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Wednesday, 28 February 2024 2:43 AM

Krishan Lal, an employee of the appellant-Corporation and

respondent No. 4, drowned on 6.3.1988 while working under a
glacier. The legal representatives/heirs of Krishan Lal filed a
claim for compensation before the Commissioner, alleging that
Krishan Lal was their sole bread-earner and was employed by the
appellant-Corporation and respondent No. 4. The claimants
stated that Krishan Lal was earning a monthly salary of Rs. 1000/-
and that they had notified the accident to the appellant-
Corporation and respondent No. 4, but their claim had not been
settled.

1. Whether Krishan Lal was employed by the respondent-Contractor?

2. Whether the appellant-Corporation alone is liable to pay compensation?

The Commissioner found that Krishan Lal was engaged in the same work at the time of
his death and awarded compensation of Rs. 63,345.26p to the legal heirs-claimants. The
appellant-Corporation appealed against this decision, arguing that the respondent-
Contractor should be held liable for the compensation payment based on the agreement
between the parties.

The Court interpreted Section 12 of the Workmen's Compensation Act and concluded
that four essential conditions must be satisfied for Section 12 to be applicable. The Court
partially allowed the appeal and modified the Commissioner's order, making both the
appellant-Corporation and the respondent-Contractor liable to pay compensation to the
claimants.
The Court referred to previous judgments of the High Courts, which held that if death
arises out of and in the course of the principal's business and the agreement stipulates that
the contractor is liable to pay compensation, Section 12(1) of the Act will be applicable.
The principal is entitled to recover the amount of compensation paid to the claimants
from the contractor by way of indemnity.

Both cases, namely W.C Nos. 97 and 98 of 1984, were applications filed under Section
100 of the Workmen's Compensation Act, 1923 (hereinafter referred to as "the Act")
claiming compensation for the death of workmen who were admittedly employed by
the second opposite party in both cases as a contractor engaged by the first opposite
party for the purpose of getting a project undertaken by the Public Works Department
in the course of its business.

The first opposite party alone filed a written statement and contested the claim.

The Court, however, found that the liability to pay compensation in regard to the
deceased workmen rests "squarely" on the second opposite party based on an
interpretation of Clause 15 of Exhibit R1 agreement entered into between the two
opposite parties.

In response to the above contention, the learned Government Pleader argued that
Section 12 of the Act may not have any application to the facts of the case due to the
specific terms contained in the agreement entered into between the two opposite
parties. The Government Pleader contended that the Court was justified in making the
second opposite party alone liable for payment of the compensation.

Whether Section 12 of the Act applies to the present case and

whether the first opposite party should also be held liable for
payment of the compensation.

Interpreting the provisions of Section 12 of the Act, this Court has held in the decision
reported in Vijayaraghavan v. Velu [1973 - I L.L.N 179] that four essential conditions
have to be satisfied before Section 12 can be applied. As such, the work in question can
only be treated as part of the business of the first opposite party. Therefore, the Court
should have made the first opposite party also liable to pay the compensation applying
the provisions of Section 12 of the Act.

Based on the above reasoning, the appeal is allowed and the order passed by the Court
is modified to make the first respondent-first opposite party also liable to pay the
compensation amount to the claimants in the two appeals.

Section 12 makes the employer liable to pay compensation not only

to his own workmen, but also to those employed in the execution
of his work by his contractor. This liability is, however, subject to
his right to be indemnified by his contractor, who in turn is
entitled to be indemnified by the subcontractor, in case the latter
is the immediate employer. Section 13 recognises the right of the
principal employer who has paid compensation to the workman,
and of the contractor who has been called on to indemnify the
principal employer, in terms of S. 12 , to be indemnified by any
other person who is legally liable in damages, in respect of the
injury caused.

Section 13 alsoropes in a total stranger who is himself the tortfeasor

and, therefore, liable to pay damages in respect of the
injury. Section 13 does not allow the workman to proceed, against a
stranger; it confers a right on the person who has paid
compensation, and the person liable to pay indemnity, in terms
of S. 12 to be in turn indemnified by the stranger who is liable in
law to pay damages. Section 13excludes the claim of a workman
from its purview.