K.K. Mohandas (Dead) and Others v. V.K. Devassykutty (Dead) and Others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE K.HARILAL** **& THE HONOURABLE MR. JUSTICE A.M.BABU** **FRIDAY, THE 18TH DAY OF AUGUST 2017/27TH SRAVANA, 1939** **MFA.No. 116 of 2013 () -----------------------** **AGAINST THE ORDER/JUDGMENT IN WCC 184/1994 OF THE COMMISSIONER FOR WORKMEN'S COMPENSATION (DEPUTY LABOUR COMMISSIONER),THRISSUR DATED 24.6.2011** **APPELLANT(S):** **------------** **1. K.K. MOHANDAS (EXPIRED) MANAGING PARTNER COCHIN CLAY PRODUCTS KARUKUTTY P.O 683 576.** **2. SMT.VISALAKSHY W/O.LATE.K.K.MOHANDAS KANNAKKATTIL HOUSE, ASHTAMICHIRA P.O THRISSUR DISTRICT.** **3. SRI.JIM MOHANDAS S/O.LATE K.K.MOHANDAS -- DO ---** **4. SMT.JISSY, D/O.LATE K.K.MOHANDAS W/O.KRISHNAPRASAD, KANDANGATH HOUSE IRINJALAKKUDA P.O, THRISSUR DISTRICT.** - **BY ADVS.SRI.K.B.GANGESH SMT.SMITHA CHATHANARAMBATH** **RESPONDENT(S):** **--------------** **1. V.K. DEVASSYKUTTY(EXPIRED) S/O.LATE KOCHAPPU VADASSERY HOUSE, P.O.KOOVAKKATTUKUNNU MELUR-680 311.** **2. ROSY, W/O.LATE V.K.DEVASSYKUTTY C/O.JESSY JAMES (DAUGHTER) KUTTIYIL HOUSE, WARD 16 NEAR PANCHAYATH OFFICE, KOTTANELLUR P.O, AVITTATHUR -680 683** **3. THE MANAGING PARTNER (DELETED) KALPAKA TILES AND CERAMICS (P) LTD KARUKUTTY P.O, 683 576.** **4. V.A.JOSEPH, S/O.ANTHONY VADAKKAN HOUSE, MELOOR P.O, VIA CHALAKKUDY** **5. M.A.JOHNSON, MUNDANMANI HOUSE KANJIRAPPILLY P.O, VELOOKARA, CHALAKKUDY - 680721.** **6. THE MANAGING DIRECTOR KERALA FINANCIAL CORPORATION THIRUVANANTHAPURAM.** **R6 BY ADV. SRI.MOLLY JACOB, SC, KERALA FINANCIAL CORPORATION R2 BY ADV. SRI.P.RAMAKRISHNAN R4 BY ADV. SRI.M.R.ANISON R4 BY ADV. SRI.BINU JOHN R6 BY ADV. SRI.VENUGOPAL M.R., SC, KERALA FINANCIAL CORPORATION** **THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 18-08-2017, ALONG WITH MFA.NOS 117 & 118/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **K.HARILAL & A.M.BABU, JJ.** **.......................................... MFA Nos.116, 117 & 118 of 2013 ........................................... Dated 18[th] August, 2017** ## **JUDGMENT** ## **K.HARILAL, J.** These appeals are filed challenging a common order passed in W.C.C.No.184/94, W.C.C.No.186/94 and W.C.C.No.185/94 respectively by the Compensation Commissioner for Workmen's Compensation, Thrissur and the parties are common in all the appeals. Therefore all these appeals are heard together and disposed of accordingly. 2. The aforesaid applications were filed by the dependents of the deceased three persons by names Joshy, Suresh and M.A.Ouseph who died in an accident occurred on 16[th] May,1994 in the property of the second opposite party. According to the applicants, the aforesaid deceased persons were workmen employed by the first and second opposite parties, for loading clay from the property of the second opposite party, for transporting the same, to the tile manufacturing factory of the first opposite party by name Kalpaka Tiles and Ceramics Private Ltd. During the course of aforesaid employment mud billowed from the top of the land and they were grievously injured. While taking them to hospital 2 MFA Nos.116, 117 & 118 of 2013 all the workmen were succumbed to their injuries. In short, according to them, the death of the aforesaid three persons was the result of the accident arose out and in the course of employment, under first and second opposite parties. 3. Subsequently they filed a rejoinder stating that at the relevant time of accident, the tile factory owned by the first opposite party was taken over by the fifth opposite party and thereafter the fifth opposite party handed over the possession and management of the factory, to the third opposite party, for operation and in that attempt the accident occurred when third opposite party engaged the deceased workmen for collecting clay. They were being paid by the fifth and third opposite parties and thereby they are liable for granting compensation for the loss sustained by them owing to the death of the deceased persons. Thus, in the rejoinder they have confined their claim against third and fifth opposite parties. 4. The second opposite party filed a statement contending that he had sold away the right to take clay from his property to the first opposite party and thereby he is not liable, for granting compensation, for the death of the deceased, who were engaged in removing and transporting clay from his land, to the tile factory owned by the first 3 MFA Nos.116, 117 & 118 of 2013 opposite party. He denied the allegation that the deceased workmen were engaged by him. 5. The first opposite party filed a statement contending that the tile factory owned by the first opposite party was taken over by his financier, the fifth opposite party in default of the repayment of the loan amount and at the relevant time, the fifth opposite party was the owner in possession and management of the tile factory and thereby he is not liable for granting compensation for the death of the deceased. Further, he denied the allegation that the deceased workmen were employed by the first opposite party. 6. The fifth opposite party, the Kerala Financial Corporation filed a statement contending that even though the fifth opposite party has undertaken the tile factory owned by the first opposite party, the fifth opposite party could not run the factory and the factory was kept closed for a long period. Thereafter, they have auctioned the unit and the third opposite party was the highest bidder in the auction and subsequently the possession and management of the tile factory was transferred to him on 11.5.1994. Thus, according to the fifth opposite party, on the date of accident the third opposite party was in possession and management of the tile factory and the 4 MFA Nos.116, 117 & 118 of 2013 deceased workmen were employed by the third opposite party to collect and transport clay from the land owned by the second opposite party, to the tile factory. Thus, they denied the liability to pay compensation for the death of the deceased persons and the liability was shouldered on the third opposite party . 7. Initially, the third opposite party was set ex parte and the Commissioner for Workmen's Compensation passed a common order fixing the liability on the 5[th] opposite party. The 5[th] opposite party challenged the said order in MFA No.37/2006 before this Court. This Court set aside the impugned order and remitted the application back to the Commissioner for fresh consideration and disposal. After the remand from this Court the legal heirs of the third opposite party entered appearance and they got impleaded as opposite party Nos 6 to 8. They filed a statement contending that it is not correct to say the accident occurred, while loading clay for the first opposite party and according to their knowledge the tile factory was not functioning during the period of alleged accident. So also there was no contract between the first and second opposite parties for supplying clay. They denied the allegation that the deceased employees were employed by them for collecting 5 MFA Nos.116, 117 & 118 of 2013 clay from the property of the second opposite party to the tile factory owned by the first opposite party. According to them, the accident was not arising out or in the course of employment and the accident has no connection with the tile factory. Further they claimed that landed properties having an extent of one acre 25 cents, wherein the tile factory is situated, was purchased by the third opposite party in public auction and thereafter a registered sale deed was executed transferring the ownership of the tile factory to third opposite party on 17[th] June 1994 and till that date the factory was under the possession and management of the fifth opposite party. 8. On the aforesaid rival pleadings the applicants and the fifth opposite party adduced evidence both oral and documentary, consists of AW1 to AW6, A1 to A20, MW1 to MW3 and M1 to M10. After considering the aforesaid evidence on record the Compensation Commissioner allowed the applications by granting compensation to the applicants on a finding that the third opposite party was liable to pay compensation to the applicants as the deceased workmen were employed by him for collecting and transporting clay from the property of the second opposite party to the tile factory owned by the first opposite party and thereby the accident arose out 6 MFA Nos.116, 117 & 118 of 2013 and in the course of employment under the third opposite party. The legality and correctness of the aforesaid findings are mainly challenged in these appeals. In support of the arguments advanced by the learned counsel for the third opposite party, the learned counsel cited a decision of this Court in **1995 (1) KLT 621 (Payyannur Educational Society vs. Narayani).** 9. Heard the learned counsel for the appellants and the respective counsel appearing for the opposite parties. 10. The sum and substances of the arguments advanced by the learned counsel for the appellants is that there is no substantial evidence to prove the employer-employee relationship between the third opposite party and the deceased persons. The learned counsel for the appellants further contended that indisputably the accident occurred in the property owned by the second opposite party and in the absence of any documentary evidence to prove the transfer of right to collect clay from his property to the tile factory owned by the first opposite party, the second opposite party is liable for the loss caused by the death of the deceased. Further it is contended that Ext M8 sale deed would prove that the possession of the tile factory was transferred to third opposite 7 MFA Nos.116, 117 & 118 of 2013 party on 16.6.1994, after the date of accident. According to him, the Compensation Commissioner went wrong by placing reliance on Ext M4 application allegedly filed by the third opposite party and Ext M5 acknowledgment issued thereunder. According to the learned counsel Exts M4 and M5 are only photo copies. So, no reliance could have been placed on Exts M4 and M5 as they are secondary evidence and the same are inadmissible in evidence. _11. Per contra_ the respective counsel appearing for the opposite parties advanced arguments to justify the findings of the Compensation Commissioner. The counsel appearing for the applicants contended that provisions under the Evidence Act cannot be applied to the proceedings before the Compensation Commissioner as the Compensation Commissioner is not a Court and a quasi judicial forum only. Therefore, the Commissioner for Workmen's Compensation could be justified in relying on Exts M4 and Ext M5. In support of the aforesaid arguments the learned counsel for the applicants cited **1995 (1) KLJ 341 (Venu and Others vs. Senen Fernandez and Others), 1992 (2) KLT 702 (United India Insurance Co Ltd vs. Sethu Madhavan).** 12 **.** In view of the submissions at the bar, the larger 8 MFA Nos.116, 117 & 118 of 2013 question to be considered is whether the Compensation Commissioner is justified in finding that the third opposite party is liable to pay compensation for the death of the deceased, to the applicants, under the Workmen's Compensation Act on a finding that there was an employer-employee relationship between the third opposite party and the deceased workmen. The first point to be decided is, can the Commissioner be justified in finding that third opposite party was the employer of the deceased and the death arose out and in the course of employment under the third opposite party. It is not disputed that the death of the deceased persons was the result of the accident occurred in the property of the second opposite party on 16.5.1994, when they were engaged in collecting and transporting clay from the land owned by the second opposite party. It is also not disputed that while digging a pit, landsliding occurred and clay from the top of the land billowed on them and they had sustained grievous injuries and as a result of the injuries and at last they were succumbed to the said injuries while taking them to hospital. In other words, it is not disputed that the accident which culminated in the death of the deceased arose out and in the course of the employment. 13. The question in controversy centers around the 9 MFA Nos.116, 117 & 118 of 2013 disputed question, among the opposite parties who employed them for collecting, loading and transporting clay by the lorry. It is very interesting to note that according to the second opposite party, the first opposite party was the employer and he in turn contended that the fifth opposite party was the employer and they in turn contended that the third opposite party was the employer of the deceased at the relevant date of accident. They have not disputed the nature of employment in which the deceased sustained grievous injuries which culminated in their death. 14. Let us examine the version of the applicants, as regards the employer of the deceased employees. It is a specific case of the applicants from the very beginning that the deceased workmen were engaged in collecting, loading and transporting clay from the property owned by the second opposite party to the tile factory by name Kalpaka Tiles and Ceramics Private Ltd owned by the first opposite party. Subsequently, they filed rejoinders in all the applications alleging that the tile factory owned by the first opposite party was taken over by the fifth opposite party and fifth opposite party in turn transferred the possession and management of the factory to the third opposite party and thereby the fifth and 10 MFA Nos.116, 117 & 118 of 2013 third opposite parties are liable to pay compensation under Workmen's Compensation Act. Thus, in the rejoinder the compensation was sought from the fifth and third opposite parties only. 15. In order to prove the aforesaid claim against the fifth and third opposite parties, the applicants were examined as AW1, AW3, AW5 and AW6 and Exts A1 to A11 were marked. Among the aforesaid witnesses AW4 was a workman who worked along with the deceased at the time of accident. When AW3, AW5 and AW6 were examined as applicants they stood by their specific case that the deceased were engaged in collecting, loading and transporting clay from the land owned by the second opposite party, to the tile factory owned by the third opposite party. Their evidence is supported by the evidence of AW4 a workman who worked along with the deceased at the time of accident and AW2, an independent witness. AW2 deposed that the deceased workmen were working under the third opposite party and they were paid by the third opposite party. Further the aforesaid evidence is supported by the oral testimony of AW2, an independent witness examined to prove the accident. From the aforesaid evidence it stands proved that the clay from the property of 11 MFA Nos.116, 117 & 118 of 2013 second opposite party was sold to first opposite party much earlier before the date of accident. 16. Merely on the reason that the accident occurred in the property of a person, it cannot be said that the owner of the property is the employer, unless it is proved that the employees were employed by the owner of the property. The police might have registered a case against owner of the property on the reason that he is the owner of the property, wherein the accident occurred. But, the enquiry contemplated under the Workmen's Compensation Act is entirely different as the liability under the Act rests on the question, who is the employer of the deceased. Therefore it is not safe to rely on police records relating to registration of cases for finding the employer-employee relationship, and the compensation commissioner is bound to conduct an independent enquiry on the basis of the evidence on record, notwithstanding the police records. 17. The second opposite party has stated that he had not employed any workman, including the deceased, under him, for taking and transporting clay from his property. Further, it is his case that he had sold away the right to take clay from his property to 1[st] opposite party. In order to 12 MFA Nos.116, 117 & 118 of 2013 substantiate the said contention, he himself testified as M.W.1 and nothing has been brought out in cross-examination, to discredit his version. The 1[st] opposite party has not denied the said contention of the 2[nd] opposite party, in his counter statement. But, he further stated that the 1[st] opposite party had availed loan from the fifth 5[th] opposite party and when the 1[st] opposite party became a chronic defaulter in repayment, the 5[th] opposite party had taken over Kalpaka Tiles and Ceramics with effect from 4.8.1993 and thereafter, the 5[th] opposite party is liable for any untoward incident occurred in connection with the business of the factory. In the absence of denial from the part of the 1[st] opposite party as regards the selling of the clay to the 1[st] opposite party, we are inclined to accept the case of the 2[nd] opposite party that he had already sold away the right to take clay from his property to the 1[st] opposite party. At this juncture, it is pertinent to note that first opposite party has no case that even though he has purchased the clay, the digging and transportation of the clay was entrusted with second opposite party. 18. In the instant case, as discussed above, there is sufficient evidence, proving that the second opposite party had already acquired the right to take clay from his property to first 13 MFA Nos.116, 117 & 118 of 2013 opposite party. Hence no way second opposite party can be held liable merely on the reason that he is the owner of the property. 19. The 5[th] opposite party has not denied the case of the 1[st] opposite party that the 5[th] opposite party had taken over Kalpaka Tiles and Ceramics with effect from 4.8.1993. The 5[th] opposite party, in turn, further admitted that Kalpaka Tiles and Ceramics Pvt. Ltd. was taken over by them on 4.8.1993 and the factory was handed over to 3[rd] opposite party on 11.5.1994. According to them, they conducted an auction to sell the tile factory and in that auction, the 3[rd] opposite party was the highest bidder. Consequently, the physical possession of the factory was handed over to the 3[rd] opposite party on 11.5.1994, before the formal execution of the sale deed, on the request of the 3[rd] opposite party. Thus, at the time of accident, the 3[rd] opposite party was in management of the factory and he had employed workers, including the deceased, for taking and transporting clay from the property of the 2[nd] opposite party. Thus, in view of the admission from the part of the fifth respondent that they had taken over the factory with effect from 4.8.1993, neither the 1[st] opposite party nor the 2[nd] opposite party could be held liable, for the accident occurred 14 MFA Nos.116, 117 & 118 of 2013 on 16.5.1994. 20. But, it is the case of the 3[rd] opposite party that the M1 sale deed transferring the ownership of the tile factory was executed, by the 5[th] opposite party on 17.6.1994 and the accident occurred on 16.5.1994. Therefore, he is not liable to compensate the victims of the accident which occurred on 16.5.1994, before the execution of the sale deed. Thus, it is seen that the third opposite party has shouldered the liability on the fifth opposite party. 21. It is to be remembered that we have already found that the clay was taking and transporting from the property of the 2[nd] opposite party to the Kalpaka Tiles and Ceramics Factory and in that course of employment, the deceased were employed and while so, the accident occurred. Further, we have already found that the second opposite party had sold away the right to collect and transport clay from his property to the first opposite party and he cannot be held liable for the accident. Again we have found that the fifth opposite party had taken over the factory on 4.8.1993 from the first opposite party and thereby first opposite party also cannot be held liable for the accident. 22. So, the next question is, who was in management of 15 MFA Nos.116, 117 & 118 of 2013 the tile factory on the date of accident? The 3[rd] opposite party has not disputed the handing over of the factory to him by the 5[th] opposite party, pursuant to the auction; but, according to them, it was on the date of sale deed i.e 17.6.1994 only and not on 11.5.1994, as contended by the 5[th] opposite party. Then the point to be considered is, has the 5[th] opposite party succeeded in proving that though M1 sale deed was executed on 17.6.1994, they had handed over the physical possession and management of the factory to the third opposite party on 11.5.1994 and allowed him to start functioning of the factory? 23. Admittedly Ext M8 sale deed transferring ownership of the tile factory to the third opposite party was executed on 17.6.1994. In order to prove the handing over of the factory to 3[rd] opposite party on 11.5.1994 M.W.2 and M.W.3 were examined and Exts.M2 to M10 were marked. M.W.2 was the Deputy Manager and M.W.3 was the retired Assistant Manager (Recovery) of the 5[th] respondent Corporation. They were examined to prove the actual handing over of the factory to the 3[rd] respondent, pursuant to the sale of the factory in public auction. Ext.M2 is a paper publication dated 7.11.1993 and it shows that the auction proceedings started in November, 1993. Ext.M3 is the agreement for sale executed between the 3[rd] 16 MFA Nos.116, 117 & 118 of 2013 opposite party and the 5[th] opposite party. When M.W.2 was examined, he deposed that after the conformation of the sale on 29.3.1994 in favour of the 3[rd] opposite party, he submitted Ext.M4 application dated 4.5.1994 before the 5[th] opposite party and requested as follows: "I have already paid a sum of 7 lakhs (Rupees seven lakhs only)₹ as stipulated in your conformation letter dated 29.3.1994. As per clause 4 of your letter you will have to hand over the possession of the unit to us after paying 7 lakhs (Rupees seven₹ lakhs only). The machineries, rocks and pallets are in very much deplorable condition and requires urgent repairs. So also, we have to collect clay before rainy season. Hence, urgent steps may be taken for handing over the possession of the unit to us." Further, he deposed that the 3[rd] opposite party had deposited Rupees seven lakhs towards sale consideration and the same was encashed on 11.5.1994 and the physical possession of the factory was handed over to 3[rd] opposite party immediately after the encashment. M.W.3 is the then Assistant Manager (Recovery) of the 5[th] opposite party, who was examined to prove the actual physical handing over of the possession of the factory to 3[rd] opposite party, under mahazar and he deposed that he had handed over possession to the 17 MFA Nos.116, 117 & 118 of 2013 third opposite party under Ext M5 letter acknowledging receipt of possession. We have gone through the deposition of M.W.2 and M.W.4. It is true that they have produced the photo copies of M4 and M5 and the same were marked subject to objection. It is pertinent to note that the 3[rd] opposite party has not denied Ext.M4 application or M5 letter. M.W.3 was cross-examined at length by the counsel for sixth and eighth opposite parties. But, nothing has been brought out to discredit the oral testimony of M.W.2 and M.W.3, which stand supported by M4, M5 and M10. During the cross-examination MW3 has deposed that M4 and M5 were found misplaced and thereby the photocopies of the same were produced in evidence. 24. It has come out in evidence from Ext M3 agreement and M4 letter submitted by the third opposite party that as per the sale condition total sale consideration was Rs.32 lakhs. Out of Rs.32 lakhs, Rs.7 lakhs shall be paid in cash, and the balance amount of Rs.25 lakhs shall be paid by 32 monthly installments. The physical possession of the factory would be handed over to third opposite party on payment of Rs.7 lakhs and he paid the amount by cheque on 30.3.1994 and the full amount was encashed on 11.5.1994. Therefore there was no 18 MFA Nos.116, 117 & 118 of 2013 legal impediment in handing over the physical possession to the third opposite party on 17.6.1994. 25. As regards the admissibility of Exts.M4 and M5, we would remember the decision laid down by this court in _**Rudrani v. Baby**_ 1979 KLT 513 and _**Venu & others v. Senan Fernandez and others**_ 1995 (1) KLJ 341. 26. In the former decision, this Court held that the Commissioner, being not a court, his decision involving a judicial element is a quasi-judicial act and the proceedings before him in which such decision is rendered is quasi-judicial proceedings. Hence, the Evidence Act, 1872 is not attracted to distribution proceedings before the Commissioner. In _**Venu's**_ decision, this Court held that “we are firmly of the view that the Evidence Act would apply only to judicial proceedings in or before any court and that administrative or quasi-judicial, Tribunals are only fact finding bodies and the method of fact finding varies from that sanctioned by law in courts”. What is inferable from the above decision is that provisions of Evidence Act does not strictly apply to proceedings before the Commissioner for Workmen's Compensation under the Workmen's Compensation Act. In this decision, this Court relied onan earlier decision of this Court in _**United India**_ 19 MFA Nos.116, 117 & 118 of 2013 _**Insurance Co.Ltd. v. Sethu Madhavan**_ [1992(2) KLT 702]. At this juncture, it is appropriate and profitable to remember that decision, which is extracted below: "The administrative and quasi judicial proceedings are not fettered by technical rules of evidfence and the Tribunals are entitled to act on materials which may not be accepted as evidence in a court of law. But they should adhere to the Rules of natural justice." 27. In the above view, the Commissioner for Workmen's Compensation is justified in relying on M4 and M5,which stands supported by the oral testimony of M.W.2 and M.W.3, particularly when no denial or contra evidence from the part of the third respondent. It is pertinent to note that neither any oral nor any documentary evidence was produced from the part of the 3[rd] opposite party. In the above analysis, the Commissioner for Workmen's Compensation is justified in finding that the physical possession of the factory was handed over to the third respondent on 11.5.1994, before the execution of sale deed and the accident occurred on 16.5.1994 when the 3[rd] opposite party was in possession and management of the factory. From the request in Ext.M5, it could be reasonably found that he started functioning of the factory before rainy season and employed the deceased for digging and transporting clay from the property of the 2[nd] 20 MFA Nos.116, 117 & 118 of 2013 opposite party and in that course of employment,the accident which culminated in their death occurred. In other words, the Commissioner for Workmen's Compensation is justified in finding that the deceased were employed by the 3[rd] opposite party at the time of accident and thereby the accident, which culminated in death of the deceased workers arose out and in the course of employment under the third opposite party. 28. Coming to the sustainability of the quantum of compensation granted to the applicants, no substantial challenge was raised. Rs.1,000/- was taken as wages and the amount was calculated on the basis of their age, which stands proved by birth certificates. We find that the monthly wages determined by the Commissioner is just and reasonable and there is no reason to interfere with the quantum of compensation determined by the Commissioner. These Miscellaneous First Appeals are devoid of merits and dismissed accordingly. **K.HARILAL Judge** **A.M.BABU Judge** sks/19.8.2017 21 MFA Nos.116, 117 & 118 of 2013