Chodipalli Masenu vs Gampala Narasamma

Satyanarayana Rao, J.—This is an appeal by the owner of a boat who was made liable to pay compensation to the respondent under the

Workmen''s Compensation Act. The respondent''s husband, one Somitri, was engaged as a member of the crew of the boat of one Merugu

Masenu. This Merugu Masenu, entered into a contract dated 26-3-1948, with Chodipalli Masenu, the owner of the boat whereunder it was

agreed that in consideration of Merugu Masenu paying to the owner of the boat a sum of Rs. 600 as hire, the boat No. 141 should be allowed to

carry 500 bales of palmyra fibre from Kakinada Port to Tuticorin which Merugu Masenu agreed to carry on behalf of Krishna Company,

Kakinada for hire of Rs. 1,500. Under the terms of the agreement the owner was under no responsibility for the expenses of the trip and the

salaries of the crew, etc. He was paid Rs. 300 as advance on the date of the agreement and the balance was agreed to be paid after the boat had

reached Tuticorin and the goods were unloaded. If however the bales to be carried were more than 500, the owner should be paid one-third of

the hire received in excess and should similarly be entitled to hire which might be received by Merugu Masenu on his return trip from Tuticorin to

Kakinada in case any goods should be carried on the return voyage. The boat reached safely Tuticorin Port and while returning empty had to face

rough weather when Somitri fell down from the boat and died. The petitioner in the lower Court is the unfortunate widow of Somitri and she

impleaded as party to the application the owner of the boat Chodipalli Masenu but did not implead Merugu Masenu, the person who hired the

boat under the contract already referred to.

There is no serious dispute that Somitri was a ""workman"" within the meaning of the Workmen''s Compensation Act, and that he had met with his

death by accident arising out of and in the course of the employment. The amount of compensation is also not in dispute between the parties. The

only point on which there was serious difference between the parties was whether the owner of the boat could be made liable to pay the amount of

compensation fixed by the Additional Commissioner.

The Commissioner was of opinion that the agreement entered into between the owner of the boat and Merugu Masenu was merely a make

believe arrangement intended to defeat the rights of persons like the respondents who might claim, compensation under the Workmen''s

Compensation Act and it was with this object that Merugu Masenu, who it is alleged was a man of straw, was elected. The real dispute therefore

has to be decided upon a proper construction and the truth of the agreement, Ex. D. 1. Having read the evidence adduced in the case I have no

doubt that the agreement was entered into ''bona fide'' and there was no intention to defeat the rights of any person or persons at the time the

parties entered into the contract. The opinion of the Commissioner is not warranted by anything which appears in the evidence in the case. It is

claimed on behalf of the respondent by his learned Advocate that this agreement. Ex. D. 1, brought about the relationship of principal and agent or

master and servant and, as a last resort, the relationship of partners, and that therefore the owner of the boat was either the principal, the master or

the partner of Merugu Masenu. It is rather difficult to accept this interpretation of the agreement. In my view the agreement is a mere demise of the

boat for hire which was agreed to be paid between the parties, and thereafter the owner had nothing to do with the boat or the trip or the cost of it.

The entire amount payable as freight for the carriage of the cargo is receivable under the agreement from Krishna and Company by Merugu

Masenu alone. It is not as if Merugu Masenu received the amount on account of the owner of the boat and made himself liable to account to him

for the expenses and for the profits. The fact that if there was more cargo to be carried, a portion of the extra hire that might be earned by the trip

was made payable to the owner would not, in my opinion, alter in any way the original demise of the boat by the owner to Merugu Masenu. The

terms of the agreement are wholly inconsistent with either the relationship of partners or the relationship of master and servant or that of agent and

principal. It is not disputed that if the contract is a mere demise of the boat the appellant cannot be made liable for the payment of the

compensation.

It is, however, argued on behalf of the respondent that the decision of the Irish Court of Appeal in ''Kelly v. Owners of Ship'' ""Miss Evans

(1913) 2 Ir R 385 concludes the matter in favour of the respondent. The agreement in that case was one between Richard Jones acting on behalf

of the owners and Kinsella, who was appointed captain by the former. Under the agreement Kinsella was to work the vessel

On the best paying trade for the benefit of all concerned, receiving for his services two-thirds. of all freights carried, out of which he is responsible,

and agrees to pay, all crew''s wages, victuals of crew, port charges, towages, and all and every other expenses connected with the working of the

vessel; the remaining one- third he agrees to remit to the said Richard Jones as owners'' share.

In pursuance of this agreement Kinsella appointed the crew for the vessel, and the question was whether when one of the crew who was engaged

by the captain met with an accident and claimed compensation against the owners under the Workmen''s Compensation Act of 1906 the owners

could be made liable. The contention apparently urged on behalf of the owners was that the agreement was a demise of the schooner, and that

there was no relationship of master and servant between the crew and the owners, under the terms of the agreement, it is obvious that Kinsella was

appointed as merely a captain of the vessel by a person acting on behalf of the owners, and he did not therefore become a lessee of the vessel.

When once he was appointed captain it was his duty to appoint the crew and when once they were so appointed they became the servants of the

owners. The remuneration of the captain no doubt was not fixed on the basis of the remuneration to be paid by the owners on a monthly basis, but

he was to receive for his services two-thirds of the gross freights, which were to cover not only his remuneration but also the wages of the crew

and other expenses. That did not alter the nature of the agreement, and the relationship that was brought about under the terms of the agreement.

He was no more than an agent of the owners, and even if it was assumed that he became a partner by virtue of the agreement, as did Holmes, L.

J., in the case, even then the owners would be liable. The question in the ease mainly turned upon the interpretation of the clause which gave to the

captain two-thirds of the freights, and O''Brien, L. C., Holmes, L. J., and Cherry, L. J., agreed in holding that that clause did not alter the

relationship between the owners and the crew, which was that of master and servant, and that therefore they were liable to pay the compensation.

It would be therefore seen that that decision as clearly distinguishable from the present case, as in the present case the agreement undoubtedly

created a demise of the boat in favour of Merugu Masenu. The amount that was payable under the agreement was clearly a payment for the hire,

and was not a share of the profits or an amount which Merugu Masenu was bound to collect on behalf of the principal and account to him after

deducting the expenses for the trip. It therefore follows that the view taken by the Commissioner is wrong and the owners cannot be made liable

for the damages. The result no doubt from the point of view of the unfortunate widow is to be regretted, but it cannot be helped as she did not

implead as party to this petition Merugu Masenu also in addition to the owner, in which case it would have been possible to grant a decree against

him. It follows that the appeal must be allowed and the order of the Additional Commissioner must be set aside. In the circumstances of the case I

think this is not a fit case in which I should award costs to the appellant. The Commissioner will refund the amount which it is said has been

deposited by the appellant.