DAIVSHALA & ORS. versus ORIENTAL INSURANCE COMPANY LTD. & ANR

DAIVSHALA & ORS. versus ORIENTAL INSURANCE COMPANY LTD. & ANR

Section 51E of the ESI Act is clarificatory and retrospective; the phrase 'accident arising out of and in the course of his employment' in Section 3 of the EC Act is to be understood, in pari materia with the ESI Act, to include accidents occurring while commuting to or from work provided a nexus between the circumstances, time and place of the accident and the employment is established; on the facts the deceased (a night watchman proceeding to duty) was within that nexus, so the accident arose out of and in the course of employment and compensation awarded by the Commissioner was rightly payable.

Parties
Appellants: Daivshala & Ors.; Respondent No.1 Insurance Company: Oriental Insurance Company Ltd.; Respondent No.2 Employer: Respondent No.2 - Sugar Factory (employer)
Jurisdiction
India
Judgment Date
28 July 2025
Procedural Posture
Civil Appeal No. 6986 of 2015 / Appeal From the Judgment and Order Dated 01.12.2011 of the High Court of Bombay at Aurangabad (first Appeal No. 2015 of 2011) Heard and Decided by the Supreme Court
Outcome
Appeal allowed; High Court judgment dated 01.12.2011 in FA No. 2015 of 2011 set aside; judgment of the Commissioner for Workmen’s Compensation dated 26.06.2009 restored
Legal Topics
Accident Arising Out of and in the Course of Employment, Section 51 E ESI Act Retrospective Effect, Declaratory and Clarificatory Statutes, Theory of Notional Extension, Beneficial Legislation, Statutes in Pari Materia
Labour and Employment Social Security Law Statutory Interpretation Accident Arising Out of and in the Course of Employment Section 51 E ESI Act Retrospective Effect Declaratory and Clarificatory Statutes Theory of Notional Extension Beneficial Legislation +1 more

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Parties

Daivshala & Ors.

Appellants

Oriental Insurance Company Ltd.

Respondent No.1 Insurance Company

Respondent No.2 - Sugar Factory (employer)

Respondent No.2 Employer

Procedural Posture

Civil Appeal No. 6986 of 2015 / Appeal From the Judgment and Order Dated 01.12.2011 of the High Court of Bombay at Aurangabad (first Appeal No. 2015 of 2011) Heard and Decided by the Supreme Court

Legal Issues

  1. 1 Whether the accident causing death arose out of and in the course of employment
  2. 2 Whether Section 51E of the ESI Act (enacted 01.06.2010) is clarificatory/declaratory and thus retrospective to cover accidents before enactment
  3. 3 Whether the meaning given to that phrase in the ESI Act can inform interpretation of the same phrase in the EC Act

Ratio Decidendi

Section 51E of the ESI Act is clarificatory and retrospective; the phrase 'accident arising out of and in the course of his employment' in Section 3 of the EC Act is to be understood, in pari materia with the ESI Act, to include accidents occurring while commuting to or from work provided a nexus between the circumstances, time and place of the accident and the employment is established; on the facts the deceased (a night watchman proceeding to duty) was within that nexus, so the accident arose out of and in the course of employment and compensation awarded by the Commissioner was rightly payable.

Court Disposition

Appeal allowed; High Court judgment dated 01.12.2011 in FA No. 2015 of 2011 set aside; judgment of the Commissioner for Workmen’s Compensation dated 26.06.2009 restored

Orders

  • High Court of Judicature at Bombay, Bench at Aurangabad judgment dated 01.12.2011 in First Appeal No. 2015 of 2011 set aside
  • Judgment of the Commissioner for Workmen’s Compensation and Civil Judge, Senior Division, Osmanabad in Workmen’s Compensation Application No. 28 of 2005 dated 26.06.2009 restored