Summary
A factory watchman died in a motorcycle accident 5 km from the factory while riding to his 3 a.m. shift; the High Court, applying Francis De Costa, held the accident did not arise out of and in the course of employment under the Employees' Compensation Act, 1923. The Supreme Court held that Section 51E of the ESI Act (inserted 01.06.2010), which deems commuting accidents to arise out of and in the course of employment where a nexus with the employment is established, is clarificatory and retrospective, and that the ESI Act and EC Act being in pari materia, the same meaning applies to Section 3 of the EC Act. The Commissioner's award was restored.
Issues
- Whether a fatal road accident suffered by an employee while commuting from his residence to his place of work arises out of and in the course of his employment under Section 3 of the Employees' Compensation Act, 1923.
- Whether Section 51E of the Employees' State Insurance Act, 1948, inserted with effect from 01.06.2010, is clarificatory and therefore applies retrospectively to an accident of 22.04.2003.
- Whether the meaning given by Section 51E to the phrase 'arising out of and in the course of employment' in the ESI Act can be applied to the same phrase in Section 3 of the EC Act on the principle of statutes in pari materia.
- Whether on the facts the nexus between the circumstances, time and place of the accident and the employment was established.
Provisions considered
- Section 3(1), Employees' Compensation Act, 1923Section 3(1) makes the employer liable where personal injury is caused to an employee by accident arising out of and in the course of his employment. The Court construed this phrase, in the light of Section 51E of the ESI Act and the pari materia rule, to include an accident occurring while the employee commutes from residence to the place of employment for duty or back after duty, provided a nexus between the circumstances, time and place of the accident and the employment is established. (¶¶ 11, 13, 22, 47, 48, 55)
- Section 51E, Employees' State Insurance Act, 1948Section 51E deems an accident occurring while an employee commutes between residence and place of employment to have arisen out of and in the course of employment if a nexus between the circumstances, time and place of the accident and the employment is established. The Court held it neutralised Francis De Costa, was enacted to clarify a phrase that had long vexed the courts, and is therefore clarificatory and retrospective; the word 'deemed' in it is used to put beyond doubt a construction that was hitherto uncertain, not to create a legal fiction. (¶¶ 15, 16, 25, 30, 44, 45, 46)
- Sections 2(8), 46(1)(d), 51C and 53, Employees' State Insurance Act, 1948Section 2(8) defines 'employment injury' with the same operative phrase as Section 3 of the EC Act; Section 46(1)(d) provides dependants' benefit; Section 51C (from 28.01.1968) deems accidents while travelling in employer's transport to arise out of employment, giving statutory recognition to the rule in Agnes decided under the EC Act; Section 53 bars double recovery under the Workmen's Compensation Act. The Court relied on these to show the cognate nature of the two Acts and that they operate in close tandem. (¶¶ 12, 13, 24, 35, 38, 39)
Held
- Section 51E of the ESI Act neutralised the holding in Francis De Costa that a road accident on the way to work does not arise out of or in the course of employment: a commuting accident is deemed to arise out of and in the course of employment, the only condition being that a nexus between the circumstances, time and place of the accident and the employment is established. (¶¶ 14, 15, 16)
- A declaratory or clarificatory statute, enacted to remove doubts or supply an obvious omission as to the meaning of an earlier statute, is not subject to the presumption against retrospectivity and operates retrospectively; regard is to be had to substance rather than form. (¶¶ 25, 26, 27, 28, 29)
- The question whether an accident while commuting to or from work arises out of and in the course of employment had long vexed the courts, producing divergent rulings on individual facts under the theory of notional extension (Saurashtra Salt, Agnes, Mackinnon Mackenzie, Sadgunaben Amrutlal, Bhagubai); Section 51E was enacted to clarify and put beyond doubt the meaning of that phrase for commuting accidents, and is therefore clarificatory in character with retrospective effect. (¶¶ 30, 31, 32, 36, 37, 42, 43, 44)
- The word 'deemed' in Section 51E is not used to create a legal fiction but to put beyond doubt a particular construction that was hitherto uncertain. (¶¶ 45, 46)
- The ESI Act and the EC Act are statutes in pari materia: the operative phrase in Section 3 of the EC Act is identical to that in Section 2(8) of the ESI Act, both are beneficial social-security legislations requiring liberal construction, they differ only in the employers they cover, and case law under each has been applied to the other. Where statutes in pari materia serve a common object, the meaning of a provision in one may be ascertained by comparing it with the other, and they are to be construed together as one system explanatory of each other. (¶¶ 18, 19, 20, 21, 23, 39, 48, 49, 50, 51, 52, 53, 54)
- The phrase 'accident arising out of and in the course of his employment' in Section 3 of the EC Act includes an accident occurring 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, provided the nexus between the circumstances, time and place of the accident and the employment is established. The Court clarified it was not importing Section 51E into the EC Act but giving the same phrase the same meaning. (¶¶ 47, 55)
- On the facts, the deceased watchman was dutifully proceeding to his workplace to be on time for a 3 a.m. shift when the accident occurred about 5 km away; there was a clear nexus between the circumstances, time and place of the accident and his employment, so the accident arose out of and in the course of employment and the Commissioner rightly allowed the claim. (¶ 56)
Result
Appeal allowed. The High Court's judgment dated 01.12.2011 in First Appeal No. 2015 of 2011 set aside and the Commissioner for Workmen's Compensation, Osmanabad's judgment dated 26.06.2009 in Workmen's Compensation Application No. 28 of 2005 (compensation of Rs. 3,26,140 with 12% interest, payable by the insurer, with penalty on the employer) restored. No order as to costs.