Nangia Construction (India) Pvt. ... vs Union Of India (Uoi) And Ors.
2002 Latest Caselaw 1161 Del

JUDGMENT

S. Mukerjee, J.

IA 11199/92 (Objection of respondent) and IA 10122/92 (Supplementary Objections) and Suit No. 3246/1991.

1. The plaintiff were awarded contract in the work styled 'Providing 7.cm thick semi dense asphaltic concrete on the treated surface of Mall Road Road Extension from Km 12 to 15 from 'Y' Point Azadpur to Jahangir Puri Crossing' vide Agreement No. 48/EE/EWD/88-89, which work was successfully completed by the plaintiff.

2. Certain disputes arose between the parties. Since the said contract contains an arbitration clause, the Defendant No. 2 appointed Sh. V. Nainani Defendant No. 3 as the Sole Arbitrator, to adjudicate upon the disputes that had arisen between the parties vide letter No. 15/12/90-A&C (DA) dt. 8.3.1991, and the Defendant No. 3 entered upon reference on 14.3.91 vide File No. ARB/VN/243.

3. The learned Sole Arbitrator made and published an award dated 30th September, 1991 up to which date, by mutual consent, the time stood duly extended. He awarded on amount of rs. 1,51,857/- with 12% simple interest from the date of the Award till the date of payment or the decree of this Court whichever is earlier.

4. Pursuant to an application filed under Section 14 and 17 of the Arbitration Act 1940, a direction was issued to the Sole Arbitrator to file his Award and proceedings in this Court and the said Award and the proceedings have been so received.

5. The Union of India filed objections to the Award. The initial objections were in the form of IA 11199/92, while certain supplementary objections are No. IA 10122/92. When the matter was taken up for arguments both the counsel agreed that instead of standing on technicalities about the entitlement of the respondent/Objector to file two sets of objections, the matter may be considered and decided on merits.

6. After some arguments, learned counsel for the respondent/Objector fairly conceded that except for one objection which he is vehemently pressing, the other objections, are not really sustainable under Section 30 or 33 of the Arbitration Act, 1940.

7. In these circumstances I propose to deal only with the one objection which survives for consideration, viz in relation to amount of Rs. 67,914/- which had been deposited by the Union of India, with the Office of the Authority under Workmen Compensation Act in relation to the death of one workman who died in an accident.

8. The plaintiff had claimed a sum of Rs 67,914/-, withheld for payment as compensation to a workman who had died in an accident at the site of work. The Ld. Arbitrator held as under:-

I am thus of the opinion that withholding of the assessed amount of compensation would not be justified any longer. I however allow a further period of 3 months from today to the respondent to pursue and get the case settled with WCA Commissioner failing which I direct that the withheld amount of Rs. 67,914/- be released to the claimant. The claimant shall thereafter directly discharge the liability in this regard as adjudicated by WCA Commissioner."

9. The objection of the Union of India is that notwithstanding Union of India having paid the corresponding amount as is prescribed by the statutory provisions of the Workmen Compensation Act, still the learned Sole Arbitrator has held that the payment of the petitioner (contractor and immediate employer of the deceased workman) could not be withheld to the corresponding extent.

10. Section 8 of the Act, inter-alia, stipulates that no payment of compensation in respect of a workman whose injury has resulted in death and no payment of a lump sum as compensation to a woman or a person under a legal disability, shall be made otherwise then by deposit with the Commissioner and no payment shall be made directly by an employer shall deemed to be a payment of compensation. For ready reference the relevant part of Section 8 of the Act is set out hereinbelow:-

"8. Distribution of compensation.-(I) No payment of compensation in respect of a workman whose injury has resulted in death, and no payment of a lump sum as compensation to a woman or a person under a legal disability, shall be made otherwise than by deposit with the Commissioner, and no such payment made directly by an employer shall be deemed to be a payment of compensation:"

11. Strong reliance has also been placed by the Union of India upon Clause IA of the agreement which stipulates as under:-

"In every case in which by virtue of the provisions of Section 12, Sub-section (i) of the Workmen's Compensation Act, 1923, Government is obliged to pay compensation to a workman employed by the contractor, in execution of the work, Government will recover from the contractor the amount of the compensation so paid; and, without prejudice to the rights of the Government under Section 12, Sub-section (ii) of the said Act, Government 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 Government to the contractor whether under this contract or otherwise. Government shall not be bound to contest any claim made against it under Section 12, Sub-section (i) of the said Act, except on the written request of the contractor and upon his giving to Government full security for all costs for which Government might become liable in consequence of contesting such claim.

12. Section 19 of the Act stipulates that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation, including the question as to whether the person injured is a workman or not, or as to the amount or duration of compensation, including any question as to the nature or extent of disablement, the question shall be settled only by the Commissioner. For ready reference Section 19 set out hereinbelow:-

"19. Reference to Commissioners.- (1) If any question arises in any proceedings under this Act as to the liability of any person to pay compensation (including any question as to whether a person injured is or is not a workman) or as to the amount or duration of compensation (including any question as to the nature or extent of disablement), the question shall, in default of agreement be settled by [a Commissioner].

(2) No civil court shall have jurisdiction to settle, decide or deal with any question which is by or under this Act required to be settled, decided or dealt with by a Commissioner or to enforce any liability incurred under this Act."

13. As a perusal of the above clause and statutory provisions will reveal the Union of India as the principal employer under the agreement had the authority and rather the duty to make payment of any claim for workman compensation of the nature of a death of a workman of the contractor, as had happened in the present case. It was not obligatory for the Union of India to have necessarily contested the matter, and/ or to have awaided a judicial/quasi-judicial finding that the compensation is payable.

14. The learned Sole Arbitrator has proceeded to hold that the amount to that extent was wrongly withheld from the due payments outstanding towards the petitioner only on the reasoning that from time to time the learned Sole Arbitrator had adjourned the matter and had waited for considerable period to enable the Union of India to get a Court order/direction authorising the payment in relation to the said compensation amount of Rs. 67,917/-, which amount had been deposited by the Union of India pursuant to the death of the workman in an accident.

15. Learned counsel for the petitioner while supporting the Award elaborated on this aspect further by contending that unless and until the petitioner/contractor had been associated with such an adjudication, the compensation would not be payable on its account, and hence the deduction was illegal. Learned counsel for the petitioner further submits that since the workman died in an accident which took place at 2.30 in the night, and according to him the workman was not on duty at that time and the accident was a normal accident of a truck running over the workman as such therefore, the compensation itself was not payable on the merits. According to him Union of India ought to have contested the matter, more so because according to him there was some internal inquiry conducted by the officers of the concerned department of the Union of India which had absolved the contractor of blame in this behalf.

16. It is well settled that an Arbitrator cannot go to the contrary provisions of the contract itself. Neither could the arbitrator have ignored the statutory provisions quoted above. Moreover in this case the provisions of Clause 18A of the contract are very clear. In the event of a claim arising under Section 12A of the Workmen's Compensation Act, the amount computed as per the provisions of the said Act, was required to be deposited with the Authority under the Workmen Compensation Act, and it was not at all obligatory for the Union of India to have contested the claim.

17. In fact, it was the petitioner/contractor who, instead of waiting for being invited/imp leaded by the Union of India, should have applied for impleadment in those proceedings or taken such other steps and/or recourse as were available to respondent to establish before the Workmen Compensation Authority that no amount whatsoever was payable by the employer in relation to the death by accident of the workman in question, either on the ground of the accident being one not arising out of during or in the course of employment or otherwise on any other legal or factual ground.

18. The petitioner/contractor not having done so and the Union of India having actually deposited the amount with the Authority under the Workmen Compensation Act as contemplated by the said statutory provisions as well as the contract between the parties, therefore the action of holding of the payment to the corresponding extent by the Union of India, was entirely in accordance with the contractual provisions applicable and rather binding upon them. Therefore the Award suffers from error apparent on the face of the record in as much as the Sole Arbitrator has held the deduction to be unwarranted an has directed the Union of India to pay the corresponding amount which in fact means that Union of India will have to make the payment twice over in relation to the amount of Rs. 67,914/-.

19. It was submitted by learned counsel for the petitioner that upon the amount being deposited suo motu, the legal heirs of the deceased workman simply came before the Workmen Compensation Authority, who thereupon permitted them to withdraw the amount and now they have gone and the amount has become recoverable. In as much as the petitioner (immediate employer of deceased workman) was all along aware of the pendency of the proceedings before the Authority under the Workmen Compensation Act and could have participated therein, and/or could even have filed such independent proceedings for restitution of amount by obtaining the declaration of a competent court that the amount was not payable to the legal heirs of the deceased workman, but still the respondent/contractor preferred to restrict himself to only one limb of the contract i.e. between himself and the Union of India, while pretending ignorance and showing no action vis-a-vis the other limb viz. the proceedings before the authority under the Workmen Compensation Act, it follows that the respondent so acted on it's own peril and could not have objected to the deduction made by the Union of India.

20. Resultantly the Award to the extent of this amount of Rs. 67,914/-, is set aside by allowing the objections of the Union of India to this extent. Since the Award on the other points is severable, as such on all other accounts the objections are dismissed and the Award dated 30.9.1991 is made a Rule of the Court except to the extent of Respondents claim regarding Rs. 67,914/- in relation to which claim, the award stands as set aside. Parties are left to bear their own costs.