V K Reghunathan Pillai v. Food Corporation of India & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR** **TUESDAY, THE 14[TH] DAY OF NOVEMBER 2023 / 23RD KARTHIKA, 1945** ## **MFA (ECC) NO. 9 OF 2019** ## **ECC 600/2014 OF EMPLOYEES' COMPENSATION COMMISSIONER, KOLLAM** ## **APPELLANT (1ST OPPOSITE PARTY)** V K REGHUNATHAN PILLAI, VINAYAKA, KANNIMEL CHERRY, MARUTHADI P.O, KOLLAM -691 003 BY ADVS. A.K.PREETHA SRI.C.ANIL KUMAR SMT.HEMA R. ## **RESPONDENTS (APPLICANTS & OPPOSITE PARTIES 2 TO 5)** - 1 SHOBITHA, W/O. LATE NIZAM, SIYAL MANZIL, ALUMMODU P.O, PUNUKKANNOOR, MAMPUZHA, KOTTAMAKARA,KOLLAM-691 577 - 2 MUHAMMED SIYAL, S/O. LATE NIZAM, SIYAL MANZIL, ALUMMODU P.O, PUNUKKANNOOR, MAMPUZHA, KOTAMAKARA,KOLLAM-691 577 - 3 SALMI, D/O. LATE NIZAM, SIYAL MANZIL,ALUMMODU P.O, PUNUKKANNOOR, MAMPUZHA, KOTAMAKARA,KOLLAM-691 577 - 4 SUBAIDA BEEVI, W/O. LATE ABDUL ASSIS, SIYAL MANZIL, ALUMMODU P.O, PUNUKKANNOOR, MAMPUZHA, KOTAMAKARA,KOLLAM-691 577 - 5 FOOD CORPORATION OF INDIA, REPRESENTED BY ITS MANAGING DIRECTOR , NO.16-20,BARAKHAMBA LANE, NEW DELHI-695 -004 - 6 GENERAL MANAGER (EC), REGIONAL OFFICE, FOOD CORPORATION OF INDIA, KESAVADASAPURAM, THIRUVANANTHAPURAM-695 004 - 7 ASSISTANT MANAGER (CIVIL) FOOD CORPORATION OF INDIA DEPOT, CHINNAKKADA, KOLLAM-691 001 - 8 DEPOT SUPERINTENDENT, FOOD CORPORATION OF INDIA, KILIKOLLOOR, KOLLAM-691 004 BY ADV SRI.T.C.KRISHNA FOR R5 TO R8 THIS MFA (ECC) HAVING BEEN FINALLY HEARD ON 8.11.2023, THE COURT ON 14.11.2023 DELIVERED THE FOLLOWING: _**MFA.(ECC).9/2019**_ 2 ## **JUDGMENT** Dated : 14[th] November, 2023 1. This appeal has been preferred under Section 30 of the Employees Compensation Act 1923, by the opposite party in E.C.C.600/2014, on the file of the Employees Compensation Commissioner (Industrial Tribunal), Kollam. The above application was filed by the legal heirs and dependents of the deceased employee claiming compensation on account of his death that occurred on 6.7.2013. 2. The first opposite party was a contractor of the second opposite party, who had undertaken to execute the repair work in the godown of respondents 5 to 8 namely the Food Corporation of India and it's officials. On the ill-fated day, the employee was directed to carry out leak proofing works of the asbestos sheets on the roof of the godown. While he was doing the repair work, the asbestos sheet broke and he fell down on the floor at about 3.00 pm. At the time of the accident, the godown building was locked from outside and hence, the workman was denied immediate medical care and he succumbed to the injuries. The petitioners claimed compensation of Rs.18,00,000/- on the ground that the deceased had a monthly wages of Rs.15,000/-. _**MFA.(ECC).9/2019**_ 3 3. As per the impugned order, the Employees Compensation Commissioner awarded a compensation of Rs.8,06,640/- along with interest and funeral expense. In the impugned order, the respondents 5 to 8 were directed to deposit the award amount and they were permitted to recover the same from the first opposite party/appellant, being the immediate employer of the deceased. It was in the above context the first opposite party filed this appeal challenging the finding of the Commissioner permitting the respondents 5 to 8 to realize the amount from the appellant. 4. At the time of arguments, the learned counsel for the appellant would argue that since the godown was locked from outside, the employee could not be taken to the hospital forthwith and the same has resulted in causing the death of the employee. Further, according to the learned counsel for the appellant, the Commissioner failed to adjudicate the issue of indemnification by the contractor as required under Section 12(2) of the Employees Compensation Act. It was revealed that at the time of the accident, the employee was not wearing the safety belt. According to the learned counsel for the appellant, the engineer of the FCI, who was supervising the work, had a duty to see that the workman wears the safety belt. 5. On the other hand, according to the learned counsel for respondents 5 to _**MFA.(ECC).9/2019**_ 4 8, as per the terms of Ext.B1 agreement, the entire liability under Act 8 of 1923 is on the appellant and that respondents 5 to 8 have no liability in that respect. Further according to him, it is the duty of the appellant to take the necessary precautions for the safety of the employee engaged by him. Therefore, the learned counsel for the respondents prayed for dismissal of the appeal. 6. Now the question of law that arise for consideration is as follows :- Whether there was any lapse on the part of the Employees Compensation Commissioner in not adjudicating the question of reimbursement under Section 12(2) of Act 8 of 1923 ? ## 7. Sub-section (2) of Section 12 of Act 8 of 1923 states that :- 12(2). Where the principal is liable to pay compensation under this section, he shall be entitled to be indemnified by the contractor 4 [,or any other person, from whom the 1 [employee] could have recovered compensation and where a contractor who is himself 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 1 [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. 8. Admittedly, the appellant is a contractor who had engaged the deceased workman for carrying out the repair works of the godown of respondents _**MFA.(ECC).9/2019**_ 5 5 to 8. The employee sustained injuries and he succumbed to the injuries while carrying out the above work. In the impugned order, the Employees Compensation Commissioner awarded compensation to the legal heirs of the employee and directed respondents 5 to 8 to deposit the amount and thereafter, to realize the same from the appellant. According to the learned counsel for the appellant, there was no proper adjudication of the question of reimbursement by the Employees Compensation Commissioner as required under Section 12(2) of Act 8 of 1923. 9. In the decision in **The Chief Post Master General and Anr. v. Lekha and Anr. (MFA.4 of 2016 decided on 27.7.2017),** a Division bench of this Court held that, the question of indemnification as required under sub-section (2) of Section 12 is to be separately adjudicated by the Commissioner. In that respect, even a separate application under Section 12(2) can be filed before the Commissioner. In paragraph 6 of the above ## judgment, the Division Bench held thus : “6. What is imposed under Section 12(1) of the Act to the principal employer is only an “initial liability” to compensate the employee and it is well evident from sub section (2) of Section 12 of the Act that it casts a liability on the Contractor to indemnify the principal. A mere reading of sub section (2) of Section 12 of the Act would show that the question of indemnification would arise in relation to a Contractor under whom the employee was working and all questions as to the right to and the amount of any such indemnity shall, in default of agreement, be settled by the _**MFA.(ECC).9/2019**_ 6 Commissioner. It is really an enabling provision for the Principal to recover the amount of compensation, if any, paid or liable to be paid to the employee and all questions as to the right to and the amount of indemnity shall, in default of agreement, be settled by the Commissioner. The expression “in default of agreement” stands for the default of covenant agreed upon, if any, committed by the Contractor. In other words, when there is no default with respect to any contractual obligation, sub section (2) of Section 12 of the Act would not come into play.” - 10.In the instant case, admittedly the appellant has not filed any application under Section 12(2) before the Commissioner praying for adjudicating the question of reimbursement separately, so far, though the impugned order was passed in the year 2017. For not moving such an application before the Commissioner, no satisfactory explanation could be offered by the appellant. - 11.On a perusal of sub-section (2) of Section 12, it can be seen that, any indemnification of the compensation as required under the above subsection will be subject to any agreement between the parties. In the instant case, there is an agreement between the contractor and the principal employer namely, FCI. Ext.B1 is the agreement. According to the learned counsel for the respondents, in the light of clauses 18A and 19C in Ext.B1 agreement, there is no scope for any such enquiry. Clause 18A of Ext.B1 states as follows: - _**MFA.(ECC).9/2019**_ 7 “In every case in which by virtue of the provisions of Section 12 subsection (1) of the Workmen's Compensation Act, 1923 Food Corporation of India is obliged to pay compensation to a workman employed by the contractor in execution of the works, the Corporation will recover from the contractor the amount of the compensation so paid and without prejudice to the rights of the Corporation under Section 12, sub-section (2) of the said Act, the Corporation shall be at liberty to recover such amount or any part thereof by deducting it from the Security Deposit or from any sum due by the Corporation to the contractor whether under this contract or otherwise, the Corporation shall not be bound to contest any claim made against it under Section 12 sub-section (1) of the said Act except on the written request of the contractor and his giving to the Corporation full Security for all costs for which the Corporation might become liable in consequence of contesting such claim.” ## 12.Clause 19C relating to personnel liability states thus :- “All persons employed by the contractor shall be engaged by him as his own employees/workers in all respects and all rights and liabilities under the Indian Factories Act, or the Employees Compensation Act and Employees Provident Fund & Misc.Provisions Act or any other similar applicable enactments in respect of all such personnel shall exclusively be that of the contractor. The contractor shall be bound to indemnify the Corporation against all the claims whatsoever in respect of his personnel under the Employees Compensation Act, 1923 or any statutory modification thereof or otherwise for or in respect of any damage or compensation payable in consequence of any accident or injury sustained by any workmen or other person whether in employment of the Contractor or not.” 13.On a perusal of the above clauses in Ext.B1 agreement, it can be seen _**MFA.(ECC).9/2019**_ 8 that, as per the agreement entered into between the appellant and the principal employer, the principal employer has no liability under Section 12(2) and it is the liability of the appellant to compensate the employee under the provisions of Act 8 of 1923. clause 19C further states that the appellant has to indemnify the FCI, the compensation, if any, paid to any employees under Act 8 of 1923. 14.In the light of the above clauses in Ext.B1 agreement, it is the liability of the appellant to pay the compensation due to the deceased employee. In the above circumstances, there is no illegality or irregularity in the finding of the Employees' Compensation Commissioner, much less any question of law involved in this case and as such, there is no valid grounds to interfere with the impugned order. The points answered accordingly. In the result, the appeal stands dismissed. Sd/- **C.Pratheep Kumar, Judge** Mrcs/9.11.