1 2025:CGHC:47652 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR FA No. 320 of 2015 1 - Steel Authority Of India Limited Bhilai Steel Plant Through Chief Executive Officer Formely Designated As The Managing Director Ispat Bhawan, Sector-1, Bhilainagar Tehsil- Durg, Chhattisgarh, Police Station- Bhatti Thana, Bhilainagar, Chhattisgarh, Civil And Revenue District- Durg, Chhattisgarh- 491001 ..........Defendant, Chhattisgarh ---Appellant Versus 1 - M/s Prakash Trading Company Registered Partnership Firm Through Shri Bholanath Gupta, Partner Indira Market, Durg, Tehsil And District Durg, Chhattisgarh - 491001 ..........Plaintiff, Chhattisgarh --- Respondent FA No. 226 of 2015 1 - M/s Prakash Trading Company Registered Partnership Firm Through Shri Deepak Kumar Gupta, Partner, Resident Of 7, Indira Market, Durg, Tehsil And District- Durg, Chhattisgarh ..............Plaintiff, Chhattisgarh --- Appellant Versus 1 - Steel Authority Of India Limited Bhilai Steel Plant, Through Managing Director, Bhilai Steel Plant, Ispat Bhawan, Sector- 1, Bhilai City, Tehsil And District- Durg, Chhattisgarh .............Defendant, Chhattisgarh --- Respondents FA No. 320/2015 For Appellant : Dr. Saurabh Kumar Pande, Advocate For Respondent : Mr. Amrito Das, Advocate FA No. 226/2015 For Appellant : Mr. Amrito Das, Advocate For Respondent : Dr. Saurabh Kumar Pande, Advocate SHUBHAM DEY Digitally signed by SHUBHAM DEY 2 S.B.: Hon'ble Shri Parth Prateem Sahu, Judge Order On Board 16/09/2025 1. This first appeal is filed being aggrieved with the judgment and decree dated 30.06.2015 (Annexure A/1) passed by the Learned 6th Additional District Judge, Durg, District – Durg (C.G.) in Civil Suit No. 21-B/2013 whereby, the learned Court below has passed an order accepting the claim of the Respondent/Plaintiff and directed the Appellant/Defendant to pay an amount of Rs. 1,59,800/- along with an interest of 12% per annum. 2. Learned counsel for the appellant would submit that the learned Trial Court while allowing the suit for recovery of the amount of Rs 1,59,800/- filed by the Respondent/Plaintiff had though taken note of Clause 20 of the General Conditions of Contract (hereinafter for brevity referred to as the GCC), however, misread the said clause. He contended that Clause 17 which has been extracted in para 20 of the impugned judgment supported along with Clause 20 of the GCC which is an indemnity clause wherein, it has been specifically provided that the contractor at all times indemnify the risk of accidents also along with others as mentioned therein. It is not in dispute that the Respondent/Plaintiff was awarded a contract for supply of High Silica Dolomite. On the date of alleged accident, the Truck bearing MP 24 CC 1717 was loaded with Silica Dolomite dispatched by the Respondent/Plaintiff caused an accident to an employee of the Appellant/Defendant. Due to the motor accidental injuries, the said employee, namely, Nirmal Das died on the spot. At that time, Nirmal Das was on his duty and accident happened during working hours. The appellant being employer of the deceased, in discharge of his obligations under the Workmen’s Compensation Act, 1923 has 3 calculated and deposited compensation for a sum of Rs. 1,59,800/- before the Commissioner, Workmen’s Compensation Act, 1923, District – Durg. He contended that after the accident, criminal case was registered against driver of the Truck. The truck was seized which is also pleaded in the plaint from which, it is apparent that the accident occurred with a Truck entered into the appellant’s premises for supply of Silica Dolomite dispatched by the Respondent/Plaintiff. Under clause 20 of the GCC, plaintiff has to indemnify the loss suffered by the defendant due to the said accident and therefore, invoking Clause 17 of the GCC, said amount of Rs. 1,59,800/- has been deducted from the RA bills of the respondent. 3. Learned Trial Court erred in not considering Clause 20 of the GCC in an appropriate manner and have passed the impugned judgment and decree against the appellant, holding that appellant is liable to pay sum of Rs. 1,59,800/- deducted from bills, along with interest at the rate of 12% per annum, which is erroneous. 4. Learned Counsel for the Respondent/plaintiff opposes the submission of counsel for the appellant and would submit that the judgment and decree passed by the learned Trial Court is in accordance with law. The Trial Court has taken note of the clauses 11, 17, 18 and 20 relied upon by the defendant therein/appellant herein and have concluded that the conditions of Clause 20 has not been complied by the appellant/defendant as no notice was issued to him prior to deducting the said amount. It is contention that, had the notice was issued, the plaintiff/respondent could get an opportunity to bring to their knowledge that even if accident is occurred with the truck, deputed by the respondent/plaintiff for supply of Silica Dolomite, it was insured with 4 Oriental Insurance Company and the Insurance Company was liable to indemnify the insured i.e. the respondent. He also contended that though in the plaint, happening of the accident with the Truck owned by the respondent is denied, however, even if there was an accident with the Truck owned by the respondent, causing vital injuries to Nirmal Das, employee of the appellant, then also, the family member of the deceased could have filed an application seeking compensation under the Motor Vehicles Act, 1988 impleading the owner and insurer of the offending vehicle wherein, the respondent could have the opportunity to defend the pleadings made therein and to make out a case that his vehicle is not involved in the accident. 5. In alternate, he further submits that if the appeal filed by the appellant is to be allowed, then the rights of the respondent be kept open to claim the amount so deducted by the appellant against the motor accidental injuries suffered by Nirmal Das from the insurance company/insurer of the offending vehicle. 6. I have heard learned counsel for the parties and perused the record of claim case. 7. The Respondent/Plaintiff in the pleading of suit have pleaded about the issuance of work order by the appellant after becoming successful in tender proceedings. It is also pleaded that pursuant to the work order, he started supply of Silica Dolomite to appellant. In para 6 of the plaint, it is pleaded that on 01.05.1996, truck bearing registration no. MP 24 C 1717 after unloading Dolomite in the premises of the appellant went towards the weigh bridge for weighing empty truck. It was also pleaded that on the next day, police arrested driver of the truck stating that he caused accident to Nirmal Das by his truck on 5 01.05.1996 in the premises of the appellant, due to which, he suffered injuries and died. Driver of the truck have denied the fact of accident from his vehicle. It is also pleaded that after 06 months of the accident, on 07.11.1996, the appellant/defendant informed the plaintiff/respondent that due to motor-accidental death of Nirmal Das, an employee of the appellant/defendant, compensation is to be paid in accordance with the provisions under the Employee’s Compensation Act, 1923 (henceforth the Act, 2023) of Rs. 1,59,800/- to which, the defendant have already deposited and the said amount has been deducted from the running bills of the plaintiff. 8. In the plaint, there is no pleading as to what happened to the criminal case registered by the police against driver of the plaintiff’s truck. There is no mention of the aforementioned fact in evidence of P.W. 1 also. Defendant have filed reply/written statement to the plaint wherein in para 7, it is specifically pleaded that according to the contract agreement entered into between the parties, for any mistake or loss on site, the defendant company suffers loss or damage due to any accident, the contractor will be liable. There is clear mention in the purchase order that the clauses of GCC will apply to the contract/agreement entered into between the parties. It is also pleaded that the liability to pay the compensation is on account of the wrong committed by the representative of the plaintiff and therefore, liability to bear the said compensation is upon the plaintiff. 9. There is no dispute with respect to the supply order, on the date of accident dated 01.05.1996, truck owned by the plaintiff went to the premises of the defendant to supply Silica Dolomite. Death of Nirmal Das due to the motor accidental injuries, registration of criminal case 6 against driver of the offending truck owned by the plaintiff is also not in dispute. 10.During course of argument, counsel for plaintiff/respondent has not disputed the submission of counsel for appellant that clauses of GCC is made applicable to the contract entered into between the parties of supply of Silica Dolomite. Copy of the GCC of Bhilai Steel Plant is filed as Ex. P/7. The relevant clauses which was relied upon by the counsel for appellant/defendant is Clause17 and Clause 20 and therefore both the clauses are extracted below for ready reference:- “17. RECOVERY OF SUMS DUE: Whenever under this contract any sum of money is recoverable from and payable by the Contractor, the Purchaser shall be entitled to detain withhold and recover such sum by appropriating, in part or whole, the security deposited by the contractor, if a security is taken against the contract, and to sell any Government Pro- missiory Notes, etc, forming the whole or part of such security. In the event of the security being insufficient or if no security has been taken from the Contractor, then the balance or the total sum recoverable, as the case may be shall be, deducted from any sum then due or which at any time thereafter may become due to the Con- tractor under this or any other contract with the Purchaser or any other unit of Steel Authority of India Ltd., Should this sum be not sufficient to cover the full amount recoverable, the Contractor shall pay to the Purchaser on demand the remaining balance due. This action is without prejudice to the right of the purchaser to take legal action against the contractor for the breach of the contract. 20. INDEMNITY: The Contractor shall at all times indemnify the Purchaser against all claims which may be made in respect of the stores for infringement of any right protected by Patent Registration of Design or Trade Mark and shall take all risk of accidents or damage which may cause a failure 7 of the supply from whatever cause arising and the entire responsibility the for sufficiency of all the means used by him for the fulfilment of the contract, provi-ded, always that in the event of any claim in respect of alleged breach of Letters Patent, Registered Design or Trade Mark being made against the Purchaser, the Purchaser shall notify the contractor of same, and the Con- tractor shall be at liberty at his own expense, to settle any dispute or to conduct any litigation that may arise therefrom.” 11.Perusal of the above extracted clause would show that it talks of recovery of sums due and Clause 20 talks of indemnity. Perusal of Clause 20 would show that liability upon the Contractor to indemnify the risk of accidents or damage which may cause a failure of the supply from whatever cause. From perusal of Clause 20, it is clear that it provides for the liability upon the contractor to indemnify the employer to take risk of accidents amongst others. 12.In the evidence also, PW-1 had admitted that on 01.05.1996, Ashwini Kumar was driving the truck bearing registration no. MP 24 C 1717 and the concerned police station registered a crime against the driver of truck for alleged commission of offence under Section 304A of the IPC. In his evidence, he has not made any averment/statement as to what happened to to the criminal case registered against driver of the truck, owned by the plaintiff, whether it was culminated into conviction or acquittal. 13.In the aforementioned facts of the case, death of Nirmal Das due to motor-accidental injuries on 01.05.1996, registration of criminal case against driver of the truck owned by the plaintiff is proved. Indemnity clause is also there in the GCC (Ex. P/7) which clearly mentions that the contractor shall take all risks of accidents. Amount of Rs. 8 1,59,800/- subject mater of suit was deducted by the defendant on the ground that he already paid compensation under Act, 1923 to the legal heirs/representatives of deceased employee of the defendant. According to the pleadings made in the suit, letter was written to the plaintiff. 14.Learned Trial Court in the impugned judgment had exonerated the plaintiff from the indemnity clause only on the ground that no prior notice was given to the plaintiff and the deduction of Rs. 1,59,800/- to be not in accordance with law. Perusal of Clause 20 of the GCC would show that it talks of notice in very specific contingencies as mentioned therein i.e. breach of Letters Patent, Registered Design or Trade Mark being made against the Purchaser (appellant), Purchaser shall notify the contractor of same, issuance of notice to the contractor is not mentioned for indemnifying the risk of accidents. From bare reading of Clause 20, it is apparent that the employer is not required to issue notice to contractor to indemnify risk of accidents. 15.Once there is agreed contract and the clauses specify the liability and responsibility, then the liability, is to be fixed in accordance with the conditions of GCC. Learned Trial Court misread the indemnity clause forming part of GCC. 16.As under Clause 20 of “indemnity”, it was the liability of the contractor to indemnify and to take all risk of the accidents in the opinion of this Court, claim by the legal representatives of the deceased employee of the appellant/defendant company, is to be deposited at the earliest to avoid interest and penalty as envisaged under Section 4A of the Act, 1923 and the defendant deposited the said amount. Learned Trial Court has erroneously held that in absence of notice mandated under 9 Clause 20 of GCC, the defendant/employer of contract committed illegality in deducting the amount of Rs. 1,59,800/- which is not sustainable in the facts of the case and therefore, it is accordingly, set- aside. 17.Consequently, the judgment and decree dated 30.06.2015 passed in case of ‘M/s. Prakash Trading Company Vs. Steel Authority of India Ltd.’ in Civil Suit No. 21B/2013 is set-aside. 18.However, the plaintiff is at liberty to to file appropriate proceedings before the appropriate forum against Insurance Company, if any remedy under law for recovery of amount deducted is available in accordance with law. 19. In view of above, First Appeal No. 320/2015 is allowed, claim and suit filed by the plaintiff is dismissed. As F.A. No. 320/2015 filed by the employer is allowed, nothing remains for adjudication of appeal bearing FA No. 226/2015 filed by contractor seeking enhancement of the rate of interest awarded in the judgment and decree dated 30.06.2015 passed by the learned Trial Court and it is dismissed in light of the judgment passed in FA No. 320/2015. 20. Decree be drawn accordingly. Certified copy as per rules. Sd/--/-/--------/--/- (Parth Prateem Sahu) Judge Dey