JUDGMENT
C.K. Thakker, CJ.
1. All these appeals arise out of cases No. 24 of 1993, 26 of 1993, 27 of 1993 and 28 of 1993 decided on May 27, 1998 by the Commissioner, Workmen’s Compensation, HPSEB, Unit-11, Mandi, H.P.
2. To appreciate the controversy raised in the present appeals, few facts, which are necessary may now be stated. A fatal accident was reported by the Executive Engineer, Baner Construction Sub Division No. II, HPSEB, Jia Tehsil, Palampur. It was reported that at the said accident, which took place on August 18, 1993 at about 3.10 p.m., six persons, namely, S/Shri Kunjumon, Hari Bahadur, Ram Kumar, Vir Bahadur, Kamal and Roop Lama lost their lives on the spot. They were engaged by Ansal Properties and Industries Ltd. (appellant herein). A notice under Section 23 of; Workmen’s Compensation Act, 1923 (hereinafter referred to as ‘the Act’) was issued by the Commissioner for Workmen’s Compensation on the employee asking it to submit documents, as required and the case was fixed at various places on different dates.
3. The case on behalf of the workmen was that the workmen, who met with fatal accident were engaged by Ansal Properties and. Industries, who had entered into an agreement’ with HPSEB (principal employer) to execute Civil Components of Baner Hydel Project. The appellant was to construct feeder tunnel, Desilting tank, Bye Pass tunnel, approach tunnel, flushing gallery, etc. On August 18, 1993, after completing the drilling in sub-gallery No. 2 of flushing gallery at about 1.30 p.m., one Kundan Lal, Foreman Civil of Ansal Properties and Industries Ltd. arranged the explosives from the portable Magazine at Project site as per requirement and handed it over to Shri Kunjumon, P.R.W. who along with the drillers and helpers were blown into pieces at about 3.10 p.m. while preparing primer for blasting. All the six workers who were present were killed on the spot and none was left there to eye witness the unfortunate incident. An FIR was registered with the police station, Palampur by the Company officials regarding the incident and post mortem of the deceased was conducted on the next day i.e. August 19, 1993. Proceedings were initiated under the Act. On the basis of the materials on record, issues were framed, statements of the officers concerned of the Company as well as HPSEB were recorded. It was established that the workers lost their lives because of blasting and, hence, they were entitled to compensation under the Act. The only question, which was contested by the appellant-Company before the Commissioner for Workmen’s Compensation
was as to who was liable to pay compensation to the workmen, the appellant-company, which had taken the contract from the HP SEB, or HPSEB, the principal employer.
4. The case of the appellant-Company was that since the Company had undertaken to carry out the work as contractor, the liability to pay compensation to workmen under the Act was of the principal employer i.e. HPSEB and not of the appellant-Company which was a contractor. On the other hand, the contention of the HPSEB was that since there was a contract between HPSEB, principal employer and the appellant-Company, contractor under which the entire work was to be done by the appellant-Company, it was the appellant-Company, which was liable under the Act. The appellant-Company, therefore, cannot contend that the principal employer was liable to pay compensation to the workmen.
5. The Commissioner for Workmen’s
Compensation by the orders, impugned in the
present appeals, considered the relevant clauses
of the agreement executed on December 13,
1990 and held that as per the agreement, the
explosive materials was to be obtained by the
Company as also it was the duty of the
Company to take precautionary measures of the
explosives. It was the sole responsibility of the
Company to make safety arrangements for
labourers and to pay compensation to the
workers, who were engaged by it for executing
the work and HPSEB was in no way liable to
pay compensation.
6. The Commissioner noted that the work, which was to be executed by the Company was of HPSEB. It was undertaken by the Company in conformity with law and, hence, such an agreement could not be contrary to or violative of the provisions contained in Explosives Act and Explosives Rules, 1983. It was contended by the Company that certain clauses of the agreement were violative of the provisions of the Explosives Act and Explosives Rules and they could not, therefore, be pressed in service and implemented. It was also contended that necessary precautionary measures required to be taken by the HPSEB were not taken and on that ground also, the Company was not liable.
Since the agreement was not legal and valid, it cannot be enforced. If it were so, the Company contended, the principal employer would be wholly liable. The learned counsel appearing for the Company, however, stated before the Commissioner for Workmen’s Compensation that his client i.e. Company was ready and willing to share the contributory liability.
7. The Commissioner for Workmen’s Compensation, however, held that in accordance with the Clauses of the agreement, the liability was that of the Company and HPSEB could not be held responsible. The terms of the agreement, in the opinion of the Commissioner for Workmen’s Compensation, were amply clear on the point. He also noted that since the beginning, it was the company, which was doing the work of blasting and first explosive blast on the Project site was undertaken by the Company on March 20, 1991 immediately after starting the work on the site and it was continuously doing till the accident took place for more than two years i.e. on August 18, 1993 without caring for the provisions of law and even afterwards, the same procedure continued till completion of the work. The company thus knowingly violated the provisions of law regarding execution of works in spite of the letter by the Chief Engineer (Projects) HPSEB, Shimla dated December 13, 1990. Because of that lapse, accident took place which claimed lives of six employees and the Company could not escape its liability and the responsibility from making payment to the claimants. The Commissioner also observed that in the Accident Report itself, the Company admitted that all the deceased were on its rolls, which was also evident and proved from FIR lodged by the Resident Manager on August 18, 1993 itself with Police Station, Palampur and the statement of the Construction Manager dated August 19, 1994. The Commissioner also observed that proceedings were delayed by the Company on one pretext or the other. The Company also moved the High Court of Himachal Pradesh by filing CWP No. 207 of 1996 titled Ansal Properties and Industries Ltd. and Ors. v. Commissioner, under Workmen’s Compensation Act and others, but ultimately the petition was dismissed on September 23, 1996. Thus, on careful scrutiny and record placed before the Commissioner for Workmen’s Compensation, he held that the Company was solely liable to pay compensation under the provisions of the Act and there was no question of sole liability of the principal employer i.e. HPSEB nor of contributory liability. Accordingly, the award was made and the compensation was granted in favour of the claimants.
8. We have heard Mr. Dinesh K. Sharma, learned counsel for the appellant, Mr. S.S. Mittal, learned counsel for respondent No. 1 and Mr. Jagdish Thakur, learned counsel for respondents No. 2 to 4.
9. It was contended by the learned counsel for the appellant that the award passed by the Commissioner for Workmen’s Compensations was illegal and contrary to law. It was urged that in accordance with the provisions of the Act, the liability was that of the principal employer and the Commissioner exceeded his jurisdiction in ordering the appellant-Company to pay compensation and in exonerating the principal employer. He also submitted that the so called agreement said to have been arrived at between the appellant-Company and HPSEB was inconsistent with the provisions of the Explosives Act and Explosives Rules and no such agreement could, therefore, be enforced in a Court of law. In that case, the sole liability was only of the principal employer and the appellant-Company ought not to have been held liable. Finally, it was submitted by the learned counsel that when a concession was made by the learned counsel appearing for the company before the Commissioner for Workmen’s Compensation and stated that his client was agreeable if the amount is paid by both appellant-Company as well as principal employer, the said concession and suggestion ought to have been accepted by the principal employer and upheld by the Commissioner. By not upholding the said submission, the Commissioner has committed an error apparent on the face of the record, which requires to be corrected by this Court. Since a substantial question of law has been involved, it deserves to be upheld, and all the appeals deserve to be allowed by setting aside the award passed by the Commissioner for Workmen’s Compensation.
10. Mr. Mittal, learned counsel for HPSEB, on the other hand, supported the award passed by the Commissioner for Workmen’s Compensation. He submitted that on the basis of agreement said to have been arrived at between the parties and interpreting various clauses, the Commissioner for Workmen’s Compensation rightly recorded a finding that it was the appellant-Company, which was liable and accordingly passed an award. Such an award cannot be termed as illegal or unlawful. According to Mr. Mittal, there is nothing either in the Explosives Act or in the Explosives Rules on the basis of which it is contended by the appellant-Company that such an agreement could not have been arrived at between the parties. If the Contractor, on the one hand, and HPSEB, principal employer, on the other hand, decided inter se that in case of any accident, the liability would be that of the appellant-Company, such an agreement cannot be termed as illegal, contrary to law or otherwise unlawful. It was accepted by the appellant-Company with an open eye and when the question of liability arose, it could not come forward and contend that no such agreement could have been arrived at between the appellant and the HPSEB. He, therefore, submitted that there is no substance in the appeals and they are liable to be dismissed.
11. Having heard the learned counsel for the parties, in our opinion, it cannot be said that the awards passed by the Commissioner for Workmen's Compensation deserve interference. In this connection, our attention was invited by the learned counsel for the parties to the relevant provisions of the Act and the Rules. The term 'employer' is defined in Clause (e) of Section 2 of the Rules. It is inclusive in nature and declares that the word 'employer' includes any body or persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and, when the services of a workman are
temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him. The term ‘workman’ is defined as any person other than a casual worker employed in any capacity specified in Schedule II. Section 3 fixes liability of employer to pay compensation. Section 4 determines amount of compensation. Section 12 declares that where a principal employer in the course of or for the purposes of his trade or business contracts with another person, namely, contractor for execution by or under the contractor of the whole or any part of any work which is ordinarily part of the trade or business of the principal, the principal shall be liable to pay to any workman employed in the execution of the work any compensation which he would have been liable to pay if that workman had been immediately employed by him. It also states that in such cases, he would be entitled to be indemnified by the contractor. The section, however, clarifies that the provisions shall not be construed as preventing a workman from recovering compensation from the contractor instead of the principal. Chapter III makes provisions regarding appointment of Commissioners and their powers. Section 30 provides for appeals to the High Court on substantial questions of law.
12. In exercise of the powers conferred by Section 32 of the Act, the Central Government has framed Rules known as ‘Workmen’s. Compensation Rules, 1924’. Rule 39 lays down procedure where indemnity is claimed under Section 12(1) of the Act.
13. The contention of the learned counsel for the appellant is that since in accordance with the provisions of the Act and the Rules, the liability is of the principal employer, no proceedings could have been initiated against the appellant-Company by the claimants nor the Commissioner for Workmen’s Compensation could have passed the award against the appellant. Hence, a substantial question of law has arisen for the determination of this Court and since the proceedings were null and void, the awards made by the Commissioner for Workmen’s Compensation are liable to be set aside. The contra submission, on the other hand, by Mr. Mittal on behalf of the HPSEB is that under the relevant provisions of the Act, an application can be moved by the claimants either against the contractor or against the principal employer and an appropriate award can be made by the Commissioner for Workmen’s Compensation. If the principal employer is held liable, the law enables him to get indemnified by the contractor by taking appropriate proceedings in accordance with law. That, however, does not prohibit or prevent workmen from claiming compensation from the contractor and if such proceedings have been initiated and the contractor was held liable and award is made by the Commissioner for Workmen’s Compensation against him, he cannot make any grievance against such award. Moreover, since the award can be said to be strictly in conformity with law, no question of law, much less substantial question of law, can be said to have arisen, so as to confer right on the contractor to file an appeal under Section 30 of the Act. Since after considering the relevant Clauses of the agreement in the light of the provisions of law, the Commissioner for Workmen’s Compensation passed an award against the contractor-appellant-Company, it is not open to the Company to contend that it is not liable and the only liability to pay the compensation is of the principal employer. Hence, the appeals are liable to be dismissed.
14. In our considered opinion, the present appeals are not maintainable and must be dismissed only on that ground. Section 12 of the Act, which is material may be quoted in extenso:
“12. Contracting. (1) Where any person (hereinafter in this section referred to as the principal) in the course of or for the purposes of his trade or business contracts with any other person (hereinafter in this section referred to as the contractor) for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the trade or business of the principal, the principal shall be liable to pay to any workman employed in the execution
of the work any compensation which he would have been liable to pay if that workman had been immediately employed by him; and where compensation is claimed from the principal, this Act shall apply as if references to the principal were substituted for references to the employer except that the amount of compensation shall be calculated with reference to the wages of the workman under the employee by whom he is immediately employed.
(2) Where the principal is liable to pay compensation under this section, he shall be entitled to be indemnified by the contractor or any other person from whom the workman could have recovered compensation and where a contractor who is himself a principal is liable to pay compensation or to indemnify a principal under this section he shall be entitled to be indemnified by any person standing to him in the relation of a contractor from whom the workman could have recovered compensation and all questions as to the right to and the amount of any such indemnity shall, in default of agreement be settled by the Commissioner.
(3) Nothing in this section shall be construed as preventing a workman from recovering compensation from the contractor instead of the principal.
(4) This section shall not apply in any case where the accident occurred elsewhere than on, in or about the premises on which the principal has undertaken, or usually undertakes, as the case may be, to execute the work or which are otherwise under his control or management.”
15. A bare reading of the section leaves no room of doubt that it confers right on the workman either to claim compensation against the principal employer or against the contractor. If, therefore, application is made against the contractor by the workman and compensation is claimed, it is not open to the contractor to contend that the workman ought to have claimed compensation from the principal employer and not from the contractor.
Obviously, in such cases, the Commissioner for Workmen’s Compensation will consider the rival claims of the contractor as well as the principal employer and will pass appropriate order. If the principal employer is held liable, the law enables him to get himself indemnified by claiming the said amount from the Contractor if there is an agreement to that effect.
16. In the case on hand, the Commissioner
for Workmen’s Compensation interpreted the
relevant Clauses of the agreement. Clause 18-A
provides for compensation to workman. It
reads as under:
“Clause 18-A: Compensation to Workman
General : The contractor is required to follow at his own cost and abide by all Acts/Rules in force as made applicable by H.P Government/HPSEB from time to time in respect of all labour employed by him and make available necessary facilities and compensation etc.
In every case in which by virtue of the provision of Section 12 Sub-section (1) of the Workmen’s Compensation Act, 1923, it shall be the obligation of the contractor to pay compensation to a workman employed by the contractor in execution of the works and in the event of failure by the contractor to do so the Board will pay compensation to a workman employed by the contractor, in execution of the works and Board shall recover from the contractor the amount of the compensation so paid, and, without prejudice to the rights of the Board under Section 12, Sub-section (ii) of the said Act: Board shall be at liberty to recover such amount or any part thereof by deduction if from the security deposit or from any such due by Board to the contractor whether under his control or otherwise Board shall not be bound to contest any claim made against it under Section 12, Sub-section (1) of the said Act, except on the written request of the contractor and upon his giving to Board full security for all costs for which Board might become liable in consequence of contesting such claim.”
17. In the light of the above clause, the
Commissioner for Workmen’s Compensation
cannot be said to have committed an error of
law and/or of jurisdiction in granting award
against the appellant-Company and by directing
it to pay compensation. Since the law allows
the workman to recover the amount of
compensation either from the contractor or
from the principal employer, the award can be
said to be in accordance with law. It cannot be
said that a substantial question of law has arisen
for determination of this Court under Section
30 of the Act and, in our opinion, the appeals
filed by the appellant-Company are not
maintainable in law.
18. Section 30, which gives right of appeal to the High Court against an order passed by the Commissioner states that such an appeal would lie under Section 30(1)(d) against the order allowing or disallowing the claim for the amount of an indemnity under Sub-section (2) of Section 12. In our considered opinion, therefore, an appeal can be filed not by the contractor, but by the principal employer in a case where the principal employer is held liable by the Commissioner for Workmen’s Compensation and a direction is issued to him to pay the amount of compensation. Thereafter, if his claim for identification by a contractor is either upheld i.e. allowed or negatived i.e. disallowed, he can approach the High Court. The condition precedent, however, is that the Commissioner for Workmen’s Compensation must have initially held principal employer liable. If the principal employer is not held liable, Clause (d) of Sub-section (1) of Section 30 cannot be pressed in aid.
19. The learned counsel for the appellant drew our attention to a decision of the High Court of Calcutta in B. P. Nandy v. General Manager, East India Rly. and Anr., AIR 1954 Cal 453, wherein it has been observed by a Division Bench of the High Court of Calcutta that an appeal under Section 30 of the Act is not an appeal only against a party, but also against basic order awarding compensation to the workman. It was contended in that case that when an appeal is filed under Sub-section (2) of Section 12 of the Act, it was necessary to challenge the finding on any of the matters covered by Sub-section (1) of Section 12 also. The contention, however, was negatived by observing thus:
“I am unable to accept that contention. It appears to me that what Clause (d) of Section 30(1) contemplates is only an appeal which raises a question between the person indemnified and the indemnifier without in any way placing the award itself under challenge. If the award itself is brought into issue, the appeal would be an appeal against an order awarding compensation and it would be in part at least an appeal under Clause (a), although it might be an appeal under Clause (d) as well. If one examines a little closely the appealable orders referred to in clauses other than Clause (a) of Section 30(1), one would find that those are all orders by which the workman’s right to receive the compensation awarded to him is in no way put in peril.
The principle of the section appears to me
to be that if the appeal be such that by it the workman’s right to the compensation awarded to him is placed in jeopardy, security for the workman must be provided for by the deposit of the amount of compensation and such a deposit would be essential to the maintainability of the appeal. If, on the other hand, the workman’s right to the compensation awarded does not come into question in the appeal at all, there is no risk to the workman’s getting the compensation awarded to him and there is thus no necessity for requiring anyone, preferring such an appeal, to deposit the compensation money. If one remembers that broad fact in mind, the true meaning of Section 30 (1) would emerge with sufficient clarity.”
20. In our opinion, the ratio laid down in
– Nandy (supra) does not apply to the facts of the
case. In the instant case, on the basis of
agreement arrived at between the parties, the
contractor was held liable by the Commissioner,
Workmen’s Compensation. The decision in
Merchant Steam Navigation Co. Ltd., Alleppey
v. Mohammed Kunju Appukka and Anr.,
AIR 1956 TC 55, also has no application. In the said case, it has been held that a challenge to the legality of the procedure adopted by the Commissioner would constitute a good ground for the appeal. In the instant case, there was no defect in procedure by the Commissioner for Workmen’s Compensation and the ratio, therefore, does not take the appellant further.
21. Similar is the reasoning in Jwali and Ors. v. Babu Lal and Anr., AIR 1958 All 564. It has been indicated in the said decision that phrase ‘substantial question of law’ as used in the proviso to Sub-section (1) of Section 30 of the Act must be given a wider construction. The connotation, according to the High Court, would cover a case in which the Commissioner has clearly misdirected himself on question of law.
22. In Sarjerao Unkar Jadhav v. Gurindar Singh (Painting Contractor) and another, 1992-I-LLJ-156, a single Judge of the High Court of Bombay held that supply of electricity in the city was trade or business of the principal. Since electricity cannot be supplied without electric poles, the work of painting of poles would also include within the supply of electricity and if the workman engaged for painting of poles gets himself injured, it must be held to be part of business or trade of the company and the principal is liable.
23. In our considered opinion, in absence of an agreement in the case on hand between the appellant-company and the principal employer HPSEB, the principal employer would have been held liable. But when there was a specific agreement between the parties, under which it was the liability of the appellant-Company, the award passed by the Commissioner for Workmen’s Compensation cannot be termed as without jurisdiction which would fall under Section 30 of the Act.
24. Sarjerao Unkar Jadhav was followed by a Division Bench of this Court in H.P. State Forest Corporation Ltd. v. Smt. Vimla Devi and Ors., 2001-II-LLJ-500, and the Corporation was held liable to pay compensation under the Act to the workmen. As stated by us, the ratio would not apply because of the agreement arrived at between the appellant (contractor) and HPSEB (principal employer).
25. For the foregoing reasons, in our opinion, it cannot be said that the workmen could not have instituted proceedings against the appellant. It also cannot be held that the Commissioner for Workmen’s Compensation could not have passed award against the appellant-Company since the law grants option to the workmen and/or their dependents to proceed against the contractor or against the principal employer and/when the appellant-company was held liable on the basis of the agreement arrived at between it and the principle employer HPSEB, and award was passed, no appeal can be filed by the contractor against the principal employer under Section 30 of the Act. None of the Clauses of Sub-section (1) of Section 30 of the Act confers right on the contractor to file such appeal as Clause (d) of Section 30 of the Act, in our considered opinion, does not cover the cases of the present nature. The appeals, therefore, deserve to be dismissed as not maintainable. Since we are holding that the appeals are not competent, it is open to appellant to take appropriate proceedings in accordance with law. The appeals are dismissed as not maintainable. Since the appellant has also impleaded claimants as respondents, who, in our opinion, were undoubtedly entitled to compensation and even interim relief is obtained, it would be in the interest of justice, if we dismiss the appeals against them with costs, which is quantified at Rs. 5,000 in each case.
26. The appeals are dismissed in the aforesaid terms. Interim orders stand vacated.