Delhi High Court
Brijesh Kumar Verma vs Aurangjeb & Anr. on 20 December, 2017
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 20th December, 2017
+ FAO 345/2016 and CM Appln.26849/2016
BRIJESH KUMAR VERMA ...... Appellant
Through: Mr. Harvinder Singh, Mr.Jatin
Kumar, Advocates
versus
AURANGJEB & ANR. ..... Respondents
Through: Ms. Pratima N. Chauhan,
Advocate for respondent no.1.
Mr.Sanjoy Ghose, ASC for
GNCTD.
CORAM:
HON'BLE MR. JUSTICE J.R. MIDHA
JUDGMENT
1. The appellant has challenged the order dated 6 th May, 2016
passed by the Commissioner, Employees‟ Compensation whereby
compensation of Rs.10,69,008/- along with interest @ 12% per annum
has been awarded to respondent no.1.
2. The appellant is the owner of property bearing No.BU-48,
Pitampura, Delhi on which a four storey building was being
constructed in March 2012. On 6th March, 2012, the roof (lintel) of
the third floor was being laid. Respondent no.1 and his father were
working as labourers on the construction site, along with 12-13 other
labourers. According to respondent no.1, the contractor Gulab Singh
(respondent no.2) instructed respondent no.1 to climb the wall of the
third floor and club the grease of the lift with a cord from the bamboo
whereupon respondent no.1 and another labourer told the contractor
that the wall was weak and wet and would fall down. On the
insistence of the contractor Gulab Singh, respondent no.1 climbed the
wall whereupon wall broke and respondent no.1 fell down and
suffered grievous injuries namely compression fracture of L1
vertebrae and olecranon fracture of the left elbow along with tendon
deformity in both lower legs. Respondent no.1 was admitted to Hindu
Rao Hospital. The injuries suffered by respondent no.1 resulted in
80% permanent disability relating to both lower limbs due to post-
traumatic paraplegia as per the disability certificate dated 12 th April,
2013. Police Station, Maurya Enclave registered FIR No.75 dated 6 th
March, 2012 under Sections 288/337 against the contractor, Gulab
Singh (respondent no.2) in which charge sheet has been filed.
3. On 22nd August, 2012, respondent no.1 filed an application for
compensation before the Commissioner, Employees‟ Compensation
against the appellant as well as respondent no.2. Respondent No.1
claimed that the accident arose out of and during the course of his
employment. Respondent No.1 claimed compensation according to his
age of 21 years, wages of Rs.10,500/- per month @ Rs.350/- per day
and 100% permanent disability.
4. The appellant contested the compensation application on the
ground that the appellant had given the contract for construction of the
stilt parking and a four storey building to respondent No.2 vide
agreement for construction dated 10th August, 2011 and, therefore, the
appellant was not liable to pay any compensation to respondent No.1.
The appellant filed an application for being deleted from the array of
the parties which was dismissed by the Commissioner vide order dated
2nd May, 2013.
5. Respondent no.2 contested the application for compensation on
the ground that he had given the sub-contract for construction to
Mohd. Rahil who had employed respondent no.1. Respondent no.2,
however, admitted having taken respondent no.1 to the hospital where
he spent Rs.85,000/- on the treatment of respondent no.1. Respondent
No.2 filed an application for impleading Mohd. Rahil as a respondent
which was dismissed by the Commissioner vide order dated 2 nd May,
2013.
6. On 21st December, 2012, the appellant filed an application
seeking direction to the Medical Superintendent of Aruna Asaf Ali
Hospital, Delhi to examine respondent No.1 and assess his disability
and issue a disability certificate in pursuance to which on 21 st
February, 2013, the Commissioner directed the Medical
Superintendent of Aruna Asaf Ali Hospital to examine respondent
No.1 and issue the certificate.
7. On 12th April, 2013, the Medical Superintendent of Aruna Asaf
Ali Government Hospital issued a certificate assessing the permanent
disability of respondent No.1 as 80% in respect of both lower limbs
due to post-traumatic paraplegia. The relevant portion of the said
certificate is reproduced hereunder:-
―GOVERNMENT OF NCT OF DELHI
OFFICE OF MEDICAL SUPERINTENDENT
ARUNA ASIF ALI GOVERNMENT HOSPITAL
5, RAJPUR ROAD, DELHI-54
No.1262 Dated:12.04.2013
CERTIFICATE FOR THE PERSONS WITH DISABILITIES
This is to certify that Sh/Smt./Km. Aurangjeb Son/wife/Daughter of
Sh. Harun Age 22 years old male/female, registration no.23964 is
a case of Post Traumatic Paraplegia. He/She is physically
disabled/visual disabled/speech disabled and has 80% (Eighty
percent) permanent (Physical impairment/visual
impairment/speech & hearing impairment) in relation to his/her
Both lower limbs
Note:
1. This condition is progressive/non-progressive/ likely to
improve/ not likely to improve.
2. Re-assessment is not recommended/is recommended after
a period of _________Months/years.
(Strike out which is not applicable)
Signed/- Signed/- Signed/-
Specialist Specialist Specialist
Dr. B. Kanhar Dr. V.S. Rawat Dr. Rajender
M.S. (Ortho) Specialist Medicine Singh‖
Sr. Ortho Specialist & HOD DMC Reg. No.2653
(Ortho) Member Disability
Reg. No. 10361-DMC Board
Aruna Asif Ali Govt. Hospital
5, Rajpur Road, Delhi-110054
8. The Commissioner, Employees‟ Compensation held that
respondent no.1 suffered grievous injuries in the accident while
working on the construction of building for the appellant and the
accident arose out of and during the course of his employment with
respondent no.2. The Commissioner took the upper-wage limit of
Rs.8,000/- per month, respondent no.1‟s age of 21 years at the time of
the accident and the factor of 222.71. The permanent disability of
respondent no.1 was assessed by the Medical Board as 80% relating to
both limbs due to post-traumatic paraplegia. However, considering
that respondent no.1 was unable to do any physical work, the
Commissioner took the loss of earning capacity as 100%. The
Commissioner, Employees‟ Compensation held that respondent no.1
was entitled to compensation of Rs.10,69,008/- along with interest @
12% per annum. The Commissioner held the appellant liable to pay
compensation to respondent No.1. The Commissioner gave liberty to
the appellant to recover the amount from respondent no.2 or any other
person liable according to the appellant by invoking Sections 12 and
13 of the Employee‟s Compensation Act.
9. Vide order dated 09th January, 2017, this Court requisitioned
the record of FIR No.75/2012 dated 06th March, 2012 under Section
288/338 IPC, P.S. Maurya Enclave, Delhi in pursuance to which the
relevant record of the FIR No.75/2012 was produced before this
Court on 16th May, 2017. The record of the FIR No.75/2012 contains
the statement made by the appellant before the police on 03 rd
September, 2012 under Section 161 Cr.P.C. The appellant stated
before the police on 03rd September, 2012 that there was no written
agreement between him and Gulab Singh. Translation of the statement
of the appellant before the police under Section 161 Cr.P.C is
hereunder:
―Case FIR No.75/2012 dated 06.03.12 u/s 288/338 IPC P.S.
Maurya Encalve, Delhi
Statement of Brijesh Kumar Verma s/o R.T.Verma r/o BU-48
Pitam Pura, Delhi
U/S 161 CRPC
I am the current resident of abovementioned address
and I am doing my private work and I had given the
construction work of my house no. BU-48 Pitam
Pura, Delhi to contractor Gulab Singh s/o Ram
Singh r/o T-133 Mangol Puri, Delhi at the rate of
Rs.115 per square feet. Gulab Singh started
construction work of my house in October, 2011 and
at that time there was no written agreement between
us.
You have taken my statement which is correct.
Singed
H.C. Satbir 60/NW
P.S. M. enclave
3.9.12‖
10. Learned counsel for the appellant urged at the time of the
hearing that respondent no.1 was employed by respondent no.2 who
alone was liable to pay the compensation to the petitioner. Reference
was made to the construction agreement dated 10th August, 2011
between appellant and respondent no.2 under which respondent no.2
was responsible for the accident during construction. It was further
submitted that respondent no.2 had appointed a sub-contractor, Rahil
who in turn had employed respondent no.1. It was further submitted
that the appellant cannot be held liable to pay the compensation under
Section 12 of the Employees‟ Compensation Act because the
construction of the residential house was not part of his trade or
business. The appellant disputed the income of respondent no.1 taken
by the Commissioner, Employees‟ Compensation. The appellant
further disputed the permanent disability of 80% assessed by the
Medical Board and the loss of earning capacity of 100% assessed by
the Commissioner. Reliance was placed on Bharat Earth Movers Ltd.
v. Bhagyamma, 1975 A.C.J. 113, Dr. B. Radhakrishna v.
Gouramma, 2000 (85) FLR 388, Lakshminarayana Shetty v.
Shantha, 2002 III LLJ 523, Ajay Singh Lal v. Somwati, 116 (2005)
DLT 421, Om Parkash Batish v. Ranjit, II (2008) ACC 462 (SC),
Management, Sirishad Construction (P) v. C.P. Ravinder, 2000 LAB
I.C. 1817 and Kolhan Samvedak Sangh v. State of Jharkhand, 2017
(154) FLR 298.
11. Learned counsel for respondent no.1 urged at the time of the
hearing that respondent no.1 was an "employee" within the meaning of
Section 2(1)(dd) of the Employees‟ Compensation Act. It was
submitted that the definition of "workman‖ in Section 2(1) (n) of the
Workmen‟s Compensation Act was amended in the year 2000. It was
submitted that Section 2(1) (n) of the Workmen‟s Compensation Act,
1923 was amended by Workmen‟s Compensation (Amendment) Act,
2000 with effect from 8th December, 2000 whereby the words "other
than a person whose employment is of a casual nature and who is
employed otherwise than for the purposes of the employer's trade or
business" in the definition of ‗workman' in Section 2(1) (n) were
omitted. The effect of the omission of words "other than a person
whose employment is of a casual nature and who is employed
otherwise than for the purposes of the employer's trade or business"
in the definition of workman in Section 2(1)(n) by the amendment in
2000 is that a person whose employment is of a casual nature and is
employed other than for the purposes of the employer‟s trade or
business, would be covered within the meaning of ―employee‖ as
defined in Section 2(1)(dd) of the Employees Compensation Act and
entitled to compensation against the principal under section 12 of the
Employees Compensation Act. Reliance was placed on Govind
Goenka v. Dayawati, 2013 ACJ 1897 in which this Court held that
after the amendment, the workman whose employment is of casual
nature and who is employed otherwise than for the purpose of
employer's trade or business, would also be covered within the
definition of "workman‖. Reliance was also placed on Public Works
Department v. Commissioner, Workmen Compensation, 1981
Lab.I.C. 493 in which Division Bench of Jammu and Kashmir High
Court held that the word "business" in Section 12 has to be given an
extended meaning, so as to include even an activity which engages
time, attention or labour as a principal serious concern or interest of an
individual without an element of profit in it. The Response of
respondent no.1 to the judgments relied upon by the appellant is as
under:-
11.1. In Bharat Earth Movers Ltd. v. Bhagyamma (supra) relied
upon by the appellant, the Karnataka High Court exonerated the
principal holding that the construction of the building was not
ordinarily a part of trade or business of the appellant who was engaged
in the business of manufacture of earth moving machinery. This
judgment does not help the appellant as it relates to an accident in
1969 i.e. prior to the Workmen‟s Compensation (Amendment) Act,
2000.
11.2. In Dr. B. Radhakrishna v. Gouramma (supra) relied upon by
the appellant, the Karnataka High Court held that a person
constructing a residential building cannot be held liable unless it is
shown that he had given a contract and he was the principal employer.
This judgment does not help the appellant as it relates to an accident in
1990 i.e. prior to the Workmen‟s Compensation (Amendment) Act,
2000.
11.3. Lakshminarayana Shetty v. Shantha (supra) also relates to
case prior to Workmen‟s Compensation (Amendment) Act, 2000 by
which the words "other than a person whose employment was of
casual nature" were omitted.
11.4. In Ajay Singh Lal v. Somwati (supra), the owner of a
residential house was exonerated from the liability under Section 12 of
the Act on the ground that the construction work was ordinarily not
part of the ‗trade or business' of the owner. This judgement also
relates to an accident prior to Workmen‟s Compensation
(Amendment) Act, 2000.
11.5. All the aforesaid four judgments relied upon by the appellant
relates to the accidents prior to the Workmen‟s Compensation
(Amendment) Act, 2000 whereas the present case relates to an
accident after the 2000 amendment, which came into force on 8th
December, 2000. Workmen‟s Compensation (Amendment) Act, 2000
deleted the words ‗trade or business' from the definition of the word
‗workman'. In Govind Goenka v. Dayawati (supra), this court held
that the effect of omission of ―trade or business‖ from the definition
of ―workman‖ meant that the owner shall be liable even in respect of
the work other than his trade or business.
11.6. Bharat Earth Movers Ltd. v. Bhagyamma (supra), Dr. B.
Radhakrishna v. Gouramma (supra), Ajay Singh Lal v. Somwati
(supra) and Lakshminarayana Shetty v. Shantha (supra) did not
consider the interpretation of the word ―business‖ in Section 12. The
word ‗business' in Section 12 has been interpreted in Payyannur
Educational Society v. Narayani (supra), Public Works Department
v. Commissioner, Workmen Compensation (supra), Bala Mallamma
v. Registrar, Osmania University (supra), Govind Goenka v.
Dayawati (supra), Raj Pal Saini v. Kamla (supra) to include an
activity which engages time, attention and labour.
11.7. In Om Parkash Batish v. Ranjit (supra), the Supreme Court
dealt with the question as to whether a casual employee would be a
―workman‖ within the meaning of Section 2(n) of the Workmen‟s
Compensation Act, 1923 in respect of an accident dated 30 th June,
1996. The Supreme Court held that the person, whose employment
was of casual nature, was specifically excluded in the definition of
workman under Section 2(n) of the Workmen‟s Compensation Act,
1923. The Supreme Court further held that the words "other than a
person whose employment was of casual nature‖ were omitted by an
amendment in 2000 but the amendment would not apply to an
accident occurred prior to the date on which amendment came into
force. The Supreme Court clearly recorded in para 22 of the judgment
that they were considering the statutory provision prior to the
amendment of 2000 by which the words "other than a person whose
employment was of casual nature" were omitted.
11.8. In Management, Sirishad Construction (P) v. C.P. Ravinder
(supra), the employee suffered hearing loss of 20% as per the medical
certificate issued by a doctor. The Commissioner, Employees‟
Compensation held the loss of earning capacity to be 70%. The
Andhra Pradesh High Court set aside the order and remanded back the
matter to the Commissioner. This judgement does not help the
appellant as the claimant in that case was not examined by the Medical
Board of a Government Hospital whereas in the present case, the
Commissioner, Employees‟ Compensation directed the Medical
Superintendent of Aruna Asif Ali Hospital, Delhi on 21 st February,
2013 to examine respondent No.1 and certify his disability in
pursuance to which the Medical Board examined the injured-claimant
and issued the disability certificate dated 12th April, 2013.
11.9. In Kolhan Samvedak Sangh v. State of Jharkhand (supra), this
Court held the contractor liable to pay the cess and dismissed the writ
petition of the contractor for seeking refund of 1% cess deducted by
the Rural Works Department. This judgment is not relevant with
respect to the liability of an owner of a residential house to pay the
compensation under Section 12 in respect of the death/injury to the
employee employed through the contractor.
12. Vide order dated 9th January, 2017, Mr. Sanjoy Ghose, learned
Additional Standing Counsel for Govt. of NCT of Delhi was directed
place on record the safety requirements for construction workers and
the legal position with respect to the responsibilities for failure to
comply with the legal norms and standards. Learned Additional
Standing Counsel was also directed to give suggestions with respect to
the responsibility of the owners of the building who carry out
construction without any safety measures for building workers.
13. Mr. Sanjoy Ghose submitted a note with respect to the various
statutes applicable to the construction workers and suggestions for
ensuring the safety of the construction workers. It was submitted that
the definition of "workman‖ in Section 2 (1) (n) of the Workmen‟s
Compensation Act was amended in the year 2000 to include the
workers whose appointment were of casual nature and who were
employed otherwise for the purpose of employers ―trade or business‖.
It was submitted that the rules of purposive construction, liberal
interpretation and cessante ratione legis, cessat et ipsa lex would
apply to interpret the amendment of Section 2 (1) (n). Reliance was
placed on Workmen of American Express v. Management of
American Express, AIR 1986 SC 458, Union of India v.
Prabhakaran Vijaya Kumar, (2008) 9 SCC 527, Kunal Singh v.
Union of India, (2003) 4 SCC 524, B.D. Shetty v. CEAT Ltd., (2002)
1 SCC 193, Transport Corporation of India v. ESI Corporation,
(2000) 1 SCC 332, Regional P.F. Commissioner v. Hooghly Mills
Co. Ltd., (2012) 1 SCR 363 and H.H. Shri Swamiji Shri Admar Mutt
Etc. v. The Commissioner, Hindu Religious & Charitable
Endowments Department, (1980) 1 SCR 368. Mr. Sanjoy Ghose also
submitted a note on the meaning of ―trade or business‖ in Section 12
and the legal effect of the omission of words "trade or business‖ from
the definition of "employee" in Section 2(1)(dd) of the Employees‟
Compensation Act on Section 12 of the Employees‟ Compensation
Act. It was submitted that the word "business‖ in Section 12 has been
interpreted by the Division Bench of Andhra Pradesh High Court in
Balla Mallamma v. Registrar, Osmania University, Hyderabad, 2001
(2) T.A.C. 182 (AP) 11 and Govind Goenka v. Dayawati (supra), in
which this Court held that the word ―business‖ has to be given
extended meaning to include an activity that engages time, attention or
labour.
14. During the course of the hearing dated 31 st July, 2017, this
Court considered the applicability of Building and Other Construction
Workers (Regulation of Employment and Conditions of Service) Act,
1996 which applies to residential buildings in which more than 10
workers are employed on any day during preceding 12 months and the
total cost of the construction is more than Rs.10 lakh. The appellant
admitted that he spent more than Rs.10 lakh in the construction of the
building but disputed the applicability of the Act on the ground that
the building workers employed by the contractor never exceeded 10.
The relevant portion of the order dated 31st July, 2017 is reproduced
hereunder:
―1. Arguments heard with respect to the applicability of
Building and Other Construction Workers' (Regulation of
Employment and Conditions of Service) Act,1996 to residential
buildings in which more than 10 workers are employed on any
day during 12 months and the cost of the building is more than
Rs.10,00,000/- and scope of Section 45(2) which imposes the
responsibility of payment of the compensation under the
Employee's Compensation Act on the owner as defined in
Section 2(i), if the contractor fails to make the payment of
compensation in respect of the building workers.
2. Mr. Harvinder Singh, leaned counsel for the appellant
admits that the appellant spent more than Rs.10,00,000/- in
construction of the building but the building workers employed
by the contractor never exceeded 10.
3. At this stage, this Court considered necessary to examine
the appellant on oath. The appellant has been partly examined
to ascertain the cost of construction and the number of workers
employed in the construction of the building.‖
(Emphasis supplied)
st
15. On 31 July, 2017, this Court examined the appellant under
Section 165 of the Indian Evidence Act when the appellant deposed
on oath that only 4-5 persons worked on the site during construction
The statement of the appellant recorded by this Court on 31 st July,
2017 is reproduced hereunder:
―Statement of Brijesh Kumar Verma, S/o late Sh. Tirath Verma,
R/o. BU-48, Pitampura, Delhi.
On SA
I awarded the contract for construction of
residential house at property No.BU-48,
Pitampura, New Delhi in September, 2011 to
respondent No.2. The construction of the building
was completed in January, 2013. I incurred cost of
Rs.40,00,000/- to Rs.45,00,000/- in the
construction of this building. I paid approximately
Rs.5,50,000/- to the contractor Gulab Singh. I
visited the property approximately about 25-30
times during the course of the construction.
Whenever I visited the property, only 4-5 persons
(1-2 mistari and 2-3 workers) were doing the
construction work.‖
16. Respondent no.1, in his cross-examination dated 10th December,
2014, had stated that more than 30 workers were working on the site
and 12-13 labourers were present on the date of accident. Relevant
portion of the cross-examination of respondent no.1 is reproduced
hereunder:
―It is correct that I was daily wage labourer. My father is
also a daily wage labourer. It is correct that I was part of
labours who were in supposed to put linter in BU-48,
Pitam pura, delhi and I was called my Md. Rahil as well
as Sh. Gulab Singh. 30 more workers were working with
Mohd. Rahil......
xxx xxx xxx
.........On that day i.e. 06.03.2012, I was working on the
3rd floor of the premises. It is incorrect that I was
specifically called for putting up of linter in the said
premises and I did not do any other work......12-13 other
labourers were present on the date of accident‖
17. On 11th August, 2017, this Court heard the arguments on the
applicability of BOCW Act to the present case. It was submitted on
behalf of the appellant that the appellant was the owner of the building
but he was not an employer as defined in Section 2(1) (i) of BOCW
Act. It was further submitted that respondent no.2 (contractor) was
the employer for the purpose of Section 2(1) (i) of BOCW Act. It was
further submitted that the owner of the building can be held liable only
when the owner himself carries on the construction activity on his
premises but when the construction is carried out through the
contractor, the contractor will be deemed to be the owner. It was
further submitted that the appellant was not liable to pay compensation
under Section 45 of the BOCW Act. It was further submitted that the
liability, if at all, will arise if the contractor fails to make the payment.
18. The submissions of respondent no.1 with respect to the BOCW
Act are that the Act applies to every establishment where 10 or more
building workers were employed in the building or other construction
work; ―building or other construction work‖ has been defined in
Section 2(1)(d) of the BOCW Act; the term "employer‖ has been
defined in Section 2(1)(i) of the BOCW Act which defines employer
to mean owner and includes the contractor in relation to an
establishment; ―establishment‖ has been defined in Section 2(1)(j)
which only excludes the construction work of the residential house by
the owner himself where the cost of construction is less than Rs.10
lakh; and Section 45 imposes the liability of payment of compensation
on the employer as defined in Section 2(1)(i) . It was submitted that
the appellant was the employer and clearly liable to pay the
compensation under Section 45 of the BOCW Act as the cost of
construction was more than Rs.10 lakh and more than 10 employees
were employed in the construction work.
19. Mr. Sanjoy Ghose, learned Additional Standing Counsel for
GNCTD urged at the time of the hearing that BOCW Act applies to
private construction of residential building where the cost of such
construction is more than Rs.10 lakh and more than 10 building
workers had been employed on any day in the preceding 12 months.
The ―employer‖ defined in Section 2(1) (i) of BOCW Act specifically
includes the owner. Section 58 of the BOCW Act clearly provides
that the provisions of Employee‟s Compensation Act shall apply to the
building workers. Section 45 of the BOCW Act makes the contractor
and employer liable to pay the compensation to the building worker.
The appellant, being the owner of the building, is an ―employer‖
within the meaning of Section 2(1) (i) and is liable to pay the
compensation under Section 45 of the BOCW Act.
20. Liability of the principal under Section 12 of the Employee's
Compensation Act
Section 12 of the Employee‟s Compensation Act imposes the liability
of payment of compensation on the principal with right to recover the
same from the contractor in respect of work being carried out by the
contractor. Section 12 of the Employee‟s Compensation Act is
reproduced hereunder:
―Section 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 the 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
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 an
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.‖
(Emphasis supplied)
21. Object of Section 12 of the Employee's Compensation Act
The object for enacting the Employees‟ Compensation Act even as
early as 1923 was to ameliorate the hardship of economically poor
employees who were exposed to risks in work, or occupational
hazards by providing a cheaper and quicker machinery for
compensating them with pecuniary benefits. Section 12 safeguards
the right to compensation when the employer delegates the work to
another person. Section 12 is intended to secure to an employee the
right to claim compensation not only against his immediate employer
who, in the Act, is referred to as a contractor, but also against the
person who had employed such contractor to execute the work. The
Act refers to him as the principal. The main object of enacting Section
12 of the Act is to secure compensation to the employees who have
been engaged by the principal employer through a contractor for the
work which the principal employer is supposed to carry out. If a
person substitutes another for himself to do his work, he ought not to
escape the liability which would have been imposed upon him, if he
had done it himself. The intention of the Legislature in enacting
Section 12 provision appears to be that the injured employee or the
dependent of a deceased employee who has been awarded
compensation by the Commissioner, should not be put to any
difficulty in realising such amount of compensation on account of any
recalcitrance of the employer or on account of the vicissitudes of his
(the employer‟s) financial position. The Employees‟ Compensation
Act, 1923 is a piece of social beneficial legislation and its provisions
have to be interpreted in a manner so as not to deprive the employees
of the benefit of the legislation. Reference be made to Bhutabhai
Angadbhai v. Gujarat Electricity Board, 1987 (1) L.L.N. 156; M.R.
Mishrikoti v. Muktumsab Hasansab Asoti, (1972) 2 Mys LJ 449;
Koli Mansukh Rana v. Patel Natha Ramji, 1992 ACJ 772;
Payyannur Educational Society v. Narayani, (1996) 72 FLR 709;
Public Works Department v. Commissioner, Workmen
Compensation, (supra); Koodalingam v. Superintending Engineer,
Project Circle, Public Works Department, Kozhikode, 1994 (2)
L.L.N. 779; Sardar Sewa Singh v. Hindustan Lever Ltd., 1980 (1)
L.L.N. 566 and Executive Engineer/Deputy General Manager, Sub
Urban Division, DHBVNL, Bhiwani v. Priyanka, 2017 (153) FLR
302 in which the Courts have examined the scope of Section 12.
22. Section 12 of the Act has, in effect, stretched the contours of the
word "employer‖ wider as to include the person contracting with
another person for carrying out the work of the former. In such cases,
the provision enjoins that the principal shall stand substituted as the
employer. This is achieved by the words "where compensation is
claimed from the principal, this Act shall apply as if references to the
principal were substituted for references to the employer". The
principal may have a claim for indemnity from his contractor or
delegatee but the victim or his dependents are not to be involved in
such disputes.
23. Section 12 will apply notwithstanding the agreement or contract
entered into between the principal and contractor regarding their
liability for payment of compensation under the Act. The agreement or
contract between the principal and the contractor shall govern only
their inter-se rights and liabilities, and cannot affect the right of the
employee or the dependants of the employee, to get the compensation
from the principal or from the contractor at their option.
24. Section 12 secures compensation to the employee who cannot
fight out his battle for compensation by a speedy process. A person
who employs others to advance his own interest is expected to provide
a surer basis for payment of the injured employee than the
intermediary, who may often turn out to be a man of straw, from
whom compensation may not be available. This is the purpose for
which the claimant is given the option under section 12 (3) of the Act
to claim the compensation either from the principal or from the
contractor.
25. The contractor may not be a man of means or he may be merely
a man of straw or it may be that wittingly or unwittingly he may
possibly be part of an arrangement conceived by the principal to avoid
confrontation directly with the employee engaged in the execution of
the work. In either case, the interests of the employee need to be
protected and that is what this provision secures to the employee. The
principal can seek indemnification from the contractor if he has been
made answerable for the payment of compensation. The right of the
principal to be indemnified has thus been incorporated under Section
12 (2), who has entrusted the work to the contractor stipulating the
right of indemnification under the Act.
26. Section 12 of the Act gives protection to the employee in case
of an accident and secures compensation from the persons who can
pay, so that such employee will not be dependent upon a petty
contractor(s) who may themselves not be able to pay compensation on
account of their financial inability.
27. Section 12 is an enabling provision for the benefit of the
employee(s) and enacted with the clear objective that the employee(s)
should not be hampered by technicalities or practical difficulties of
deciphering the correct employers. A pragmatic method has thus been
devised for fixing the liability of the principal employer and thereby
affording speedy relief to the employee for payment of compensation
on account of the accident, though the principal has been invested with
the right of indemnifying himself from the contractor who may have
employed the employee and may have been responsible for taking
work from him.
28. Interpretation of the words "trade or business‖ in Section 12
The words ―trade or business‖ used in Section 12 of the Act have to
be understood in the context in which this Act was enacted. The Act
was enacted to provide compensation to the employees suffering
during the course of their employment. It was also the purpose of the
Act that the employees should get speedy remedies and it appears that
the intention of enacting Section 12 of the Act was only to ensure that
compensation is paid by the principal expeditiously and if this purpose
of the Act and the provision is kept in mind, then the words ―trade‖ or
―business‖ may not have the same meaning which they would have,
for instance, when used in interpreting a taxing statute. The word
"trade" connotes commercial activity whereas the word "business" is
of much wider import and may be used in different contexts in
different senses. Used in one context, it may imply a particular
occupation or employment to earn livelihood or gain, whereas used in
a different context it may mean an activity which engages time,
attention, or labour as a principal serious concern or interest. Its
connotation may thus vary with the varying contexts in which it is
used. In taxing statutes for instance, the word "business" will always
denote an activity carried out with the object of earning profit, though
the same may not be true when used in relation to other activities. The
meaning of these two crucial words in Section 12 has to be understood
in the context of its object. The word "business" in the Section 12 need
not be restricted to what is synonymous with ―trade‖. The use of the
conjunction ‗or' should be understood as disjunctive for covering
totally different areas unconnected with ―trade‖. The word "business"
has different shades of meanings. Among them, the most suitable in
the present context is the meaning task, duty, concern or undertaking
to do a work. The word "business" in its wider connotation may have
more extensive meaning than the word ―trade‖ and it means
"anything which occupies the time and attention and labour of a
man for the purpose of profit". The word ―business‖ used in Section
12 of the Act has been intended to convey the meaning ―the work or
task undertaken by the person concerned‖ which is not restricted to
trade or commercial work alone. Used in broader sense, a person
building his residential house may well be said to do "business" in so
far as the said activity engages his or its time, attention or labour as
principal serious concern or interest. Used in broader sense, a person
building his residential house, may well be said to do "business" in so
far as the said activity engages his time, attention or labour as
principal serious concern or interest. Reference be made to the
following judgments in which the Courts interpreted the words ―trade
or business‖ in Section 12:-
28.1. In Payyannur Educational Society v. Narayani, (supra), two
workmen engaged in land excavating operation were buried alive in a
landslide whereupon claim for compensation was made against an
educational society. The society contested the claim on the ground
that the society sold the soil to the contractor, who had engaged the
workman and was liable to pay the compensation. It was further
pleaded that ordinary business of the society was to impart education
and digging work was not part of its ―trade‖ or ―business‖. The
Division Bench of Kerala High Court headed by K.T.Thomas, J. as he
then was, held that the word ―business‖ used in Section 12 of the Act
has been intended to convey the meaning as the work or task
undertaken by the person concerned which are not restricted to trade
or commercial work alone. The relevant portion of the judgment is
reproduced hereunder:-
―9. It is trite law that the safe guidance for interpreting any
provision in a statute or for understanding the scope and
meaning of a particular word in provision, is to ascertain the
intention of the legislature. However wide in the abstract,
general words and phrases are more or less elastic and admit of
restriction or extension to suit the legislative intention. "The
object of the legislation would afford answer to the problems
arising from ambiguities which it contains", (vide Maxwell on
the "Interpretation of Statutes" 12th edition at page 86).
10. We bear in mind that one of the objects for enacting the
Act even as early as 1923 was to ameliorate the hardships of
economically poor workmen who were exposed to risks in work,
or occupational hazards by providing a cheaper and quicker
machinery for compensating them with pecuniary benefits. With
the progress of times the concept impelled the courts, by and
large, to make stretched constructions without violating the
fundamental principles in order to advance the above object.
Looking at it from the above angle, the object of the legislature
in providing Section 12 in the Act is to safeguard the right to
compensation when the employer delegates the work to another
person.
11. We will now proceed to consider in what manner the
words "business" and "ordinarily" in Section 12 of the Act
should be understood.
12. Section 3 of the Act imposes a liability on the employer
to pay compensation in cases where personal injury is caused to
a workman by accident arising out of and in the course of the
employment. Section 12 of the Act has, in effect, stretched the
contours of the word "employer" wider as to include the person
contracting with another person for carrying out the work of the
former. In such cases, the provision enjoins that the principal
shall stand substituted as the employer. This is achieved by the
words 'where compensation is claimed from the principal, this
Act shall apply as if references to the principal were substituted
for references to the employer". The principal may have any
claim for contribution from his contractor or delegatee, but that
can be dealt with as between them separately. The victim or his
dependents are not to be involved in such disputes. This much
can easily be discerned from the section.
13. The meaning of the two crucial words in Section 12 has
to be understood in the above context. We do not think that the
word "business" in the section need be restricted to what is
synonymous with trade. The use of the conjunction "or" should
be understood as disjunctive for covering totally different areas
unconnected with "trade'. A reference to the Dictionary would
reveal that the word "business" has different shades of
meanings. Among them the most suitable in the present context
is that which "The Oxford Advanced Learners Dictionary of
Current English" has given as its third meaning: "Task, duty,
concern or undertaking to do a work". Some succinct
illustrations have also been given in the said dictionary to drive
the meaning home. They are: "It is a teacher's business to help
his pupils; I still make it my business to see that money is paid
promptly; that is no business of yours". In none of the
illustrations the word "business" is used to denote anything
connected with trade or commerce. We think that, the word
business used in Section 12 of the Act has been intended to
convey the meaning as the work or task undertaken by the
person concerned which are not restricted to trade or
commercial work alone. Hence the interpretation given to the
words "trade or business" appearing in Article 19 of the
Constitution, or in the Rent Control Law is not apposite in the
context of Section 12 of the Act. We may observe with great
respect that the Division Bench of this Court in Travancore
Devaswom Board v. Prushothaman (1989 2 LLJ 114), has not
adopted any principle in conflict with the above view.
14. In Bata Shoe Company v. Union of India AIR 1954
Bombay 129 Gajendragadhkar, J. (as he then was) observed
that the word "business" in its wider connotation may have
more extensive meaning than the word "trade". His Lordship
then quoted Jessel M.R. in Smith v. Anaerson 1880 15 Ch D 247
who stressed the meaning of business as "anything which
occupies the time and attention and labour of a man for the
purpose of profit". This wide meaning was followed in Public
Works Dept. v. Commissioner 1981 Lab I.C. 498 by a Division
Bench consisting of Dr. A.S. Anand, J. (as His Lordship then
was) and I.K. Kotwal, J. in Workmen's Compensation cases. We
are, therefore, emboldened by the above decisions in adopting
the wide connotation for the word "business" in the present
case.
15. Our next endeavour is to ascertain what the legislature
meant by the word "ordinarily" in Section 12 of the Act. The
word "ordinarily" is an elastic term. It is seen used in different
statutes. The word has different shades of meaning in different
contexts (vide Kailash Chandra v. Union of India (1961-II-LLJ-
369) (SC). If it is used for referring to jurisdictional aspects it
may mean "in large majority of cases but not invariably". When
the word is used for referring to residential qualification it may
sometimes include even temporary residence. But the word
"ordinarily" is employed in Section 12 of the Act for a different
connotation. That has to be understood in the background of the
preceding portion in the section wherein execution of the work
carried out through any other person contracted by the
principal for this purpose is mentioned. What the principal
would have done if he has not contracted with another person to
carry out that work? He himself would have normally done that
work or caused it to be done under his supervision. The word
"Ordinarily" is used in Section 12 of the Act for projecting that
idea. So the word "ordinarily" in Section 12 of the Act means
"otherwise, normally". We cannot confer any other meaning to
the term "ordinarily" as it appears in the section. We did not
find anything contrary to the above legal position in the
decision of the Division Bench of this Court in Vijayaraghavan
v. Velu (1973 I LLJ 490).
16. Learned counsel for the appellant lastly contended that as
the soil was sold to the second respondent, appellant had lost
any ownership thereof and hence he cannot be made liable.
What was sold by the appellant was only the soil and not the
land. As long as the soil was not separated and transported, it
remained as part of the land. The work involved in transforming
land into soil must necessarily have been done when the
ownership and title of the land remained with the appellant. So
the appellant cannot disclaim liability in that line either.
17. When the legal position is understood thus, we are of the
view that appellant is the employer vis-a-vis the victims, as
per Section 12 of the Act. Appellant is therefore liable to pay the
compensation due under the Act to the claimants. Accordingly,
we dismiss the appeals.‖
(Emphasis supplied)
28.2. In Public Works Department v. Commissioner, Workmen
Compensation (supra), the Division Bench of Jammu and Kashmir
High Court held that the word "business" occurring in Section 12 has
to be given an extended meaning, so as to include even an activity
which engages time, attention or labour as a principal serious concern
or interest of the Government or an individual without an element of
profit in it. The relevant portion of the judgment is reproduced
hereunder:
―4. Unlike the word "trade" which merely; connotes
commercial activity, the word "business" is of much wider
import and may be used in different contexts in different senses.
Used in one context, it may imply a particular occupation or
employment to earn livelihood or gain, whereas used in a
different context it may mean an activity which engages time,
attention, or labour as a principal serious concern or interest.
Its connotation may thus vary with the varying contexts in which
it is used. In taxing statutes for instance, the word "business"
will always denote an activity carried out with the object of
earning profit, though the same may not be true when used in
relation to other activities. Used in broader sense, a person
building his residential house or a Government constructing a
road, may well be said to do business in so far as the said
activity engages his or its time, attention or labour as principal
serious concern or interest. In saying so, I derive support from
the following observations made by their Lordships of the
Supreme Court in M/s. Hindustan Steel Ltd. v. State of Orissa,
AIR 1970 S C 253:
"The expression "business" though extensively
used is a word of indefinite import, in taxing
statutes it is used in the sense of an occupation, or
profession which occupies the time, attention and
labour of a person, normally with the object of
making profit. To regard an activity as business
there must be a course of dealings, either actually
continued or contemplated to be continued with a
profit motive, and not for sport or pleasure."
Its amplitude has been more exhaustively dealt with by
Gajendragadkar J. in Bata Shoe Co. Ltd. v. Union of India, AIR
1954 Bom 129 wherein it has been observed :
"In its wider denotation, the word "business"
may have a more extensive meaning than the word
"trade". But in the context, we think it would be
safe to adopt the definition of the word "business"
laid down by Jessel M. R. in 'Smith v. Anderson',
(1880) 15 Ch D 247 at p. 258 (B), where the
learned Judge has observed that 'anything which
occupies the time and attention and labour of a
man, for the purpose of profit, is business". It is
true that the word "business" in its most general
and unrestricted sense may conceivably cover all
human activities. It may even include the business
of governing a country. But we are disposed to
hold that the context in which the word has been
used in S. 18 (b), Presidency Small Cause Courts
Act, S. 20, Civil P. C. and CL 12 of the Letters
Patent, requires that this word should not be
construed in such a wide and unrestricted sense."
5. The next question which then falls for determination is; what
meaning should be assigned to the word "business" occurring in
Section 12?
6. It is well settled that where a word used in a statute is
capable of two meanings, only that meaning should be assigned
to it which carries out its object. This rule 'of interpretation of
statutes has been often times affirmed by their Lordships of the
Supreme Court. In M/s. New India Sugar Mills Ltd. v. Commr.
of Sales Tax, Bihar, AIR 1963 S C 1207 it was held:
"....It is a recognised rule of interpretation of
statutes that the expressions used therein should
ordinarily be understood in a sense in which they
best harmonise with the object of the statute, and
which effectuate the object of the Legislature. If an
expression is susceptible of a narrow or technical
meaning, as well as a popular meaning the Court
would be justified in assuming that the Legislature
used the expression in the sense which would carry
out its object and reject that which renders the
exercise of its powers invalid."
Again, in South Asia Industries Pvt. Ltd. v. S. Sarup Singh AIR
1966 SC 346, it was observed:
".... A court would be fully justified in holding
that in such a case it was intended that an order
for recovery of possession can be made against the
assignee alone for that would enable the object of
the statute which was to enable the landlord to
recover possession, to be achieved. An
interpretation which defeats the objects of a statute
is, therefore, of course, not permissible."
7. The only object behind the provisions of Section appears to
be to secure speedy payment of compensation resulting from
injuries to a workman. The legislature intended to make doubly
sure payment of such compensation to the workman, or to his
dependants in the event of his death, as it could not exclude the
possibility of the contractor being in some cases a man of straw,
whose straitened circumstances might jeopardise the changes of
recovery of such compensation. If, therefore, a restricted
meaning is given to the word "business" so as to imply an
activity with the object of earning profit only, the object behind
Section 12 is likely to be defeated. Not only to speak of the
Government performing its various functions of a welfare State,
even many other persons may have to be kept out of the purview
of Section 12 by assigning such a limited meaning to the word
"business" occurring in it. Such an interpretation would absolve
from liability to pay compensation even a person who would
appoint a contractor for building his residential house, as
building one's residential house cannot be said to have the
object of earning profit or gain behind it. It cannot, as such, be
said to partake of "business or trade" in commercial sense.
Merely because the word "business" is clubbed with the word
"trade" in Section 12, it should not be inferred that it has been
used in simple commercial sense. Both these words have to be
read disjunctively and rot conjunctively. Similarly, the doctrine
of immunity attached to sovereign acts of State cannot be
extended to acts like constructing roads or bridges, as such acts
are not of such a nature as cannot be done by a private person.
Viewed thus, the word "business" occurring in Section 12 has to
be given an extended meaning, so as to include even an activity
which engages time, attention, or labour as a principal serious
concern or interest of the Government or an individual without
an element of profit in it. It is one of the meanings given to the
word "business" in dictionary. (See Webster's New International
Dictionary, Vol. I, Ed. 1926). Construction of roads being one
of the principal concerns of the Public Works Department of the
Government inviting its serious attention, it is "business" within
the meaning of Section 12 and the appellant was thus the
principal employer vis-a-vis the deceased labourers.‖
(Emphasis supplied)
28.3. In Bala Mallamma v. Registrar, Osmania University (supra),
a claim for compensation was made for the death of a workman who
fell down from a height of 40 feet while whitewashing the walls of
Osmania University Science College. The claim was contested by the
University on the ground that the University was constituted for
imparting education and the whitewashing of the walls of the
University was not a part of the ―trade‖ or ―business‖ of the
University. The Division Bench of Andhra Pradesh High Court,
following Public Works Department v. Commissioner, Workmen
Compensation (supra), held that whitewashing/colour washing was a
regular feature of the activity of the University and it could be treated
ordinarily as part of the ―business‖ of the University because the
words 'trade' or 'business', as used in the Act, have to be understood in
the context in which the Act was enacted, failing which the very
raison d'être of Section 12 of the Act would be defeated. The relevant
portion of the judgment is reproduced hereunder:
―14. The learned Counsel for the applicant has drawn our
attention to the judgment of the Supreme Court reported in
Mohan Lal v. R. Kondaiah, . Para No.3 of the said judgment is
important for the purpose of the present case, which is
reproduced below:
"The expression business has not been defined
in the Andhra Pradesh Buildings (Lease, Rent and
Eviction) Control Act, 1960. It is a common
expression which is sometimes used by itself and
sometimes in a collection of words as in "business,
trade or profession". It is a word of large and wide
import, capable of a variety of meanings. It is
needless to refer to the meanings given to that term
in the various Dictionaries except to say that every
one of them notices a large number of meanings of
the word. In a broad sense it is taken to mean
'everything that occupies the time, attention and
labour of men for the purpose of livelihood or
profit'. In a narrow sense it is confined to
commercial activity. It is obvious that the meaning
of the word must be gleaned from the context in
which it is used. Reference to the provisions of the
Constitution or other statutes where the expression
is used cannot be of any assistance in determining
its meaning in Section 10(3) (a) (iii) of the Andhra
Pradesh Buildings (Lease, Rent and Eviction)
Control Act, 1960. It is not a sound principle of
construction to interpret expressions used in one
Act with reference to their use in another Act;
more so if the two Acts in which the same word is
used are not cognate Acts. Neither the meaning,
nor the definition of the term in one statute affords
a guide to the construction of the same term in
another statute and the sense in which the term has
been understood in the several statutes does not
necessarily throw any light on the manner in which
the term should be understood generally. On the
other hand, it is a sound, and, indeed, a well-
known principle of construction that meaning of
words and expressions used in an Act must take
their colour from the context in which they
appear".
15. This judgment reiterates a principle of interpretation and
the principle is that the meaning of the word must be gleaned
from the context in which it is used. Meaning assigned to a word
in a particular Act may mean one thing and the meaning of the
same term may give a different meaning when used in a
different Act. Therefore, the word 'trade' or 'business' as used in
this Act have to be understood in the context in which this Act
has been enacted. Basically the Act has been enacted to provide
compensation to the workers suffering during the course of
employment. It is also the purpose of the Act that they should
get speedy remedies and it appears that the intention of enacting
the Section 12 of the Act was only to ensure that compensation
is paid by the principal expeditiously and if this purpose of the
Act and the provision are kept in mind, then the word 'trade' or
'business' may not have the same meaning which it would have,
for instance, when used in interpreting a taxing statute. If the
plea of the University is accepted that they are engaged in
imparting education, conducting examinations and conferring
degrees only and cannot be termed to be doing any business or
trade and hence they are not liable to pay compensation, then
any person engaged for similar activity by any Government
Department, any University, any hospital, if faced with an
accident, would not be able to get compensation in terms
of Section 12 of the Act although such a person would be a
workman under the Act. Similarly if an individual who wants to
construct a residential house of his own engages a person for
construction of the house and if such a person faces an accident
during the course of the building of the house, he would be
remediless under the Act. Even otherwise the normal activity of
the University is imparting education, conducting of
examinations and conferring degrees, this they cannot do
without having proper buildings.‖
(Emphasis supplied)
28.4. In Govind Goenka v. Dayawati (supra), the appellant engaged
a contractor for repairs and alterations in his shop. A portion of the
wall fell on a labourer who suffered fatal injuries whereupon a claim
for compensation was made against the owner who contested it on the
ground that the deceased labourer was employed by the contractor.
This Court, following the judgement of Division Bench of Andhra
Pradesh High Court in Balla Mallamma v. Registrar, Osmania
University (supra), held that the word ―business‖ in Section 12 has to
be given an extended meaning. The relevant portion of the judgment is
reproduced hereunder:
― 6. As would be seen from the definition of "employer"
envisaged under Section 2(e) of the Act, the same is of wide
amplitude and would certainly encompass the present
appellant who at the relevant time had employed the services
of the contractor to carry out the job of repairs and alterations
in his shop. The contractor who had taken the services of the
deceased workman as a labourer no doubt will also be
covered within the definition of employer but qua the appellant
he would remain his agent and the appellant would be the
principal employer. There is thus no difficulty to arrive at a
conclusion that the appellant for all intents and purposes was
the principal employer who had engaged the services of an
Agent contractor to carry out the said job of the repair work.
xxx xxx xxx
9. So far as the interpretation of section 12 of the Act is
concerned, again reference has been made to the principal
making a contract for the purposes of trade or business, the
judgment of the Division Bench of Andhra Pradesh High
Court in the case of Balla Mallamma v. Registrar, Osmania
University, Hyderabad and Anr, 2001(2)T.A.C.182(AP) is a
complete answer.........
10. As would be seen from the above judgment of the Hon'ble
Division Bench where the Osmania University, Hyderabad
had engaged services of a contractor for white washing and
painting the walls of the University and a worker employed by
the contractor while white washing the walls had fallen and
died and the objection raised was that whitewashing the walls
of the University would not be an activity which could be
construed as an activity for the purposes of trade and business
of the University. Giving an extended meaning to the word
"business" employed in the said section 12, the Hon'ble
Division Bench took a view that the restricted meaning given
to the said expression would defeat the very raison d'être
of section 12 of the Act.
12. The said interpretation given by the Division Bench also
finds support from the amendment brought by the Parliament
in the definition of Section 2(1)(n) of the Act omitting the
words "Casual workman" and a workman who is employed
other than for the purposes of employer's trade or business.
Reverting back to the facts of the present case, here also the
deceased workman was employed by the contractor and
although for carrying out repair job it might not be the
principal activity of the appellant but yet the appellant cannot
escape its liability keeping in view the object of the said
beneficial piece of legislation.
13. For the expeditious grant of compensation in the event of
such accidents taking place in favour of the victim's dependent
members, this act was enacted and a hyper technical
interpretation of the statute would not only defeat the purpose
of the said Act but would be adding insult to injury.........‖
(Emphasis supplied)
28.5. In Raj Pal Saini v. Kamla, (2016) 151 FLR 302, a mistry
suffered an electric shock during the construction of second floor of a
building. The owner of the building contested the claim on the ground
that he had engaged the contractor who in turn had engaged the
employee. Following Govind Goenka v. Dayawati (supra), this Court
held the owner liable to pay compensation under Section 12 of the
Act. The relevant portion of the judgment is reproduced hereunder:
―6. On careful consideration of the rival contentions of the
parties, this Court is of the view that the appellant, being the
principal employer, is liable to pay the compensation to the
respondent who was admittedly engaged in the construction
work at the petitioner's house and was electrocuted on 16 th
December, 2009. This case squarely covered by Govind
Goenka v. Dayawati (supra) in which this Court held that the
principal employer cannot escape its liability on the ground
that the deceased employee was employed by the
contractor.‖
(Emphasis supplied)
28.6. Applying the rules of liberal and purposive interpretation,
superior purpose and felt necessity, the word "business" occurring in
Section 12 is given an extended meaning, so as to include even an
activity which engages time, attention, or labour. Hence, construction
of a residential house would be covered in Section 12. If the person
who employs contractor is allowed to evade his liability by raising the
defence that only the contractor or the intermediary should pay the
compensation, then Section 12 will become redundant. This Court
agrees with the view taken by the different High Courts in the
judgments discussed herein above.
29. Section 12 would apply notwithstanding the agreement or
contract entered into between the principal and contractor regarding
their liability for payment of compensation under the Act
In Koodalingam v. Superintending Engineer, Project Circle, Public
Works Department, Kozhikode (supra), the Division Bench of Kerala
High Court held that Section 12 would apply notwithstanding the
agreement or contract entered into between the principal and
contractor regarding their liability for payment of compensation under
the Act. The agreement of contract between the principal and the
contractor governs only their inter-se rights and liabilities, and cannot
affect the right of the workmen or their dependants to get the
compensation form the principal or from the contractor at their option.
Relevant portion of the judgment is as under:
―11..........The avowed object with which Section 12 was
enacted as part of the Act as seen from the Report of the Select
Committee is to enable the workmen or the dependents of the
workmen to proceed against the contractor or against the
principal or both and to make the contractor liable to
indemnify the principal in all cases in the absence of any
agreement to the contrary. The Report of the Select Committee
would also show that while finalising the provision the
Committee has eliminated the provision which in the Bill as
introduced exempted the Government and local authorities
from liability imposed by this clause. The Committee has
observed that these authorities are liable just in the same
manner as private individuals. If these were the avowed
objects with which Section 12 of the Act was incorporated in
an enactment which itself is a beneficial legislation intended to
confer benefits on the workmen, we are of the view that the
provisions in Section 12(1) would apply notwithstanding the
agreement or contract entered into between the principal and
contractor regarding their liability for payment of
compensation under the Act. So long as the Section has not
been made specifically subject to any contract to the contrary,
the Section would have application in all cases where the
conditions specified in the Section are satisfied. The fact that
no non obstante provision is used in the Section may not be a
sufficient reason to exclude the application of the Section to
cases where the conditions are satisfied. At best, agreements
or contracts entered into between the principal and contractor
can govern only their inter se rights and liabilities and cannot
affect the right of the workmen or their dependents to get
compensation either from the principal or from the contractor
at their option. Right to get indemnified from the contractor
specifically conferred on the principal under Section 12(2) of
the Act sufficiently safeguards the interest of the principal who
has entrusted the work to the contractor stipulating the
liability under the Act.‖
(Emphasis supplied)
30. Section 12 imposes the liability on the principal where several
tiers of contractors or petty contractors are employed
In Sardar Sewa Singh v. Hindustan Lever Ltd. (supra), the Allahabad
High Court held Section 12 of the Workmen‟s Compensation Act to
be an enabling provision for the benefit of the workmen enacted with a
clear objective that the workmen should not be hampered by
technicalities or practical difficulties of deciphering the correct
employers. A pragmatic method has been advised for fixing the
liability on the principal employer for affording speedy relief to the
workmen for payment of compensation on account of the accident.
Section 12 imposes the liability on the principal where several tiers of
contractors or petty contractors are employed. The relevant discussion
of Section 12 is as under:
―3.........Chapter II of the Act captioned ―workmen's
compensation‖ deals with the question of compensation
claimed by a workman. Ordinarily such claims are disposed of
under the provisions of Ss. 3 to 5. The scheme of the Act is that
the ―employer‖ as defined in S. 2(c) should be liable in the
manner mentioned in S. 3. In view, however, of the vastly
increasing ramifications of industrial establishments and the
multiplicity of immediate and indirect or remote employers
which such process inevitably involves the Legislature has
inserted a provision in the Act which may relieve a workman of
the difficulty of ascertaining with precision as to who should
be deemed to be the actual employer liable for compensation
under the Act. Section 12, therefore, provides for a case where
we have several tiers of employers or petty employers. It is a
matter of common knowledge that in big industrial
establishments important branches of undertakings are
entrusted to contractors, who may in their turn have to employ
other petty contractor working under their direction and a
workman may be actually employed by one of these aforesaid
persons and in such an elaborate hereby there may be no
direct privity of contract between the principal and the
workman in the last analysis. The workman has for all
practical purposes to deal with an immediate employer but
when it comes to lodging a legal claim for compensation on
account of an accident he is concerned with the principal
employer and not the immediate employer qua the workman.
This is an enabling provision for the benefit of the workman
and enacted with the clear objective that the workman should
not be hampered by technicalities or practical difficulties of
deciphering the correct employers. A pragmatic method has
thus been devised for fixing the liability of the principal
employer and thereby affording speedy relief to the workman
for payment of compensation on account of the accident,
though the principal has been invested with the right of
indemnifying himself from the contractor who may have
employed the workman and may have been responsible for
immediately taking work from him.‖
(Emphasis supplied)
31. Effect of amendment of Workmen's Compensation Act by
Workmen's Compensation (Amendment) Act, 2000
31.1. Definition of ―Workman/Employee‖ - The definition of
‗workman', as it originally existed in the Workmen‟s Compensation
Act, 1923, excluded the workmen whose employment was of a casual
nature and who were employed otherwise than for the purpose of
employer‟s ―trade‖ or ―business‖. Section 2(1) (n) of the Workmen‟s
Compensation Act, 1923 was amended by Workmen‟s Compensation
(Amendment) Act, 2000 with effect from 8th December, 2000 whereby
the words "other than a person whose employment is of a casual
nature and who is employed otherwise than for the purposes of the
employer's trade or business" in the definition of ‗workman' in
Section 2(1) (n) were omitted.
31.2. Section 2(1) (n) of the Workmen‟s Compensation Act, prior to
the Workmen‟s Compensation (Amendment) Act, 2000 read as under:
―Section 2(1) (n) -
―workman‖ means any person (other than a person
whose employment is of a casual nature and who is employed
otherwise than for the purposes of the employer's trade or
business) who is -
(i) .........
(ii) employed ****]2 in any such capacity as is
specified in Schedule II, whether the contract of
employment was made before or after the passing
of this Act and whether such contract is
expressed or implied, oral or in writing; but does
not include any person working in the capacity of
a member of the Armed Forces of the Union; and
any reference to a workman who has been
injured shall, where the workman is dead,
include a reference to his dependants or any of
them.‖
(Emphasis supplied)
31.3. Section 2(1)(n) of the Workmen‟s Compensation Act, after the
Workmen‟s Compensation (Amendment) Act, 2000 reads as under:
―Section 2(1) (n) -
―workman‖ means any person who is -
(i) .........
(ia).........
(ii) employed in any such capacity as is specified
in Schedule II, whether the contract of
employment was made before or after the passing
of this Act and whether such contract is
expressed or implied, oral or in writing; but does
not include any person working in the capacity of
a member of the Armed Forces of the Union;
and any reference to a workman who has been
injured shall, where the workman is dead,
include a reference to his dependants or any of
them.‖
(Emphasis supplied)
31.4. Workmen‟ Compensation Act was again amended in 2009 by
Workmen‟s Compensation (Amendment) Act, 2009 with effect from
18th January, 2010 whereby the words ―workman‖ and ―workmen‖,
were substituted with the words ―employee‖ and ―employees‖. The
Workmen‟s Compensation (Amendment) Act, 2009 omitted Section
2(1)(n) that defined ―workman‖ and replaced it by Section 2(1)(dd)
which defined ―employee‖, though the substance of the definition
remained the same. The aforesaid amendment also changed the name
of the Workmen‟s Compensation Act to Employee‟s Compensation
Act. Section 2(1)(dd) of the Employee‟s Compensation Act reads as
under:
―Section 2(1) (dd) -
―employee‖ means a person, who is -
(i) .........
(ii) .........
(iii) employed in any such capacity as is
specified in Schedule II, whether the contract of
employment was made before or after the passing
of this Act and whether such contract is expressed
or implied, oral or in writing; but does not include
any person working in the capacity of a member of
the Armed Forces of the Union; and any reference
to any employee who has been injured shall, where
the employee is dead, include a reference to his
dependants or any of them;‖
31.5. The definition of ―employee‖ in Section 2(1)(dd) of the
Employee‟s Compensation Act has to be read with Schedule II and the
relevant Entry No.(viii) of Schedule II reads as under:
―SCHEDULE II
[Section 2(1) (dd)]
LIST OF PERSONS WHO SUBJECT TO THE
PROVISIONS OF SECTION 2(1) (dd), ARE INCLUDED
IN THE DEFINITION OF EMPLOYEES
The following persons are employees within the
meaning of Section 2(1) (dd) and subject to the
provisions of that section that is to say any person
who is -
―(viii) employed in the construction, maintenance,
repair or demolition of -
(a) any building which is designed to be or is or
has been more than one storey in height above the
ground or twelve feet or more from the ground
level to the apex of the roof; or......‖
(Emphasis supplied)
31.6. In Govind Goenka v. Dayawati (supra), this Court examined
the effect of Workmen‟s Compensation (Amendment) Act, 2000 and
held that, after the amendment, the workman whose employment is of
casual nature and who is employed otherwise than for the purpose of
employer's trade or business, would also be covered within the
definition of "workman‖. Relevant portion of the said judgment is
reproduced hereunder:
―8. So far as the definition of workman envisaged in Section
2(n) of the said Act is concerned, there has been a drastic
change in the definition of the "workman" as it stood prior to
the amendment and after the amendment. Prior to the
amendment, certainly the workman whose employment was
of a casual nature and who was employed otherwise than for
the purpose of trade or business of the employer would not
fall in the said definition. However, after the amendment of
the said definition through the Amending Act 46 of 2000, the
Parliament had removed the said mischief which was then
prevailing and coming in the way of such casual workmen
who met with an accident during the course of the
employment unconnected with the employer's trade or
business. With the amendment of the said definition, now
certainly the workman whose employment is of casual nature
and who is employed otherwise than for the purpose of
employer's trade or business would also be covered within
the definition of workman.‖
(Emphasis supplied)
32. Rules of Interpretation of Social welfare legislations
32.1. The principles of statutory construction are well settled that
the words occurring in statutes of liberal import such as social welfare
legislation and 'Human Rights' legislation are not to be put in
procrustean beds or shrunk to Lilliputian dimensions. In construing
these legislations, the imposture of literal construction must be
avoided and the prodigality of its misapplication must be recognized
and reduced. Where legislation is designed to give relief against
certain kinds of mischief, the Court is not to make inroads by making
etymological excursions but to advance the intent.
32.2. It is a recognized rule of interpretation of statutes that the
expressions used therein should ordinarily be understood in a sense in
which they best harmonize with the object of the statute, and which
effectuate the object of the Legislature. If an expression is susceptible
of a narrow or technical meaning as well as a popular meaning, the
Court would be justified in assuming that the Legislature used the
expression in the sense which would carry out its object and reject that
which renders the exercise of its powers invalid.
32.3. It is trite law that the safe guidance for interpreting any
provision in a statute or for understanding the scope and meaning of a
particular word in provision, is to ascertain the intention of the
legislature. However wide in the abstract, general words and phrases
are more or less elastic and admit of restriction or extension to suit the
legislative intention. The object of the legislation would afford answer
to the problems arising from ambiguities which it contains.
32.4. Purpose of Employee's Compensation Act, 1923
In N.P. Lalan v. V.A. John, (1972) II LLJ 273 Ker, V.R. Krishna Iyer,
J. as he then was, explained the purpose of Employee's Compensation
Act in the following words:-
―4.The Act with which I am concerned relates to workers, and
the entire purpose of the statute is to see that the weaker section
of the community, namely, the working class, is not caught in
the meshes of litigation which involves a protracted course of
appeal. That is why the statute creates a special Tribunal and
provides only for a restricted appeal .........
xxx xxx xxx
Part IV of the Indian Constitution serves as a perspective while
construing the Workmen's Compensation Act. May be that pre-
Constitution statutes were interpreted in a particular way by
Courts on certain assumptions of the State's functions at that
time. Today it is absolutely plain that the Directive Principles of
State Policy, though not enforceable by a Court, are
nevertheless fundamental in the governance of the country, and
must inform the judicial mind when interpreting statutes
calculated to promote the welfare of the working class. In fact,
Article 42 enjoins upon the State to make provision for securing
just and humane conditions of work and Article 43 compels the
State to endeavour to secure, by suitable legislation, to all
workers conditions of work ensuring a decent standard of life.
Indeed, the spirit of Part IV of the Constitution must colour the
semantic exercises of the judiciary when applying the provisions
of the Workmen's Compensation Act. If that be the approach to
be made, I am clear in my mind that the argument that the
proviso to Section 30 has been interpreted liberally in the pre-
Constitution days is of no significance. The same words, with
socio-economic developments in society, acquire a new
emphasis in tune with the changed conditions. It is clear
therefore, that the dynamics of legal interpretation based on
social changes which have taken place in the nation's life and
goals demand .........‖
(Emphasis supplied)
32.5. Rules of ―Purposive Interpretation‖, ―Superior Purpose‖
and ―Felt Necessity‖
In Lanco Anpara Power Ltd v. State Of Uttar Pradesh, (2016) 10
SCC 329, the appellants challenged the applicability of Building and
Other Construction Workers' (Regulation of Employment and
Conditions of Service) Act, 1996 (hereinafter referred to as "the
BOCW Act") and the Buildings and Other Construction Workers'
Welfare Cess Act, 1996 (hereinafter referred to as "the Welfare Cess
Act") on the ground that they were registered under the Factories Act,
1948 and therefore, they were not covered by the definition of
―building or other construction work‖ as contained in Section 2(1)(d)
of the BOCW Act and, therefore, the said Act was not applicable to
them by virtue of Section 1(4) of BOCW Act. The Supreme Court
held that the "superior purpose" of BOCW Act and the Welfare Cess
Act has to be kept in mind as both these enactments namely BOCW
Act and Welfare Cess Act are social welfare legislations. It was
further observed that the concept of "felt necessity" and "purposive
interpretation" would apply since the purpose of BOCW Act is to take
care of a particular necessity i.e. welfare of unorganized labour class
involved in construction activity as stated in the Statement of Objects
and Reasons of the BOCW Act. The relevant portion of this
judgement is reproduced herein under:-
―25. We have bestowed our due and serious consideration to
the submissions made of both sides, which these submissions
deserve. The central issue is the meaning that is to be assigned
to the language of Section 2(1)(d) of the Act, particularly that
part which is exclusionary in nature i.e. which excludes such
building and construction work to which the provisions of the
Factories Act apply. Before coming to the grip of this central
issue, we deem it appropriate to refer to the objectives with
which the Factories Act and the BOCW Act were enacted, as
that would be the guiding path to answer the core issue
delineated above.
xxx xxx xxx
39. ......... As pointed out above, if the construction of this
provision as suggested by the appellants is accepted, the
construction workers who are engaged in the construction of
buildings/projects will neither get the benefit of the Factories
Act nor of the BOCW Act/Welfare Cess Act. That could not have
been the intention of the legislature. The BOCW Act and the
Welfare Cess Act are pieces of social security legislation to
provide for certain benefits to the construction workers.
40. Purposive interpretation in a social amelioration legislation
is an imperative, irrespective of anything else. This is so
eloquently brought out in the following passage in Atma Ram
Mittal v. Ishwar Singh Punia [Atma Ram Mittal v. Ishwar Singh
Punia, (1988) 4 SCC 284] : (SCC p. 289, para 9)
―9. Judicial time and energy is more often
than not consumed in finding what is the intention
of Parliament or in other words, the will of the
people. Blackstone tells us that the fairest and
most rational method to interpret the will of the
legislator is by exploring his intentions at the time
when the law was made, by signs most natural and
probable. And these signs are either the words, the
context, the subject-matter, the effects and
consequence, or the spirit and reason of the law.
See Commentaries on the Laws of
st
England (facsimile of 1 Edn. Of 1765, University
of Chicago Press, 1979, Vol. 1, p. 59). Mukherjea,
J. as the learned Chief Justice then was,
in Poppatlal Shah v. State of Madras[Poppatlal
Shah v. State of Madras, AIR 1953 SC 274 : 1953
Cri LJ 1105 : 1953 SCR 677 : (1953) 4 STC 188]
said that each word, phrase or sentence was to be
construed in the light of purpose of the Act itself.
But words must be construed with imagination of
purpose behind them said Judge Learned Hand, a
long time ago. It appears, therefore, that though
we are concerned with seeking of intention, we are
rather looking to the meaning of the words that the
legislature has used and the true meaning of what
words [Ed.: Lord Reid in the afore cited case had
observed: (AC p. 613: All ER p. 814) ―We often
say that we are looking for the intention of
Parliament, but this is not quite accurate. We are
seeking the meaning of the words which
Parliament used. We are seeking not what
Parliament meant but the true meaning of what
they said.‖] as was said by Lord Reid in Black-
Clawson International Ltd. v. Papierwerke
Waldhof-Aschaffenburg A.G. [Black-Clawson
International Ltd. v. Papierwerke Waldhof-
Aschaffenburg A.G., 1975 AC 591 : (1975) 2 WLR
513 : (1975) 1 All ER 810 (HL)] We are clearly of
the opinion that having regard to the language we
must find the reason and the spirit of the law.‖
(Emphasis in original)
xxx xxx xxx
41. How labour legislations are to be interpreted has been
stated and restated by this Court time and again. In M.P.
Mineral Industry Assn. v. Regl. Labour Commr. (Central) [M.P.
Mineral Industry Assn. v. Regl. Labour Commr. (Central), AIR
1960 SC 1068] , this Court while dealing with the provisions of
the Minimum Wages Act, 1948, observed that this Act is
intended to achieve the object of doing social justice to
workmen employed in the scheduled employments by
prescribing minimum rates of wages for them, and so in
construing the said provisions the court should adopt what is
sometimes described as a beneficent rule of construction.
In Surendra Kumar Verma v. Central Govt. Industrial Tribunal-
cum-Labour Court [Surendra Kumar Verma v. Central Govt.
Industrial Tribunal-cum-Labour Court, (1980) 4 SCC 443 :
1981 SCC (L&S) 16] , this Court reminded that semantic
luxuries are misplaced in the interpretation of ―bread and
butter‖ statutes. Welfare statutes must, of necessity, receive a
broad interpretation. Where legislation is designed to give relief
against certain kinds of mischief, the Court is not to make
inroads by making etymological excursions.
42. We would also like to reproduce a passage
from Workmen v. American Express International Banking
Corpn. [Workmen v. American Express International Banking
Corpn, (1985) 4 SCC 71: 1985 SCC (L&S) 940], which
provides complete answer to the argument of the appellants
based on literal construction: (SCC p. 76, para 4)
"4. The principles of statutory construction
are well settled. Words occurring in statutes of
liberal import such as social welfare legislation
and human rights' legislation are not to be put in
Procrustean beds or shrunk to Lilliputian
dimensions. In construing these legislations the
imposture of literal construction must be avoided
and the prodigality of its misapplication must be
recognised and reduced. Judges ought to be more
concerned with the ―colour‖, the ―content‖ and
the ―context‖ of such statutes (we have borrowed
the words from Lord Wilberforce's opinion
in Prenn v. Simmonds [Prenn v. Simmonds, (1971)
3 All ER 237: (1971) 1 WLR 1381 (HL)]). In the
same opinion Lord Wilberforce pointed out that
law is not to be left behind in some island of literal
interpretation but is to enquire beyond the
language, unisolated from the matrix of facts in
which they are set; the law is not to be interpreted
purely on internal linguistic considerations.‖
43. In equal measure is the message contained in Carew and
Co. Ltd. v. Union of India [Carew and Co. Ltd. v. Union of
India, (1975) 2 SCC 791]: (SCC p. 802, para 21)
―21. The law is not ―a brooding
omnipotence in the sky‖ but a pragmatic
instrument of social order. It is an operational art
controlling economic life, and interpretative effort
must be imbued with the statutory purpose. No
doubt, grammar is a good guide to meaning but a
bad master to dictate.‖
44. The sentiments were echoed in Bombay Anand Bhavan
Restaurant v. ESI Corpn. [Bombay Anand Bhavan
Restaurant v. ESI Corpn., (2009) 9 SCC 61: (2009) 2 SCC
(L&S) 573] in the following words: (SCC p. 66, para 20)
―20. The Employees' State Insurance Act is
a beneficial legislation. The main purpose of the
enactment as the Preamble suggests, is to provide
for certain benefits to employees of a factory in
case of sickness, maternity and employment injury
and to make provision for certain other matters in
relation thereto. The Employees' State Insurance
Act is a social security legislation and the canons
of interpreting a social legislation are different
from the canons of interpretation of taxation law.
The courts must not countenance any subterfuge
which would defeat the provisions of social
legislation and the courts must even, if necessary,
strain the language of the Act in order to achieve
the purpose which the legislature had in placing
this legislation on the statute book. The Act,
therefore, must receive a liberal construction so as
to promote its objects.‖
45. In taking the aforesaid view, we also agree with the learned
counsel for the respondents that ―superior purpose‖ contained
in the BOCW Act and the Welfare Cess Act has to be kept in
mind when two enactments -- the Factories Act on the one hand
and the BOCW Act/Welfare Cess Act on the other hand, are
involved, both of which are welfare legislations. [See Allahabad
Bank v. Canara Bank[Allahabad Bank v. Canara Bank, (2000)
4 SCC 406] , which has been followed in Pegasus Assets
Reconstruction (P) Ltd. v. Haryana Concast Ltd. [Pegasus
Assets Reconstruction (P) Ltd. v. Haryana Concast Ltd., (2016)
4 SCC 47 : (2016) 2 SCC (Civ) 524 : (2016) 1 Scale 1] in the
context of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 and the
Companies Act, 1956.] Here the concept of ―felt necessity‖
would get triggered and as per the Statement of Objects and
Reasons contained in the BOCW Act, since the purpose of this
Act is to take care of a particular necessity i.e. welfare of
unorganised labour class involved in construction activity, that
needs to be achieved and not to be discarded. Here the doctrine
of purposive interpretation also gets attracted which is
explained in recent judgments of this Court in Richa
Mishra v. State of Chhattisgarh [Richa Mishra v. State of
Chhattisgarh, (2016) 4 SCC 179.
(Emphasis supplied)
32.6. Rule of liberal interpretation of social welfare legislations
In Prakash Cotton Mills (P) Ltd. v. State of Bombay, (1957) 2 LLJ
490, Chagla J. unerringly observed that no labour legislation, no
social legislation, no economic legislation, can be considered by a
Court without applying the principles of social justice in interpreting
the provisions of these laws. Social justice is an objective which is
embodied and enshrined in our Constitution. It would indeed be
startling for anyone to suggest that the Court should shut its eyes to
social justice and consider and interpret a law as if our Country had
not pledged itself to bringing about social justice.
32.7. The rule of interpretation is that welfare, social and beneficial
statutes are not to be construed strictly. In Regional P.F.
Commissioner v. Hooghly Mills Co. Ltd., [2012] 1 SCR 363, the
Supreme Court observed that a liberal rule of interpretation should be
applied to social welfare legislations. The Court observed as follows:
―23. If we look at the modern legislative trend we will
discern that there is a large volume of legislation enacted with
the purpose of introducing social reform by improving the
conditions of certain class of persons who might not have been
fairly treated in the past. These statutes are normally called
remedial statutes or social welfare legislation, whereas penal
statutes are sometime enacted providing for penalties for
disobedience of laws making those who disobey, liable to
imprisonment, fine, forfeiture or other penalty.
24. The normal canon of interpretation is that a remedial
statute receives liberal construction whereas a penal statute
calls for strict construction. In the cases of remedial statutes, if
there is any doubt, the same is resolved in favour of the class of
persons for whose benefit the statute is enacted, but in cases of
penal statutes if there is any doubt the same is normally
resolved in favour of the alleged offender.‖
(Emphasis supplied)
32.8. Cessante ratione legis, cessat et ipsa lex
One of the most ancient maxims known to our law and constantly
followed by our Courts is cessante ratione legis, cessat et ipsa lex i.e.
when the reason for a law ceases, the law itself ceases. This principle
of law can be applied to the present proposition. A restrictive
interpretation to the words ―trade or business‖ would disallow large
claims of employees who otherwise would be covered by the Statute
and the purpose behind the enactment would be lost. This principle of
law has been applied in H.H. Shri Swamiji Shri Admar Mutt Etc, v.
The Commissioner, Hindu Religious & Charitable Endowments
Department and Ors., [1980] 1 SCR 368 as well as the Foreign
Courts. In Fox v Snow, 6 N.J. 12 (1950), the Supreme Court of New
Jersey observed:
―Cessante ratione legis, cessat et ipsa lex (the reason for
a law ceasing, the law itself ceases) is one of the most ancient
maxims known to our law and it is constantly followed by our
courts. Of this maxim it was said in Beardsley v. City of
Hartford, 50 Conn. 529, 47 Am. Rep. 677, 682 (1883), "This
means that no law can survive the reason on which it is
founded. It needs no statute to change it; it abrogates itself."
The same thought was enunciated by Lord Coke in Milborn's
Case, 7 Coke 7a (K.B. 1609): "Ratio legis est anima legis, et
mutata legis ratione, mutatur ex lex" (the reason for a law is the
soul of the law, and if the reason for a law has changed, the law
is changed). "It is revolting," says Mr. Justice Holmes, "to have
no better reason for a rule of law than that so it was laid down
in the time of Henry IV. It is still more revolting if the grounds
upon which it was laid down have vanished long since, and the
rule simply persists from blind imitation of the past," and "To
rest upon a formula is a slumber that, prolonged, means death.‖
(Emphasis supplied)
33. Interplay of Section 12 and Section 2(1) (dd) of the Employees
Compensation Act. (Earlier Section 2(1)(n) of Workmen's
Compensation Act)
The effect of the omission of words "other than a person whose
employment is of a casual nature and who is employed otherwise than
for the purposes of the employer's trade or business" in the definition
of workman in Section 2(1)(n) by the amendment in 2000 is that a
person whose employment is of a casual nature and is employed other
than for the purposes of the employer‟s trade or business comes within
the meaning of ―employee‖ as defined in Section 2(1)(dd) of the
Employees Compensation Act. Although the words ‗trade' or
‗business' remain in Section 12 of the Employees Compensation Act,
applying the rules of ‗purposive interpretation', ‗superior purpose',
and ‗felt necessity' this Court is of the view that the words ‗trade' or
‗business' in the definition of ―employee‖ in Section 2(1) (dd) were
omitted to grant all the benefits of the Act to casual employees and
employees employed other than for the purposes of employer's trade
or business as held in Govind Goenka (supra).
34. Judicial precedents must be applied with reference to the facts
of the case
34.1. The judgments relied upon by the appellant, namely, Bharat
Earth Movers Ltd. v. Bhagyamma (supra), Dr. B. Radhakrishna v.
Gouramma (supra), Lakshminarayana Shetty v. Shantha (supra),
Ajay Singh Lal v. Somwati (supra), Om Parkash Batish v. Ranjit
(supra), Management, Sirishad Construction (P) v. C.P. Ravinder
(supra) and Kolhan Samvedak Sangh v. State of Jharkhand (supra),
do not help the appellant for the reasons given by the respondent no.1
in para 12 which are hereby accepted and are not being repeated
herein for the sake of brevity. The other judgments cited by the
appellant do not support the appellant.
34.2. It is well settled that judicial precedent cannot be followed as a
statute and has to be applied with reference to the facts of the case
involved in it. The ratio of any decision has to be understood in the
background of the facts of that case. What is of the essence in a
decision is its ratio and not every observation found therein nor what
logically follows from the various observations made in it. It has to be
remembered that a decision is only an authority for what it actually
decides. It is well settled that a little difference in facts or additional
facts may make a lot of difference in the precedential value of a
decision. The ratio of one case cannot be mechanically applied to
another case without regard to the factual situation and circumstances
of the two cases.
34.3. In Padma Sundara Rao v. State of Tamil Nadu (2002) 3 SCC
533 the Supreme Court held that the ratio of a judgment has to be read
in the context of the facts of the case and even a single fact can make a
difference. In para 9 of the said judgment, the Supreme Court held as
under:
―9. Courts should not place reliance on decisions without
discussing as to how the factual situation fits in with the fact
situation of the decision on which reliance is placed. There is
always peril in treating the words of a speech or judgment as
though they are words in a legislative enactment, and it is to be
remembered that judicial utterances are made in the setting of
the facts of a particular case, said Lord Morris in British
Railways Board v. Herrington. Circumstantial flexibility, one
additional or different fact may make a world of difference
between conclusions in two cases.‖
34.4. In Bharat Petroleum Corporation Ltd v. N.R. Vairamani,
(2004) 8 SCC 579, the Supreme Court held that a decision cannot be
relied on without considering the factual situation. The Supreme Court
observed as under:-
―9. Courts should not place reliance on decisions without
discussing as to how the factual situation fits in with the fact
situation of the decision on which reliance is placed.
Observations of courts are neither to be read as Euclid's
theorems nor as provisions of a statute and that too taken out of
their context. These observations must be read in the context in
which they appear to have been stated. Judgments of courts are
not to be construed as statutes. To interpret words, phrases and
provisions of a statute, it may become necessary for judges to
embark into lengthy discussions but the discussion is meant to
explain and not to define. Judges interpret statutes, they do not
interpret judgments. They interpret words of statutes; their
words are not to be interpreted as statutes. In London Graving
Dock Co. Ltd. v. Horton [1951 AC 737: (1951) 2 All ER 1
(HL)] (AC at p. 761) Lord Mac Dermott observed: (All ER p. 14
C-D)
―The matter cannot, of course, be settled merely by
treating the ipsissima verba of Willes, J., as though
they were part of an Act of Parliament and
applying the rules of interpretation appropriate
thereto. This is not to detract from the great weight
to be given to the language actually used by that
most distinguished judge...‖
10. In Home Office v. Dorset Yacht Co. [(1970) 2 All ER 294:
1970 AC 1004: (1970) 2 WLR 1140 (HL)] (All ER p. 297g-h)
Lord Reid said,
―Lord Atkin's speech ... is not to be treated as if it
were a statutory definition. It will require
qualification in new circumstances‖.
Megarry, J. in Shepherd Homes Ltd. v. Sandham (No.
2) [(1971) 1 WLR 1062: (1971) 2 All ER 1267] observed:
―One must not, of course, construe even a
reserved judgment of Russell, L.J. as if it were an
Act of Parliament.‖
And, in Herrington v.British Railways Board [(1972) 2 WLR
537: (1972) 1 All ER 749 (HL)] Lord Morris said: (All ER p.
761c)
―There is always peril in treating the words of a
speech or a judgment as though they were words in
a legislative enactment, and it is to be remembered
that judicial utterances made in the setting of the
facts of a particular case.‖
11. Circumstantial flexibility, one additional or different fact
may make a world of difference between conclusions in two
cases. Disposal of cases by blindly placing reliance on a
decision is not proper.
12. The following words of Lord Denning in the matter of
applying precedents have become locus classicus:
―Each case depends on its own facts and a close
similarity between one case and another is not
enough because even a single significant detail
may alter the entire aspect, in deciding such cases,
one should avoid the temptation to decide cases
(as said by Cardozo) by matching the colour of one
case against the colour of another. To decide
therefore, on which side of the line a case falls, the
broad resemblance to another case is not at all
decisive.
xxx xxx xxx
Precedent should be followed only so far as it
marks the path of justice, but you must cut the dead
wood and trim off the side branches else you will
find yourself lost in thickets and branches. My plea
is to keep the path to justice clear of obstructions
which could impede it.‖‖
(Emphasis supplied)
Liability of the owner of a residential building under the Building
and Other Construction Workers Act, 1996
35. BOCW Act is a social welfare legislation to benefit the
construction workers. The preamble of BOCW Act is reproduced
hereunder:
―An Act to regulate the employment and conditions
of service of building and other construction workers and
to provide for their safety, health and welfare measures
and for other matters connected therewith or incidental
thereto.‖
36. BOCW Act applies to every establishment which employs or
had employed 10 or more building workers in any building or other
construction work on any day in preceding 12 months. Section 1(4) of
the Act is reproduced hereunder:
"Section 1 - Short title, extent, commencement and
application
...............
(4) It applies to every establishment which employs, or
had employed on any day of the preceding twelve
months, ten or more building workers in any building or
other construction work.
Explanation.--For the purposes of this sub-section, the
building workers employed in different relays in a day
either by the employer or the contractor shall be taken
into account in computing the number of building
workers employed in the establishment.‖
(Emphasis supplied)
37. Section 2(1) (d) of the BOCW Act defines ‗building or other
construction work'. Section 2(1)(d) is reproduced hereunder:
―Section 2 - Definitions
(1) In this Act, unless the context otherwise requires,--
...
(d) ―building or other construction work‖ means the
construction, alteration, repairs, maintenance or
demolition, of or, in relation to, buildings, streets, roads,
railways, tramways, airfields, irrigation, drainage,
embankment and navigation works, flood control works
(including storm water drainage works), generation,
transmission and distribution of power, water works
(including channels for distribution of water), oil and gas
installations, electric lines, wireless, radio, television,
telephone, telegraph and overseas communications,
dams, canals, reservoirs, watercourses, tunnels, bridges,
viaducts, aquaducts, pipelines, towers, cooling towers,
transmission towers and such other work as may be
specified in this behalf by the appropriate Government,
by notification but does not include any building or other
construction work to which the provisions of the
Factories Act, 1948 (63 of 1948), or the Mines Act, 1952
(35 of 1952), apply;‖
38. Section 2(1) (j) of the BOCW Act defines ―establishment‖. It
is a wide definition which includes the establishment of an individual
who employs building workers as well as establishment belonging to a
contractor. However, an individual who employs workers in any
building or construction work in relation to his own residence, where
the cost of construction is less than Rs.10 lakh, is not included.
Section 2(1)(j) is reproduced hereunder:
―Section 2 - Definitions
(1) In this Act, unless the context otherwise requires,--
...
(j) ―establishment‖ means any establishment belonging
to, or under the control of, Government, any body
corporate or firm, an individual or association or other
body of individuals which or who employs building
workers in any building or other construction work; and
includes an establishment belonging to a contractor, but
does not include an individual who employs such workers
in any building or construction work in relation to his
own residence the total cost of such construction not
being more than rupees ten lakhs‖
(Emphasis supplied)
39. Section 2(1) (i) of the BOCW Act defines the ―employer‖
which includes the owner. Section 2(1)(i) is reproduced hereunder:
―Section 2 - Definitions
(1) In this Act, unless the context otherwise requires,--
...
(i) ―employer‖, in relation to an establishment, means
the owner thereof, and includes,--
(i) in relation to a building or other construction work
carried on by or under the authority of any department of
the Government, directly without any contractor, the
authority specified in this behalf, or where no authority is
specified, the head of the department;
(ii) in relation to a building or other construction work
carried on by or on behalf of a local authority or other
establishment, directly without any contractor, the chief
executive officer of that authority or establishment;
(iii) in relation to a building or other construction work
carried on by or though a contractor, or by the
employment of building workers supplied by a
contractor, the contractor;
(Emphasis supplied)
40. Section 2(1) (g) of the BOCW Act defines the ―contractor‖.
Section 2(1)(g) is reproduced hereunder:
―Section 2 - Definitions
(1) In this Act, unless the context otherwise requires,--
...
(g) ―contractor‖ means a person who undertakes to
produce a given result for any establishment, other than
a mere supply of goods or articles of manufacture, by the
employment of building workers or who supplies building
workers for any work of the establishment; and includes
a sub-contractor;
41. Section 2(1) (e) of the BOCW Act defines ‗building worker'.
Section 2(i)(e) is reproduced hereunder:
―(e) ―building worker‖ means a person who is employed
to do any skilled, semi-skilled or unskilled, manual,
supervisory, technical or clerical work for hire or
reward, whether the terms of employment be expressed
or implied, in connection with any building or other
construction work but does not include any such
person--
(i) who is employed mainly in a managerial or
administrative capacity; or
(ii) who, being employed in a supervisory
capacity, draws wages exceeding one thousand
six hundred rupees per mensem or exercises,
either by the nature of the duties attached to the
office or by reason of the powers vested in him,
functions mainly of a managerial nature;‖
42. Section 45 of the BOCW Act imposes the liability of payment
of compensation on the employer in the event of the failure of the
contractor to make the payment of compensation to the building
worker pay compensation in accordance with the provision of the
Employee‟s Compensation Act. Section 45 of the BOCW Act is
reproduced hereunder:
―Section 45 - Responsibility for payment of wages and
compensation
(1) An employer shall be responsible for payment of
wages to each building worker employed by him and
such wages shall be paid on or before such date as may
be prescribed.
(2) In case the contractor fails to make payment of
compensation in respect of a building worker employed
by him, where he is liable to make such payment when
due, or makes short payment thereof, then, in the case of
death or disablement of the building worker, the
employer shall be liable to make payment of that
compensation in full or the unpaid balance due in
accordance with the provisions of the Workmen's
Compensation Act, 1923 (8 of 1923), and recover the
amount so paid from the contractor either by deduction
from any amount payable to the contractor under any
contract or as a debt payable by the contractor.‖
43. Section 58 of the BOCW Act extends the provisions of the
Employee‟s Compensation Act to the building workers. Section 58 of
the BOCW Act is reproduced hereunder:
―Section 58 - Application of Act 8 of 1923 to building
workers
The provisions of the Workmen's Compensation Act,
1923, shall so far as may be, apply to building workers
as if the employment to which this Act applies had been
included in the Second Schedule to that Act‖
44. This Court is of the view that the BOCW Act applies to the
construction of a residential building in which more than 10 building
workers have been employed in the preceding 12 months and the cost
of such construction is more than Rs.10 lakh. The owner of the
aforesaid residential building would be an employer within the
meaning of Section 2 (1) (i) and Section 45 of BOCW Act makes him
liable to pay the compensation under the Employee‟s Compensation
Act.
Findings
45. The appellant is the owner of property bearing No. BU-48,
Pitam Pura, Delhi on which he raised a four storeyed building through
the contractor (respondent no.2). On 06th March, 2012, respondent
No.1 was working as a labourer on the construction site of the
aforesaid building when he fell down and suffered grievous injuries.
The aforesaid accident arose out of and during the course of the
employment of respondent No.1 with respondent No.2. Respondent
no.1 is held to be an employee as defined in Section 2 (1) (dd) of the
Employee‟s Compensation Act read with Clause (viii) (a) of Schedule
II of the Employee‟s Compensation Act.
46. The definition of ‗workman', as it originally existed in the
Workmen‟s Compensation Act, 1923, excluded the workmen whose
employment was of a casual nature and who were employed otherwise
than for the purpose of employers ―trade or business‖. Section 2 (1)
(n) of the Workmen‟s Compensation Act, 1923 was amended by
Workmen‟s Compensation (Amendment) Act, 2000 with effect from
8th December, 2000 whereby the words "other than a person whose
employment is of a casual nature and who is employed otherwise than
for the purposes of the employer's trade or business" in the definition
of ‗workman' in Section 2(1) (n) were omitted. The effect of the
omission of words "other than a person whose employment is of a
casual nature and who is employed otherwise than for the purposes of
the employer's trade or business" in the definition of workman in
Section 2(1)(n) by the amendment in 2000 is that a person whose
employment is of a casual nature and who is employed other than for
the purposes of the employer‟s trade or business is covered within the
meaning of ―employee‖ as defined in Section 2 (1) (dd) of the
Employees Compensation Act. Applying the rules of ‗purposive
interpretation', ‗superior purpose', and ‗felt necessity', this Court is of
the view that the words ‗trade or business' in the definition of
―employee‖ in Section 2 (1) (dd) were omitted to grant all the benefits
of the Act to casual employees and employees employed other than
for the purposes of employer's trade or business. In Govind Goenka v.
Dayawati (supra), this Court examined the effect of Workmen‟s
Compensation (Amendment) Act, 2000 and held that, after the
amendment, the workman whose employment is of casual nature and
who is employed otherwise than for the purpose of employer's trade or
business, would also be covered within the definition of "workman‖.
This Court agrees with the above interpretation.
47. In Payyannur Educational Society v. Narayani (supra), Public
Works Department v. Commissioner, Workmen Compensation
(supra), Bala Mallamma v. Registrar, Osmania University (supra),
Govind Goenka v. Dayawati (supra), the Courts have interpreted the
word „business' in Section 12 of the Employee‟s Compensation Act to
include an activity which engages time, attention and labour. This
Court agrees with the interpretation of the word ‗business' in the
aforesaid judgments. Applying the principles laid down in the
aforesaid judgments, construction of a residential house by the
appellant through the contractor (respondent no.2) would fall within
the meaning of ‗business' and, therefore, the appellant is liable to pay
the compensation to respondent no.1 under Section 12 of the
Employee‟s Compensation Act.
48. All the ingredients of Section 12 are satisfied in the present case
and the appellant, being the principal, is liable to pay the
compensation to respondent no.1 with right to recover the same from
the contractor (respondent no.2). This case is squarely covered by the
principles laid down in the judgments discussed above.
49. There is no merit in the appellant‟s contention that the appellant
cannot be held liable in view of written agreement with the contractor
under which the contractor is liable. As held in Koodalingam v.
Superintending Engineer, Project Circle, Public Works Department,
Kozhikode (supra), Section 12 would apply notwithstanding the
agreement or contract entered into between the principal and
contractor regarding their liability for payment of compensation under
the Act. The agreement or contract between the principal and the
contractor shall govern only their inter-se rights and liabilities, and
cannot affect the right of the employee or the dependants of the
employee, to get the compensation from the principal or from the
contractor at their option. The appellant‟s contention is, therefore,
rejected.
50. There is no merit in the defense of respondent no.2 that he had
appointed Mohd. Rahil as sub-contractor who in turn had employed
respondent no.1. Respondent no.2 filed an application under Order 1
Rule 10 of the Code of Civil Procedure for impleading Mohd. Rahil as
a respondent which was rejected by the Commissioner vide order
dated 02nd May, 2013. On the appreciation of evidence before the
Commissioner, this Court holds respondent no.1 to be the employee of
respondent no.2 and the defence of respondent no.2 before the
Commissioner for shifting the liability to Mohd. Rahil is rejected. So
far as the appellant is concerned, Section 12 imposes the liability on
the principal where several tiers of contractors or petty contractors are
employed as held in Sardar Sewa Singh v. Hindustan Lever Ltd.
(supra).
51. Notwithstanding clear liability of the appellant to pay the
compensation to respondents No.1 under Section 12 of the
Employee‟s Compensation Act, the appellant is also liable to pay the
compensation under Section 45 read with Section 1(4), Section 2(1)
(d), (e), (g), (i), (j) and 58 of the BOCW Act. BOCW Act applies to
construction of a residential buildings in which more than 10 workers
had been employed and cost of the residential building was more than
Rs.10,00,000/-. Section 45 of BOC Act makes the employer liable to
pay the compensation and the term ‗employer' in Section 2(1) (i) of
the BOCW Act includes the owner. In the present case, BOCW Act is
applicable as the cost of the appellant‟s building was more than
Rs.10,00,000/- and more than 10 building workers were employed
during the construction work. The appellant‟s building falls within the
definition of ‗building and other construction work' as defined in
Section 2(1)(d); respondent no.1 is a ‗building worker' within the
meaning of Section 2(1)(e) of the BOCW Act; the appellant‟s building
is an ‗establishment' within the meaning of Section 2(1)(j) of the
BOCW Act as the cost of the construction was more than Rs.10 lakhs;
Respondent no.2 is a ‗contractor' within the definition of Section
2(1)(g) of the BOCW Act and the appellant, being the owner, is an
‗employer' within the definition of Section 2(1) (i) of the BOCW Act
which includes the owner. The appellant is liable to pay the
compensation to respondent no.1 under Section 45 of the Employee‟s
Compensation Act as the contractor has failed to make the payment of
the compensation when it fell due. The objection of the appellant that
the appellant is not the employer and he is not liable to pay the
compensation under Section 45 is rejected.
52. Respondent no.1 suffered post-traumatic paraplegia which
resulted in 80% permanent disability relating to both lower limbs as
per the disability certificate dated 12th April, 2013. The
Commissioner, Employees‟ Compensation has taken the loss of
earning capacity as 100%. Respondent no.1 appeared before this
Court on 9th March, 2017 and this Court is satisfied that the
Commissioner, Employees‟ Compensation has rightly taken the loss
of earning capacity as 100% as respondent no.1 is unable to do any
work. Computation of compensation of Rs.10,69,008/- by the
Commissioner is upheld.
Conduct of the appellant
53. During the course of hearing dated 31st July, 2017, the appellant
raised a false claim before this Court that less than 10 workers were
employed during the construction whereupon this Court examined the
appellant under Section 165 of Indian Evidence Act when the
appellant made a false statement on oath with respect to the number of
the workers. It is matter of record that more than 30 workers were
employed on the site as stated by respondent No.1 during his cross-
examination on 10th December, 2014. Even the appellant, in his
written submissions filed before the Commissioner, Employees‟
Compensation on 27th January, 2016, admitted that respondent no.1
and 10-15 labourers were working on the site on the date of the
accident. The relevant portion of the written submissions of the
appellant, duly signed by the appellant and respondent no.2 as well as
their counsel are reproduced herein below:-
―3. ..................The above said applicant was brought to
the site of work by Mr. Mohd. Rahil alongwith 10-15
labourers on daily wages, who used to lay linter work in
the building on the day of incident i.e. 6.3.2012............
Gulab Singh Brijesh Kumar Verma
Signed/- Signed/-
Respondents
Signed/-
Counsel
Delhi Through
Dated: 27.1.2016‖
54. Raising a false claim before the Court is an offence under
Section 209 of Indian Penal Code which is reproduced here under:-
―Section 209 - Dishonestly making false claim in Court
-- Whoever fraudulently or dishonestly, or with intent
to injure or annoy any person, makes in a Court of
Justice any claim which he knows to be false, shall be
punished with imprisonment of either description for a
term which may extend to two years, and shall also be
liable to fine.‖
55. In H.S. Bedi v. National Highway Authority of India, 2016
(155) DRJ 259, this Court examined the scope of Section 209 of the
Indian Penal Code and held as under:
―15.1 Section 209 of the Indian Penal Code makes
dishonestly making a false claim in a Court as an offence
punishable with imprisonment upto two years and fine.
15.2 The essential ingredients of an offence under
Section 209 are: (i) The accused made a claim; (ii) The
claim was made in a Court of Justice; (iii) The claim was
false, either wholly or in part; (iv) That the accused knew
that the claim was false; and (v) The claim was made
fraudulently, dishonestly, or with intent to injure or to
annoy any person.
15.3 A litigant makes a ‗claim' before a Court of Justice
for the purpose of Section 209 when he seeks certain relief
or remedies from the Court and a ‗claim' for relief
necessarily impasses the ground for obtaining that relief.
The offence is complete the moment a false claim is filed
in Court.
15.4 The word ―claim‖ in Section 209 of the IPC cannot
be read as being confined to the prayer clause. It means
the ―claim‖ to the existence or non-existence of a fact or
a set of facts on which a party to a case seeks an outcome
from the Court based on the substantive law and its
application to facts as established. To clarify, the word
―claim‖ would mean both not only a claim in the
affirmative to the existence of fact(s) as, to illustrate, may
be made in a plaint, writ petition, or an application; but
equally also by denying an averred fact while responding
(to the plaint/petition, etc.) in a written statement, counter
affidavit, a reply, etc. Doing so is making a ―claim‖ to
the non-existence of the averred fact. A false ―denial‖,
except when the person responding is not aware, would
constitute making a ―claim‖ in Court under Section 209
IPC.
15.5 The word ‗claim' for the purposes of Section 209 of
the Penal Code would also include the defence adopted by
a defendant in the suit. The reason for criminalising false
claims and defences is that the plaintiff as well as the
defendant can abuse the process of law by deliberate
falsehoods, thereby perverting the course of justice and
undermining the authority of the law.
15.6 Whether the litigant's ‗claim' is false, is not
considered merely from whatever he pleads (or omits to
plead): that would be to elevate form over substance. To
make out the offence, the Court does not merely
inspect how a litigant's pleadings have been drafted or
the case has been presented. The real issue to be
considered is whether, all said and done, the litigant's
action has a proper foundation which entitles him to seek
judicial relief.
15.7 Section 209 was enacted to preserve the sanctity of
the Court of Justice and to safeguard the due
administration of law by deterring the deliberate
making of false claims. Section 209 was intended to
deter the abuse of Court process by all litigants who
make false claims fraudulently, dishonestly, or with
intent to injure or annoy.
15.8 False claims delay justice and compromise the
sanctity of a Court of justice as an incorruptible
administrator of truth and a bastion of rectitude.
15.9 Filing of false claims in Courts aims at striking a
blow at the rule of law and no Court can ignore such
conduct which has the tendency to shake public
confidence in the judicial institutions because the very
structure of an ordered life is put at stake. It would be a
great public disaster if the fountain of justice is allowed to
be poisoned by anyone resorting to filing of false claims.
15.10 The Courts of law are meant for imparting justice
between the parties. One who comes to the Court, must
come with clean hands. More often than not, process of
the Court is being abused. Property-grabbers, tax-
evaders, bank-loan-dodgers and other unscrupulous
persons from all walks of life find the Court-process a
convenient lever to retain the illegal gains indefinitely. A
person, who's case is based on falsehood, has no right to
approach the Court. He can be summarily thrown out at
any stage of the litigation.
15.11 The disastrous result of leniency or indulgence in
invoking Section 209 is that it sends out wrong signals. It
creates almost a licence for litigants and their lawyers to
indulge in such serious malpractices because of the
confidence that no action will result.
15.12 Unless lawlessness which is all pervasive in the
society is not put an end with an iron hand, the very
existence of a civilized society is at peril if the people of
this nature are not shown their place. Further if the
litigants making false claims are allowed to go scot free,
every law breaker would violate the law with immunity.
Hence, deterrent action is required to uphold the majesty
of law. The Court would be failing in its duties, if false
claims are not dealt with in a manner proper and effective
for maintenance of majesty of Courts as otherwise the
Courts would lose its efficacy to the litigant public.‖
(Emphasis supplied)
Conclusion
56. The impugned order holding the appellant liable to pay the
compensation of Rs.10,69,008/- along with interest @12% per annum
to respondent no.1 is upheld. However, the appellant is granted
recovery rights to recover the compensation amount from respondent
no.2 (contractor) after making the payment of the entire compensation
amount to respondent no.1.
57. In the present case, the compensation was not paid to
respondent no.1 when it fell due. Section 4A(3) of the Employees‟
Compensation Act provides for penalty upto 50% of the compensation
amount if the compensation due under the Act is not paid within one
month it fell due. However, the Commissioner, Employees‟
Compensation has not imposed penalty under Section 4A (3) of the
Employees‟ Compensation Act. The Commissioner, Employees‟
Compensation is directed to initiate the penalty proceedings under
Section 4A (3) of the Employees‟ Compensation Act in accordance
with law.
58. This Court is of the prima facie view that the appellant has
raised a false claim before this Court and therefore, a show cause
notice is hereby issued to the appellant to show cause as to why a
complaint be not made against him under Section 340 Cr.P.C. for
raising a false claim under Section 209 IPC. Reply to the show cause
notice be filed by the appellant within four weeks.
59. The appeal is disposed of in the above terms. Pending
application is also disposed of.
Disbursement of Compensation Amount
60. The appellant has deposited Rs.10,69,008/- with the
Commissioner, Employees‟ Compensation on 14th July, 2016. The
appellant is directed to deposit interest amount with the Registrar
General of this Court within four weeks.
61. Vide order dated 9th March, 2017, this Court directed the
Commissioner, Employees‟ Compensation to instruct State Bank of
India, Tis Hazari Courts Branch to transfer the aforesaid amount of
Rs.75,000/- to the savings bank account No.36035499387 of
respondent No.1 with State Bank of India, Tis Hazari Courts Branch
and the monthly interest on the FDR of the balance amount be
transferred to the savings bank account of respondent No.1 near the
place of the residence of respondent No.1.
62. The Commissioner, Employees‟ Compensation is directed to
disburse the remaining amount to respondent No.1 by directing the
State Bank of India, Tis Hazari Courts Branch in the following
manner:-
(i) Rs.8,00,000/- be kept in 50 FDRs of Rs.16,000/- each in the
name of respondent no.1, Aurangjeb for the period 1 month
to 50 months respectively with cumulative interest.
(ii) The balance amount, after keeping Rs.8 lakh in FDRs, be
released to respondent No.1 by transferring the same to his
individual savings bank account near the place of his
residence.
(iii) The maturity amounts of the FDRs made in the name of
respondent no.1, Aurangjeb along with the interest shall be
transferred to his individual savings bank account near the
place of his residence.
(iv) All the original FDRs shall be retained by the State Bank of
India, Tis Hazari Courts Branch. However, the statement
containing FDR number, FDR amount, date of maturity and
the maturity amount be furnished to respondent No.1.
(v) No loan or advance or pre-mature discharge shall be
permitted without the permission of this Court.
(vi) The concerned bank of respondent No.1 is directed not to
issue any cheque book or debit card to respondent no.1 and
if the same have already been issued, concerned bank is
directed to cancel the same. Respondent no.1 shall produce
the copy of this judgement before the concerned bank
whereupon the concerned bank shall make an endorsement
on the passbook of respondent no.1 that no debit card or
cheque book shall be issued to respondent no.1 without the
permission of this Court.
(vii) The concerned bank shall permit respondent no.1 to make
cash withdrawals on the basis of the withdrawal forms.
(viii) Respondent no.1 shall produce his passbook to the Manager,
State Bank of India, Tis Hazari Courts Branch who shall
ensure and verify that an endorsement on the passbook of
respondent no.1 has been made to the effect that no cheque
book or debit card has been issued and if the same have
already been issued, concerned bank has cancelled the same.
63. List on 29th January, 2018.
64. The record of the Commissioner, Employees‟ Compensation be
returned back forthwith for being listed before the Commissioner,
Employees‟ Compensation for initiating penalty proceedings on 15 th
January, 2018.
65. Copy of this judgement be given dasti to the counsel for the
parties.
66. Copy of this judgement be given dasti to Sanjoy Ghose,
Additional Standing counsel for GNCTD for compliance by
Commissioner, Employees‟ Compensation and Mr. Sajiv Kakra,
Advocate for compliance by State Bank of India, Tis Hazari Courts
Branch.
J.R. MIDHA
DECEMBER 20, 2017 (JUDGE)
ak/dk
