1. This is an appeal by the Principal being aggrieved and dissatisfied by the judgment and award passed by the Commissioner under the Employees
Compensation Act, 1923, thereby allowing the petition filed under Section 4 of that Act by the respondent Nos. 1 to 3.
2. The appellant Nos. 1 and 2 are the Chairman and Managing Director of the Sugar Factory. Appellant No. 3 is the Managing Director of
Cooperative Society, registered with the Sugar Factory, and the respondent No. 4 is the Labour Contractor who had allegedly engaged the deceased
for cutting Sugarcane for and on behalf of the appellants.
3. After hearing both the sides, the substantial questions of law which arise for determination in this First Appeal are:
(1) Whether there was an employer - employee relationship between the appellants and the deceased ?
(2) Whether the deceased has died during the course of the employment ?
(3) Whether the appellants are liable to pay the compensation, penalty and interest as determined by the Commissioner ?
4. Both the sides have been heard on the aforementioned substantial questions. The learned advocate for the appellants vehemently submitted that the
deceased was employed by the respondent No. 4 and no relationship of employer and employee ever existed between the appellants and the
deceased. He would then submit that there is no evidence to show that the deceased has died during the course of the employment. He would then
submit that the liability to pay compensation would arise only after it falls due on account of the award passed by the Commissioner and therefore, the
Commissioner himself without following the mandate of Section 4 A of the Employees Compensation Act, could not have legally awarded interest and
compensation from the date of the accident and penalty of 50% on the compensation amount.
5. The learned advocate for the respondent No. 4 submitted that he had merely worked as a contractor and allowed the appellants to engage the
deceased for cutting sugarcane.
6. The learned advocate for the respondent Nos. 1 to 3 supported the judgment and award.
7. According to the respondent Nos. 1 to 3, the deceased was a sugarcane cutting labourer engaged by the respondent No. 4 and the Sugarcane was
to be supplied to the appellant - Sugar Factory. They averred that on 28.11.2009, the deceased was bitten by snake while he was busy in cutting
sugarcane in the field of one Bandu Machindra Chavan at village Akube, Taluka Madha, District Solapur. They averred that as a result of the snake
bite, he died on 04.12.2009 after under going treatment at Sion Hospital, Mumbai. Even the postmortem report shows that he died due to poisonous
Snake bite.
8. The respondent Nos. 1 to 3 led evidence about the deceased having died of a Snake bite while cutting Sugarcane. The Commissioner by referring
to the evidence has recorded a finding of fact that the deceased who originally hailed from Taluka Patoda, District Beed, was bitten by a Snake while
cutting sugarcane at a distant place and the fact was sufficient to draw an inference that he was a sugarcane cutting labourer engaged by the
respondent No. 4 â€" Labour Contractor to work for the appellants’ â€" Sugar Factory. The Commissioner also noted that the evidence led by the
respondent Nos. 1 to 3 was not controverted by leading any contrary evidence. I find no sufficient and cogent reason to interefere in the finding of
facts by the Commissioner which are clearly substantiated by the evidence.
9. The deceased was indeed engaged as a labourer by the respondent No. 4 â€" Labour Contractor, for cutting sugarcane which was to be supplied to
the appellants’ â€" Sugar Factory and by virtue of Section 12 of the Employees Compensation Act, the appellants are liable to pay the
compensation in view of the employer - employee relationship arising from such a deeming provision. Admittedly, the appellants represent a Sugar
Factory and manufacturing of sugar is its business, which it could not have carried out except by cutting sugarcane and if not through the Labour
Contractor, it was imperative for it to have got the sugarcane supplied by getting it cut by engaging labourers directly. Therefore, no fault can be found
with the conclusion drawn by the Commissioner that there existed employer - employee relationship and the appellants and the respondent No. 4 are
liable to pay the compensation. Accordingly, I answer the substantial question No. 1 framed herein above in the affirmative.
10. Coming to the second question, there is enough evidence to show that the deceased was a sugarcane cutting labourer and has died of a snake bite
while he was busy in cutting operation. Consequently, the decision of the Commissioner in this regard is also unassailable. The deceased did die of a
snake bite during the course of employment.
11. As regards the third substantial question, it is important to note that the liability to pay interest and penalty under Section 4 A (3) (b) arises, where
the employer does not accept his liability from expiry of one month from the date of order of the Commissioner, which in this matter is 25.01.2017.
One can safely rely upon the decision in the case of Vedprakash Garg Vs. Premi Devi and Others, (1997) 8 SCC 1. In view of such interpretation put
by the Supreme Court, the Commissioner has committed an illegality in directing penalty to be paid at 50% of the amount of compensation and also
directing the interest at the rate of 12% per annum to be paid from the date of the incident. To this extent, the impugned judgment and award is not in
accordance with law and therefore, I answer the third question formulated herein above in the negative.
12. The appeal is partly allowed. The impugned judgment and award is modified to the following extent:
The order imposing 50% penalty on the compensation amount and awarding interest at the rate of 12% per annum from the date of the incident are
quashed and set aside. The interest at the rate of 12% per annum shall become payable only after expiry of period of one month from 25.01.2017.
