- 1 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 30TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR MISCELLANEOUS FIRST APPEAL NO.22392 OF 2012 (WC) BETWEEN: THE EXECUTIVE ENGINEER (ELE), AGE: MAJOR, WORKS DIVISION, KPTCL, HUBLI-580024. …APPELLANT (BY SRI B.S. KAMATE, ADVOCATE) AND: 1. SRI FAKIRAPPA S/O. SHIVAPPA MARINAIKAR, AGE: 69 YEARS, OCC: NIL, R/O. BANDIWAD, TQ: HUBLI-580031, DIST: DHARWAD. 2. SMT. DYAMAVVA W/O. FAKIRAPPA MARINAIKAR, AGE: YEARS, OCC: HOUSEHOLD, R/O. BANDIWAD, TQ: HUBLI-580031, DIST: DHARWAD. 3. M/S. LARSEN AND TURBO LIMITED, ECC DIVISION (BRANCH), HOUSE 50/18/1, ‘HITAISHI’, 1ST CROSS, PRAGATI COLONY, NEAR YALIWAL NURSING HOME, VIDYUT NAGAR, HUBLI-21, PRESENT ADDRESS: NO.19, KUMARKRUPA ROAD, 1 AND 2 FLOOR, BANGALURU-590001. …RESPONDENTS (BY SRI MAHESH WODEYAR, ADV. FOR R1 AND R2; NOTICE TO R3 IS SERVED) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 30 OF EMPLOYEES COMPENSATION ACT, 1923, PLEASED TO SET ASIDE THE JUDGMENT AND ORDER DATED 30.08.2008 PASSED BY THE LABOUR OFFICER AND COMMISSIONER FOR WORKMEN’S COMPENSATION, HUBLI SUB-DIVISION, HUBLI, IN CASE NO.WCA/F-18/2007, INSOFAR AS THE APPELLANT/KPTCL IS CONCERNED, BY ALLOWING THIS MFA WITH COSTS IN THE INTEREST OF JUSTICE. R Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 THIS MISCELLANEOUS FIRST APPEAL, COMING ON FOR HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING: ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR) This appeal is filed by the principal employer, the Executive Engineer-KPTCL challenging the order and award passed by the Labour Officer and Commissioner for Workmen’s Compensation, Hubli Sub-Division, Hubli in Case No.WCA/F-18/2007 dated 30.08.2008, thereby, the claim petition filed by claimants is allowed in holding that appellant and respondent No.3 are jointly and severally liable to pay compensation. 2. It is the case of claimants that the deceased- Udachappa was working as coolie under respondent No.3- L&T Company and there was contract of electrical work between the appellant and respondent No.3 and the appellant had entered into agreement with respondent No.3 and accordingly, work order was issued. The deceased was working as a coolie under the employment of contractor-respondent No.3 and while working for and - 3 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 on behalf of the appellant through the contractor- respondent No.3, the deceased died due to electrocution. Therefore, the claimants being father and mother of the deceased have filed a claim petition before the Commissioner for Workmen’s Compensation. The learned commissioner has awarded compensation along with statutory interest in holding that appellant and respondent No.3 are jointly and severally liable to pay the compensation. 3. Being aggrieved by it, the appellant-KPTCL has filed the appeal by raising various grounds and the learned senior counsel for the appellant-KPTCL submitted that the deceased was not working for and on behalf of the appellant-KPTCL. Therefore, the appellant is not liable to pay compensation. Further, submitted that even respondent No.3 denied that the deceased was working as coolie under him. Therefore, there is no relationship of employer and employee between the appellant and - 4 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 deceased. Therefore, awarding of compensation is not correct. 4. Further submitted that if at all the deceased was working as a coolie under respondent No.3, but respondent No.3 alone is liable to pay compensation but not by the appellant. Therefore, prays to allow the appeal and set-aside the order and award passed by the learned Commissioner. 5. On the other hand, learned counsel for respondents No.1 and 2-claimants submitted that the deceased was working as a coolie under the employer/contractor-respondent No.3-L&T company and this respondent is engaged by the appellant-KPTCL for electrical work. Therefore, the deceased was working for and on behalf of the appellant through the contractor- respondent No.3. Therefore, both appellant and respondent No.3 are jointly and severally liable to pay compensation and this is correctly held by the learned Commissioner. Hence, submitted that there is no need to - 5 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 make interference with the order and award passed by the learned Commissioner. Hence, prays to dismiss the appeal. 6. Upon perusing the evidence and material on record and the arguments of learned counsel for both the parties, the following substantial questions of law would arise for consideration in this appeal. i. Whether, under the facts and circumstances involved in the case, the claimants prove that the deceased was working as a coolie under respondent No.3-L&T Company and there was contract of work between the appellant and respondent No.3 and thus, is amounting to the deceased was working for and on behalf of the appellant-KPTCL, thus, both appellant and respondent No.3 are liable for jointly and severally as per Section 12 of the Employees Compensation Act? ii. Whether the order and award passed by the Labour Officer and Commissioner for Workmen’s Compensation, Hubli Sub-Division, Hubli requires any interference by this Court? - 6 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 7. It is the case of the claimants that the deceased was their son who was working as coolie under the respondent No.3 and the appellant has engaged services of respondent No.3 for electrical work as per contract between the appellant and respondent No.3 and in this process while the deceased was working for and on behalf of the appellant through respondent No.3-contractor died in the mishap. Thus, it is submitted that the death of deceased is out of and in the course of employment. 8. Upon, considering the argument addressed by learned counsel for appellant-KPTCL that the documents at Exs.R1 and R2 which are produced by the appellant before the learned Commissioner during the trial and contract agreement executed on 09.04.2003 between the appellant and respondent No.3 for work of transmission line from Narendra to Haveri. Ex.R2 is the work order issued by the appellant to the respondent No.3. These, documentary evidence prove that the appellant has given contract and work order to respondent No.3 for installation of - 7 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 transmission line from Narendra to Haveri. The appellant himself has produced these documentary evidence under the pretext that the deceased has been engaged by respondent No.3 for the work but not by the appellant. Hence, respondent No.3 alone is liable to pay compensation. For this purpose, Exs.R-1 and R-2 are produced. Thus, documentary evidence are not disputed by the respondent No.3. It is proved that the respondent No.3 is a successful bidder of getting work order of transmission line from Narendra to Haveri. 9. Then, the question comes before this Court is that whether the deceased was working as a coolie under respondent No.3, during such work of installation of transmission line from Narendra to Haveri died in the accident. The claimants have stated that the deceased was working under respondent No.3 as a coolie and the deceased was engaged in the process of installation of transmission line from Narendra to Haveri as it was entrusted by the appellant to respondent No.3. To - 8 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 corroborate this averment in the claim petition, the claimants have produced documentary evidence as Ex.P1- FIR, Ex.P2-Complaint and Ex.P3-Final report. These are at undisputed point of time soon after death of deceased in the mishap. The accident was taken place on 05.05.2004 at 04.00 p.m. The Police have received and recorded FIR, statement and accordingly, report is prepared on 05.05.2004 at evening 7.00 p.m. The said FIR was forwarded to the learned Magistrate on the same day on 05.05.2004 at 7.30 p.m. Therefore, soon after the accident, it is reported before the Police that the deceased was working under the employment of respondent No.3 as coolie and during process of erection of transmission line, the accident was occurred and died in the accident. In the complaint, FIR and final report, it is mentioned by the complainant that while the deceased was discharging his duty as a coolie under the employment of respondent No.3, as he was engaged to do work for and on behalf of the appellant-KPTCL, the said accident has occurred. Therefore, it is proved that the death of deceased is out of - 9 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 and in the course of employment while he was working as coolie under the employment of respondent No.3- contractor for and on behalf of the appellant. Ex.P-4 is a post-mortem report which proves the death of deceased is due to electric shock. Therefore, after appreciating evidence on record, it is proved that death of deceased is out of and in the course of employment when he was working under respondent No.3 for and on behalf of the appellant-KPTCL. 10. Section 12 of the Employees Compensation Act stipulates 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 employee employed in the execution of the work any compensation which - 10 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 he would have been liable to pay if that employee 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 employee 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 employee 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 employee 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 an employee from - 11 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 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.” 11. Section 12 of the Employees Compensation Act imposes liability on the principal employer with right to recover the same from the contractor in respect of work being carried out by the contractor as per Section 12 of the Act, the liability on the principal employer and contractor is joint and several. Therefore, the appellant being principal employer cannot evade of his liability to pay compensation to the claimants. 12. The object of Section 12 of the Employee’s Compensation Act is explained in the judgement of Delhi High Court in the case of SHRI. KRISHNAN VS. JASODA DEVI reported in 2017 SCC Online Del 11137 (Shri. - 12 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 Krishnan Case). After referring various judgments, it is observed as follows: 9. In Bhutabhai Angadbhai v. Gujarat Electricity Board, 1987 (1) L.L.N. 156, the Division Bench of Gujarat High Court explained the object of Section 12 of the Workmen's Compensation Act as under: "9. The object of enacting Section 12 of the Act is to give protection to the workmen and secure compensation from the persons who can pay and in case of an accident such workmen will not be dependent, sometime upon a petty contractor who will not be able to pay compensation on account of his financial inability. In our opinion, the main object of enacting Section 12 of the Act is to secure compensation to the employees who have been engaged through the Contractor by the principal employer for its ordinary part of the business, which, in the ordinary course, the principal employer is supposed to carry out by its own servants. 10. While imposing this liability on the principal employer, sub-Section (2) of Section 12 of the Act has provided that the principal employer will be entitled to be indemnified by the contractor in case the principal employer is required to pay compensation to the employees of the contractor." (Emphasis supplied) 10. In M.R. Mishrikoti v. Muktumsab Hasansab Asoti, (1972) 2 Mys LJ 449, the Division Bench of Mysore High Court explained the intention of the legislature in enacting Section 12 of the Employees' Compensation Act as under: "7. In the aforesaid proviso, the term 'employer' is used in contradistinction to the injured workman or the dependent of a deceased workman who had made an application for compensation and - 13 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 who can also appeal from an order of the Commissioner if he feels aggrieved by such order. The intention of the Legislature in enacting that proviso appears to be that the injured workman or the dependent of a deceased workman who has been awarded compensation by the Commissioner, should not be put to any difficulty in realising such amount of compensation on account of any recalcitrance of the employer or on account of the vicissitudes of his (the employer's) financial position after he prefers an appeal." (Emphasis supplied) 11. In Koli Mansukh Rana v. Patel Natha Ramji, 1992 ACJ 772, the Gujarat High Court explained the object of Section 12 as under: "15... 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.” (Emphasis supplied) 12. In Executive Engineer/Deputy General Manager, Sub Urban Division, DHBVNL, Bhiwani v. Priyanka, 2017 (153) FLR 302, the Punjab and Haryana High Court explained the object of Section 12 as under: "10....... The avowed object of the said Section is to confer benefits on the employee and their legal representatives in the cases of death for their right to compensation either from the principal or from the contractor at their option. The purpose being that a - 14 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 contractor may be merely a man of straw and, therefore, might not be in a position as such to pay off the claims immediately and, therefore, their interests were to be protected to avoid any direct confrontation. The right of the principal to be indemnified has thus been incorporated. The interest of the principal employer has been duly safeguarded under Section 12(2), who has entrusted the work to the contractor stipulating the right of indemnification under the Act.” (Emphasis supplied) 13. This Court in the judgment of Divisional Manager South Central Railway, Hubli V/s Smt. Manjamma ILR 2012 KAR 5171, while making interpretation of Section 12 of the Employees Compensation Act, it is held as follows: “8. The main object of enacting Section 12 of the said Act is to secure the compensation to the employees, who have been engaged through the contractor by the principal employer for the latter’s ordinary part of business. The scheme of Section 12 of the said Act is intended to secure a workman the right to claim compensation not only against the immediate employer, be it a contractor or sub-contractor, but also against the principal employer.” 14. Therefore, the object of Section 12 is that the principal employer is made liable even in respect of the work in favour of employee engaged under contractor, if - 15 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 the work entrusted with the contractor is connected with the trade and business of the principal employer. Here, the words ‘trade’ and ‘business’ are interpreted as follows and held in Shri. Krishnan Case (supra). “13. In Payyannur Educational Society v. Narayani, (1996) 72 FLR 709, two workmen engaged in land excavating operation were buried alive in a landslide whereupon claim for compensation was made against an educational society. The society contested the claim on the ground that the society sold the soil to the contractor, who had engaged the workman and was liable to pay the compensation. It was further pleaded that ordinary business of the society was to impart education and digging work was not part of its "trade" or "business". The Division Bench of Kerala High Court headed by K.T. Thomas, J. as he then was, held that the word "business" used in Section 12 of the Act has been intended to convey the meaning as the work or task undertaken by the person concerned which are not restricted to trade or commercial work alone. The relevant portion of the judgment is reproduced hereunder: "1. Two workmen while engaged in a land excavating operation, were buried alive under heaps of mud billowed on them in a landslide and the site became their grave instantaneously, Dependents of those who died in such a trice made claims for compensation from the owner of the land (appellant) and two others (respondents 2 and 3). The Workmen's Compensation Commissioner (for short ‘the Commissioner') found that it was the appellant who had employed them, and on that finding he directed the appellant to pay compensation amount to the dependents of those two victims. These appeals are in challenge of the common award passed by the Commissioner. - 16 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 2. There is no dispute that at the time of the catastrophe the two workmen were engaged in excavation work on appellant's land. Appellant is a registered society called "Payyannur Educational Society". Appellant's contentions were that the two workmen were not employed by the society but they were recruited by the second respondent to whom the society sold soil at the rate of Rs. 15/- per Lorry load and that the mishap occurred during the operation undertaken by the second respondent who was permitted by the society to do the excavatory work and collect the soil. In other words, appellant's main case is that it was not the employer. xxx xxx xxx 7. Learned counsel for the appellant advanced the following arguments to bypass Section 12 of the Act. That provision can be invoked only if the digging work as part of "the trade or business" of the society and further such should have been the normal business of the society. According to the counsel, the ordinary business of the society is to impart education and the digging work was not a part of it at all. xxx xxx xxx 9. It is trite law that the safe guidance for interpreting any provision in a statute or for understanding the scope and meaning of a particular word in provision, is to ascertain the intention of the legislature. However wide in the abstract, general words and phrases are more or less elastic and admit of restriction or extension to suit the legislative intention. "The object of the legislation would afford answer to the problems arising from ambiguities which it contains", (vide Maxwell on the "Interpretation of Statutes" 12th edition at page 86). 10. We bear in mind that one of the objects for enacting the Act even as early as 1923 was to ameliorate the hardships of economically poor - 17 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 workmen who were exposed to risks in work, or occupational hazards by providing a cheaper and quicker machinery for compensating them with pecuniary benefits. With the progress of times the concept impelled the courts, by and large, to make stretched constructions without violating the fundamental principles in order to advance the above object. Looking at it from the above angle, the object of the legislature in providing Section 12 in the Act is to safeguard the right to compensation when the employer delegates the work to another person. 11. We will now proceed to consider in what manner the words "business" and "ordinarily" in Section 12 of the Act should be understood. 12. Section 3 of the Act imposes a liability on the employer to pay compensation in cases where personal injury is caused to a workman by accident arising out of and in the course of the employment. Section 12 of the Act has, in effect, stretched the contours of the word "employer" wider as to include the person contracting with another person for carrying out the work of the former. In such cases, the provision enjoins that the principal shall stand substituted as the employer. This is achieved by the words 'where compensation is claimed from the principal, this Act shall apply as if references to the principal were substituted for references to the employer". The principal may have any claim for contribution from his contractor or delegatee, but that can be dealt with as between them separately. The victim or his dependents are not to be involved in such disputes. This much can easily be discerned from the section. 13. The meaning of the two crucial words in Section 12 has to be understood in the above context. We do not think that the word "business" in the section need be restricted to what is synonymous with trade. The use of the conjunction "or" should be understood as disjunctive for covering totally different areas unconnected with "trade". A reference - 18 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 to the Dictionary would reveal that the word "business" has different shades of meanings. Among them the most suitable in the present context is that which "The Oxford Advanced Learners Dictionary of Current English" has given as its third meaning: "Task, duty, concern or undertaking to do a work". Some succinct illustrations have also been given in the said dictionary to drive the meaning home. They are: "It is a teacher's business to help his pupils; I still make it my business to see that money is paid promptly; that is no business of yours". In none of the illustrations the word "business" is used to denote anything connected with trade or commerce. We think that, the word business used in Section 12 of the Act has been intended to convey the meaning as the work or task undertaken by the person concerned which are not restricted to trade or commercial work alone. Hence the interpretation given to the words "trade or business" appearing in Article 19 of the Constitution, or in the Rent Control Law is not apposite in the context of Section 12 of the Act. We may observe with great respect that the Division Bench of this Court in Travancore Devaswom Board v. Prushothaman (1989 2 LLJ 114), has not adopted any principle in conflict with the above view. 14. In Bata Shoe Company v. Union of India AIR 1954 Bombay 129 Gajendragadhkar, J. (as he then was) observed that the word "business" in its wider connotation may have more extensive meaning than the word "trade". His Lordship then quoted Jessel M.R. in Smith v. Anaerson 1880 15 Ch D 247 who stressed the meaning of business as "anything which occupies the time and attention and labour of a man for the purpose of profit". This wide meaning was followed in Public Works Dept. v. Commissioner 1981 Lab IC. 498 by a Division Bench consisting of Dr. A.S. Anand, J. (as his Lordship then was) and IK. Kptwal, J. in Workmen's Compensation cases. We are, therefore, emboldened by the above - 19 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 decisions in adopting the wide connotation for the word "business" in the present case. 15. Our next endeavour is to ascertain what the legislature meant by the word "ordinarily" in Section 12 of the Act. The word "ordinarily" is an elastic term. It is seen used in different statutes. The word has different shades of meaning in different contexts (vide Kailsdh Chandra V. Union of India (1961-II-LLJ-369 (SC)). If it is used for referring to jurisdictional aspects it may mean "in large majority of cases but not invariably". When the word is used for referring to residential qualification it may sometimes include even temporary residence. But the word "ordinarily’’ is employed in Section 12 of the Act for a different connotation. That has to be understood in the background of the preceding portion in the section wherein execution of the work carried out through any other person contracted by the principal for this purpose is mentioned. What the principal would have done if he has not contracted with another person to carry out that work? He himself would have normally done that work or caused it to be done under his supervision. The word "Ordinarily" is used in Section 12 of the Act for projecting that idea. So the word "ordinarily" in Section 12 of the Act means "otherwise, normally”. We cannot confer any other meaning to the term "ordinarily" as it appears in the section. We did not find anything contrary to the above legal position in the decision of the Division Bench of this Court in Vijayaraghavan v. Velu (1973 I LLJ 490). 16. Learned counsel for the appellant lastly contended that as the soil was sold to the second respondent, appellant had lost any ownership thereof and hence he cannot be made liable. What was sold by the appellant was only the soil and not the land. As long as the soil was not separated and transported, it remained as part of the land. The work involved in transforming land into soil must necessarily have been done when the ownership and - 20 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 title of the land remained with the appellant. So the appellant cannot disclaim liability in that line either. 17. When the legal position is understood thus, we are of the view that appellant is the employer vis- a-vis the victims, as per Section 12 of the Act. Appellant is therefore liable to pay the compensation due under the Act to the claimants. Accordingly, we dismiss the appeals.” (Emphasis supplied) 14. In Public Works Department v. Commissioner, Workmen Compensation, (1981) Lab IC. 493, the Division Bench of Jammu and Kashmir High Court held that the word "business" occurring in Section 12 has to be given an extended meaning, so as to include even an activity which engages time, attention or labour as a principal serious concern or interest of the Government or an individual without an element of profit in it. The relevant portion of the judgment is reproduced hereunder: "4. Unlike the word "trade" which merely; connotes commercial activity, the word "business" is of much wider import and may be used in different contexts in different senses. Used in one context, it may imply a particular occupation or employment to earn livelihood or gain, whereas used in a different context it may mean an activity which engages time, attention, or labour as a principal serious concern or interest. Its connotation may thus vary with the varying contexts in which it is used. In taxins, statutes for instance, the word "business" will always denote an activity carried out with the object of earning profit, though the same may not be true when used in relation to other activities. Used in broader sense, a person building his residential house or a Government constructing a road, may well be said to do business in so far as the said activity engages his or its time, attention or labour as principal serious concern or interest. In saying so, I derive support from the following observations - 21 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 made by their Lordships of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa, (1969) 2 SCC 627 : AIR 1970 S.C. 253: "The expression "business" though extensively used is a word of indefinite import, in taxing statutes it is used in the sense of an occupation, or profession which occupies the time, attention and labour of a person, normally with the object of making profit. To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit motive, and not for sport or pleasure." Its amplitude has been more exhaustively dealt with by Gajendragadkar J. in Bata Shoe Co. Ltd. v. Union of India, AIR 1954 Bom 129 wherein it has been observed: "In its wider denotation, the word "business" may have a more extensive meaning than the word "trade". But in the context, we think it would be safe to adopt the definition of the word "business" laid down by Jessel M.R. in 'Smith v. Anderson', (1880) 15 Ch D 247 at p. 258 (B), where the learned Judge has observed that 'anything which occupies the time and attention and labour of a man, for the purpose of profit, is business". It is true that the word "business" in its most general and unrestricted sense may conceivably cover all human activities. It may even include the business of governing a country. But we are disposed to hold that the context in which the word has been used in S. 18 (b), Presidency Small Cause Courts Act, S. 20, Civil P.C. and CL 12 of the Letters Patent, requires that this word should not be construed in such a wide and unrestricted sense.” 5.The next question which then falls for determination is; what meaning should be assigned to the word "business" occurring in Section 12? - 22 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 6. It is well settled that where a word used in a statute is capable of two meanings, only that meaning should be assigned to it which carries out its object. This rule of interpretation of statutes has been often times affirmed by their Lordships of the Supreme Court. In New India Sugar Mills Ltd. v. Commr. of Sales Tax, Bihar, AIR 1963 S.C. 1207 it was held: "....It is a recognised rule of interpretation of statutes that the expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and which effectuate the object of the Legislature. If an expression is susceptible of a narrow or technical meaning, as well as a popular meaning the Court would be justified in assuming that the Legislature used the expression in the sense which would carry out its object and reject that which renders the exercise of its powers invalid," Again, in South Asia Industries Pvt. Ltd. v. S. Sarup Singh AIR 1966 SC 346, it was observed: “....A court would be fully justified in holding that in such a case it was intended that an order for recovery of possession can be made against the assignee alone for that would enable the object of the statute which was to enable the landlord to recover possession, to be achieved. An interpretation which defeats the objects of a statute is, therefore, of course, not permissible." 7. The only object behind the provisions of Section appears to be to secure speedy payment of compensation resulting from injuries to a workman. The legislature intended to make doubly sure payment of such compensation to the workman, or to his dependants in the event of his death, as it could not exclude the possibility of the contractor being in some cases a man of straw, whose straitened circumstances might jeopardise the changes of recovery of such compensation. If, - 23 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 therefore, a restricted meaning is given to the word "business" so as to imply an activity with the object of earning profit only, the object behind Section 12 is likely to be defeated. Not only to speak of the Government performing its various functions of a welfare State, even many other persons may have to be kept out of the purview of Section 12 by assigning such a limited meaning to the word "business" occurring in it. Such an interpretation would absolve from liability to pay compensation even a person who would appoint a contractor for building his residential house, as building one's residential house cannot be said to have the object of earning profit or gain behind it. It cannot, as such, be said to partake of "business or trade" in commercial sense. Merely because the word "business" is clubbed with the word "trade" in Section 12. it should not be inferred that it has been used in simple commercial sense. Both these words have to be read disjunctively and rot conjunctively. Similarly, the doctrine of immunity attached to sovereign acts of State cannot be extended to acts like constructing roads or bridges, as such acts are not of such a nature as cannot be done by a private person. Viewed thus, the word "business" occurring in Section 12 has to be given an extended meaning, so as to include even an activity which engages time, attention, or labour as a principal serious concern or interest of the Government or an individual without an element of profit in it. It is one of the meanings given to the word "business" in dictionary. (See Webster's New International Dictionary, Vol. I, Ed. 1926). Construction of roads being one of the principal concerns of the Public Works Department of the Government inviting its serious attention, it is "business" within the meaning of Section 12 and the appellant was thus the principal employer vis-a-vis the deceased labourers." (Emphasis supplied) - 24 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 15. In Bala Mallamma v. Registrar, Osmania University, 2002 ACJ 986, a claim for compensation was made for the death of a workman who fell down from a height of 40 feet while whitewashing the walls of Osmania University Science College. The claim was contested by the University on the ground that the University was constituted for imparting education and the whitewashing of the walls of the University was not a part of the "trade" or "business" of the University. The Division Bench of Andhra Pradesh High Court, following Public Works Department v. Commissioner, Workmen Compensation, (supra), held that whitewashing/colour washing was a regular feature of the activity of the University and it could be treated ordinarily as part of the "business" of the University because the words 'trade' or 'business', as used in the Act, have to be understood in the context in which the Act was enacted, failing which the very raison d'tre of Section 12 of the Act would be defeated. The relevant portion of the judgment is reproduced hereunder: "14. The learned Counsel for the applicant has drawn our attention to the judgment of the Supreme Court reported in Mohan Lal v. R. Kondaiah,. Para No. 3 of the said judgment is important for the purpose of the present case, which is reproduced below: "The expression business has not been defined in the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. It is a common expression which is sometimes used by itself and sometimes in a collection of words as in "business, trade or profession". It is a word of large and wide import, capable of a variety of meanings. It is needless to refer to the meanings given to that term in the various Dictionaries except to say that every one of them notices a large number of meanings of the word. In a broad sense it is taken to mean 'everything that occupies the time, attention and - 25 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 labour of men for the purpose of livelihood or profit’. In a narrow sense it is confined to commercial activity. It is obvious that the meaning of the word must be gleaned from the context in which it is used. Reference to the provisions of the Constitution or other statutes where the expression is used cannot be of any assistance in determining its meaning in Section 10(3)(a)(iii) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. It is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act; more so if the two Acts in which the same word is used are not cognate Acts. Neither the meaning, nor the definition of the term in one statute affords a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally. On the other hand, it is a sound, and, indeed, a well- known principle of construction that meaning of words and expressions used in an Act must take their colour from the context in which they appear". 15. This judgment reiterates a principle of interpretation and the principle is that the meaning of the word must be gleaned from the context in which it is used. Meaning assigned to a word in a particular Act may mean one thing and the meaning of the same term may give a different meaning when used in a different Act. Therefore, the word 'trade' or 'business' as used in this Act have to be understood in the context in which this Act has been enacted. Basically the Act has been enacted to provide compensation to the workers suffering during the course of employment. It is also the purpose of the Act that they should get speedy remedies and it appears that the intention of enacting the Section 12 of the Act was only to ensure that compensation is paid by the principal expeditiously and if this purpose of the Act and the provision are kept in mind, then the word 'trade' or 'business may not have the same - 26 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 meaning which it would have, for instance, when used in interpreting a taxing statute. If the plea of the University is accepted that they are engaged in imparting education, conducting examinations and conferring degrees only and cannot be termed to be doing any business or trade and hence they are not liable to pay compensation, then any person engaged for similar activity by any Government Department, any University, any hospital, if faced with an accident, would not be able to get compensation in terms of Section 12 of the Act although such a person would be a workman under the Act. Similarly if an individual who wants to construct a residential house of his own engages a person for construction of the house and if such a person faces an accident during the course of the building of the house, he would be remediless under the Act. Even otherwise the normal activity of the University is imparting education, conducting of examinations and conferring degrees, this they cannot do without having proper buildings.” (Emphasis supplied) 16. In Govind Goenka v. Dayawati, 2012 (2) TN MAC 105 (Del.), the appellant engaged a contractor for repairs and alterations in his shop. A portion of the wall fell on a labourer who suffered fatal injuries whereupon a claim for compensation was made against the owner who contested it on the ground that the deceased labourer was employed by the contractor. This Court, following the judgement of Division Bench of Andhra Pradesh High Court in Balla Mallamma v. Registrar, Osmania University (supra), held that the word "business" in Section 12 has to be given an extended meaning. The relevant portion of the judgment is reproduced hereunder: "6. As would be seen from the definition of "employer" envisaged under Section 2(e) of the Act, the same is of wide amplitude and would certainly encompass the present appellant who at the relevant - 27 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 time had employed the services of the contractor to carry out the job of repairs and alterations in his shop. The contractor who had taken the services of the deceased workman as a labourer no doubt will also be covered within the definition of employer but qua the appellant he would remain his agent and the appellant would be the principal employer. There is thus no difficulty to arrive at a conclusion that the appellant for all intents and purposes was the principal employer who had engaged the services of an Agent contractor to carry out the said job of the repair work. xxx xxx xxx 9. So far as the interpretation of section 12 of the Act is concerned, again reference has been made to the principal making a contract for the purposes of trade or business, the judgment of the Division Bench of Andhra Pradesh High Court In the case of Balla Mallamma v. Registrar, Osmania University, Hyderabad 2001 (2) T.A.C. 182 (AP) is a complete answer......... 10. As would be seen from the above judgment of the Hon'ble Division Bench where the Osmania University, Hyderabad had engaged services of a contractor for white washing and painting the walls of the University and a worker employed by the contractor while white washing the walls had fallen and died and the objection raised was that whitewashing the walls of the University would not be an activity which could be construed as an activity for the purposes of trade and business of the University. Giving an extended meaning to the word "business" employed in the said section 12, the Hon'ble Division Bench took a view that the restricted meaning given to the said expression would defeat the very raison d'être of section 12 of the Act. 12. The said interpretation given by the Division Bench also finds support from the - 28 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 amendment brought by the Parliament in the definition of Section 2(1)(n) of the Act omitting the words "Casual workman" and a workman who is employed other than for the purposes of employer's trade or business. Reverting back to the facts of the present case, here also the deceased workman was employed by the contractor and although for carrying out repair job it might not be the principal activity of the appellant but yet the appellant cannot escape its liability keeping in view the object of the said beneficial piece of legislation. 13. For the expeditious grant of compensation in the event of such accidents taking place in favour of the victim's dependent members, this act was enacted and a hyper technical interpretation of the statute would not only defeat the purpose of the said Act but would be adding insult to injury…….” (Emphasis supplied) 17. In Raj Pal Saini v. Kamla, (2016) 151 FLR 302, a mistry suffered an electric shock during the construction of second floor of a building. The owner of the building contested the claim on the ground that he had engaged the contractor who in turn had engaged the employee. Following Govind Goenka (supra), this Court held the owner liable to pay compensation under Section 12 of the Act. The relevant portion of the judgment is reproduced hereunder: "6. On careful consideration of the rival contentions of the parties, this Court is of the view that the appellant, being the principal employer, is liable to pay the compensation to the respondent who was admittedly engaged in the construction work at the petitioner's house and was electrocuted on 16th December, 2009. This case squarely covered by Govind Goenka v. Dayawati (supra) in which this Court held that the principal employer cannot escape its liability on the ground that the deceased employee was employed by the contractor." - 29 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 (Emphasis supplied) 18. In Delhi Development Authority v. Raju @ Maya Ben, (2014) 143 DRJ 612, an electrician appointed by a contractor in a high rise building fell down and suffered 100% disability. Applying Section 12 of the Employees' Compensation Act, this Court upheld the compensation awarded against the principal. The relevant portion of the judgment is reproduced hereunder: "4. As per Section 12 of the Act two persons are liable to the employee who suffers an accident arising out of and in the course of the employment. One is the parent employer who employed him and second is the person with whom the employee is working on the directions of his parent employer, called the principal under Section 12. As per Section 12 of the Act the person with whom the employee is working, though not employed by such a person, such person became a principal employer and an employee is entitled to claim compensation from the person with whom he is working i.e. the principal although not directly employed by the said person/principal. The right given under Section 12 of the Act is only an alternative right and an employee can also sue his parent employer. In the present case, the parent employer respondent no. 2 herein and the person with whom the respondent no. 1 was working was the appellant no. 1. The requirements of Section 12 of the Act are therefore clearly satisfied in the facts of the present case. 5. The issue argued before this Court on behalf of the appellant is that since the respondent no. 1 was not employed by the appellant no. 1, therefore, no liability arises of the appellant no. 1, in my opinion, is clearly answered against the appellant no. 1 in view of the clear language of Section 12 of the Act which has been reproduced above. Appellant no. 1 therefore, in terms of Section 12 of the Act is principal in case injuries were caused to respondent no. 1/employee while working with the appellants, - 30 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 although the respondent no. 2 was the actual/parent employer of the respondent no. 1 herein." 19. In Lokhart Estate, Devicolam v. Kaliappan, 1976 (1) L.L.N. 532, the Division Bench of Kerala High Court held the tea estate liable to pay compensation in respect of death and injury of workmen employed through the contractor for construction of cooli -lines for the estate workers as construction of cooli-lines was part of their business. The relevant discussion of Section 12 in the said judgment is reproduced as under: "4............. It is necessary, in order to render a person, who has not directly employed the workman or workmen concerned, liable to answer the claim for compensation, to show the existence of various requisites which would attract Section 12(i) and one of them is that the principal employer has, in the course or for the purpose of his trade or business contracted with any other person 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. It is said that the trade or business of the principal here is that of producing tea in the Estate, manufacturing it, preparing it for the market and marketing it and any work which is ordinarily part of this work could alone fall within the scope of Section 12(i). Consequently, it is said that if the workmen were engaged in such activities as construction of cooli-lines when they met with the accident, even if the cooli-lines were constructed for the purposes of the Estate, that would not enable a claim to be made against the Estate as the principal employer. This contention calls for examination of what the trade or business of the principal is. The term "trade" or "business" would not have been used in Section 12(i) to mean the same, though in certain contexts they may bear the same meaning. The very fact that both these terms are employed in the section would indicate that they connote different ideas and they do not cover the - 31 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 identical field, "trade" as generally understood means activities of buying and selling and the business which is related to such buying and selling whereas "business" is a term of such larger import. All categories of business need not be trade, since there are many categories in which there is no element of trade at all, Taking for instance, the case of a tea estate, the trade may refer to the activities of buying and selling, buying for the purpose of the business of the tea estate and selling the products of the tea estate. Business is a concept which takes in all the activities including the running of a hospital for the Estate, the maintenance of cooli-lines, providing such amenities as are agreed to between the management and the labour and all other incidental activities. It goes without saying that in the assessment to income-tax, if the Estate is to claim deduction for expenses of business, expenses such as those incurred for the purpose of running a hospital for the benefit of the Estate will be claimed as business expenses though they are not to be treated as trading expenses. 5. In a different context the question of the distinction between business and trade was considered by the Chancerv Division in the decision in. In re a Debtor (1927 (1) Chancery 97). Sir Scrutton, L.J., said in that case: "The word 'trade' is often confined to buying and selling commodities. Where to draw the line between what is a profession and what is a trade is a matter which it is not possible to deal with by any general definition. ‘Business' is a much wider term than 'trade’. The word 'business' at least covers a continuous occupation involving liabilities to others." We cannot agree with the counsel for the principal employer that the construction of cooli-lines in the estate is not part of the business of the principal. Section 15 of the Plantations Labour Act, 1951 obliges every employer to provide and maintain for every worker and his family residing in the - 32 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 plantation necessary housing accommodation. It is a statutory duty. In discharge of such duty, the employer may himself construct houses for residence of the workers or such work may be done through a contractor. If he does such work by himself, it cannot be said that it is not part of his business, for, the business is not concerned merely with growing tea and selling it. Tea can be grown only in the tea estate and a tea estate could be run only in accordance with certain regulations and one of the regulations is that quarters are to be provided. Even if there be no statutory obligation if it is the usual requirement of the business or a term of the employment, then work such as construction of cooli-lines would be part of the business of the employer. If that be so, the consequences cannot be avoided by entrusting the work to a contractor." (Emphasis supplied) 20. In Kerala Balagram v. Kochumon, 1997 (3) L.L.N. 921, an employee suffered amputation of two fingers while working for a charitable society. The application for compensation was contested on the ground that the appellant was a charitable society and conducts no "trade" or "business" and therefore, the deceased was not be a workman. The Kerala High Court rejected the argument and held that the agricultural operations of the charitable society are covered in the term "business" and merely because the nature of the society is charitable, it will not get absolved from the liability under the Act. The relevant portion of the judgment is reproduced hereunder: "3............. The words 'trade or business' are used in several statutes like fiscal statutes, rent laws and labour laws, apart from Article 19(1)(g) of the Constitution of India. The meaning ascribed to such words shall always be with reference to the context and with respect to the content of the statute itself. Therefore, the meaning that is ascribed in one statute cannot be taken to interpret the very same - 33 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 words in another statute legislated with altogether a different intention and object. The said words in the fiscal statutes or rent laws cannot have a similar meaning when employed (sic) in any welfare legislation like Workmen's Compensation Act. 4. Even if profit motive must be there, to consider a venture as 'business', even then the appellant cannot escape from the liability. As is seen from Schedule II the workmen engaged in farming and agricultural operations come within the definition of the 'workman'. The appellant society is also conducting agricultural operations and farming. Even if private individual or society conducts agricultural operation for in, house use and consumption and not for the purpose of sale, there will be a profit element in the conduct of agriculture. No society or individual will, under normal circumstances, without expecting a surplus, invest funds for agricultural operations. The appellant society conducting a destitute home in conducting agricultural operation, because it is more profitable to produce paddy by itself rather than purchasing it from outside for feeding the children and with an intention that by investing funds in the agriculture it can produce paddy worth more than the amount invested. That itself is sufficient profit motive. Therefore, the agricultural operations of the appellant come within the term 'business' employed in Section 2 (1)(n) of the Act. Merely because the nature of the appellant society is charitable, it will not get absolved from the liability under the Act to compensate the workman who had met with an accident during the course of employment in connection with its business.” (Emphasis supplied) 21. In Assistant Director of Horticulture Division, Anna Pannai v. Andi, 1993 (3) L.L.N. 493, the horticulture department allotted the work for digging a well. A labour employed by a contractor for digging the well died in an accident during the course of - 34 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 employment whereupon the legal representatives raised the claim against the government which was contested on the ground that the digging of the well was entrusted to a contractor who alone is liable to pay compensation. It was further contended that digging of a well is neither a "trade" nor a "business". Rejecting this contention, the Madras High Court held the construction of wells and deepening of existing wells as ordinary work of P.W.D., and therefore, it would be considered as a "business" within the ambit of Section 12 of the Act. The relevant portion of the judgment is reproduced hereunder: "8. In this case, the digging of the well is the work that was entrusted to the contractor, for which purpose, the deceased employee was employed. The question is, whether the digging of well is a trade or business. 9. In a Welfare State, any activity by the State for the welfare of the people, even though cannot be termed as 'trade', it will come within the definition of 'business'. In Bai Mani v. Executive Engineer 1987 I.A.C.C. 76 the Gujarat High Court had occasion to consider a case where the State Government through its Public Works Department, was doing excavation and construction work for the purpose of constructing a dam. In that case, the Court said that the word "business" has a much wider meaning and covers activities which may not be commercial and may include the construction work carried out by the Public Works Department. In that case, the learned Judge of the Gujarat High Court followed an earlier decision of the same Court reported in Executive Engineer, Kadana Dam v. Phebiben 1977 A.C.J. 204. That was also a case of construction of a dam by P.W.D. through a contractor. In that case, the Court said that the word 'trade' means 'commercial activity. But the word 'business' has a much wider connotation and covers activities which may not be commercial and may include the construction work - 35 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 carried out by the Public Works Department. Trade and business cover not only commercial activity but also many other activities which will he covered by the term 'business'. In the earlier decision of the Gujarat High Court which was followed by the same Court in 1987 1 ACC 76, it was said that, 'Construction of all sorts of work indisputably is the ordinary activity of the Public Works Department and one such ordinary activity was sought to be carried out through the contractor'. In this case, due to drought conditions, naturally, construction of wells and deepening of existing wells is one of ordinary work of P.W.D., one of the State Departments and therefore, it could be considered as a 'business' coming within the scope of Sec. 12 of the Workmen's Compensation Act. In that view of the 30 matter, the finding of the authority that all the respondents are liable to compensate the claimant is justified." (Emphasis supplied) 22. In Koodalingam v. Superintending Engineer, Project Circle, Public Works Department, Kozhikode, 1994 (2) L.L.N. 779, the Division Bench of Kerala High Court held that Section 12 would apply notwithstanding the agreement or contract entered into between the principal and contractor regarding their liability for payment of compensation under the Act. The agreement of contract between the principal and the contractor governs only their inter-se rights and liabilities, and cannot affect the right of the workmen or their dependants to get the compensation form the principal or from the contractor at their option. Relevant portion of the judgment is as under: "11…… The avowed object with which Section 12 was enacted as part of the Act as seen from the Report of the Select Committee is to enable the workmen or the dependents of the workmen to proceed against the contractor or against the principal or both and to make the contractor liable to indemnify the principal in all cases in the absence of - 36 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 any agreement to the contrary. The Report of the Select Committee would also show that while finalising the provision the Committee has eliminated the provision which in the Bill as introduced exempted the Government and local authorities from liability imposed by this clause. The Committee has observed that these authorities are liable just in the same manner as private Individuals. If these were the avowed objects with which Section 12 of the Act was incorporated in an enactment which itself is a beneficial legislation intended to confer benefits on the workmen, we are of the view that the provisions in Section 12(1) would apply notwithstanding the agreement or contract entered into between the principal and contractor regarding their liability for payment of compensation under the Act. So long as the Section has not been made specifically subject to any contract to the contrary, the Section would have application in all cases where the conditions specified in the Section are satisfied. The fact that no non obstante provision is used in the Section may not be a sufficient reason to exclude the application of the Section to cases where the conditions are satisfied. At best, agreements or contracts entered into between the principal and contractor can govern only their inter se rights and liabilities and cannot affect the right of the workmen or their dependents to get compensation either from the principal or from the contractor at their option. Right to get indemnified from the contractor specifically conferred on the principal under Section 12(2) of the Act sufficiently safeguards the interest of the principal who has entrusted the work to the contractor stipulating the liability under the Act." (Emphasis supplied) 23. In Superintending Engineer, Mettur Thermal Power Station, Tamil Nadu Electricity Board, Mettur v. Veerappan, 2011 (2) TN MAC 88, the Electricity Board entered into an agreement with the contractor to remove the coal dust whereupon the contractor - 37 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 engaged the workmen. While collecting coal from heap of waste, the coal suddenly slided on the workmen resulting in fatal injuries. The claim for compensation was made against the Board under Section 12 of the Employees' Compensation Act. The Madras High Court examined Section 12 and held that the removal of coal ash was an ordinarily a part of "trade" or "business" of the Electricity Board under Section 12 and therefore, the Board was liable to pay the compensation. Relevant portion of the said judgment is reproduced hereunder: "44. The contention of the Board that they have to be absolved of their liability arises only in a case, if the contract was to do certain things, not ordinarily a part of business or trade. If removal of coal ash was a requirement, incidental or connected with the generation of electricity, the business of the Principal Employer, then the work would have been done by the Board or through an Immediate Employer, under his supervision, if he had contracted the Immediate Employer/Contractor. ……… 45. Merely because coal was sold for profit to the Immediate Employer the Board cannot be permitted to contend that the removal of coal dust is not ordinarily a part of their trade or business. May be coal was sold, after removal, by the Contractor, but that was not the main activity for which, the Contractor was engaged. The activity for which the work was entrusted to an Immediate Employer, viz., the Contractor was ordinarily a part of their work, i.e., trade or business. On the facts of this case and applying the principles stated supra in various decisions, this Court is of the view that the contract executed by the Electricity Board with the Contractor, forms part of the trade or business and hence, they are liable to pay compensation to the legal representatives of a deceased workmen. 46. Yet another aspect to be considered is whether the execution of any. agreement by the Immediate Employer, viz., the Contractor, to - 38 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 indemnify the Principal Employer, the Electricity Board, would disentitle the injured workman or the legal representatives from claiming compensation against the Principal Employer. Such an agreement or contract entered into between the Principal Employer and Contractor can only govern their inter se rights and would not in any way affect the rights of the workman or the dependents to get their compensation either from the Principal Employer or from the Contractor. Option is given to the claimants to claim compensation from anyone of them or both. 47. Provision of Section 12(1) of the Workmen's Compensation Act, would apply notwithstanding the agreement or contract entered into between the Principal Employer and Contractor regarding their liability for payment of compensation under the Act. Section 12(2) of the Workmen's Compensation Act, confers a right on the Principal Employer, who is made liable to pay compensation under the provisions to get himself indemnified by the Contractor and in such circumstances, both the Principal Employer and the Contractor would be jointly and severally liable to pay compensation." (Emphasis supplied) 24. In Panditrao Shamrao Bhongade v. Sunanda, Widow of Nagesh Dongra, 2000 (2) L.L.N. 527, a claim for compensation was made in respect of the death of a labourer who suffered electric shock during construction of a shopping complex. The owner of the shopping complex contested the claim on the ground that he was constructing a shopping complex on his own land and it is not the "trade" or "business" of the appellants to construct buildings and therefore, they are not liable under Section 12 of the Employees' Compensation Act. The Nagpur Bench of Bombay High Court rejected the argument and held the owner liable to pay the compensation. Relevant portion of the said judgment is reproduced hereunder: - 39 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 "2. The original non-applicants No. 1 to 3 (appellants herein) owned and possessed a plot on the southern bank of Amba Nala at Amravati where they were making the construction of their building known as 'Bhangade Complex' (hereinafter referred to as shopping complex). They employed original non-applicant No. 4 as Contractor for carrying out the construction work. Deceased Nagesh was employed by the Contractor original non-applicant No. 4 for construction work as a labourer. On May 23, 1990 at about 3.30 p.m. the non-applicant No. 3 asked Nagesh and 3/4 other workers, who were doing the work at construction site of the said complex to lower down the electric motor pump in the well of the non-applicants No. 1 to 3. The water from that well was being utilized for the construction of the said complex and while doing work by lowering down the electric motor pump, deceased Nagesh received electric shock and ultimately died. xxx xxx xxx 9. The learned Counsel for the appellants emphasised on the terminology in the course of or for the purpose of his trade or business contracts with any other person 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 any workman employed in the execution of the work.....". What is contended is that the appellants were constructing a shopping complex on their own land. It is not trade or business of the appellants to construct buildings and, therefore, they cannot be said to be principal employers. xxx xxx xxx 13. However, what is contended by the learned Counsel for the appellants Mr. Chandrukar is that the appellants were constructing the shopping complex on their own land and it was not their regular trade or business to do construction work by purchasing - 40 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 different plots and they were not in any way builders by profession. To accept the argument would tantamount to not only negativing the intention of the Legislature behind the provision but to adding something to the provisions of Section 12 which states that it must be in the course of trade or business of the person referred to as the principal who contracts with any other person. A case wherein a person is building his own house on his land or on land possessed by him has engaged an contractor may not be covered but where a person is constructing a building either for constructing and disposing of and selling residential flats or for constructing a market complex for selling the shops or leasing them out then it would be difficult to comprehend that it was not in the course of his trade or business. In other words, it is necessary to find that it is his regular business to purchase plots and construct buildings thereon. This would mean adding the word "regular" to the provision of Section 12 which is against all the principles of Interpretation. The Legislature is presumed to know its business well and when the Legislature has not used the words as "in the course of regular trade or business" it is not possible to accept the arguments of the learned Counsel for the appellants and to hold that since it was not a regular business of the appellants to construct shopping complex or buildings, they are not in the position of the principal employers. xxx xxx xxx 15................While interpreting the provisions of Workmen's Compensation Act, it must be borne in mind that it is a beneficial legislation and should not be interpreted in a manner so as not to deprive the claimant-workman of the benefit of the legislation specially by adding certain words to the terminology used in the statute. Since the statute does not use the words in Section 12 as "in course of regular trade or business," it must be accepted that it is only "in course of trade or business and if a person builds or - 41 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 constructs even one building for sale of residential flats or for selling or leasing out residential flats or shops, then it becomes his business. The sole purpose of entering into such business is to earn profit and it would be travesty of justice to hold that it is not his trade or business since he was not regularly indulging into that activity. In this connection, the learned Counsel for the respondents relied on a decision of this Court in the case of Sarjerao Unkar Jadhav v. Gurindar Singh, (1992 I LLJ 156 (Bom)) wherein the provisions of Section 12 were re required to be interpreted. In that case before this Court, the Electricity Board had given a contract for painting electric poles and the workman employed by the contractor was injured while painting the poles. The question was, whether painting of electric poles was ordinarily a part of trade or business of: principal i.e. electricity board and giving a finding in the affirmative the learned single Judge held in 1992 I LLJ 156 at 159, 160: "9. The dispute in this case is regarding the second condition only, there being no dispute that the supply of electricity is the trade or business of respondent No. 2 and the contractor was engaged for the purpose of that trade or business. Therefore, what is required to be considered is whether painting electric poles is also a work which is ordinarily a part of the trade or business of respondent No. 2 and this requires to be examined in the context of the three decisions relied upon by Mr. Chandrachud. No doubt, the legislature has in its wisdom used the expression "trade or business in Sub-section(1) of Section 12 at two places which could not be without any purpose. In fact, the purpose has been brought out very succinctly in the three decisions relied upon by Mr. Chandrachud. However, the safer test would be that if it is ordinarily a part of business of the principal to execute certain work, then ordinarily he will do that work by his own servants and he cannot escape the liability for accident that takes place merely because he has engaged a contractor. Now, in the present - 42 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 case, the trade or business of respondent No. 2 is to supply electricity. One cannot supply electricity without having electric poles. Electric poles are not one or two in number. They are hundreds and thousands having regard to the area of operation of respondent No. 2. In Bombay climate, the poles are likely to get rusted unless painted frequently. It will thus be an ordinary part of respondent No. 2's business to paint the poles if it is interested in supplying electricity continuously and properly. It is for this reason that I am inclined to hold that the contractor was engaged not only for the purpose of respondent No. 2's trade or business, but the activity in which the workman was engaged was ordinarily a part of its trade or business. Accordingly, I further hold respondent No. 2 responsible and liable for compensation under Section 12(1) of the Workmen's Compensation Act." 25. In Sardar Sewa Singh v. Hindustan Lever Ltd., 1980 (1) L.L.N. 566, the Allahabad High Court held Section 12 of the Workmen's Compensation Act to be an enabling provision for the benefit of the workmen enacted with a clear objective that the workmen should not be hampered by technicalities or practical difficulties of deciphering the correct employers. A pragmatic method has been advised for fixing the liability on the principal employer for affording speedy relief to the workmen for payment of compensation on account of the accident. Section 12 imposes the liability on the principal where several tiers of contractors or petty contractors are employed. The relevant discussion of Section 12 is as under: "3………Chapter II of the Act captioned "workmen's compensation" deals with the question of compensation claimed by a workman. Ordinarily such claims are disposed of under the provisions of Ss. 3 to 5. The scheme of the Act is that the “employer” as defined in S. 2(c) should be liable in the manner mentioned in S. 3. In view, however, of - 43 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 the vastly increasing ramifications of industrial establishments and the multiplicity of immediate and indirect or remote employers which such process inevitably involves the Legislature has inserted a provision in the Act which may relieve a workman of the difficulty of ascertaining with precision as to who should be deemed to be the actual employer liable for compensation under the Act. Section 12, therefore, provides for a case where we have several tiers of employers or petty employers. It is a matter of common knowledge that in big industrial establishments important branches of undertakings are entrusted to contractors. who may in their turn have to employ other petty contractor working under their direction and a workman may be actually employed by one of these aforesaid persons and in such an elaborate hereby there may be no direct privity of contract between the principal and the workman in the last analysis. The workman has for all practical purposes to deal with an immediate employer but when it comes to lodging a legal claim for compensation on account of an accident he is concerned with the principal employer and not the immediate employer qua the workman. This is an enabling provision for the benefit of the workman and enacted with the clear objective that the workman should not be hampered by technicalities or practical difficulties of deciphering the correct employers. A pragmatic method has thus been devised for fixing the liability of the principal employer and thereby affording speedy relief to the workman for payment of compensation on account of the accident, though the principal has been invested with the right of indemnifying himself from the contractor who may have employed the workman and may have been responsible for immediately taking work from him." (Emphasis supplied) - 44 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 15. Therefore, considering the said circumstances in this case, just because the appellant-KPTCL being a principal employer might not have directly engaged the deceased for the work but the KPTCL has contracted the work to respondent No.3 and the respondent No.3 was getting done the said work through the deceased by engaging so many employees, among them deceased is also one of the employees. Therefore, it is amounting to the deceased as he was working for and on behalf of the appellant-KPTCL but through the contractor. Under these circumstances, the liability is joint and several on the appellant and respondent No.3. Therefore, the appellant cannot escape from its liability. When a contingent event occurs to protect interest of LR’s as deceased or injured the principal employer enters into contract with a contract or agency and getting work done and if any employee died or sustained injuries while working under the contractor, while working for and on behalf of principal employer in the course of trade or business of principal employer for which also because of existence of contract between the - 45 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 appellant and contractor/agency, the principal employer is also made jointly and severally liable along with the contractor or agency. 16. The liability is on both as it is joint and several but not independent. Therefore, as per Section 12 of the Employees Compensation Act, the appellant-KPTCL is also liable along with respondent No.3 to pay compensation. Therefore, in this regard, the order and award passed by the Commissioner is perfectly justifiable and correct one. Therefore, appeal is liable to be dismissed. However, the principal employer is at liberty to recover the amount from the respondent No.3 as per Section 12 of the Act. Accordingly, I answer substantial question of law No.1 is Affirmative and substantial question of law No.2 is Negative. 17. Hence, I proceed to pass the following: - 46 - NC: 2025:KHC-D:1883 MFA No. 22392 of 2012 ORDER i. The appeal is dismissed. ii. The judgment and award dated 30.08.2008, passed in case No.WCA/F-18/2007, on the file of Labour Officer and Commissioner for Workmen’s Compensation, Hubli Sub-Division, Hubli, is confirmed. The appellant shall pay compensation to the claimant at first instance. However, liberty is reserved to the appellant to initiate the recovery proceedings against respondent No.3- Company as per Section 12 of the Act. iii. The amount deposited by the appellant in this Court shall be transmitted to the Tribunal/Commissioner. iv. Send a copy of this judgment and award to the Tribunal. v. No order as to costs. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE RKM List No.: 1 Sl No.: 56