(1) JUDGMENT REPORTED IN THE HIGH COURT OF JUDICATURE AT BOMBAY, AURANGABAD BENCH, AT AURANGABAD. FIRST APPEAL NO. 280 OF 2007 Mahindra Gujrat Tractor Ltd., Vishwamitra, Near Vishwamitra Over Bridge, Vadodara - 390 011, .. Appellant State of Gujrat, (Original Through : Its Jr. Officer-Marketing respondent no.2) Mr. Pramod s/o. Vithalrao Bhoite. versus 1. Shabana w/o. Abdul Rauf Pathan, Age : 29 years, Occupation : Household. 2. Sumayya d/o. Abdul Rauf Pathan, Age : 11 years. 3. Tabassum d/o. Abdul Rauf Pathan, Age : 9 years. 4. Alisha d/o. Abdul Rauf Pathan, Age : 6 years. 5. Amirkhan s/o. Abdul Rauf Pathan, Age : 7 years. (2) Respondent nos.2 to 5 are minor and under the guardianship of their real Mother i.e. Respondent No.1. All C/o. Adv. N.G. Patel, "Nasar Palace", Ayesha Colony, Opp. S.P. Office, Khori Galli, Latur, District : Latur. 6. Wahidoddin s/o. Rakmuddin Shaikh, .. Respondents Age : Major, (Nos.2 to 5 - Occupation : Business as Original petitioners Proprietor of R.K. Agro Sales, & Nanded Road, No.6 - Original Opp. Gramin Police Station, respondent no.1 ) Latur - 413 512. ....................... Mr. R.V. Ghuge, Advocate, for the appellant. Mr. R.B. Deshmukh, Advocate, for respondent nos.1 to 5. Mr. V.J. Dixit, Senior Advocate, with Mr. S.Y. Mahajan, Advocate, for respondent no.6. ........................ CORAM : K.U. CHANDIWAL, J. DATE : 8TH APRIL 2010 (3) ORAL JUDGMENT : 1. The award of Commissioner for Workmen's Compensation Act & Judge, Labour Court, Latur, dated 12th January 2007, in Application (W.C.) No. 27 of 2001, directing the appellant (manufacturer) to pay compensation of Rs. 4,23,580/- with interest at the rate of 6 % per annum, is questioned in the First Appeal. 2. On 26th March 2007, after hearing the learned Counsel for the appellant, this Court observed thus : " On appearance of Respondent No.6, the matter will be finally heard and he be put on notice that it will be immediately heard and disposed of on the next date. In the meanwhile, the amount deposited in the Labour Court be not disbursed and the same be invested in Fixed Deposit in the name of the present appellant. " It is more than clear, no substantial question of law, as mandated in terms of Section 30 of the Workmen's Compensation Act, 1923 (For short, "the said Act"), was formulated. 3. The factual details, to a major extent, not in controversy, can be condensed as under : (4) Deceased Abdul Rauf, during the course of affairs of demonstration of tractor in the field of Jadhav, at his age of 28 years, succumbed due to turtling of the tractor on 9-10-2000. The respondent nos.1 to 5 (the claimants) are his legal representatives. The respondent no.6 (dealer) was the agent / dealer appointed by the appellant (manufacturer) to sell the tractors in the area of Latur under a agreement. The controversy or the genesis thereof would certainly center to the employer and employee relations or whether the deceased could be branded to be an employee of the appellant (manufacturer). 4. Mr. V.J. Dixit, learned Senior Counsel appearing for respondent no.6 (dealer), has raised basic objection and addressed, since there is no question of law being either referred in the appeal or is formulated, the appeal will have to be dismissed at the threshold. The second contention raised by the learned Senior Counsel is, the casual approach of the appellant (manufacturer) is writ large, as after sending the written statement by post, there was no participation, there was no authorization from the manufacturer to prosecute the matter either before the learned Judge of the Labour Court, Latur, or before this court in First Appeal. 5. Mr. R.B. Deshmukh, learned Counsel appearing for (5) the claimants (respondent nos.1 to 5 in the appeal), has fervently stated, in the battle of giants, his client is the sufferer, waiting for the fruits of award from ten years. The liability of the appellant (manufacturer), in terms of Section 12 of the said Act will surface and appellant may get it indemnified in terms of Section 12(2) of the said Act. 6. Mr. R.V. Ghuge, learned Counsel appearing for the appellant (manufacturer), criticized the judgment and the observations of the learned Judge, going a step ahead, finding in paragraph 9 of the judgment, to be a mockery of justice. According to him, it is against conscionable approach of the Counsel representing the claimants, the evidence is misread, new defence of the dealer was considered by the learned Judge. The learned Judge failed to formulate issue of employer and employee relationship and the Issue No.2 is indeed miscarriage of justice. He read entire evidence to impress as to how the findings require interference vis-a-vis the evidence recorded by the learned Judge. 7. The authorization which was essential to be produced, is now produced, dated 21-2-2007 signed by Mr. O.P. Irani, Financial Controller. The mistake is not deliberate, it is mere formality, and a durable defect, condoned. The controversy was not revolving to the status of manufacturer inter (6) se. The authorization is taken on record. 8. There cannot be a quarrel on the mandate ordained in Section 30 of the said Act and, in the light of want of grounds of appeal, at the threshold, the appeal need not be dismissed, however, the Counsel arguing are made aware that following is the substantial questions of law, between the parties : (A) Whether the learned Judge was illegally influenced with the evidence recorded by the claimant and the dealer (respondent no.6), reached at an erroneous finding ?, and (B) Whether non-formulation of issue of employer and employee relations, by itself, has adverse impact in the decision of the learned Judge ? 9. It is well settled, if the finding of fact had been arrived at, upon taking into consideration, inadmissible evidence and based on presumptions which could not have been raised, the High Court's jurisdiction to interfere is not squeezed. 10. To cut short, the evidence of the claimant Shabana unmistakenly demonstrate, her husband deceased Abdul Rauf (7) was attending the showroom or dealership activities of the dealer and was getting Rs. 150/- per day. Her husband told her, he was in the employment of the dealer, the respondent no.6. She, in categorical terms, in examination in chief and also in the cross examination, stated that her husband had no relations with the appellant (manufacturer) in any capacity. Having she said so, was it open for the learned Judge to have taken recourse in the manner the learned Judge has done in paragraphs 7 and 9 of the judgment ? The learned Judge erred in reaching to the conclusion of employment of deceased Abdul Rauf with the manufacturer (appellant). This is more particular in the absence of there being any evidence adduced by the dealer contrary. 11. The dealer knew the consequences of the claim. He pays the income tax. He has 3 - 4 employees, as affirmed by witness Pathan Abdul Jafar. If it is so, there was no injunction against the dealer (respondent no.6) to have produced his accounts, his extract of returns or the labour statement to demonstrate, at no time, deceased Abdul Rauf was his employee. Having such absolute opportunity being missed, the burden could not rationally be thrown to the manufacturer / the appellant. Though the conduct of the manufacturer projects remissness and laxity, this remissness need not be stretched to saddling the liability. (8) 12. The overall analysis of the evidence of the claimant, the dealer, his witness Pathan Abdul Jafar, leads to an unmistakable inference that the deceased Abdul Rauf could and only was having the employer and employee relations with the dealer (respondent no.6 in the appeal). The fact remains, the evidence of Pathan Abdul Jafar, the nephew of dealer, will not be coining the contentions of the dealer, respondent no.6. The respondent no.6 deliberately and consciously did not produce the available record. Suppression of available record unravels to the questionable conduct of Dealer, to draw adverse inference. The claimants and particularly widow being a Pardanshin lady, as could be seen, was not expected to bank upon the documents which were exclusively in the custody of the dealer, respondent no.6, or of the appellant (respondent no.2 in the original petition). 13. In the scenario, the learned Judge erred in saddling the responsibility upon the manufacturer (appellant) and particularly, there being no evidence to establish employer and employee relations. 14. The Issue No.2 indeed gave indication about expected evidence from parties, which include the relations which parties could have availed to lead evidence. The (9) appellant, having failed to adduce evidence, cannot be allowed to agitate non-framing of proper issue. 15. So far as Point No.1 formulated herein above, the learned Judge erred in appreciating the evidence amounting to miscarriage of justice. I may not agree to terminology of "mockery of justice". This, as stated earlier, having amounted to substantial question of law, so formulated, needs to be answered in favour of the appellant. 16. Then comes effect of Section 12 of the Workmen's Compensation Act, 1923. The definition of "managing agent" carved out in Section 2(f) in the said Act conceives, any person appointed or acting as the representative of another person for the purpose of carrying on such other person's trade or business, but does not include an individual manager subordinate to an employer; it will not be available to be put in. The nature of activity of the manufacturer was to sell his product i.e. tractor through dealer, this activity in the eventuality, in which Section 12 is formulated, will bring within its bracket the term "trade or business of the principal". The consequent effect, in the situation, would be, the manufacturer as a principal, would be liable initially to pay the claim, however, in terms of Section 12(2) appellant would be entitled to be indemnified by the dealer (respondent no.6). In the scenario of the matter, the (10) claimants did not commit any mistake in prosecuting the claim against the original respondent no.1 (dealer) and original respondent no.2 (manufacturer), as Section 12(3) of the said Act provide, nothing in the said Section shall be construed as preventing a workman from recovering compensation from the contractor instead of the principal. I hold, in the transaction of dealership to sale tractor, if driver, employee of dealer expired, the manufacturer would be bound to satisfy the award, with right and recourse to exercise indemnification from dealer and recover. 17. In the result, the appeal is allowed. The order under challenge is set aside and instead thereof, following order is passed : The claimants (respondent nos.1 to 5) are entitled for the amount of Rs. 4,23,580/- with interest at the rate of 6 % per annum from the date of claim till the entire amount is deposited, from Respondent No.6 (dealer). The amount initially shall be paid by the appellant, the manufacturer, to be indemnified and recovered from the dealer (respondent no.6 in the appeal). The costs to be paid by the respondent no.6 to the manufacturer, the appellant. (11) The amount deposited by the appellant (manufacturer) be paid over with accrued interest to the claimant (respondent nos.1 to 5 in the appeal) on or after 15th June 2010. ( K.U. CHANDIWAL ) JUDGE ......................... bgp/fa280