Bhatt, J.
1. The present appeal is directed against the judgment and award passed by the learned Judge, Labour Court & Ex-officio Commissioner for Workmen's Compensation, Rajkot, ('Commissioner' for short, hereinafter) in W. C. (N. F.) Application No. 14 of 1981, by invoking the aids of the provisions of section 30 of the Workmen's Compensation Act, 1923 ('Act' for short, hereinafter). The appellant is the original applicant/workman and the respondent herein is the original opponent/employer. Therefore, they are hereinafter referred to as 'workman' and 'employer' for the sake of convenience and brevity.
2. The workman claimed compensation of Rs. 16,128/- for personal accidental injuries sustained by him when he was attending sugar-cane crushing machine, on 10-2-1981. The workman was earning monthly wages of Rs. 330/-. On the day of the accident, his right hand was crushed in the said crushing machine, which resulted into the permanent partial disablement to the extent of 60%. The workman contended that he was working with the opponent/employer and he sustained injuries in the course of and out of his employment with the opponent/employer. Despite notice being served, the employer did not pay compensation. Therefore, the workman filed the aforesaid application for compensation.
3. The employer appeared and resisted the application for compensation by filing written statement, at Ex. 9. He, inter alia, contended that the applicant is not a workman as defined under the Act. He admitted the factum of the accident and the resultant injury arising out of the accident, on 10-2-1981. He denied that the applicant was his employee. It was pleaded by him that the applicant being a relative of one Bachu Nanji, who was his contractor, had unauthorisedly tampered with the crushing machine and, therefore, he is not entitled to any compensation.
4. In view of the facts and circumstances of the case and the evidence on record, the learned Commissioner was pleased to hold that original applicant is a workman' as defined under the Act. It was also found by the learned Commissioner that the 'workman' was earning Rs. 330/- per month, at the time of the unfortunate accident. The learned Commissioner has also held that the 'workman' has sustained permanent partial disablement to the extent of 60% on account of amputation of right hand which was crushed in the sugar-cane crushing machine. However, the learned Commissioner dismissed the application for compensation under section 3 of the Act on the ground that the applicant was not the workman of the opponent/employer. In other words, it was held that the original opponent, Patel Natha Ramji was not the employer.
5. Being aggrieved by the dismissal of the application for compensation, the original applicant/workman has, now, come up before this Court, challenging its legality and validity, under section 30 of the Act.
6. It is contended on behalf of the workman that he is entitled to compensation under section 3 read with section 12 of the Act. The learned Commissioner has found that the applicant was a workman on the date of the accident and he was earning Rs. 330/-per month. However, the learned Commissioner held that he was not a workman of opponent/employer Patel Natha Ramji. This finding of fact is, seriously, challenged.
7. After having examined the facts and circumstances of the present case, it appears that the learned Commissioner has committed a serious error in holding that the applicant/workman is not entitled to compensation under section 3 of the Act. It is an admitted fact that the opponent/employer had engaged one Bachu Nanji and one Jay-anti Soma as his contractors for cutting, collecting and crushing sugar-canes in his field. It is specifically pleaded in the written statement, at Ex. 9, that he had given contract to one Bachu Nanji and one Jayanti Soma for crushing sugarcanes. The learned Commissioner also believed that they were the contractors of the original opponent-Patel Natha Ramji. It is also held by the learned Commissioner that the applicant was a 'workman' as defined under the Act, at the relevant time. However, the application for compensation came to be dismissed as the learned Commissioner found that the applicant was not a workman of opponent/employer. It would be necessary, at this stage, to refer to the relevant facts emerging from the evidence on record.
8. The applicant was working on a sugarcane crushing machine, in the field of the opponent. The accident occurred, on 10-2-1981, in the field of the opponent when the applicant was attending to the aforesaid crushing machine. Unfortunately, on that day, the right hand of the applicant was crushed and he sustained permanent partial disability. One Bachu Nanji, who was the contractor of the opponent, was present at the time of the accident. Immediately after the accident, the opponent was called. The opponent rushed to the venue of the accident from his place, which is situated in the same field. The injured workman was shifted to Ervin Civil Hospital at Jamnagar, where he was admitted as an indoor patient. The applicant was undergoing treatment from 10-2-1981 to 30-3-1981. In the course of the treatment, in the hospital, the right forearm was removed by amputation. According to the medical evidence of Dr. M. M. Oza of the Ervin Hospital, at Jamnagar, there was amputation of distal fore-arm right, resulting into 60% permanent partial disability. It is clearly certified and testified by the Medical Officer Dr. M. M. Oza that the injured applicant has sustained permanent partial disablement to the extent of 60%. The disability certificate is also produced on record.
9. The learned Commissioner found that the applicant was a 'workman' at the relevant time. But, unfortunately, he dismissed his application for compensation holding that the opponent-Patel Natha Ramji, was not his employer. Unfortunately, it is also not clearly observed as to whose workman he was at the relevant time. On one hand the learned Commissioner has found that the applicant was a 'workman' at the time of the accident, but who is his employer is not discussed. It is only observed that the opponent was not the employer. According to the case of the applicant, opponent was the employer and this contention is not accepted by the learned Commissioner. This finding of fact is not only erroneous but is illegal in the light of the facts of the present case. The applicant was either the workman of opponent or Bachu Nanji. At the best it can be said that the applicant was engaged as employee by one Bachu Nanji, who was admittedly a contractor of the opponent. It is also found from the evidence on record that the applicant is a relative of one Bachu Nanji. So the applicant would be a workman of opponent-Patel Natha Ramji or the contractor Bachu Nanji. Unfortunately, the learned Commissioner did not decide as to who was the employer. Considering, the facts and circumstances of the present case, there can be no third person who would be the employer of the applicant. Either the opponent Patel Natha Ramji or the contractor Bachu Nanji would be the employer of the applicant. The learned Commissioner found that the original opponent was not the employer and, therefore, the. application for compensation came to be dismissed.
10. Now the question would arise as to whether the opponent would be liable for the payment or compensation in the present case. In the light of the facts and circumstances of the present case, it appears that the applicant being the relative of Bachu Nanji. who was, admittedly, a contractor of original opponent - Patel Natha Ramji must have engaged the applicant as a 'workman' for doing sugarcane crushing work. It is in evidence that the applicant, Koli Mansukh Rana, had come from Lalpur for the work which was going on in the field of the opponent-Patel Natha Ramji. Bachu Nanji, a contractor of the opponent-Patel Natha Ramji, had engaged some labourers for doing sugarcane crushing work. The applicant was also doing sugarcane crushing work on the day of the accident during which his right hand was crushed in the machine. At that time Bachu Nanji was present. Immediately after the accident, the opponent was also summoned and he along-with Bachu Nanji, took the applicant to Jamnagar to get him admitted in Ervin Hospital, tor treatment. Admittedly, medical expenses were borne by the opponent. Taxi charges were also borne by him. In the light of the facts of the present case and from the evidence on record, it can safely be concluded that the applicant was engaged as a workman by Bachu Nanji. Unfortunately, Bachu Nanji is not a party in the present case.
11. It appears from the record of the present case and from the impugned award that the attention of the learned Commissioner was not drawn to the provisions of section 12 of the Act. section 12 has material bearings in the present case. It 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 workmen 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'.
12. This Section contemplates a case where a contract is given by a person in the usual course of his trade or business which he would have carried out himself. The question which, now, requires to be adjudicated is as to whether in the light of the facts of the present case, could the opponent be fastened with the liability for the payment of compensation? It is an admitted fact that the original opponent Patel Natha Ramji had engaged said Bachu Nanji and one Jayanti Soma as his contractors for cutting, collecting and crushing sugar-canes which was a part of the process for making jaggery. Admittedly, the original opponent was doing the business of jaggery and he had, therefore, also engaged one Nazirtbhai Abdul as his contractor, for preparing jaggery The opponent has specifically pleaded such a case in his written statement, at Ex. 9. Even in his evidence, at Ex.30, he has clearly admitted that one Bhhaiya Nazir was given contract for preparing jaggery. It is also testified by him in his evidence that Bachu Nanji and one Jayanti Soma were given contract for crushing sugar-cane which was a part of the process for preparing jaggery. According to the evidence on record, Bachu Nanji and Jayanti Soma, as contractors of the opponent, had to cut, collect and crush sugarcanes so as to make jaggery. In view or the evidence and admitted facts on record, following three propositions would emerge:
(1) That the opponent-Patel Natha Ramji, was doing business of Jaggery,
(2) That he had engaged Bachu Nanji and one Jayanti Soma, as his contractors for preparing sugarcane juice by crushing sugarcane, and
(3) Nazirbhai Abdul was given contract for preparing jaggery for original opponent.
It is found from the evidence on record that the applicant was engaged as a workman by Bachu Nanji, for doing sugar-cane crushing work. It was a part of the process of preparing jaggery, which was the business of the original opponent. In the light of these facts, the liability for payment of compensation would also arise on the part of the original opponent. Patel Natha Ramji, being the principal in view of the specific provision incorporated in section 12 of the Act. section 12 prescribes that a person who is engaging a contractor for the execution of a contract work relating to his trade or business^ would be the principal and he would be equally liable for payment of compensation to a workman for personal injuries under section 3 of the Act. The word 'trade' means commercial activity. But the word 'business' has much wider connotation and covers activities which may not be com mercial. It is an admitted fact that the opponent was doing business of jaggery and for preparing jaggery, he had engaged contractors Bachu Nanji alongwith one Jayanti Soma for cutting, collecting and crushing sugarcanes. The applicant was engaged by Bachu Nanji as his workman for doing the same work which was going on in the field of the opponent. Consequently, a workman who is engaged by a contractor in execution of the contract work which is a part of the business of another person, who would be the principal, he would be liable for the payment of compensation in the event of accidental injury to the workman. Unfortunately, the provisions of Section 12 of the Act were not brought to the notice and were not considered by the learned Commissioner.
13. In order to hold the principal liable for payment of compensation, in the present case, the original opponent-Patel Natha Ramji, under section 12 of the Act, the following conditions are required to be satisfied:
(1) that the principal is carrying on trade or business and in the course of or for the purpose of that trade or business engages a contractor,
(2) that the work in question is ordinarily a part of trade or business of the principal,
(3) that the accident had occurred in or about the premises the principal has undertaken or usually undertakes to execute the work or which is in his control or management, and
(4) the accident occurred while the workman was in the course of his employment in executing the said work.
If all the aforesaid essential conditions are satisfied, then the principal can be made liable under section 12 or the Act for payment of compensation under section 3 of the Act. As observed hereinbefore, in the present case, all the aforesaid four conditions are fully satisfied. Needless to mention that there is a purpose and policy in incorporating such a provision in the Act.
13-A. Now the question would arise as to whether in absence of the original employer Bachu Nanji, can the applicant claim compensation under section 3 of the Act with the aid of section 12 of the Act? Answer to this question, spontaneously, would be in the affirmative. In view of the clear provisions in section 12 of the Act, a right is given to the workman to claim compensation either from the contractor, being the employer or from the principal or from both. Thus, option is given to the victim of employment injuries to claim compensation either from the principal or from the employer. Therefore, the applicant is entitled to claim compensation under section 12 of the Act from the principal also and it will be open for the principal to go for indemnification proceedings under the provisions of section 12 of the Act. Therefore, even in absence of the employer, Bachu Nanji, it will be open for the applicant to claim compensation from the principal. The very object behind the provisions of section 12 of the Act is to secure compensation to the workman who cannot fight out his battle for compensation by a speedy process. A person who employs others to advance his own business and interest is expected to provide a surer basis for payment of the injured workman 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 employer.
14. In view of the facts and circumstances of the present case, the applicant is entitled to claim compensation from the opponent-Patel Natha Ramji, being the principal of the contractor, Bachu Nanji, who had engaged the applicant as his workman. Therefore, there is no hesitation in holding that the applicant is entitled to compensation from respondent herein/original opponent.
15. Now a question would arise as to what amount of compensation should be awarded under section 3 of the Act in the present case. There is no dispute about the fact that the applicant was earning Rs. 330/-per month at the time of the unfortunate accident. The learned Commissioner has also clearly found and has held that the injured applicant was earning Rs. 330/- per month by way of wages. This being a case of an accident of 1981, the old relevant provisions will be applicable. According to Schedule IV, the injured applicant who was getting salary or wages in the bracket of Rs. 300/- Rs. 400 would be entitled to Rs. 26,880/- in case of permanent total disablement. Admittedly in the present case, the extent of permanent partial disablement is 60% on account of amputation of distal fore-arm. Therefore, the learned Counsel for the applicant has contended that the applicant would be entitled to a sum of Rs. 16,128/- by way of compensation being 60% of the amount as stipulated in the said Schedule. This contention is, rightly, not challenged on behalf of the original opponent. With the result, the applicant would be entitled to Rs. 16,128/- by way of compensation for the personal injuries sustained by him and for the permanent partial disablement to the extent of 60% in the right upper limb which arose out of and in the course of his employment. He would be, therefore, entitled to Rs. 16,128/- by way of compensation from the original opponent being the principal, by virtue of the special provision incorporated in section 12 of the Act.
16. Learned Counsel for the appellant/original applicant has, fairly conceded that in view of the peculiar circumstances of the present case and the bona fide belief of the opponent/respondent herein, it cannot be said that there was any wilful default or unjustifiable delay in making payment of compensation and, therefore, there would be no question of any award of amount by way of penalty or interest. In view of this candid and fair submission made by learned Counsel for the appellant, Mr. Bhudhbatti, the.question of awarding amount of penalty and/or interest under section 4A(3) of the Act would not assume any survival value. Incidentally, it may be mentioned that the original opponent/respondent herein had graciously and spontaneously extended his full cooperation to the unfortunate victim of the employment injury so as to secure speedy medical treatment for the injured. He paid charges for taxi in which he along-with Bachu Nanji, took the applicant to Ervin Hospital, at Jamnagar, and he had paid medical expenses incurred by the applicant. Therefore, apart from the fair concession, on the facts of the present case, there is no fit case to invoke the provisions of section 4A(3) of the Act for awarding any penalty or interest. However, it would be expedient and reasonable to award cost of this appeal and the application before the learned Commissioner.
17. Before parting with this judgment, it is difficult to resist the temptation of mentioning about the approach of the learned Commissioner. Needless to mention that the proceedings before the Commissioner for Workmen's Compensation are proceedings not like before a Civil Court and the strict principles of CivilProcedure Code and Evidence Act do not apply as they are applicable in civil proceedings before a Civil Court. The proceedings under the Act are distinct and stand on a different footing. Higher responsibility is cast on the Commissioner. For example, even under Section 10(A) of the Act, the Commissioner is empowered to initiate 'suo motu' inquiry about an employment accident or injury and to collect necessary information on receipt of intimation about such an accident from any source. Rules are also made under the Act. Therefore, the Commissioner is obliged to see that the rightful claim arising out of unfortunate employment injuries is not delayed or defeated on account of any such technicalities or procedures. The learned Commissioner could have resorted to the provisions of section 12 of the Act. Unfortunately, though the Commissioner found that the applicant was a workman, did not award compensation on hyper technical ground that it was not proved as to who was the employer. Could a workman who is legally entitled to compensation on account of such calamities arising out of the employment injuries be left at the mercy of such technicalities The learned Commissioner, unfortunately, failed to address himself to the underlying design and desideratum of the provisions of the Act and the relevant rules. An illiterate and unsophisticated village labourer remained unpaid and was deprived of his rightful compensation for a long spell of nine years on the altar of technicalities. Be as it may.
18. With the above observations, the appeal is allowed with costs. The impugned judgment and award shall stand modified accordingly.
19. The respondent herein/original opponent shall deposit a sum of Rs. 16,128/-by way of compensation within a period of ten weeks before the concerned Commissioner with costs throughout.
20. The learned concerned Commissioner is directed to see that the amount of compensation is invested in a suitable Government security or in fixed deposit in a nationalised bank for a period not less than ten years. Obviously, the original applicant would be entitled to the interest which shall accrue due thereon periodically. Needless to mention that the original applicant shall not be entitled to create any charge or encumbrance on the said amount of security without prior approval of the concerned Commissioner.
21. It will be open for the original applicant to move the concerned Commissioner for withdrawal of the amount from the fixed deposit or security in the event of any unforeseen circumstance or eventuality or emergency and it will be open for the concerned Commissioner to examine and decide such an application as and when made for withdrawal, on merits thereof.
22. With the aforesaid observations and directions, the appeal stands allowed accordingly with costs.