J.B. Koshy, J.
1. The appellant railway questions the judgment of the Commissioner for Workmen's Compensation. Respondent No. 1 filed an application before the Commissioner for Workmen's Compensation claiming that while he was doing doubling work of railway line under the respondent No. 2, J&J; Constructions, he-met with an accident and suffered injuries. Respondent No. 2 even though entered appearance through advocate, remained absent and did not file any written statement and did not contest the case. The appellant railway filed a written statement stating that there was no employer-employee relationship between the railway and the respondent No. 1 workman. It was also contended that the railway has engaged a contractor by name M.D. Simon for doing the doubling work in the area in question and not the respondent No. 2 and, therefore, even as a principal employer they are not liable to pay any compensation to the respondent No. 1 workman. It was further contended that they were not informed about the accident and even if Simon who was the contractor engaged J&J; Constructions as sub-contractor, it is not proved that the accident happened while doubling work of the railway was done and, therefore, it cannot be held that any accident happened in the course of employment connected with railway. Finally, it was contended by the learned Counsel for the appellant that the Commissioner has calculated compensation on the basis of provisions of the amended Act as amended by Act 30 of 1995 which came into force with effect from 15.9.1995. The accident happened on 10.6.1995 as per the application, i.e., before the commencement of the amended Act. Therefore, the compensation can be calculated, even if payable, only as per the provisions of the unamended Act.
2. The Commissioner has assessed loss of earning capacity at 10 per cent. The above assessment of loss of earning capacity is not questioned. The Commissioner found that the accident occurred during the railway doubling work. Commissioner relied on the oral evidence of the applicant as well as the F.I.R. produced in this case. In fact no counter evidence was adduced by the appellant or the respondent No. 2 to dispute the averment made by the applicant. No evidence to the contrary was adduced. So finding of the Commissioner that the accident arose during the railway doubling work cannot be questioned in an appeal under Section 30 of the Workmen's Compensation Act. Therefore, we are of the opinion that the Commissioner was correct in holding that the accident occurred while the workman was engaged in the work connected with the railway. It is true that even after filing the written statement by the railway stating that the railway contractor engaged for the doubling work in the area was one Simon, respondent workman (applicant) did not take any steps to implead the contractor. However, it is clear that the ultimate employer in this case was the railway as the work involved was the doubling of railway line and the railway also could have impleaded the contractor. The railway also did not adduce any evidence before the lower court to show that the railway contractor was Simon and they could have produced contract with the Simon before the court. That was also not done. No evidence was adduced by the railway to prove terms of the contract also. In any event, evidence in this case clearly shows that workman met with the accident during the railway line doubling work. Hence, ultimate employer is the railway. Doubling of railway line is part of trade and business of the railway. Hence, principal employer is the railway and it cannot escape liability under Section 12 of Workmen's Compensation Act on the ground that its contractor has engaged a sub-contractor. Obligation of the principal employer under Section 12 of the Act will not extinguish merely because contractor or sub-contractor was not made a party to the application. We hold that the principal employer is liable to pay compensation under Section 12 to sub-contractor's employees also in the same manner as to the workers employed by the contractor if other conditions in Section 12 are satisfied.
3. The respondent No. 2 did not file any written statement in this case even though it had entered appearance. Categorical averment by the applicant was that he was engaged by the J&J; Constructions for the work of the railway and J&J; Constructions was the employer. Section 12 of the Workmen's Compensation Act reads as follows:
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 workman employed in the execution of the work any compensation which he would have been liable to pay if that workman 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 workman 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 workman 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 workman could have recovered compensation and all questions as to the right to and the amount of any such indemnity shall, in default of agreement, be settled by the Commissioner.
(3) Nothing in this Section shall be construed as preventing a workman from recovering compensation from the contractor instead of the principal.
(4) This Section shall not apply in any case where the accident occurred elsewhere than 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.
Under Section 12(2) of the Act the principal employer has got the right to get indemnified from any person from whom the workman could have recovered compensation. Hence, principal employer can recover the amount not only from the contractor but also from the sub-contractor who actually employed the workman. If sub-contractor is the real employer of the workman, he will be a person from whom the workman could have recovered compensation. Therefore, after payment of the amount, i.e., the amount of compensation as per the order of the Commissioner, as provided under Section 12(1), the principal employer can lay its claim to recover it from the employer of the applicant, i.e., respondent No. 2 herein who did not file any written statement before the Commissioner.
4. Now we will examine the contentions regarding calculation of the compensation. The Supreme Court in Kerala State Electricity Board v. Valsala K. 2000 ACJ 5 (SC), held that workmen's compensation has to be calculated on the basis of the provisions as existing on the date of the accident. The Amendment Act 30 of 1995 was brought into force only on 15.9.1995. The accident happened prior to that date. Therefore, compensation should be calculated only on the basis of the unamended provisions of the Act on the date of the accident. If that be so, maximum monthly income that can be calculated is only at the rate of Rs. 1,000 and compensation will be calculated as follows:
Rs. 1,000 x 50/100 x 219.95 x 10/100 : Rs. 10,997.50
The above amount with 6 per cent interest from the date of accident, i.e., 10.6.1995 till the date of deposit of compensation (10.10.1998) should be released to the respondent No. 1 workman. The entire amount as ordered by the Commissioner was deposited by the railway as a condition precedent in filing the appeal. The amount of compensation as calculated also with 6 per cent interest as provided under the unamended provisions of the Act should be released to the respondent No. 1 workman forthwith. The balance amount should be refunded to the railway. This is without prejudice to the right of the railway in recovering the amount from the employer of the workman, i.e., respondent No. 2.
The appeal is allowed to the above extent.