, it was stated that there was no privity of contract between them and opposite party No. 1, to indemnify the opposite party No. 1 for the death of its security guards. It was further stated that respondent No. 3 herein had taken a Group Personal Accident Policy. However, that would not come under the jurisdiction of the Workmen's Compensation Act and hence, prayed for exonerating them from the liability under the Act.

8. Three questions were raised before the Commissioner for Workmen's Compensation:

(i) Whether the deceased died out of injury by accident arising out of and in the course of his employment?

(ii) Whether the claimants are entitled to receive the compensation as per the Workmen's Compensation Act?

(iii) Which opposite party was responsible for payment of compensation?

9. The Commissioner held that claimant had proved that the deceased had died out of an injury in the course of employment and, therefore, the claimant was entitled for the compensation. On the question of compensation, the Commissioner held that the deceased was receiving a salary of Rs. 650 per month. The compensation was computed at Rs. 57,905, taking note of the age of the deceased at 21 years. On the question of liability, the Tribunal referred the decision reported in K. Koodalingam Vs. Supt. Engineer and Others, and held Section 12 of the Act would apply to the case. It also noted the decision gave the guidelines in the case of employer taking the services of an emp