Principal employers cannot evade liability for employee compensation under statutory provisions, despite contractual exemptions, as the rights of workmen supersede such agreements.

JUDGMENT :

Sanjeeb K Panigrahi, J.

1. In this appeal, the appellant seeks a direction from this court to set aside the order dated 22nd March, 2016 of the Commissioner for Employees Compensation and Assistant Labour Commissioner, Balasore in E.C. Case No.03 of 2011, holding that no liability can be fastened on Opp. Party No.2, and dismiss the claim as not maintainable against it.

I. FACTUAL MATRIX OF THE CASE

2. The brief facts of the case are as follows:

(i) The Respondent Nos. 1, 2 and 3 filed E.C. Case No. 3 of 2011 before the Commissioner for Employees’ Compensation-cum-Assistant Labour Commissioner, Balasore, seeking compensation in connection with the death of Sk. Sajiduddin, who had been working on a forklift machine at the Interim Test Range (ITR) on 02.12.2010 at around 6 p.m.

(ii) The claimants described themselves as dependants of the deceased and stated that he had been functioning in the capacity of a Fitter Mechanic at the relevant time. It was stated in the proceedings that the deceased had been engaged through Opp. Party No. 1, a contractor, who had entered into an agreement with Opp. Party No. 2, the Director, Interim Test Range, on 20.08.2010, with the contractual period extending from 10.09.2010-10.09.2011.

(iii) During the pendency of the compensation claim, Opp. Party No. 2 filed objections, asserting that the deceased had been engaged by the contractor and raising contentions regarding the circumstances in which the accident occurred, including the manner in which the repair work of the forklift machine was being undertaken. The materials placed before the Commissioner included documents relating to the employment arrangement, the contract between Opp. Party No. 1 and Opp. Party No. 2, and records pertaining to the incident dated 02.12.2010.

(iv) Upon consideration of the evidence presented by all parties, the Commissioner for Employees’ Compensation passed a judgment on 22.03. 2016 directing payment of compensation quantified at Rs.6,55,410/-, with a further direction regarding interest in case of delayed deposit. Opp. Party No. 2, being dissatisfied with the said judgment, filed the present appeal challenging the findings recorded by the Commissioner.

II. SUBMISSIONS ON BEHALF OF THE APPELLANT

3. Learned counsel for the Appellant earnestly made the following submissions in support of his contentions:

(i) The appellant assails the impugned order on multiple grounds, contending at the outset that the claim petition itself was not maintainable against Opp. Party No. 2. It is argued that the claimants had no cause of action under Rule 20, Form G of the Employees’ Compensation Act, 1923, and that the proceedings suffered from misjoinder of parties, as Opp. Party No. 2 was not connected with the employment of the deceased. According to the appellant, there existed no employer–employee relationship between Opp. Party No. 2 and Sk. Sajiduddin.

(ii) It is submitted that the repair and maintenance work of the Material Handling Group (MHG) equipment of ITR, Chandipur was being executed under a contract dated 20.08.2010 between the President of India, represented by the Director, ITR, and M/s Ashalata Enterprises. Under the terms of this agreement, the contractor was solely responsible for engaging workers and for any injury, incident, loss of life or damage arising during the execution of the work. Reliance is placed on Clause 11 and other general terms and conditions of the contract to contend that ITR authorities were expressly insulated from liability for any harm sustained by contractor’s employees. Thus, responsibility for any loss or injury to the deceased, who was admittedly working under the contractor, could not be fastened upon the appellant.

(iii) The appellant further argues that the Commissioner failed to determine whether the claimants were “dependants” within the meaning of Section 2(d) of the Employees’ Compensation Act, 1923, thereby rendering the award unsustainable. It is submitted that although the Commissi