TaxTMI 
TaxTMI 
2025 (8) TMI 160
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....Judge, Senior Division, Osmanabad awarded a sum of Rs 3,26,140/- along with interest @ 12 per cent per annum from 22.05.2003 to the family members. The Insurance Company was directed to deposit the amount since there was a valid Insurance Policy. The employer was asked to pay 50 per cent of the awarded amount as penalty. The employer and the Insurance Company were directed to pay the amount of penalty and the awarded compensation within one month from the date of the order. 3. Aggrieved, the Insurance Company filed First Appeal No.2015 of 2011 before the High Court of Judicature of Bombay, Bench at Aurangabad. The High Court has reversed the findings of the Commissioner and set aside the order holding that since the deceased was on his way to his employment, the accident cannot be said to have its origin in the employment. The aggrieved family members are in appeal by way of special leave. 4. The High Court, to support its conclusion, relied on the judgment dated 11.09.1996 of this Court rendered in Regional Director, E.S.I. Corporation & Another vs. Francis De Costa and Another, (1996) 6 SCC 1. The said judgment arose under the Employees' State Insurance Act, 1948 (hereinaft....
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....hile commuting to or from work". 8. We have carefully considered the submissions of the learned counsel for the parties and perused the records. QUESTIONS FOR CONSIDERATION : 9. The primary question that arises for consideration in this case is whether the accident which caused the death of the deceased could be said to have arisen out of and in the course of employment? 10. Certain incidental questions also arise which have been set out later in the judgment. STATUTORY PROVISIONS: - 11. Before we advert to the holding in Francis De Costa (Supra), it will be useful to refer to the relevant statutory provisions in the EC Act as well as the ESI Act. Section 3 of the EC Act reads as under: - "3. Employer's liability for compensation.- (1) If personal injury is caused to a employee by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter: Provided that the employer shall not be so liable " 12. Section 46(1)(d) (which deals with 'Benefits') and Section 2(8) (which deals with 'Employment Injury') in the ESI Act, are set out hereinbelow: - ....
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....restrictive meaning to "employment injury". The injury must be of such an extent as can be attributed to an accident or an occupational disease arising out of his employment. "Out of", in this context, must mean caused by employment. Of course, the phrase "out of" has an exclusive meaning also. If a man is described to be out of his employment, it means he is without a job. The other meaning of the phrase "out of" is "influenced, inspired, or caused by: out of pity; out of respect for him" (Webster's Comprehensive Dictionary - International Edition - 1984). In the context of Section 2(8), the words "out of" indicate that the injury must be caused by an accident which had its origin in the employment. A mere road accident, while an employee is on his way to his place of employment cannot be said to have its origin in his employment in the factory. The phrase "out of the employment" was construed in the case of South Maitland Railways Pty. Ltd. v. James [67 CLR 496] where construing the phrase "out of the employment", Starke, J., held "the words 'out of' require that the injury had its origin in the employment". 7. Unless an employee can establish that the injur....
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....curring to an employee while commuting from his residence to the place of employment for duty or from the place of employment to his residence after performing duty, shall be deemed to have arisen out of and in the course of employment. The only condition was that nexus between the circumstances, the time and place in which the accident occurred and the employment had to be established. 17. In considering the applicability of Section 51E of the ESI Act to the case of appellant certain threshold questions need to be addressed:- (i) Does Section 51E of the ESI Act have retrospective effect so as to cover an accident that has taken place on 22.04.2003 when the Section was enacted on 01.06.2010? (ii) Assuming Section 51E of the ESI Act applies, would the said interpretation enure to the benefit of the appellants whose claim arises under the EC Act? (iii) Lastly, assuming both the above questions are answered in favour of the appellants are the ingredients of Section 51E attracted to the facts of the present case? BENEFICIAL NATURE OF THE ESI ACT 1948: - 18. The ESI Act was enacted to provide for certain benefits to employees in case of sickness, mate....
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....ndustrial, commercial, agricultural or otherwise notified in the official gazette under Section 1(5) of the Act. In fact, the principal difference between the ESI Act and the EC Act is that while the ESI Act applied to the employees of factories and notified establishments as mentioned above, the EC Act applied to employees under all other employers as defined. 21. The 62nd report of the Law Commission on the EC Act submitted under the chairmanship of former Chief Justice of India, Justice P.B. Gajendragadkar, in Para 1.11, rightly noticed the distinction as under: "1.11. After the passing of the Employees' State Insurance Act, the area of application of the Workmen's Compensation Act has diminished, to a certain extent. But the Employees' State Insurance Act applies only to (i) factories, and (ii) notified establishments, and in the rest of the cases the Workmen's Compensation Act still holds the field." BENEFICIAL NATURE OF THE EC ACT: - 22. The EC Act was enacted to provide for the payment by certain classes of employers to their employees of compensation for injury by accident. Section 3, as set out earlier, provides that if personal injury is ....
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....ent caused during and in the course of employment should be construed as such." (Emphasis supplied) 24. At this stage, it is important to notice one provision in the ESI Act which bars receiving or recovering compensation under any other law if compensation has been received under the ESI Act, viz. Section 53, which is extracted hereinbelow: - "53. Bar against receiving or recovery of compensation or damages under any other law. - An insured person or his dependants shall not be entitled to receive or recover, whether from the employer of the insured person or from any other person, any compensation or damages under the Workmen's Compensation Act, 1923 or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act." This is only set out to demonstrate how the ESI Act and the EC Act operate in close tandem. IS SECTION 51E OF THE ESI ACT CLARIFICATORY? 25. It is in this background that the question whether Section 51E, enacted on 01.06.2010, will have retrospective application needs to be decided. Thereafter, the further question of applying the said....
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....merely declaratory of the previous law retrospective operation is generally intended. The language 'shall be deemed always to have meant' or 'shall be deemed never to have included' is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law when the constitution came into force, the amending Act also will be part of the existing law." 27. The said passage has been quoted with approval in several judgments of this Court, namely, Commissioner of Income Tax, Bombay and Others vs. Podar Cement Pvt. Ltd. and Others, (1997) 5 SCC 482 and State Bank of India vs. V.Ramakrishnan and Anr., (2018) 17 SCC 394. 28. It has also been held in Podar Cement Pvt. Ltd. (supra) applying the said interpretation as under:- "54. From the circumstances narrated above and....
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....d issue in Saurashtra Salt Mfg. Co. v. Bai Valu Raja & Ors., 1958 SCC OnLine SC 131. This Court recognized the theory of notional extension and set out the statement of law as under: - "7. As a rule, the employment of a workman does not commence until he has reached the place of employment and does not continue when he has left the place of employment, the journey to and from the place of employment being excluded. It is now well-settled, however, that this is subject to the theory of notional extension of the employer's premises so as to include an area which the workman passes and repasses in going to and in leaving the actual place of work. There may be some reasonable extension in both time and place and a workman may be regarded as in the course of his employment even though he had not reached or had left his employer's premises. The facts and circumstances of each case will have to be examined very carefully in order to determine whether the accident arose out of and in the course of the employment of a workman, keeping in view at all times this theory of notional extension." (Emphasis supplied) Thereafter, on facts, it was held as under: - ....
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....etermined, not by the courts, but by the hierarchy of tribunals set up under the National Insurance Acts." 34. Thereafter, the learned Judge recognized that the phrase "in the course of his employment" will include doing something which was reasonably incidental to the employment, when he held as under in Ex Parte Michael (supra). "11. Construing the meaning of the phrase "in the course of his employment", it was noted by Lord Denning that the meaning of the phrase had gradually been widened over the last 30 years to include doing something which was reasonably incidental to the employee's employment. The test of "reasonably incidental" was applied in a large number of English decisions. But, Lord Denning pointed out that in all those cases the workman was at the premises where he or she worked and was injured while on a visit to the canteen or other place for a break. Lord Denning, however, cautioned that the words "reasonably incidental" should be read in that context and should be limited to the cases of that kind. Lord Denning observed: "Take a case where a man is going to or from his place of work on his own bicycle, or in his own car. He might be said....
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....nsion must necessarily depend on the circumstances of a given case. An employment may end or may begin not only when the employee begins to work or leaves his tools but also when he uses the means of access and egress to and from the place of employment...... 14. ..........As the free transport is provided in the interest of ser-vice, having regard to the long distance a driver has to traverse to go to the depot from his house and vice versa, the user of the said buses is a proved necessity giving rise to an implied obligation on his part to travel in the said buses as a part of his duty. He is not exercising the right as a member of the public, but only as one belonging to a service. The entire Greater Bombay is the field or area of the service and every bus is an integrated part of the service. The decisions relating to accidents occur-ring to an employee in a factory or in premises be-longing to the employer providing ingress or egress to the factory are not of much relevance to a case where an employee has to operate over a larger area in a bus which is in itself an integrated part of a fleet of buses operating in the entire area. Though the doctrine of reasonable or n....
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....er, it is reasonable to believe the workman would not otherwise have suffered." In other words there must be a causal relationship between the accident and the employment. The expression "arising out of employment" is again not confined to the mere nature of the employment. The expression applies to employment as such - to its nature, its conditions, its obligations and its incidents. If by reason of any of those factors the workman is brought within the zone of special danger the injury would be one which arises 'out of employment'. To put it differently if the accident had occurred on account of a risk which is an incident of the employment, the claim for compensation must succeed, unless of course the workman has exposed himself to an added peril by his own imprudent act...." (Emphasis supplied) Here again, the court used the phrase to mean nature, condition, obligation and incidents of employment. It will be noticed that this Court in Agnes (supra) too, while applying the theory of notional extension, adapted it in its application to the facts of the said case. 38. Agnes (supra) was delivered on 10.05.1963. By an amendment with effect from 28.01.1968 (added by Act 44 o....
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....t." (Emphasis supplied) 41. These observations were made after exhaustive analysis of the legal position prevailing in different jurisdictions on the issue of accidents occurring outside the employer's premises while the workman is on his way to and from his work. The Law Commission Report also discussed the International Labour Convention of 1964 for compensation on way to work accidents. 42. The High Courts in India were also engaged with this issue about the interpretation of the phrase "arising out of and in the course of employment" with regard to accidents occurring while proceeding to the place of work by the employee. In Sadgunaben Amrutlal vs. ESI Corporation, 1981 Lab 1C 1653 a judgment doubted by this Court in Francis De Costa (supra), the Division Bench of the Gujarat High Court took the view that the theory of notional extension is an elastic and flexible formula to be applied in a purposeful manner. The High Court in that case extended the benefits to the dependents of the employee even though the death occurred at a public bus stop while the employee was boarding the bus to reach the workplace. 43. Earlier in Bhagubai vs. Central Railway, (1954) 2 L....
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....he ordinary sense, impossible." It is very clear that the word "deemed" in Section 51E is employed to put beyond doubt a particular construction, that hitherto was uncertain. STATUTES 'IN PARI MATERIA': - 47. The question further remains whether assuming Section 51E is retrospective would the interpretation flowing out of 51E of the ESI Act be imported into the EC Act to interpret the phrase "accident arising out of and in the course of employment" to decide whether it will include accidents happening to employees while commuting to the place of work and vice versa. Before we answer the question, we would make it absolutely clear that it is not our endeavour to import Section 51E of the ESI Act into the EC Act. All that we are examining here is whether a meaning given to the phrase "arising out of and in the course of employment" insofar as it dealt with accidents happening while commuting to the place of work and vice versa in the ESI Act, could be said to be the same for the phrase "accident arising out of and in the course of employment" occurring in Section 3 of the EC Act. 48. First of all, the operative phraseology occurring in Section 3 of the EC Act is the same ....
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....ication has been accepted, then the presumption shall at once arise under the section. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. It may here be mentioned that the legislature has chosen to use the words 'shall presume' and not 'may presume' the former a presumption of law and latter of fact. Both these phrases have been defined in the Indian Evidence Act, no doubt for the purpose of that Act, but s.4 of the Prevention of Corruption Act is in pari materia with the Evidence Act because it deals with a branch of law of evidence, e.g. presumptions, and therefore should have the same meaning...." (Emphasis supplied) 52. In Craies on Legislation (9th Edition) dealing with statutes in pari materia has the following observation in para 20.1.26. "Statutes in pari materia Two Acts are said to be in pari materia if taking all their circumstances into account it is natural to construe them as if they formed part of a single code on a particular matter. Where this is found to be the case the result is that definitions in one may be applied to expressions found in another, and de....