Orissa High Court
Case Details
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 IN THE HIGH COURT OF ORISSA AT CUTTACK F.A.O. No.96 of 2021 (In the matter of an application under Section 30 of the Workmen’s Compensation Act, 1923) Block Development Officer, Jajpur …. Appellant (s) -versus- Surekha Patra & Ors. …. Respondent (s) Advocates appeared in the case through Hybrid Mode: For Appellant (s) For Respondent (s) : : Ms. Gayatri Patra, ASC. Mr. D.K. Mohapatra, Adv. CORAM: DR. JUSTICE SANJEEB K PANIGRAHI DATE OF HEARING:-10.12.2025 DATE OF JUDGMENT:-24.12.2025 Dr. Sanjeeb K Panigrahi, J. 1. In this present appeal, the Appellant/ State has challenged the judgment and order dated 20.02.2020 passed by the Commissioner for Employees Compensation-cum- Divisional Labour Commissioner, Cuttack in E.C. Case No.59-D/2015. I. FACTUAL MATRIX OF THE CASE:
Legal Reasoning
2. The brief facts of the case are as follows: i. The Anganwadi Centre at Badasuara, Jajpur was sanctioned in 2014 with ₹5,00,000 allocated for construction. In a Palli Sabha held on 21.11.2014, Bipra Kishore Parida was chosen as contractor Page 1 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 (Village Level Leader), and a work order was issued on 25.11.2014. ii. On 09.01.2015, Bira Kishore Patra, engaged by the contractor, was working at the site when part of the building collapsed. He sustained fatal injuries and died instantly. A police case was registered, and post-mortem was conducted at Jajpur Government Hospital. iii. His widow, Surekha Patra, and minor son filed E.C. Case No. 59- D/2015 before the Commissioner for Employees’ Compensation, Cuttack, seeking ₹9,00,000 compensation. The Commissioner fixed wages at ₹6,000 per month, age at 30 years, and awarded ₹6,23,940 with 12% interest per annum, directing the Block Development Officer (BDO), Jajpur, to deposit the amount. iv. The BDO challenged the award in FAO No. 229/2017. The High Court set aside the order and remitted the matter for fresh hearing. On 20.02.2020, the Commissioner again directed deposit of ₹6,23,940 with interest. Later, on 07.04.2020, an additional order required payment of ₹4,06,673 as balance interest, though the BDO had already deposited the principal and part interest. v. Aggrieved, the BDO filed FAO No. 96 of 2021 before the Orissa High Court, disputing liability as principal employer, questioning the imposition of excess interest, and alleging violation of natural justice and lack of evidence on wages and age. Page 2 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 SUBMISSION ON BEHALF OF THE APPELLANT:
Legal Reasoning
II. 3. Ms. Gayatri Patra, learned counsel for the Appellant/ State respectfully submits that the deceased was not employed by the Block Development Officer, Jajpur, but by an independent contractor selected in the Palli Sabha. The contractor alone was responsible for engaging labourers, supervising the work, paying wages, and ensuring safety. Therefore, fastening liability on the appellant as principal employer is erroneous in law. 4. It is further submitted that Section 12(1) of the Employees’ Compensation Act creates only a contingent and derivative liability on the principal employer, which arises if the work is part of or incidental to the trade or business of the employer. In the present case, the construction of an Anganwadi building was not part of the ordinary course of business of the Block Development Officer. Hence, statutory liability under Section 12(1) does not arise. 5. The appellant also contends that the Commissioner imposed liability without recording any evidence of control, supervision, or wage payment by the BDO. Such findings are perverse and contrary to settled law. The deceased cannot be treated as an employee of the appellant within the meaning of the Act, and the award of compensation against the BDO is unsustainable. 6. It is submitted that the appellant was not afforded adequate opportunity to lead evidence and contest the claim. The procedure adopted by the Commissioner violated principles of natural justice, Page 3 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 as the matter was decided without proper hearing and without considering the appellant’s defence. 7. The appellant further challenges the imposition of excess interest. The Commissioner himself recorded that the principal amount of ₹6,23,940 and interest of ₹61,026 had already been paid on 26.06.2020. Despite this, an additional direction to deposit ₹4,06,673 as balance interest was passed, which is unjustified and beyond the scope of the statute. 8. Finally, the appellant submits that the Commissioner failed to consider binding precedents of the Hon’ble Supreme Court, which clearly delineate the scope of Section 12 and restrict liability of the principal employer in cases where the work is executed under exclusive supervision of an independent contractor. The impugned orders are therefore liable to be set aside. III. SUBMISSION ON BEHALF OF THE RESPONDENTS: 9. Mr. D.K. MOhapatra, learned counsel for the Respondents submits that the appellant’s plea regarding the non-sustainability of interest is misconceived. The appellant himself admitted in Column No. 5 of the appeal memo that the claimant-respondents had already received the principal compensation of ₹6,23,940 along with accrued interest of ₹61,026 without objection. Once the benefit has been accepted and disbursed, the appellant cannot now deny liability for the balance interest. 10. It is further submitted that the Commissioner for Employees’ Compensation, by judgment dated 18.05.2017, had directed payment Page 4 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 of ₹6,23,940 within 30 days, failing which interest at 12% per annum would accrue from the date of accident (09.02.2015). This order was challenged in FAO No. 229/2017, but the Hon’ble High Court remitted the matter for de novo hearing on 16.08.2019. 11. After fresh hearing, the Commissioner passed judgment dated 20.02.2020 directing deposit of the compensation amount along with 12% interest per annum from the date of accident till deposit. The appellant did not challenge this order within the statutory period. Consequently, on 26.06.2020, the Commissioner disbursed the principal and accrued interest to the claimants without objection from the appellant. 12. When the matter stood thus, the Commissioner by order dated 07.04.2021 directed the appellant to deposit the shortfall interest of ₹4,06,673 within two weeks, failing which appropriate action under Section 31 of the Employees’ Compensation Act would follow. The respondents submit that this direction was fully justified, as statutory interest is mandatory under the Act until full payment is made. 13. The respondents rely on the principle laid down in Branch Manager, New India Assurance Co. Ltd v. Laxman Muduli (2016 (1) TAC 760, Orissa), where it was held that a party cannot approbate and reprobate i.e., accept benefits while denying obligations. The appellant, having allowed disbursement of compensation and interest, cannot now dispute liability for balance interest. Page 5 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 14. It is further submitted that under Section 30 of the Employees’ Compensation Act, existence of a substantial question of law is a condition precedent for maintainability of an appeal. The Hon’ble Supreme Court in T.S. Shylaja v. Oriental Insurance Co. (2014 (1) TAC 381, SC) and North East Karnataka Road Transport Corporation v. Sujatha (2018 (4) TAC 673, SC) has reiterated that appellate jurisdiction is confined to substantial questions of law. The appellant’s grounds do not raise such questions and are barred by the proviso to Section 30. 15. Accordingly, the respondents submit that the appeal is devoid of merit, hit by binding precedents, and liable to be dismissed with costs. IV. FINDINGS OF THE COURT BELLOW: 16. The Commissioner held, on the basis of the FIR, post-mortem report, inquest papers, and the testimony of PW-1 (the widow), that the deceased was working as a labourer under the contractor (Opposite Party No.5) on 09.01.2015. While engaged in demolition of the old building for construction of a new Anganwadi Centre, the building collapsed, causing his death. The accident was found to have arisen out of and in the course of employment. 17. On the issue of wages, the claimant stated that the deceased earned ₹9,000 per month. As the contractor was set ex parte and no documentary proof was produced, the Commissioner applied the prevailing minimum wage and fixed the monthly wage at ₹6,000 for calculation purposes. Page 6 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 18. Regarding age, the claimant asserted 25 years, but the post-mortem report indicated 30 years. The Commissioner accepted 30 years as the age of the deceased at the time of accident. 19. Applying the statutory formula under the Employees’ Compensation Act, the Commissioner calculated compensation as 50% of monthly wages (₹3,000) multiplied by the relevant age factor (207.98), arriving at ₹6,23,940. 20. On liability, the Commissioner observed that although the contractor was primarily responsible, the Block Development Officer (Opposite Party No.1) had sanctioned the work, issued the work order, and supervised execution. Therefore, the BDO was treated as the principal employer under Section 12(1) of the Act and directed to deposit the compensation. 21. The Commissioner ordered that the amount be deposited within 30 days, failing which interest at 12% per annum would be imposed from the date of the accident until payment. Subsequently, additional directions were issued to deposit balance interest, noting that partial payments had already been made. V. THIS COURT’S FINDINGS AND ANALYSIS: 22. The present appeal under Section 30 of the Employees’ Compensation Act, 1923, has been preferred by the Block Development Officer, Jajpur, assailing the judgment dated 20.02.2020 passed by the Commissioner for Employees’ Compensation, Cuttack in E.C. Case No. 59-D/2015, as well as the consequential order dated Page 7 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 07.04.2021 directing deposit of additional interest. The appeal is instituted before this Court. 23. At the outset, it is imperative to note that the appellate jurisdiction under Section 30 of the Act is not one of rehearing on facts. The statute expressly restricts the right of appeal to cases involving a substantial question of law. This legislative restraint reflects the benevolent and summary character of the Act, which prioritizes expeditious relief to dependents of deceased workmen over protracted litigation. Consequently, concurrent or reasoned findings of fact recorded by the Commissioner are ordinarily immune from interference unless demonstrated to be perverse, based on no evidence, or vitiated by a manifest error of law. 24. In the present case, the occurrence of the accident on 09.01.2015, resulting in the instantaneous death of the workman while engaged at the construction site of an Anganwadi Centre, is not in dispute. The Commissioner relied upon the FIR, inquest report, post-mortem examination, and the uncontroverted testimony of PW-1, the widow of the deceased, to conclude that the accident arose out of and in the course of employment. These findings are supported by cogent material and admit of no perversity. They therefore do not give rise to any substantial question of law. 25. The challenge to the determination of wages and age of the deceased is equally devoid of merit. In the absence of documentary proof of actual wages, the Commissioner adopted the prevailing minimum wage, which is a settled and judicially approved approach. Similarly, Page 8 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 the age of the deceased was taken as 30 years on the basis of the post- mortem report, in preference to oral assertions. Both determinations fall squarely within the fact-finding domain of the Commissioner and are consistent with the evidentiary record. 26. The principal jurisprudential issue urged by the appellant relates to fastening liability on the Block Development Officer as a “principal employer” under Section 12(1) of the Act. The appellant contends that the deceased was engaged by an independent contractor selected in a Palli Sabha and that the construction of an Anganwadi Centre does not form part of the “trade or business” of the Block Development Officer. 27. This contention necessitates a purposive interpretation of Section 12. The provision embodies a deliberate legislative policy to protect workmen from the risk of insolvency or default by contractors. It creates a statutory liability on the principal employer where the work contracted out is ordinarily part of, or incidental to, the principal’s trade, business, or undertaking. The expression “trade or business” has consistently received a broad and pragmatic interpretation, particularly where the principal employer is a statutory or governmental authority. 28. In the context of public administration, the “business” of a Block Development Officer cannot be viewed through a narrow commercial lens. Implementation of developmental schemes, including construction of Anganwadi Centres under welfare programmes, is not an extraneous activity but an integral and Page 9 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 statutory function of the Block Development machinery. Such construction work is therefore incidental, if not central, to the official functions of the appellant. To accept the appellant’s restrictive interpretation would render Section 12 otiose in the very class of cases—public works executed through contractors—where labour vulnerability is the highest. 29. Equally significant is the factual finding recorded by the Commissioner that the appellant had sanctioned the work, issued the work order, exercised supervisory control, and retained ultimate authority over execution. The existence of an intermediary contractor does not efface the statutory relationship created by Section 12. The Act does not predicate liability on direct payment of wages or day- to-day supervision, but on the nexus between the principal’s undertaking and the contracted work. The Commissioner’s conclusion that the appellant is the principal employer is thus rooted both in law and in fact. 30. The plea of violation of natural justice is also untenable. The record reveals that the appellant participated in the proceedings, contested the claim, and was afforded opportunity of hearing. Mere dissatisfaction with the outcome cannot be equated with denial of natural justice. The procedure adopted by the Commissioner conforms to the summary yet fair procedure contemplated under the Act. 31. The challenge to the levy of interest requires careful scrutiny. Section 4A of the Act mandates that compensation shall be paid as soon as it Page 10 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 falls due, and in the event of default, interest at the prescribed rate becomes statutorily payable. Once the Commissioner, by order dated 20.02.2020, directed payment of compensation with interest from the date of accident, and the appellant failed to challenge the said order within limitation, the direction attained finality. Partial compliance does not absolve the appellant of liability for the full statutory interest till the date of actual deposit. 32. The subsequent order dated 07.04.2021 merely quantified the shortfall in interest and directed its deposit. Such an order is in the nature of execution or clarification and does not amount to a fresh adjudication giving rise to a new cause of action. The appellant, having allowed disbursement of compensation and part interest without demur, cannot now approbate and reprobate by disputing the balance statutory liability. 33. The jurisprudence governing social welfare legislation mandates that technical objections must yield to substantive justice. The Employees’ Compensation Act is remedial in nature and must be interpreted in a manner that advances its object of securing timely and adequate compensation to dependents of deceased workmen. Any interpretation that enables a principal employer to evade liability by interposing contractors would defeat the very purpose of the statute. 34. In the absence of any substantial question of law, this Court finds no justification to interfere with the well-reasoned orders passed by the Commissioner. The findings on employment, accident, wages, age, liability, and interest are all grounded in evidence and consonant Page 11 of 12 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 with settled legal principles. The appeal, therefore, fails both on maintainability and on merits. VI. CONCLUSION: 35. In view of the foregoing analysis and reasons recorded hereinabove, this Court finds that no substantial question of law arises for consideration in the present appeal under Section 30 of the Employees’ Compensation Act, 1923. Accordingly, F.A.O. No. 96 of 2021 is dismissed. 36. The judgment dated 20.02.2020 passed by the Commissioner for Employees’ Compensation, Cuttack in E.C. Case No. 59-D/2015, as well as the consequential order dated 07.04.2021 directing deposit of balance statutory interest, are hereby affirmed. 37. The appellant/Block Development Officer, Jajpur, having already deposited the principal compensation amount and part interest, is directed to deposit the balance interest amount, if not already deposited, within a period of four (4) weeks from the date of receipt of a copy of this judgment, failing which the Commissioner shall be at liberty to proceed in accordance with law for enforcement and recovery. 38. Interim order, if any, passed earlier stands vacated. Orissa High Court, Cuttack, Dated the 24th Dec.2025 (Dr. Sanjeeb K Panigrahi) Judge Page 12 of 12