IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE A.M.SHAFFIQUE THURSDAY, THE 1ST DECEMBER 2011 / 10TH AGRAHAYANA 1933 MFA.No. 2 of 2006() ------------------- WCC.15/2002 of W.C.C.TVM. .................... APPELLANT/ 3RD OPPO.PARTY. ----------------------------- THE ORIENTAL INSURANCE CO.LTD., REGIONAL OFFICE, METRO PALACE, GROUND FLOOR, OPPO.NORTH RAILWAY STATION, ERNAKULAM, REPRESENTED BY ITS MANAGER. BY ADV. SRI.VPK.PANICKER RESPONDENT(S): APPLICANT IST AND 2ND OPPO.PARTY & APPLICANT. ------------------------------------------------ 1. SRI.B.SREEKANTANNAIR, RAJASREE, KULATHOOR P.O. THIRUVANANTHAPURAM. 2. GENERAL MANAGER, KERALA STATE CO-OPERATIVE BANK LTD. NEAR MASCOT HOTEL, PALAYAM, THIRUVANANTHAPURAM. 3. HARIKUMAR, S/O.KRISHNAPILLAI, PERUMPILAMKUZHY MELE PUTHEN VEEDU, PONGUMMOODU, VENGODE P.O. THIRUVANANTHAPURAM. ADV. SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) FOR R3 SMT.SREELEKHA PUTHALATH SRI.A.R.DILEEP SRI.R.LEKSHMANA IYER FOR R1 SRI.G.P.SHINOD FOR R1 SRI.RAM MOHAN.G. FOR R1 SRI.MANU V. FOR R1 SRI.NAGARAJ NARAYANAN,SC,K.S.CO-OP BANK FOR R.2 THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 01/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH & A.M.SHAFFIQUE, JJ. * * * * * * * * * * * * * M.F.A.No.02 of 2006 ---------------------------------------- Dated this the 1st day of December 2011 J U D G M E N T K.M.JOSEPH,J The appellant/insurer is the third opposite party in a proceedings under Section 22 of the Workmen's Compensation Act. Against a total claim of Rs.4,00,000/-, the Commissioner awarded a compensation of Rs.1,28,142/- with 12% interest per annum from the date of the accident to the date of payment. 2. The applicant/3rd respondent filed an application alleging that he was employed by the first opposite party as a painter and while he was doing painting work of the second opposite party, he fell down from the second floor and sustained serious injuries. 3. Initially, the first opposite party remained ex parte. Subsequently, it is not in dispute that the first opposite party had filed a written statement wherein it is contended that actually the applicant is not his employee and he is the employee of one Sivadasan to whom the first opposite party had subcontracted the work. It is the case of the first opposite party that the M.F.A.No.02 of 2006 2 insurance company/appellant is only liable in respect of the employees of the first opposite party. Therefore, in short, the case was that neither the first opposite party nor the insurer was liable. Before the Commissioner, the applicant and another was examined and Exts.A1 to A8 documents were produced. On the side of the opposite party, the first respondent and an official of the appellant/3rd opposite party were examined. Ext.D1 purports to be the policy schedule issued by the appellant in respect of the first opposite party. Ext.D2 purports to be the agreement dated 31/3/2001 executed by the alleged sub contractor in favour of the first opposite party. Ext.D3 is the policy in respect of the first opposite party. Ext.D4 is the receipt issued by the appellant. 4. The Commissioner, after appreciation of the evidence, came to the following conclusions: The applicant was engaged for work in the 2nd opposite party's building on the basis of the work contract entrusted with the first opposite party. It is found that the accident occurred in the course of employment. Answering issue No.4, the Commissioner held that it is the first opposite party who is liable to pay compensation as is due. The M.F.A.No.02 of 2006 3 Commissioner proceeded to consider the evidence before him and came to the conclusion that on going through the depositions it could be seen that the first opposite party might have given sub-contract for execution of work with one Sivadasan; but he could not bring evidence on record that as per the agreement between the first and the second opposite parties, he was allowed to let work to another person on sub- contract basis. Ext.D2 was found unacceptable as a valid document and rejected. The stand of the 2nd opposite party in regard to the contention of the first opposite party that he had entered into sub-contract with Sivadasan was also taken note of and it was found that the applicant sustained injuries during the course of employment under the first opposite party. 5. We have heard the learned counsel for the appellant and the learned counsel for the respondents. The learned counsel for the appellant would take us through the entire findings in issue No.4. He would point out that in view of the evidence before the Commissioner, the Commissioner ought to have found that the applicant is indeed employed by Sivadasan with whom the first opposite party entered into sub-contract. M.F.A.No.02 of 2006 4 The question whether a sub-contract could have been entered into which is not germane in proceedings under Section 22 and the question is whether the applicant was a workman of the first opposite party or whether he was employed by Sivadasan, the sub-contractor, he contends. The first opposite party has specifically contended before the Commissioner that he was not the employer of the applicant. The learned counsel for the appellant would contend that as far as the appellant is concerned, the appellant has undoubtedly issued the policy of insurance covering only the employees of the first opposite party. As far as the appellant is concerned, it is clearly open for the appellant to contend that he is not liable to compensate the workman. Even according to the first opposite party, he has never employed the applicant. The Commissioner himself finds that there might have been a sub contract and that the casting of liability on the appellant is impermissible, contends the learned counsel for the appellant. 6. Per contra, the learned counsel for the opposite party would submit that what is essentially involved in this proceedings is a finding of fact and on the basis of appreciation M.F.A.No.02 of 2006 5 of evidence, a view has been taken and there is no basis for interference by this Court. He points out that no question of law as such is raised in the appeal memorandum that the finding entered into by the Commissioner is perverse. The learned counsel for the second opposite party would also stand by its contention that there is no subcontract and there is no basis for the same. The learned counsel for the applicant would contend that the order should be sustained. 7. It is true that there is evidence that the first opposite party has set up a definite case that the applicant was never employed by him and he was employed by the subcontractor. He has also produced Ext.D2, the alleged agreement between the first opposite party and Mr.N.Sivadasan. The learned counsel for the appellant however does not dispute that the perusal of the agreement as such may not, by itself reveal that the applicant was the employee of Sivadasan. In answering issue Nos.1 and 2, we notice that the Commissioner has noted that the applicant when he had given evidence before the Commissioner deposed that his wages was being paid by the first opposite party. Even though he was cross-examined apparently he appears to have M.F.A.No.02 of 2006 6 stood by his ground that the first opposite party is his employer. Even assuming that there was a subcontract as held by the Commissioner, what is pertinent to note is whether the applicant was employed by the first opposite party or by N.Sivadasan. On the one hand the applicant would say that he was indeed the employee of the first opposite party and he was being paid wages by the first opposite party. On the other hand, the first opposite party has given oral evidence and also produced the agreement. We have already noticed that the agreement by itself does not show the name of the applicant. If that is so, we would think that in the circumstances of the case, it may not be open for the appellant to impugn the finding on the basis that the applicant is not the employee of the first opposite party. We must remind ourselves that under Section 30 of the Act, a substantial question of law must exist. In the circumstances of the case, we are not inclined to hold that the appellant has a case for interference. The order was passed after appreciation of materials before it. 8. The learned counsel for the appellant then contended that in the policy there is an exclusion of liability on the part of the insurer to pay interest and the Commissioner directed the M.F.A.No.02 of 2006 7 appellant to pay interest also. The learned counsel for the opposite party does not dispute the same. There can be no dispute that there is a clause under which there is exclusion of liability to pay interest. In such circumstances, to that extent, the learned counsel for the appellant is justified in impugning the order making him liable to pay interest. Accordingly, we modify the impugned order. While we sustain the liability of the appellant to pay the principal sum of Rs.1,28,142/- we delete the direction that the appellant will be liable to pay interest. 9. We direct that the first opposite party/1st respondent shall be liable to pay interest. The first opposite party will be liable to deposit interest @ 12% per annum from the date of the accident till the date of deposit, i.e. till 16/11/2005. The appellant will be free to withdraw the amount, representing interest which is already deposited, in excess of Rs.1,28,142/-. 10. The direction to pay penalty is impugned on the ground that no issue was raised relating to payment of penalty. We find merit in the said case. The direction to pay penalty if deposit is made beyond the period of 30 days is accordingly interfered with and we set aside that direction. M.F.A.No.02 of 2006 8 11. The appeal is allowed as above. The first opposite party will make the deposit representing interest within a period of 45 days from today. (K.M.JOSEPH, JUDGE) (A.M.SHAFFIQUE, JUDGE) jsr // True Copy// PA to Judge M.F.A.No.02 of 2006 9 M.F.A.No.02 of 2006 10 K.M.JOSEPH & M.C.HARI RANI, JJ. .No. of 200 ORDER/JUDGMENT 30/082010