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2020 Supreme(MP) 1167
THE HIGH COURT OF MADHYA PRADESH
VIVEK RUSIA, J.
Shri Ganesh Spinner and Polyplast Ltd. – Appellant
V/s.
Raju S/o. Lallan Prasad. – Respondents
M.P. No. 2551/2020
Decided On : 23-09-2020
For the Petitioner:Shri Prakhar Mohan Karpe, Advocate.
The welfare nature of the Employees Compensation Act and the liability of the employer for compensation to the employees.
Headnote:
Employees Compensation Act - Recovery of Compensation - Section 31 - Summary: The court addressed the recovery of compensation under the Employees Compensation Act, emphasizing the welfare nature of the legislation and the liability of the employer. It highlighted the power of the Commissioner to recover compensation as arrears of land revenue and the definition of 'employer' under the Act. The court also discussed the implications of the company's closure and the personal liability of the director, citing relevant case law and statutory provisions.
Fact of the Case:
The respondent suffered permanent disablement while working in the petitioner's factory. The Commissioner awarded compensation, interest, and penalty, which the petitioner did not challenge. In the execution proceedings, the petitioner's director sought to avoid liability, citing the closure of the company.
Finding of the Court:
The court emphasized the welfare nature of the Employees Compensation Act and upheld the Commissioner's decision, rejecting the petitioner's arguments regarding the company's closure and the director's personal liability.
Issues: Recovery of compensation, liability of the employer, implications of company closure, personal liability of the director
Ratio Decidendi: The court emphasized the welfare nature of the Employees Compensation Act, the power of the Commissioner to recover compensation, and the definition of 'employer' under the Act. It also clarified the implications of the company's closure and the personal liability of the director.
Final Decision: The writ petition was dismissed without notice to the respondent.
ORDER :
1. The petitioner has filed the present petition being aggrieved by the order dated 19.7.2018 and 19.2.2020 passed by Commissioner, Employees Compensation, Labour Court, Indore.
2. Facts of the case, in short, are as under : The respondent while working in the factory belonging to the present petitioner met with an accident on 22.9.2005 near about at 7.30 pm. which resulted in the amputation of two fingers of his right hand. He was treated in the hospital from 22.9.2005 to 27.9.2005. At the time of the accident, he was healthy and hearty and was getting Rs.3,300/-as monthly wages. When the petitioner did not pay him the adequate amount of compensation, he approached the Commissioner under the provisions of the Employees Compensation Act (Old Workmen Compensation Act) (hereinafter referred to as “the Act” for short) by way of Case No.97/WCNF/2006 by impleading the present petitioner through owner – Shri Andram Rathi.
3. Learned Commissioner vide award dated 6.9.2013 assessed the compensation at Rs.1,13,230/-as per the formula given in the Act. Learned Commissioner also awarded the interest @ 12% per annum from 22.9.2005 till its actual payment. Apart from the aforesaid amount, the Commissioner observed that the employer avoided the liability of making payment of compensation and refused to identify him, therefore, invited a penalty hence, the learned Commissioner has also awarded the penalty @ 30% on the amount of compensation.
4. The petitioner did not challenge the aforesaid award by filing an appeal before this court. The petitioner neither filed any appeal nor made payment to the respondent, therefore the respondent approached the Labour Court by way of execution proceedings. In the execution proceedings, he impleaded the present petitioner through its Partner – Anurag Rathi for recovery of Rs.2,60,616/-with interest.
5. Anurag Rathi appeared and filed the application on 14.2.2018 seeking deletion of his name from the execution proceedings and prayed that the compensation be recovered the properties of the company. The respondent filed the detailed reply of the aforesaid application by submitting that in the execution proceedings, Anurag Rathi had deposited Rs.30,000/-in three installments @ Rs.10,000/-and thereafter he has stopped depositing the amount. Earlier also, he moved similar applications and the same had been rejected in the year 2014. Hence, the present application be rejected with costs.
6. Vide order dated 19.7.2018, learned Commissioner has rejected the aforesaid application. Thereafter, Anurag Rathi filed an application seeking review of the order dated 19.7.2018 and that too has been rejected vide order dated 19.2.2020, hence the present petition before this Court.
7. Shri Prakhar Karpe, learned counsel appearing for the petitioner, submits that the learned Commissioner is wrongly proceeding the execution case against Anurag Rathi. The petitioner company had been closed down in the year 2004. The last Annual General Meeting (AGM) was held in the month of September, 2004. The amount payable by the company cannot be recovered from the Director as held by the Apex Court in the case of P.C. Agrawala V/s. Payment of Wages Inspector, M.P. & others : 2005 III CLR 845, hence the execution proceedings are liable to be dropped qua Director with a further direction to proceed and recover the amount from the assets of the company.
8. Heard and perused the record.
9. The Employees Compensation Act (old Workmen Compensation Act) is a welfare legislation. The respondent suffered permanent disablement while working in the factory of the petitioner’s company in the year 2005. He approached the Commissioner for Compensation, in which, Anurag Rathi appeared as a witness and he refused to even identify the respondent despite the fact that a criminal case was registered against him in the very the same accident. Learned Commissioner has observed that the company has made all efforts to avoid the payment of compensation to
