IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.07.2009 CORAM THE HONOURABLE MR. JUSTICE S.PALANIVELU C.M.A.No.1010 of 2004 ---- The Commissioner, Corporation of Chennai, 'Ripon Buildings' Chennai-600 003. ... Petitioner Vs. 1. J. Mani 2. Murugesa Naicker ... Respondents Prayer: The Civil Miscellaneous Appeal is filed under Section 30 of the Workmen Compensation Act, (Act 80 of 1923) praying to set aside the order dated 29.09.2003 by Deputy Commissioner of Labour I / Workmen's Compensation Commissioner I, Chennai made in W.C.No.281 of 2001 on his file, which is received by the appellant on 02.01.2004. For Petitioner : Mr.V.Bharathidasan For Respondents : Mr.S.Haridass - - - - - O R D E R The following are the allegations found in the claim petition:- The claimant was working as concrete mixing machine operator under the first opposite party getting a daily wages of Rs.150 per day. He was aged about 37 years at the time of accident. On 24.02.2001, in Velachery Mettu Street while the road laying operations were going on, the claimant operated the concrete mixer machine and at that time, his hand was caught in the machine and got crushed. He was removed to Royapettah Government Hospital and because of the injury, his right hand was amputated. The first opposite party is contractor and the second opposite party is principal employer. On 30.07.2001, the claimant sent a notice to both the opposite parties, but no reply was received. Hence, a sum of Rs.5,00,000/- is prayed for as compensation. 2.In the counter filed by the first opposite party, it is stated that the claimant did not work under him, that he did not send any notice, that the opposite party does not know when and where the accident took place and that the petition has to be dismissed. 3.In the counter filed by the second opposite party, it is stated that the second opposite party does not know whether the claimant was getting Rs.150/- as daily wages, that this opposite party has not paid any wages to the claimant, that there is no https://hcservices.ecourts.gov.in/hcservices/ relationship between the claimant and this opposite party, that he has to get compensation only from the first opposite party and that the second opposite party is not liable to pay compensation. 4.After considering the evidence on record, the Authority below observed that the claimant worked under the first opposite party, who is the contractor of the second opposite party and the second opposite party being the principal employer has to pay the compensation to the claimant as per the following formula:- Age : 40 Factor : 184.17 Monthly wages : Rs.4,000/-(Determined) Loss of Earning capacity : 90% Compensation :60/100x184.17x4000x 90/100 = Rs.3,97,807/- 5.At the time of admission of the appeal, this Court formulated the following question of law:- "1.Whether the Workmen Compensation Commissioner- I/Deputy Commissioner of Labour-I, Chennai was correct in not apportioning the amount of compensation as required under Section 12(2) of the Workmen Compensation Act, and the amount awarded of Rs.3,97,807/- is legally sustainable?" 6.As for the factual aspect whether the claimant was working as an employee under the first opposite party, the Commissioner has answered the point in affirmative. In this regard, this Court in 1997 (4) L.L.N.231 (Superintending Engineer (H.&R.W.), Tirunelveli Vs. Veeran and others) has observed that the question whether the claimant is an employee under the principal employer are pure question of law or pure question of fact based on evidence and that there could be no substantial question of law raised. This Court, after scrutinizing the award challenged, confirms the same with regard to the fact that the claimant was an employee under the first opposite party. 7.As far as the liability to pay the compensation by the opposite parties are concerned, the claimant had worked under sub contractor, who took contract from this appellant. In the decision of this Court reported in (2003) 3 M.L.J. 712 (The Dean, Agricultural College and Research Institute, Kilikulam, Vallanad Vs. Tms.S.Sakilabanu and others), the Division Bench of this Court had an occasion to discuss about the implications of Sections 2(e) and 3 of the Workmen's Compensation Act and observed as follows:- "Under the definition of the word employer in Sec. 2 (e) of the Act, the immediate employer is the sub- contractor and the principal employer is the contractor. Insofar as the Dean is concerned, the claim will not fall within the Act, as construction activity is not part of the business. It is the contractor, who is the principal employer liable to pay the compensation and he may get it reimbursed from the sub-contractor, the immediate employer." https://hcservices.ecourts.gov.in/hcservices/ 8.In the decision of this Court reported in (2006) 3 M.L.J. 515 (Commander, Headquarters, Coast Guard Region (East), Chennai and others Vs. Vijaya and another), this Court has held that the compensation awarded by the Commissioner has to be paid not by the principal employer and that the liability has to be fastened against the contractor under whom, the deceased was working, since the object of the Legislature specifically provides that an award for compensation has to be passed against the principal employer or the contractor and that it is only the contractor, who has to pay the compensation. 9.The learned counsel for the first respondent/claimant placed much reliance on the Division Bench judgment of this Court reported in 2004 (2) TN MAC 1 (DB) (K.Kamalaveni & others Vs. The Managing Director, Subathal Spinning Mills (P) Ltd., 128, Bhavani Main Road, Ashokapuram, Erode and others), wherein, this court has held as follows:- "31. All the above said decisions dealt with the scope of S.12 of the Act in which provision also, the accident should occur in the course of or for the purpose of employer's trade or business to claim compensation. To attract S.12 of the Act, such work should be executed through a contractor. In the present case, the factual finding is that a godown was constructed in the 1st respondent-management mills through the 2nd respondent- contractor for constructing the roof of the building, and the deceased was engaged and in the course of his employment he died. In view of the said finding of the Deputy Commissioner, S.12 of the Act is applicable to the facts of the case. According to S.12 of the Act, the 1st respondent-management mills, on whose instruction the godown was constructed for the purpose of their business, have to be construed as principal employer though the deceased was immediately employed by the 2nd respondent- contractor. 32. In view of the above, the 1st respondent-management mills are liable to pay the compensation to the appellants- claimants as fixed by the Deputy Commissioner, as no argument was advanced by the learned counsel for the 1st respondent disputing the quantum. In view of liquidation of the 1st respondent-management mills, the 3rd respondent/Official Liquidator is liable to pay the compensation to the appellants/claimants and the 3rd respondent is entitled to recover the same from the 2nd respondent-contractor as the 2nd respondent-contractor has to indemnify the liability under S.12(2) of the Act." 10.It is also argued on behalf of the first respondent/claimant that the principal employer was liable to pay compensation as per Section 12 (1) of the Act, as per the Division Bench decision of the Andhra Pradesh High Court reported in 2006 – IV – L.L.J. (Suppl.) - NOC – 290 (Depot Manager, APSRTC, Anantapur, Anantapur Dist. & others. Vs. K.Adi Reddy & others). https://hcservices.ecourts.gov.in/hcservices/ 11.Following the above said decisions, it is held that the appellant has to pay the compensation to the first respondent/claimant and then may recover the same from the second opposite party, the contractor. The compensation quantified by the Commissioner is appropriate. The substantial question of law is answered as indicated above. With the above said modification, the Civil Miscellaneous Appeal is partly allowed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar jrl/va To The Deputy Commissioner of Labour-I / Workmen's Compensation Commissioner-I, Chennai. Copy to:The Section Officer, VR Section, High Court, Madras. C.M.A.No.1010 of 2004 MBS(CO) SRA(27/08/2009) https://hcservices.ecourts.gov.in/hcservices/