Bangalore District Court
Viju M.A vs Grand Mercure Hotel on 4 March, 2025
KABC020077372021
BEFORE THE MOTOR ACCIDENT CLAIMS TRIBUNAL
COURT OF SMALL CAUSES, AT BENGALURU. (SCCH-25)
-: PRESENT:-
SMT. PRAKRITI KALYANPUR, B.A(L),LL.B., LL.M.
XXIII Additional Small Causes Judge, Bengaluru.
DATED THIS THE 4TH DAY OF MARCH 2025
ECA No.21/2021
PETITIONER/S: 1. Mr. Viju M.A.
S/o. Agasthi Kutty,
Aged about 48 years,
2. Mrs. Jessy
W/o. Mr. Viju M.A.,
Aged about 46 years,
Both are R/at
Vithala Village,
Makodu Shetty Koppa Post,
NR Pura Tq.,
Chikkamagaluru Dist. - 57.
Karnataka State.
(By Sri.M.Chidananda Murthy,
Advocate.)
V/Sin.
SCCH-25 2 ECA No.21/2021
RESPONDENT/S 1. M/s. Grand Mercure Hotel
3rd Block, Koramangala,
12th Main Road,
Bengaluru City - 560 034.
Rep. by its General Manager
Sri. Brijesh Koreani - Place of
Accident.
(By Mr.Amar Correa, Mr. Raveesh P.,
Ms.Shridevi Bhosale, and Mr.
Ramachandra S., Advocate/s.)
2.M/s. Kehems Technologies Pvt.
Ltd.,
No.64, Sector-10,
7th Main, 9th Cross,
Jeevanbhimanagara,
Bengaluru - 560 075.
Rep. by its Branch
incharge/Manager,
Sri.Deepak Kumar - Sub-Employer
3.M/s. Kehems Technologies Pvt.
Ltd.,
Office : 4B, BCM City, 'C' Block,
5th Floor, Navalakha Square,
AB Road, Indore - 452 001.
Madhyapradesh,
India.
Also at No.47, Chandrabhag Nagar,
Junny Indore, MP - 452 007.
Rep. by its Occupation Factory
Manager Mukhesh Rathore/
SCCH-25 3 ECA No.21/2021
General Manager - Main Employee.
(R-2 & 3 : By Sri.Murthy Dayanand
Naik, Advocate/s.)
4. M/s. IFFCO Tokio Gen. Ins. Co.
Ltd.,
Commerce Road,
New Palasia,
INDORE - 452 001.
Madhyapradesh.
(Compensation policy No.43198982)
The claim Officer/Manager/General
Manager - Insurer.
(By Sri. S.R.Murthy, Advocate.)
JUDGMENT
This is a Petition filed by the Petitioners under Section 22
of Workmen’s Compensation Act.1923, seeking Compensation
of Rs.45,00,000/- for death of employee – Sri.Jesvin M.V. who
died in an accident dated 15.02.2020.
2. The case of the Petitioners in brief:
SCCH-25 4 ECA No.21/2021
The Petitioner No.1 is the Father and Petitioner No.2 is
the Mother of the deceased – Sri.Jesvin M.V. The Deceased Sri.
Jesvin M.V. was appointed as Service Engineer on 15.02.2020
under the Respondent No.3 and the Respondent No.3 having
one of the branches at Bengaluru/Respondent No.2 and
deceased was working in Bengaluru Branch. The Respondent
No.2 had sent the deceased and another Service Engineer
Sri.Sharath to attend servicing and maintenance of heat
pumps without any type of safety equipment at Hotel Grand
Mercure/Respondent No.1, situated at 3rd Block,
Koramangala, Bangalore as per the Service Agreement
between the respondent No.1 i.e., Grand Mercure Hotel and
Respondent No.3 i.e., Kehems Technologies Pvt. Ltd.,
Bengaluru. Accordingly both the service Engineers while
attending to the problem at about 11.30 to 2.30pm without
any safety equipment were filling gas to heat pump
compressor a new plate type exchanger then, plate type heat
pump compressor exploded and thereby Mr.Sharath and
SCCH-25 5 ECA No.21/2021Jesvin M.V were seriously injured and were hospitalized. In
the blast Mr.Jesvin M.V. suffered fracture to his left hand and
his hand was cut-off and his left side body was severely
injured. Both the injured were shifted to St.John’s Hospital
and Mr.Jesvin M.V. died on 21.02.2020. The petitioners
further stated that, the incident had taken place due to the
negligent and careless attitude of the Respondent Nos.1 to 3.
The Specific equipments were not given by the respondents for
safety and security of the workers or employee in the working
place and the respondent Nos.1 to 3 failed to provide the
proper security in the place of the incident. The death of the
son of the petitioners has taken place only due to the negligent
attitude of the Respondent Nos.1 to 3.
3. It is the further case of the Petitioners that, the
deceased was hale and healthy and was getting salary of
Rs.3,48,720/- per annum as a Service Engineer under the
Respondent No.3. Due to his death the petitioners have lost
SCCH-25 6 ECA No.21/2021
their only bread earner and are put to shock. The accident
occurred in the course of employment under the respondent
Nos.2 & 3 and the deceased sustained grievous injuries and
died in the said accident. Therefore, the Respondent Nos.1 to 4
are liable to pay compensation to the petitioners. Hence, this
petition.
4. In response to summons issued by this court, the
Respondent Nos.1 to 4 appeared through their respective
counsels and filed separate written statements.
5. The objections of the Respondent No.1:
This respondent denied all the averments of the petition.
It has denied the appointment of the deceased as a Service
Engineer on 15.02.2020 in the Bengaluru Branch. Further
submitted that the respondent No.2 company installed two
heat pumps on 08.08.2016 which were under a warranty for a
period of one year and the same was followed by Annual
SCCH-25 7 ECA No.21/2021Maintenance Contract (Comprehensive), the last such contract
being from 19.03.2019 to 19.03.2020. That on 12.02.2020 one
of the heat pumps was not working and the same has been
telephonically informed to the respondent No.2 company and
the complaint had been raised on 14.02.2020. Further
admitted that deceased and another Service Engineer were
sent to service the heat pump to R-1 Hotel. It has denied
about the safety equipment being not given to the deceased
and another Service Engineer and also about the proper
security in the place of incident. There was no negligence on
the part of the respondent Nos.1 to 3. Further contended that
there was total compliance of health and safety policy while
carrying out the agreed jobs was part of the contract between
R-1 & 2 and the accident was caused due to the negligence of
the deceased and another Service Engineer because they have
not used the safety equipments given by the R-2 while
servicing the heat pumps at the hotel of R-1. The report by
SSS Consultants with regard to the accident at R-1 hotel on
SCCH-25 8 ECA No.21/202115.02.2020 is part of the charge sheet in CC No.6755/2020.
The chargesheet is not filed against this Respondent or its
employees. It has denied about the liability to pay
compensation to the petitioners. The R-2 & 3 have insured all
the employees with the R-4. Further submitted that it had
paid an amount of Rs.2,00,000/- to the petitioners on
humanity grounds.
Therefore, this respondent is not liable to pay compensation to
the petitioners. Hence, prayed for dismissal of the petition.
6. The objections of the Respondent Nos.2 & 3:
Both have denied the petition averments except admitting
that the deceased Mr.Jesvin was appointed as a Service
Engineer on 15.02.2020 in Bengaluru Branch of the R-3
company. It has denied that without safety equipments they
have sent the deceased to service the heat pump in Hotel
Grand Mercure. Further contended that they have given
training to its service engineers to service heat pumps and
SCCH-25 9 ECA No.21/2021they were also provided with PPE Kits. Further admitted that
as per the Agreement between the R-1 and R-2 the deceased
and another Service Engineer were sent to the R-1 hotel to
service the head pumps. In spite of providing safety measures,
the accident was caused due to the negligence of the deceased
himself. The report by SSS Consultants with regard to the
accident at R-1 hotel on 15.02.2020 is part of the charge sheet
in CC No.6755/2020. However, the Charge sheet has been
challenged before the Hon’ble High Court and the court was
pleased to stay the proceedings vide its order dated
12.05.2021. The R-3 has obtained insurance with the R-4 and
the said policy is a Group Insurance Policy for the benefit of
their employees, wherein the R-4 insurance company had
already deposited a sum of Rs.16,43,525/-.
Therefore, this respondent is not liable to pay compensation to
the petitioners. Hence, prayed for dismissal of the petition.
7. The objections of the Respondent No.4:
SCCH-25 10 ECA No.21/2021
It has denied all the petition averments except admitting
the issuance of policy in favour of M/s. Kehems Technologies
Pvt. Ltd., There is non compliance by the 3 rd respondent as per
ECA Act. It has denied the manner of accident. The accident
caused due to the violation of terms and conditions of the
policy by the R-1 to 3 and provision of ECA Act. It has denied
the age, income of the deceased. It has denied that the
deceased was an employee under the insured under R-3 at
any point of time including on the date of accident. The cause
of accident was due to the negligent act of the R.1 to 3 by not
taking sufficient care and safety measures towards their
employees. Further submitted that this respondent has
already deposited a sum of Rs.16,38,525/- on 03.07.2021.
Hence prays to dismiss the petition as against this
Respondent.
8. On the above rival contentions of the parties, this
court has framed the following issues:
SCCH-25 11 ECA No.21/2021
1. Whether the Petitioners prove that, the
deceased Sri.Jasvin M.V was appointed as
Service Engineer on 15.02.2020 under the
respondent No.3. Accordingly the service
Engineer while attending to the problem at
about 11.30to 2.30pm and not given any
safety equipment to fill to pay to heat pump
compressor a new plate type exchanger then
plate type heat pump compressor exploded
and there by Mr.Jesvin M.V. sustained
fracture to his left hand and was cut-off and
his left side body was severely injured and
succumbed to the said injuries?
2. Whether the Petitioners are entitled for
compensation? If so, how much and from
whom?
3. What Order or Award?
9. In order to prove their case, they have got examined
Mr. Viju M.A. – Father of the deceased as PW.1 and got
marked 18 documents as per Exs.P.1 to P.18. During the
cross examination of PW.1 the counsel for R-1 confronted
Exs.R.1 & 2. On the other hand the Respondent Nos.2 & 3 got
examined Mr.Muthukumar Perumal – Service Coordinator of
SCCH-25 12 ECA No.21/2021
KEHEMS Technologies Pvt. Ltd., as RW.1 and got marked
Exs.R.3 to R.14.
10. Heard both Counsels and perused the materials on
record.
The counsel for the Respondent No.4 has relied upon the
following decision and also produced the written arguments:
(i) (2006) 5 Supreme Court Cases 192 : New India
Assurance Co. ltd., Vs. Harshadbhai Amrutbhai Modhiya.
11. My finding to the above issues are as follows:-
Issue Nos.1 & 2: In the affirmative,
Issue No.5 : As per final order for the
Following:
REASONS
12. Issue No.1:
At the outset, it is pertinent to mention that, since the
Petitioners have filed the present petition seeking
compensation under Employees Compensation Act, it is
SCCH-25 13 ECA No.21/2021imperative on the part of the Petitioners to prove that, the
deceased Sri. Jesvin M.V was an employee under the
Respondent Nos.2 & 3. In the present case, it is the specific
case of the Petitioners that Sri. Jesvin M.V was working as
Service Engineer under the Respondent No.3 and it has one of
the branches at Bengaluru i.e., the Respondent 2 and
deceased Jesvin M.V. was working in Bengaluru Branch and
getting salary of Rs.3,48,720/- per annum. In this regard, the
Petitioners have examined Father of the deceased as PW.1 and
got marked Exs.P.1 to 18. PW.1 has reiterated in his evidence
the averments of the petition.
13. In the written statement, the Respondent Nos.1 to 3
have admitted that the deceased was working under R-2 & 3
as Service Engineer and the R-2 had sent the deceased Jesvin
M.V. and another Service Engineer Sri.Sharath to attend
servicing and maintenance of heat pumps at Hotel Grand
Mercure/Respondent No.1. These respondents have contended
SCCH-25 14 ECA No.21/2021
that they have provided safety precautions but the deceased
did not follow the same and himself caused the accident. The
Respondent No.4 has contended that the R-3 has failed and
neglected to perform the statutory obligation to seek
indemnification and violated the ECA Act. Further contended
that the cause of incident was due to the negligent act of the
R-1 to 3 by not taking sufficient care and safety measures
towards its employees. It has denied that deceased Jesvin was
an employee under insured/R-3 at any point of time including
on the date of accident. To prove the same the Respondent
Nos.2 & 3 got examined Service Co-Ordinator as RW.1 and got
marked Exs.R.3 to 10 i.e., the true copy of offer letter dated
29.01.2020, true copy of information related to accident dated
15.02.2020, true copy of accident information letter addressed
to Koramangala Police Station dated 24.02.2020, true copy of
letter of claim process addressed to the claim officer of IFFCO-
TOKIO Gen. Ins. Co. dated 26.02.2020 (two in Nos.), true copy
of Accident Information Letter addressed to Dy. Director of
SCCH-25 15 ECA No.21/2021
Industrial Health and Safety dated 29.02.2020, true copy of
another letter addressed to the claim officer of IFFCO-TOKIO
Gen. Ins. Co. dated 12.03.2020, certified copy of order passed
by Hon’ble H.C. in Crl.P.No.3721/2021 and copy of insurance
policy.
14. It is relevant to note that the Koramangala Police
have registered a case in Crime No.44/2020 p/u/Sec.337,
338 of IPC. The Petitioners have produced the FIR at Ex.P.1
registered on 15.02.2020 i.e., on the same day of the accident
on the complaint of Sharath S friend of the deceased/Co-
worker of the deceased as per Ex.P.2. Exs.P.3 & 4 statement of
witness and wound certificate of Sharath support the case of
the petitioners. Ex.P.5 PM report shows that death was due to
“Hemorrhagic Shock” consequent to multiple injuries
sustained. Ex.P.6 letter dated 20.02.2020 and report shows
the details of the accident. Ex.P.7 after thorough investigation
the police have filed charge sheet against Deepak Kumar and
SCCH-25 16 ECA No.21/2021
Mukesh Rathode who have sent the deceased to attend
maintenance of heat pumps without any safety precautions.
Ex.P.8 death certificate shows that Jesvin M.V died on
21.02.2020. Ex.P.9/R.3 is the Offer Letter of Jesvin M.V. for
the post of Engineer – Service. It is evident from Exs.P.1 to P.9
documents that, the deceased while working as a Service
Engineer with R- 2 & 3 has met with the accident at R-1
premises, sustained multiple injuries and succumbed due to
the injuries on 21.02.2020. These documents are public
documents which have got presumptive value under law. The
very death of the deceased in the premises belonging to the
Respondent No.1 when being under the Contract of the
Respondent Nos.2. & 3 indicates that, the deceased was
working as Service Engineer. Respondent Nos.1 to 3 have
admitted in pleadings that the deceased was working as
Service Engineer and has suffered the accident during the
course of employment. Accordingly, issue No.1 is held in
Affirmative.
SCCH-25 17 ECA No.21/2021
15. Issue No.2:-
The Petitioners have further contended in petition and
evidence that the deceased was the only bread earner of the
family. Due to sudden death of Sri.Jesvin M.V. they are
suffering from mental agony and financial problems.
Therefore, they are entitled for compensation from the
Respondent Nos.1 to 4. In this regard, the Petitioner No.1 has
reiterated these averments in his chief examination. This court
while discussing issue No.1 has already come to the
conclusion that the Petitioners have proved that deceased
Sri.Jesvin M.V. was an employee under Respondent Nos.2 & 3
and he died in the course of and arising out the employment
under the Respondent Nos.1 to 3. Under these circumstances,
this court is of the opinion that the Petitioner No.1 being the
Father and the Petitioner No.2 being the Mother of the
deceased are entitled for compensation.
SCCH-25 18 ECA No.21/2021
16. The Petitioners in the petition and evidence have
averred that the deceased was getting salary of
Rs.3,48,720/- per annum. It is also supported by the Offer
Letter at Ex.P.9/Ex.R.3. Since the Annual Income is
Rs.3,48,720/- pa, the monthly income comes to Rs.29,060/-.
17. It is further relevant to note that as per section 4(a)
of Employees Compensation Act, where death results from
injury, to decide the compensation, an amount equal to 50% of
monthly wages has to be multiplied by relevant factor shown
in the schedule IV with respect to the age of the deceased.
18. In the present case, the death of the deceased has
taken place in the year 2020. The Petitioners to prove the age
of the deceased have produced the Aadhar Card, SSLC Marks
Card, PUC Marks Card of the deceased as per Ex.P.12, 15 &
16. As per the said document, the age of the deceased is 24
years. The relevant factor applicable to age 24 is 218.47. So
SCCH-25 19 ECA No.21/2021
the total amount under the loss of dependency is
Rs.31,74,369/-(Rs.14,530 X 218.47 = 31,74,369/-). It is
relevant to note that as per section 4 (4) of the Act, the
surviving Dependant is entitled for funeral expenses.
Therefore, in the interest of justice and equity a sum of
Rs.20,000/- is granted under the heads of funeral expenses.
As such, in total the Petitioners are entitled for a sum of
Rs.31,94,369/-. The Respondent No.4 has stated that it has
already deposited Rs.16,38,525/- on 03.07.2021. The
Respondent No.1 has also paid Rs.2,00,000/- which is
admitted in the cross examination by the PW.1 and also seen
in Exs.R.1 & 2.
The counsel for the Respondent No.4 has relied upon the
following decision.
(i) (2006) 5 Supreme Court Cases 192 : New India
Assurance Co. ltd., Vs. Harshadbhai Amrutbhai Modhiya.
Wherein the Hon’ble Supreme Court has held that, the liability under
Workmen’s Compensation Act is contractual and not statutory. Hence, the
insurance company is not liable to pay interest on the compensation. The
employer shall pay the interest to the claimant.
SCCH-25 20 ECA No.21/2021
Therefore, the Respondent No.4 shall pay the balance
compensation amount of Rs.15,55,844/- to the petitioners.
It is pertinent to extract Sec.12 of EC Act which
reads as follows:
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 employee employed in the execution of the work any
compensation which he would have been liable to pay if that
employee 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 employee under the employer 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 employee could
have recovered compensation and where a contractor who is
SCCH-25 21 ECA No.21/2021himself 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 employee 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
employee 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.
It is pertinent to refer the following decisions:
(i) ILR 2012 Kar 5171 : Divisional Manager,South
Central Railway Vs. Manjamma.
Wherein the Hon’ble High Court of Karnataka has held that
the main object of enacting Sec.12 of the said Act is to secure
the compensation to the employees, who had been engaged
through the contractor by the Principal Employee for the
latter’s ordinary part of business. The scheme of Sec.12 of the
SCCH-25 22 ECA No.21/2021
said Act is intended to secure a workman the right to claim
compensation not only against the immediate employer, be it a
contractor or Sub-Contractor, but also against the Principal
Employer.
(ii) (2004) 3 LLN 1178 : Chairman, Gogate College of
Commerce, Belgaum Vs. Siddappa and Anr.
Wherein the Hon’ble High Court of Karnataka has held that a
plain reading of Sec.12(1) and (2) of the Act makes it clear that
where the Principal in the course of or for any purpose of his
trade or business contracts with the contractor for the
execution by or under the contractor, the whole or any part of
any work which is ordinarily part of his trade or business, he
is liable to pay compensation to the workman employed in the
execution of the work and that he is entitled to be indemnified
by the contractor or any person from whom the workman
could have recovered compensation and that all questions as
to the right to and the amount of any such indemnity shall be
settled by the Commissioner.
(iii) ILR 2002 Kar 3005 : Sri. Thirthamurthy Vs. Smt.
Radha.
Wherein the Hon’ble High Court of Karnataka has held that
the owner is basically liable in respect of any claim arising out
of such an incident. In any view of the matter the owner is not
SCCH-25 23 ECA No.21/2021
exonerated of his liability. If at all he can establish that the
accident has taken place due to the negligence of the
contractor to whom he has entrusted or sold the timber he can
claim reimbursement of the compensation amount which he is
liable to make good to the claimant and nothing beyond.
(iv) 2017 SCC Online Del 11137 : Krishan Vs. Jasoda
Devi.
Wherein the Hon’ble Supreme Court of India has laid
down the principles u/Sec.12 of EC Act as follows:
Summary of Principles
43.1. The Employees‟ Compensation Act, 1923 is a piece of
social beneficial legislation and its provisions have to be
interpreted in a manner so as not to deprive the employees of
the benefit of the legislation.
43.2. The object for enacting the Employees‟ Compensation
Act even as early as 1923 was to ameliorate the hardship of
economically poor employees who were exposed to risks in
work, or occupational hazards by providing a cheaper and
quicker machinery for compensating them with pecuniary
benefits.
43.3. Section 12 safeguards the right to compensation when
the employer delegates the work to another person. Section 12
is intended to secure to an employee the right to claim
SCCH-25 24 ECA No.21/2021compensation not only against his immediate employer who,
in the Act, is referred to as a contractor, but also against the
person who had employed such contractor to execute the
work. The Act refers to him as the principal.43.4. The main object of enacting Section 12 of the Act is to
secure compensation to the employees who have been
engaged by the principal employer through the contractor for
the work which the principal employer is supposed to carry
out by his own employees. If a person substitutes another for
himself to do his work, he ought not to escape the liability
which would have been imposed upon him, if he had done it
himself.
43.5. The intention of the Legislature in enacting Section 12
provision appears to be that the injured employee or the
dependent of a deceased employee who has been awarded
compensation by the Commissioner, should not be put to any
difficulty in realising such amount of compensation on account
of any recalcitrance of the employer or on account of the
vicissitudes of his (the employer‟s) financial position.43.6. Section 12 of the Act has, in effect, stretched the
contours of the word “employer‖ wider as to include the
person contracting with another person for carrying out the
work of the former. In such cases, the provision enjoins that
the principal shall stand substituted as the employer. This is
achieved by the words “where compensation is claimed from
the principal, this Act shall apply as if references to the
SCCH-25 25 ECA No.21/2021principal were substituted for references to the employer”. The
principal may have a claim for indemnity from his contractor
or delegatee but the victim or his dependents are not to be
involved in such disputes.
43.7. Section 12 will apply notwithstanding the agreement or
contract entered into between the principal and contractor
regarding their liability for payment of compensation under
the Act. The agreement or contract between the principal and
the contractor shall govern only their inter-se rights and
liabilities, and cannot affect the right of the employee or the
dependants of the employee, to get the compensation from the
principal or from the contractor at their option.43.8. Section 12 shall apply even in cases of several tiers of
employers or petty contractors. It is a matter of common
knowledge that contractors in turn employ other petty
contractors working under their direction and an employee
may be actually employed by one of these aforesaid persons
and in such a case, there may be no direct privity of contract
between the principal and the employee in the last analysis.
The employee has, for all practical purposes to deal with an
immediate employer but when it comes to lodging a legal claim
for compensation on account of an accident, he is concerned
with the principal employer and not the immediate employer
qua the employee.
43.9. In case of the multiplicity of immediate and indirect or
remote employers/contractors, Section 12 relieves an
SCCH-25 26 ECA No.21/2021
employee of the difficulty of ascertaining with precision as to
who should be deemed to be the actual employer liable for
compensation under the Act. The purport of Section 12 is to
create a deemed employer-employee relationship between the
principal employer and the employee of the immediate
employer who is brought in by the principal employer as his
contractor.
43.10. Section 12 secures compensation to the employee who
cannot fight out his battle for compensation by a speedy
process. A person who employs others to advance his own
interest is expected to provide a surer basis for payment of the
injured employee than the intermediary, who may often turn
out to be a man of straw, from whom compensation may not
be available. This is the purpose for which the claimant is
given the option under section 12(3) of the Act to claim the
compensation either from the principal or from the contractor.
43.11. The contractor may not be a man of means or he may
be merely a man of straw or it may be that wittingly or
unwittingly he may possibly be part of an arrangement
conceived by the principal to avoid confrontation directly with
the employee engaged in the execution of the work. In either
case, the interests of the employee need to be protected and
that is what the provision secures to the employee. The
principal can seek indemnification from the contractor if he
has been made answerable for the payment of compensation.
The right of the principal to be indemnified has thus been
SCCH-25 27 ECA No.21/2021
incorporated under Section 12(2), who has entrusted the work
to the contractor stipulating the right of indemnification under
the Act.
43.12. Section 12 of the Act gives protection to the employee in
case of an accident and secures compensation from the
persons who can pay, so that such employee will not be
dependent upon a petty contractor(s) who may themselves not
be able to pay compensation on account of their financial
inability.
43.13. Section 12 is an enabling provision for the benefit of the
employee(s) and enacted with the clear objective that the
employee(s) should not be hampered by technicalities or
practical difficulties of deciphering the correct employers. A
pragmatic method has thus been devised for fixing the liability
of the principal employer and thereby affording speedy relief
to the employee for payment of compensation on account of
the accident, though the principal has been invested with the
right of indemnifying himself from the contractor who may
have employed the employee and may have been responsible
for immediately taking work from him.
43.14. The words ―trade‖ or ―business‖ used in Section 12
of the Act have to be understood in the context in which this
Act was enacted. The Act was enacted to provide
compensation to the employees suffering during the course of
their employment. It was also the purpose of the Act that
employees should get speedy remedies and it appears that
SCCH-25 28 ECA No.21/2021
the intention of enacting the Section 12 of the Act was only to
ensure that compensation is paid by the principal
expeditiously and if this purpose of the Act and the provision
are kept in mind, then the words ―trade‖ or ―business‖ may
not have the same meaning which it would have, for instance,
when used in interpreting a taxing statute.
43.15. The words “trade” or ―business‖ are used in several
statutes like fiscal statutes, taxing statues and rent laws. The
meaning ascribed to such words shall always be with
reference to the context and with respect to the content of the
statute itself, Therefore, the meaning that is ascribed in one
statute cannot be taken to interpret the very same words in
another statute legislated with altogether a different intention
and object. The said words in the fiscal statutes or rent laws
cannot have a similar meaning when employed in any welfare
legislation like Employee‟s Compensation Act.
43.16. The term ―trade” or “business” would not have been
used in Section 12(1) to mean the same, though in certain
contexts they may bear the same meaning. The very fact that
both these terms are employed in the section would indicate
that they connote different ideas and they do not cover the
identical field, “trade” as generally understood means
activities of buying and selling and the business which is
related to such buying and selling, whereas “business” is a
term of much larger import.
SCCH-25 29 ECA No.21/2021
43.17. The word “trade” connotes commercial activity whereas
the word “business” is of much wider import and may be used
in different contexts in different senses. Used in one context, it
may imply a particular occupation or employment to earn
livelihood or gain, whereas used in a different context it may
mean an activity which engages time, attention, or labour as a
principal serious concern or interest. Its connotation may thus
vary with the varying contexts in which it is used. In taxing
statutes for instance, the word “business” will always denote
an activity carried out with the object of earning profit, though
the same may not be true when used in relation to other
activities. Used in broader sense, a person building his
residential house or a Government constructing a road, may
well be said to do “business” in so far as the said activity
engages his or its time, attention or labour as principal serious
concern or interest.
43.18. The meaning of these two crucial words in Section 12
has to be understood in the context of its object. The word
“business” in the Section need not be restricted to what is
synonymous with ―trade‖. The use of the conjunction „or ‟
should be understood as disjunctive for covering totally
different areas unconnected with ―trade‖. The word
“business” has different shades of meanings. Among them,
the most suitable in the present context is that which ―The
Oxford Advanced Learners Dictionary of Current English‖ has
given as its third meaning: “Task, duty, concern or
undertaking to do a work”. The word “business” in its wider
SCCH-25 30 ECA No.21/2021
connotation may have more extensive meaning than the word
―trade‖. Lord Jessel M.R. in Smith v. Anaerson, 1880 15 Ch
D 247, stressed the meaning of “business” as “anything which
occupies the time and attention and labour of a man for the
purpose of profit”. Some succinct illustrations have also been
given in the said dictionary to drive the meaning home. They
are: ―It is a teacher’s business to help his pupils; I still make
it my business to see that money is paid promptly; that is no
business of yours‖. In none of the illustrations, the word
―business‖ is used to denote anything connected with trade
or commerce. The word ―business‖ used in Section 12 of the
Act has been intended to convey the meaning “the work or
task undertaken by the person concerned” which is not
restricted to trade or commercial work alone.
43.19. The word “ordinarily” is an elastic term. It is seen to be
used in different statutes. The word has different shades of
meaning in different contexts. The word “ordinarily” is
employed in Section 12 of the Act for a different connotation.
That has to be understood in the background of the preceding
portion in the Section 12 wherein execution of the work carried
out through any other person contracted by the principal for
this purpose is mentioned. What the principal would have
done if he would not have contracted with another person to
carry out that work? He himself would have normally done
that work or caused it to be done under his supervision. The
word “ordinarily” is used in Section 12 for projecting this idea.
So the word “ordinarily” in Section 12 means “otherwise,
SCCH-25 31 ECA No.21/2021
normally”. No other meaning can be conferred to the term
ordinarily’ as it appears in Section 12.
43.20. Applying the rules of liberal and purposive
interpretation, superior purpose and felt necessity, the word
“business” occurring in Section 12 is given an extended
meaning, so as to include even an activity which engages
time, attention, or labour. Hence, construction of a residential
house would be covered in Section 12. This Court agrees with
the view taken by the different High Courts in the judgments
discussed herein above.
43.21. If the person who employs contractor is allowed to
evade his liability by raising the defence that only the
contractor or the intermediary should pay the compensation,
then Section 12 will become redundant.
43.22. This interpretation finds support from the amendment
of Section 2(1)(n) of the Act (vide Workmen‟s Compensation
(Amendment) Act, 2000) by including casual employees and
employees employed other than for the purposes of employer’s
trade or business in the definition of ―employee‖.
43.23. The definition of ―employee‖ envisaged in Section 2 (1)
(n) of the said Act has undergone drastic change. Prior to the
amendment, an employee whose employment was of a casual
nature and who was employed otherwise than for the purpose
of trade or business of the employer; did not fall in the said
definition. However, after the amendment of the said
definition through the Amending Act 46 of 2000, the
SCCH-25 32 ECA No.21/2021
Parliament had removed the said mischief which was then
prevailing and coming in the way of such casual employee
who met with an accident during the course of the
employment unconnected with the employer’s trade or
business. With the amendment of the said definition, now an
employee whose employment is of casual nature and who is
employed otherwise than for the purpose of employer‟s trade
or business is certainly covered within the definition of
employee.
43.24. Applying the rules of literal and purposive
interpretation, superior purpose and felt necessity, this Court
is of the view that the casual employees and employees
employed otherwise than for the purposes of the employer ‟s
trade or business are entitled to all the benefits of the
Employee‟s Compensation Act including that of Section 12 of
the Act. This Court agrees with the view taken by this Court in
Govind Goenka v. Dayawati (supra).
19. In all the decisions observations are made by
interpreting Sec.12 of ECA on question of absolving the
liability of the contractor or fixing liability on the principal
employer, ascertaining the relationship of employer-employee
and the objective of the Act. The reading of all these decisions
SCCH-25 33 ECA No.21/2021
and Sec.12 of ECA makes it clear that the liability can be fixed
on either the principal employer or the subcontractors and if
the liability is fixed on the principal employer, he can recover
the same from the subcontractors.
Relying on the above said decisions, the Respondent
Nos.1 to 3 being the employers of the deceased are liable to
pay the interest on the compensation amount of
Rs.31,94,369/-.
INTEREST
20. So far as interest and the date from which the
interest has to be calculated is concerned, it is relevant to refer
the decision of Hon’ble Supreme Court reported in AIR 2014
SC 1393 rendered in Saberabibi Yakubhai Saikh Vs National
Insurance company ltd and others). In the said case, the
Hon’ble Supreme Court laid down that in case of awarding
compensation under the provisions of Employees
Compensation Act the rate of interest has to be 12% and it
SCCH-25 34 ECA No.21/2021
was payable from the date of accident and not from the date
of award. Therefore, in view of the above judgment, the
Petitioners also are entitled for interest at the rate of 12% from
the date of accident. This court has already come to the
conclusion that the Respondent Nos.1 to 4 are jointly and
severally liable to pay compensation to the Petitioners. But
since the Respondent Nos.2 & 3 had insurance with the
Respondent No.4, the Respondent No.4 shall pay the balance
compensation of Rs.15,55,844/- and the respondent Nos.2 &
3 jointly and severally shall pay the interest of 12% on the
balance compensation amount. Though the Petitioners
claimed Rs.45,00,000/- compensation, they are entitled only
for a sum of Rs.31,94,369/-. Therefore, the petition is liable
to be allowed in part. Accordingly Issue No.3 is held in the
affirmative.
SCCH-25 35 ECA No.21/2021
21. Issue No.5:
For the reasons and discussions made above and finding
to the above issues this court proceed to pass the following:-
ORDER
The Petition filed by the Petitioner under
Section 22 of Employees Compensation Act
1923 is hereby allowed with costs.
The Petitioner is awarded compensation of
total amount of Rs.31,94,369/- (already
Rs.16,38,525/- deposited by Respondent No.4)
(Rupees Thirty One Lakhs Ninety Four Thousand
Three Hundred and Sixty Nine only) along with
interest @ 12% p.a., from the date of accident
i.e., 15.02.2020 till its realisation. The
Respondent Nos.1 to 4 are jointly and severally
liable to pay the compensation amount. The
SCCH-25 36 ECA No.21/2021Respondent No.4 is directed to deposit the
balance amount of Rs.15,55,844/- within 60
days from this order.
The Respondent Nos.1 to 3 are directed to
deposit interest @12% pa on the amount of
Rs.15,55,844/- (The Respondent No.1 has
already paid Rs.2,00,000/- to the petitioners and
the same may be deducted from the interest)
On deposit of the compensation amount and
interest, Rs.5,00,000/- each shall be deposited
in the names of the Petitioner Nos.1 & 2 in any
Bank of their choice for a period of 3 years. The
balance shall be released to the Petitioners
equally by way of e-payemnt on proper
identification and due acknowledgment.
The Advocate’s fee is fixed at Rs.1000/-.
SCCH-25 37 ECA No.21/2021Draw Award accordingly.
(Dictated to the stenographer on line, revised, corrected and then
pronounced in the open court this the 4th day of March 2025)(PRAKRITI KALYANPUR)
XXIII ASCJ, MEMBER MACT,
Bangalore. .
ANNEXTURE
List of witnesses examined on behalf of the Petitioner:
PW.1: Mr. Viju M.A.
List of witnesses examined on behalf of the Respondents:
RW.1: Mr. Shashikanth B. Madihalli RW.1: Mr. Muthukumar Perumal
List of documents marked on behalf of the Petitioner:
Ex.P-1 - Certified copy of FIR
Ex.P-2 - Certified copy of FIS
Ex.P-3 - Certified copy of Statement of Witness
Ex.P-4 - Certified copy of Wound certificate
Ex.P-5 - Certified copy of PM report
Ex.P-6 - Certified copy of letter dated 20.02.2020 and
report
SCCH-25 38 ECA No.21/2021
Ex.P-7 - Certified copy of Charge Sheet
Ex.P-8 - Certified copy of Death Certificate
Ex.P-9 - Certified copy of Offer letter
Ex.P-10 - Survival Certificate
Ex.P-11 - Notarized copies of Aadhar Cards of
Petitioners
Ex.P-12 - Original Aadhar Card of the deceased
Ex.P-13 - Original Ration Card
Ex.P-14 - National Trading Certificate of deceased along
with course completion and conduct
certificate
Ex.P-15 - SSLC Marks Card of the deceased
Ex.P-16 - Senior Secondary School Certificate cum
marks sheet of deceased
Ex.P-17 - Medical Certificate dated 06.04.2022 issued
by Pushpa Hospital, NR Pura
Ex.P-18 - Four outpatient slips
List of documents marked on behalf of the Respondents:
Ex.R1 Letter from the PW.1
Ex.R2 Certified copy of statement of PW.1
Ex.R3 True copy of offer letter dated 29-01-2020
Ex.R4 True copy of information related to accident
dated 15-02-2020
Ex.R5 True copy of accident information letter
SCCH-25 39 ECA No.21/2021
addressed to Koramangala Police station
dated 24-02-2020
Ex.R6 True copy of letter of claim process addressed
to the Claim officer of IFFCO-TOKIO Gen Ins
Co dated 26-02-2020(two in nos)Ex.R7 True copy of Accident information letter
addressed to Deputy Director of Industrial
health and safety dated 29-02-2020Ex.R8 True copy of another letter addressed to the
Claim Officer of IFFCO-TOKIO Gen Ins co
dated 12-03-2020Ex.R9 Certified copy of Order passed by Hon’ble
H.C., in Crl.P.No.3721/2021Ex.R10 Copy of Insurance policy
Ex.R11 copies of delivery chalan about issuance of
precautionary measuresEx.R12 Authorization letter
Ex.R13 Authorization letter
Ex.R14 Delivery chalans 2 in nos(PRAKRITI KALYANPUR)
XXIII ASCJ, MEMBER MACT,
Bangalore.
Digitally signed
by PRAKRITI
PRAKRITI KALYANPUR
KALYANPUR Date: 2025.03.14
12:52:29 +0530
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