The High Court of Jharkhand has ruled that principal employer liability under Section 12 of the Employees’ Compensation Act, 1923, can only be fastened on an entity if the contracted work being executed forms a part of its regular trade or business. Deciding on a batch of miscellaneous appeals, Justice Sanjay Kumar Dwivedi modified the orders of the Ranchi Labour Court, holding that the Jharkhand State Cricket Association (JSCA) cannot be held liable as a principal employer for the tragic deaths of three electrical technicians. The Court observed that because JSCA is a body dedicated to managing and administering cricket, electrical maintenance does not constitute its core trade or business. Accordingly, the Court declared M/s Valmont Structures India Private Limited as the principal employer and sub-contractor Gulab Khan as the immediate employer, allowing JSCA the liberty to recover the compensation amounts it had already deposited.
Background of the Case
The dispute arose from a fatal accident on September 7, 2016, at the Dhurwa Cricket Stadium in Ranchi. Three electrical technicians—Md. Ifthekhar (21), Md. Shahbaz Ansari alias Shahzada Khan (22), and Alim Ansari (23)—were tasked with repairing floodlights at the stadium. To execute the repairs, they were lifted on a trolley to a height of approximately 60 meters.
During the work, the trolley broke, causing all three technicians to fall to the ground. They died on the spot. Following the tragedy, Dhurwa P.S. Case No. 249 of 2016 was registered under Sections 304/34 of the Indian Penal Code, 1860, and Section 56 of the Labour Safety Act. The First Information Report (FIR) and subsequent police chargesheet named sub-contractor Gulab Khan and Samiullah, the Assistant Project Manager of Valmont Structures, as the individuals responsible.
The dependents of the deceased workers filed three separate compensation claims before the Commissioner, Employees’ Compensation-cum-Presiding Officer, Labour Court, Ranchi. Initially, the claims were pursued primarily against Valmont Structures and Gulab Khan. However, on December 23, 2021, JSCA was impleaded as an opposite party. Since JSCA did not enter an appearance before the Labour Court, the proceedings went ex-parte against it.
On March 2, 2023, the Labour Court awarded compensations of Rs. 15,67,639 each for the deaths of Md. Ifthekhar and Md. Shahbaz Ansari, and Rs. 15,67,583 for the death of Alim Ansari. The Labour Court held JSCA liable to pay these sums as the principal employer, reserving its right to recover the amounts from Valmont Structures and Gulab Khan. Challenging these orders, JSCA moved the High Court, having already deposited the compensation amounts, which the claimants had subsequently withdrawn. Valmont Structures also filed cross-appeals, challenging the finding that an employer-employee relationship existed between it and the deceased.
Arguments of the Parties
Counsel for JSCA, Mr. Nipun Bakshi, argued that there was no direct or indirect employment relationship between JSCA and the deceased technicians. He pointed out that the claimants themselves had consistently stated in their claim applications and depositions that the deceased were engaged by Gulab Khan on behalf of Valmont Structures. He further submitted that JSCA is an organization dedicated to managing and administering cricket, meaning electrical installation and repair do not fall under its ordinary trade or business. Thus, JSCA could not be held liable as a principal employer under Section 12 of the Act.
On behalf of Valmont Structures, Mr. Indrajit Sinha contended that the company had only supplied equipment and supervised the installation, while the actual execution and provision of labor were the responsibilities of JSCA under the agreed terms. He argued that no employer-employee relationship existed between Valmont and the deceased, citing the absence of any documentary evidence showing salary payments. Furthermore, counsel for both Valmont and Gulab Khan pointed out that their representatives had been acquitted in the parallel criminal trial, which they argued exonerated them from civil liability.
The Court’s Analysis and Observations
The High Court scrutinized the evidence on record, including the FIR, the police chargesheet, and witness depositions. The Court noted that the father of Md. Ifthekhar and other witnesses had clearly deposed that the deceased were working under the direction of Valmont Structures and were paid monthly salaries of Rs. 10,000 and daily allowances of Rs. 100 by the company.
Addressing the argument regarding the acquittal in the criminal trial, the Court rejected the contention that it wiped out civil compensation obligations, observing:
“The preponderance of probability in criminal case is different as compared to civil and compensation cases.”
The Court then analyzed the legal framework of Section 12 of the Employees’ Compensation Act, 1923, particularly sub-section (3). It noted that a principal employer is only liable to pay compensation if the work being executed is part of its regular trade or business. Highlighting this distinction, the Court observed:
“In light of sub-section (3) of Section 12 of the Act it transpires that though the work may be within the scope of the general purposes of such Principal, he is not liable unless the work is a part of the trade or business.”
Applying this rule to the current dispute, the Court found that:
“In the given facts, the installation of electrical equipment and other electrical work is not the trade and business of JSCA which is a body for managing and administering cricket. On the other hand, M/s. Valmont Structures India Private Limited is directly involved in supply of electric equipment for repair and maintenance and, therefore, the work undertaken which caused the accident is certainly the ordinary trade and business of M/s. Valmont Structures India Private Limited.”
The Decision
Based on these findings, the High Court modified the Ranchi Labour Court’s orders dated March 2, 2023. The Court officially declared Valmont Structures India Private Limited as the principal employer and Gulab Khan as the immediate employer of the deceased technicians.
The Court allowed JSCA’s appeals (M.A. Nos. 192, 193, and 194 of 2023) in part, and dismissed Valmont’s appeals (M.A. Nos. 84, 85, and 86 of 2024). Crucially, the Court granted JSCA the liberty to pursue its pending miscellaneous recovery cases before the Labour Court to reclaim the entire compensation amount it had deposited from Valmont Structures and Gulab Khan, in accordance with the indemnification provisions under Section 12 of the Act.
Case Details:
Case Title: The President, Jharkhand State Cricket Association v. Maizul Haque & Ors.
Case No.: M.A. No. 192 of 2023
Bench: Justice Sanjay Kumar Dwivedi
Date: July 2, 2026
