Partly allowed

The Branch Manager, v. R. Rani

Madras HC6 Jan 2020CMA/960/2016

Case brief

AI extract

What is this about?

Appeal against compensation award in a death-in-employment case. Court modified order to declare the contractor (insurer) liable only to be indemnified by the principal employer (service provider) rather than being primarily liable under the Workmen's Compensation Act.

What did the court decide?

Appellant to be indemnified by 2nd Respondent instead of being primarily liable for compensation payment.

The Branch Manager, Vs R. Rani — Pension and Retirement Benefits | Madras HC (2020)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 06.01.2020

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CORAM:

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THE HONOURABLE MR.JUSTICE S.VAIDYANATHAN C.M.A.No.960 of 2016 & C.M.P.No.7368 of 2016

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The Branch Manager, M/s.Kotak Mahindra Prime Limited, Plot No.12, Survey No.98, Bharathi Street, Near A.N.S. Shop, Allagapuram, Salem.

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... Appellant/2^nd respondent vs.

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1. R.Rani ..1^st respondent/ Petitioner 2. Chinnakannnu Chinnakannu Associates, 5/50B, Indranagar, Bangalore Bye-pass Road, Alagapuram Post, Salem – 4. ..2^nd respondent/1^st respondent

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1. P.Sakthivel ..3^rd respondent/3^rd Respondent 4. The Branch Manager, IFFCO-TOKYO General Insurance Co. Ltd., J.H.Towers, 2^nd Floor, No.24, LIC Colony Road, Salem – 4. ..4^th Respondent/4^th Respondent

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1. Venkatesan ..5^th respondent/5^th Respondent 6. The Deputy Commissioner of Labour cum Authority under the Workmen Compensation Act, Salem. ...6^th Respondent

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Civil Miscellaneous Appeal filed under Section 30 of the Workmen's Compensation Act, 1923 against the order of the Deputy Commissioner for Labour cum Authority under the Workmen's Compensation Act, Salem, dated 21.12.2015 passed in W.C.No.569 of 2009 and received by the Appellant on 28.01.2016.

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For Appellant : Mr.N.Umapathi for M/s.AAV Partners For 1st Respondent : No appearance For 2nd Respondent : No appearance for Mr.N.Velmurugan

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https://hcservices.ecourts.gov.in/hcservices/

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For 3^rd Respondent : No appearance

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For Respondents 4 & 5 : No appearance

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J U D G M E N T

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This Civil Miscellaneous Appeal is directed against the order dated 21.12.2015 passed by the Deputy Commissioner for Labour cum Authority under the Workmen's Compensation Act, Salem in W.C.No.569 of 2009.

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On a perusal of the records, it is seen that the Applicant viz. R.Rani, who is the 1^st Respondent herein, had approached the Deputy Commissioner for Labour cum Authority under the Workmen's Compensation Act, Salem in W.C.No.569 of 2009, seeking compensation for the death of her only son, viz. Viswanathan, who, according to her, died out of and in the course of employment under the 2^nd Respondent herein.

¶17

At the time of accident, the deceased was aged 23 years and was reported to be earning a sum of Rs.7,500/- per month. The Deputy Commissioner for Labour, Salem, on a detailed consideration of the facts of the case, held that the deceased died out of and in the course of employment under the 2^nd Respondent/Chinnakannu and the Appellant herein, and awarded a sum of Rs.4,39,900/- as compensation to the Applicant along with a sum of Rs.2,500/- towards funeral expenses. In all, a sum of Rs.4,42,400/- was awarded as compensation together with interest at 12% per annum from the 31^st day of the accident till the date of deposit.

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For better understanding, relevant portion of the Award is extracted hereunder:

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¶20

kntwe;jpuh gpiuk; ypkpbll;. Kid vz/12. rh;nt vz;/98. Ghujp bjU. V/vd;/v!;/eif fil rkPgk;. mHfhg[uk;. nryk; 4 epWtdj;jpdh; nkw;fz;lthW fzf;fPL bra;ag;gl;l , Hg;gPl;Lj;bjhif U:/4.39.900/00 cld; <kf;fphpia bryt[j;bjhif U:/2500-k; nrh;e;J bkhj;jk; U:/4.42.400/00 (U:gha; ehd;F , yl;rj;J ehw;gj;jp ,uz;lhapuj;J ehD}W kl;Lk;)I gzpahsh; , Hg;gPl;Lr;rl;lk; gphpt[/ 4A(3) (a) d;goa[k;. vd;/fnzrd;; vjph; jpyftjp kw;Wk; a[idbll; ,e;jpah ,d;t&;a{ud;!; fk;bgdp ypl/. brd;id (2010 (3) L.W. 89) tHf;fpy; khz;gik brd;id cah;ePjpkd;w otpy&d; bg";r; tH';fpa[s;s jPh;g;gpd; mog;gilapYk; tpgj;J ele;j njjpapypUe;J 30 ehl;fs; Koe;jjw;F mLj;j njjp Kjy; bjhif itg;;gPL bra;a[k; njjp tiuapyhd fhyj;jpw;F nkw;go ,Hg;gPl;Lj;bjhiff;F 12% tl;oa [ld; nrh;j;J ,e;ePjpkd;wj;jpy; itg;gPL bra;antz;Lbkd cj;jutplg;gLfpwJ/@

¶21

It is seen that, there was an Agreement between the 2^nd Respondent/Chinnakannu and the Appellant herein, thereby, the https://hcservices.ecourts.gov.in/hcservices/ Appellant had availed the services of the 2^nd

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Respondent/Chinnakannu for survey and valuation of seized vehicles. As such, the 2^nd Respondent/Chinnakannu had deputed his employee, the deceased Viswanathan, to survey and provide valuation Report of the seized Ford Icon Car bearing No.TN 30 C 1410 on 15.10.2008. Accordingly, when the deceased took the vehicle that was kept in the yard and drove the same, the vehicle ran out of control and fell into the nearby Well, which resulted in his death on the spot.

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For better appreciation of the case, relevant portion of the Valuation Agency/Asset Verification Agency Agreement entered into between the Appellant and the 2^nd Respondent/Chinnakannu, are extracted hereunder:

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Annexure B:

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“10. The Service Provider shall provide the Services diligently and shall be responsible and liable for the acts of the employees/representatives.

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The Service Provider hereby indemnifies and shall keep indemnified KMPL including its employees and Directors, its holding Company, subsidaries and associates for any loss, expense, or action caused as a result of the Service Provider failing to provide the services as specified in Annexure I to this Agreement to the satisfaction of KMPL and/or for any cost, loss, expense, action caused as a result of any act by any employee of the Service Provider and/or any such action of the Service Provider causing any loss, cost expense to KMPL.”

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Annexure 1 to the Agreement:

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“The service provider shall act on his own as a principal and not as an agent or employee of KMPL.' The service provider shall employ its own workmen employees and shall be responsible and accountable for such employees and workmen and for all the acts and omissions done by its employees and workmen. KMPL shall not in any way be responsible and accountable for any one of the workmen or employees of the Service Provider.

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In carrying out the services specified hereinabove, service provider shall act with utmost diligence and responsibility.

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https://hcservices.ecourts.gov.in/hcservices/

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Service Provider shall indemnify and keep indemnified KMPL from any loss sustained/incurred on account of any negligence on the part of the service provider in providing the aforesaid information or on account of service provider providing incorrect or false information by forthwith reimbursing to KMPL, the actual amount of loss sustained/incurred by KMPL.”

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On a reading of the aforesaid clauses, it is crystal clear that the 2^nd Respondent/Chinnakannu is a service provider to the Appellant herein. The work of the service provider is to depute his staff for the purpose of valuation of the vehicles seized in default of payment of loan, and for all other purposes as stipulated in the Agreement. It is also clearly stated in the Agreement that, the service provider shall have to act on his own, as a Principal and not as an Agent, or as an employee of the Appellant herein. Thus, there is a privity of contract and the 2^nd Respondent/Chinnakannu is undoubtedly, a principal employer of the deceased. To establish this point, the 1^st Respondent/Applicant, who is the mother of the deceased has also stated before the Authority that, her deceased son was employed as a Surveyor under the 2^nd Respondent/Chinnakannu.

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Though the word 'Contractor' has not been used by the 1^st Respondent/Applicant in her Claim before the Authority concerned, a reading of the pleadings and the evidence on record makes it clear that, as stated supra, there is privity of contract between the 2^nd Respondent/Chinnakannu and the Appellant herein and that the services of the employees of the 2^nd Respondent/Chinnakannu have been utilized by the Appellant herein for the purpose of survey and sale of vehicles seized in default of payment of loan, based on the Valuation Report submitted by the Surveyor.

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Had there not been any employer-employee relationship between the Appellant and the 2^nd Respondent/Chinnakannu, there is no reason for the deceased to go to the yard of the Appellant. The contractual terms in the said Agreement cannot be read mechanically, and a harmonious reading has to be given, as, the purpose and the legislative intent of the Workmen's Compensation Act, 1923 has to be taken into account.

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Also, the factum of death of the 1^st Respondent/Applicant's son and the place of the incident, are not in dispute. The deceased died on 15.10.2008 out of and in the course of employment under the principal employer, i.e. the 2^nd Respondent/Chinnakannu and his Contractor, i.e. the Appellant herein.

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https://hcservices.ecourts.gov.in/hcservices/

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The 1^st Respondent/Applicant, in her Claim Petition before the Authority, had sought a sum of Rs.10,00,000/- as compensation for the death of her only son, contending that, all the opposite parties before the authorities are jointly and severally liable to pay a sum of Rs.10,00,000/- as compensation together with interest.

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Though, the owner of the vehicle in question and the Insurance Company with which, the vehicle in question was insured, are parties to the present Appeal, without prejudice to the rights of parties, this Court is of the view that, they are not necessary parties for the purpose of grant of compensation under the Workmen's Compensation Act.

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It is further seen that, no evidence was produced by the 1^st Respondent/Applicant before the Authority concerned that, the deceased was earning a sum of Rs.7,500/- per month. As there was no contra evidence by the opposite parties before the Authority, in terms of Explanation to Section 4 of the Workmen's Compensation Act, 1923, which was in existence at that point of time, the monthly income of the deceased was fixed at Rs.4,000/- and taking into account the Age factor as 219.95, the Authority arrived at a sum of Rs.4,39,900/- as compensation, apart from awarding a sum of Rs.2,500/- towards funeral expenses, together with interest at 12% per annum.

¶40

It is the contention of the learned counsel for the Appellant that, compensation awarded by the Authority has to be paid only by the Insurer of the vehicle in question, i.e. the 4^th Respondent/IFFCO-TOKYO General Insurance Company Limited.

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The said contention cannot be accepted, as, the 4^th Respondent/Insurance Company has no role to the claim of compensation made before the Authority under the Workmen's Compensation Act, 1923, as stated supra. The compensation paid or payable by the 4^th Respondent/Insurance Company to the legal representative of the deceased is on a different aspect, which may even be eligible, depending upon the facts and circumstances of the case and the conditions stipulated in the Insurance Policy taken by the owner of the vehicle in question with the 4^th Respondent/Insurance Company.

¶42

In the case on hand, admittedly, the 2^nd Respondent/Chinnakannu is the Principal employer and the Appellant is a Contractor, and the Appellant is liable to pay compensation awarded by the Authority concerned to the legal representative of the deceased, as on the date of the Award, i.e. from 21.12.2015.

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Even though, there is no Indemnification Clause mentioned in the Policy, on a reading of the Contractual Agreement entered into between the Appellant and the 2^nd Respondent/Chinnakannu, it is clear that, at no stretch of https://hcservices.ecourts.gov.in/hcservices/ imagination, the Appellant can be called a 'Principal

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employer', when there are documentary evidence apart from the 1^st Respondent/Applicant's plea before the Authority that the deceased was employed under the 2^nd Respondent/Chinnakannu.

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Hence, the order dated 21.12.2015 passed by the Deputy Commissioner for Labour cum Authority under the Workmen's Compensation Act, Salem in W.C.No.569 of 2009, is modified to the extent that “the Appellant/Insurance Company is liable to be indemnified by the 2^nd Respondent/Chinnakannu for payment of compensation to the legal representatives of the deceased".

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If the amount is not paid, it is open to the Appellant/Insurance Company to seek attachment of the movable and immovable properties and take them into their custody with the help of Police. Driving the Appellant to one or more proceedings will not result in immediate justice. Thereafter, it is open to the Appellant/Insurance Company to proceed to recover the amount from the 2^nd Respondent/Chinnakannu, in accordance with law.

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The Civil Miscellaneous Appeal is disposed of accordingly. No costs. Consequently, connected C.M.P.No.7368 of 2016 is closed.

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Sd/Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar (aeb) To :

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The Deputy Commissioner of Labour cum Authority under the Workmen Compensation Act, Salem.

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+1cc to Mr.N.Umapthi , Advocate SR.No. 1041 +1cc to Mr.S.P.Yuvaraj , Advocate SR.No. 7491

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C.M.A.No.960 of 2016 sr co A.SK(26/08/2020)

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https://hcservices.ecourts.gov.in/hcservices/

The Branch Manager, v. R. Rani

Case brief

What is this about?

What did the court decide?

The Branch Manager, v. R. Rani

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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