Bombay High Court: Principal Employer Cannot be Mulcted with Liability to Pay Interest/Penalty for Accident/Death of Contractor’s Employee under Employee’s Compensation Act

Bombay High Court: Principal Employer Cannot be Mulcted with Liability to Pay Interest/Penalty for Accident/Death of Contractor’s Employee under Employee’s Compensation Act

The Bombay High Court has affirmed that it is the fundamental liability of employer to deposit compensation within one month from the date when it becomes due. In case of failure to comply with statutory obligation on the part of the employer, he can be saddled with additional liability to pay interest and penalty, however the principal employer, who is made liable to pay compensation by extended arm under Section 12 of the Employee’s Compensation Act, 1923 cannot be mulcted with the liability to pay the interest and penalty in case of accidental death/injury of contractor’s employee.

The single Judge Justice SG Chapalgaonkar of the Aurangabad bench, while upholding the compensation of over Rs. 6 lakhs awarded to the next of kin of the driver who died of cardiac arrest while on duty, observed that driving a tanker to deliver water to villages is a mentally and physically stressful job.

The Block development officer- (original non-applicant/appellant) filed an appeal under Section 30 of the Employees’ Compensation Act, 1923 challenging the award of compensation to the next of kin of the deceased under Section 4(1)(a) of the Employees’ Compensation Act.

The case arose out of the death of Rafiq Khalifa- (respondent/original Applicant no.1), the driver of a water tanker owned by Kadarkhan Kasamkhan Pathan. Zilla Parishad, Ahmednagar and Block Development Officer, Panchayat Samiti, Akole (appellant) had entered into a contract with Harshvardhan Patil Sahlari Motor Vahtuk Sanstha Limited (contractor) for supply of water during the summer of 2013. The contractor took the services of Pathan’s tanker to execute the water contract. Rafiq died of heart attack on 23 April, 2013 while performing his duty as driver on the said water tanker.

The dependents of the deceased contended that his continuous 24-hour duty of fetching water from a distance of more than 60 km and distributing it to various villages and wadis caused mental and physical stress, which led to heart attack and subsequent death. happened.

However, the appellants denied any liability towards the employees on board the water tanker, arguing that the responsibility of the contractor’s employees or any person employed on the vehicle used for the supply of water rests entirely with the contractor. He claimed that there was no employer-employee relationship between Rafiq and him.

The Employees’ Compensation Commissioner ordered the appellants to jointly and severally pay compensation of Rs.6,39,000/- to the next of kin of the deceased along with interest at the rate of 12% per annum. The appellants were also directed to pay a cost of 50% of the amount of compensation as per Section 4-A(2)(b) of the Workmen’s Compensation Act.

The Court dealt with the following issue:

First, whether commissioner was justified in holding that deceased Rafique died during the course of the employment with Appellants/original respondents 1 and 2, particularly when appellants were not party to water supply agreement between the District Collector, Ahmednagar and respondent no.3 who had hired services of truck driven by deceased for execution of work under contract?

The Court relied on the specific admission made by the appellants in their written statement wherein they had accepted the contract with the contractor for supply of water and appointment of water tanker for the said work.

The Court upheld the finding of the Commissioner that the appellants were the principal employers, and the employment of the deceased was within the purview of his contract with the contractor. The contention of the District Collector being a necessary party was rejected as it was not raised in the written statement.

Second, whether death of the deceased Rafique could be attributed to the employment causes or whether there was causal connection between death of Rafique and his employment as a driver on water tanker?

The Court noted the contention raised by the appellants that the cause of death of Rafiq, i.e., heart attack, was not proved to be related to reasons of employment, and the cause of death was not disclosed in the post mortem report.

The Court concluded that Rafiq Khalifa died due to employment reasons. The Court cited previous judgments to hold that death due to heart attack while performing work-related duties can be considered an ‘accident’ within the purview of the Act.

Third, whether liability of interest and penalty under Section 4-A (3) (b) of the Employee’s Compensation Act, 1923 could be imposed against the Appellants- original respondent No.1&2/ 2/ principal employer, who had been held liable to pay compensation in terms of Section 12 of the Act?

The appellants had argued that the interest and penalty under Section 4-A(3)(b) of the Employees’ Compensation Act could not be imposed on their principal employer (appellants) and they were only entitled to pay compensation under Section 12 of the Act.

The Court accepted the contention of the Appellants that the liability of the principal employer (appellants) for interest and penalty under Section 4-A(3)(b) was not valid.

Consequently, the Court partly allowed the appeal and modified the order passed by the Commissioner. The judge upheld the compensation amount of Rs.6,39,000 to be paid jointly and severally by Zila Parishad, BDO, contractor and tanker owner.

Accordingly, the Court ordered the contractor and the owner of the water tanker to pay interest at the rate of 12% per annum on the compensation amount to the next of kin of the deceased from April 23, 2013 till its recovery.

Furthermore, the Court directed him to pay a fine of 50% of the compensation amount.