The High Court
Case Details
Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Sr.Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 19-Feb-2024 17:43:13 IN THE HIGH COURT OF ORISSA AT CUTTACK FAO No.07 of 2016 (From the award dated 17th November, 2015 passed by the learned Commissioner for Employee’s Compensation and Assistant Labour Commissioner, Rayagada in E.C. Case No. 08 of 2014) Branch Manager, New Assurance Co.Ltd. Rayagada India …. Appellant -versus-
Legal Reasoning
Smt.Kumari Palaka & Ors. …. Respondents Advocate(s) appeared in this case:- For Appellant : Mr. P.K.Panda, Advocate For Respondent : Mr. N.K.Mishra, Senior Advocate for Respondent No.5 CORAM: JUSTICE B.P. ROUTRAY JUDGMENT 18th December, 2023 B.P. Routray, J. 1. dated 17th November, 2015 passed by Present appeal by the Insurer is directed against impugned award the Commissioner for Employee’s Compensation, Rayagada in E.C. Case No. 08 of 2014 on account of death of the deceased workman Sudarsan Palaka in course of and arising out of his employment as a labourer engaged by the FAO No.105 of 2023 Page 1 of 4 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Sr.Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 19-Feb-2024 17:43:13 contractor under Respondent No.5 i.e. M/s. IMFA Ltd., Therubali, Rayagada. 2. It is the contention of the Appellant-Insurer that the insurance policy was taken by Respondent No.5, and not by the contractor, covering ninety un-skilled workers and therefore, the accidental death of the deceased who was engaged by the contractor is not covered within the limits of the policy. 3. The employment of the deceased in the premises of Respondent No.4 is not disputed. Further, the income, age factor and amount of compensation as determined by the Commissioner are not questioned. The only contention of the Appellant, as stated above, is with regard to technicality of issuance of the policy in favour of the employer. In the instant case the status of Respondent No.5 as the principal in terms of Section 12 of the Employee’s Compensation Act, 1923 is never disputed. So the insurance policy taken by him in respect of the employees, whether engaged directly or through the contractor, must cover the risk of accident. For immediate reference it is important here to reproduce Section 12 of 1923 Act, which reads as under:- 12. Contracting-(1) Where any person(hereinafter in this section referred to as the principal) in the course of or for the purposes of his trade or business contracts with any other person (hereinafter in this section referred to as the contractor) for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the trade or business of the principal, the principal shall be liable to pay to any [employee] employed in the execution of the work any compensation which he would have been liable to pay if that [employee] had been immediately employed by him; and where compensation is claimed from the principal, this Act shall apply as if references to the principal were substituted for references to the employer except that the amount of compensation shall be calculated with reference to the wages of the [employee] under employer by whom he is immediately employed. (2) Where the principal is liable to pay compensation under this section, he shall be entitled to be indemnified by the contractor, [or FAO No.07 of 2016 Page 2 of 4 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Sr.Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 19-Feb-2024 17:43:13 any other person from whom the [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 [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. (3) Nothing in this section shall be construed as preventing a [employee] from recovering compensation from the contractor instead of the principal. (4) This section shall not apply in any case where the accident occurred elsewhere that on, in or about the premises on which the principal has undertaken or usually undertakes, as the case may be, to execute the work or which are otherwise under his control or management. 4. Bare perusal of aforesaid provision reveals that the word ‘employer’ is wide enough to include the person contracting with another person for carrying out the work of the contract. This means the Workman may claim compensation from the ultimate employer i.e. the principal for whom the contractor works. Further, section 2(dd) defines the word “employee” and Section 2(e) defines the word “employer”. Section 3 says that employer is liable to pay compensation in accordance with the provisions of the Act. 5. In the present case, according to the claimants, the deceased was engaged by the contractor who was doing the work of Respondent No. 5 at the time of the accident. Hence, Respondent No. 5 became the principal employer. In view of the clear language used in Section 12, the liability being of the principal, the Insurer who has issued the policy in respect of the employees cannot disown to indemnify the liability in respect of any such employee. Therefore, all such FAO No.07 of 2016 Page 3 of 4 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Sr.Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 19-Feb-2024 17:43:13 challenges advanced by the Appellant are seen meritless. The appeal is accordingly dismissed. 6. Since the entire compensation amount including interest has been deposited before the Commissioner, the same along with accrued interest thereon shall be disbursed on favour of the claimants on such terms and proportion as contained in the impugned award. (B.P. Routray) Judge S.Das, Sr.Steno FAO No.07 of 2016 Page 4 of 4