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Tuesday, December 22, 2009

Death due to ‘Drowning’ – Apex Court on Workmen Compensation..

Dear (s)

I had shared this earlier with my friends through e mail during Feb 2009. Here it is placed on web for the benefit of all (Knowledge sharing) and inviting views of experts for a healthy debate.

In any industry or project there are large nos. of workers and Law requires that they should be protected. This Workmen’s Compensation Act 1923, intended to be an beneficial legislation extends to whole of India. It defines workmen to be any person ther than a person whose  employment is of a casual nature and who is employed otherwise than for the purposes of the employer’s trade or business.

An accident means a mishap or any untoward incident or event. The injury to the workman may be accidental even when it is deliberate design and attempt by a third party. The employer is liable to pay compensation to a workman for personal injury caused by accident arising out of and in the course of employment and for the occupational diseases. The employer is liable to pay compensation in accordance with the provisions of the Act, towards personal injury caused to a workman by accident arising out of and in the course of his employment. There are also some exclusions asprovided in the Statute itself.

Many Insurance Companies (Both PSU & Private) have Policy providing cover to the Insured against all sums for which the insured would be liable to pay his employees under WC Act 1923, Fatal Accidents Act 1855 and Common Law. Besides the Motor Vehicle Policy also cover the WC liability for driver, cleaner and other workmen engaged. The compensation package is dependant on – the age of the worker, nature of injury : temporary / permanent disablement or death. The liability is primarily in respect of mishaps arising “arising out of and in the course of his employment”. Invariably, at the time of the accident, the workmen must be on the site and there should be casual connection between the cause and the employment. In common understanding the course of employment would only refer to the time during which employment continues i.e., the work at the factory doing the work for which he is engaged for.

There is something more – a concept of notional extention of employment premises – very liberal interpretations at that borne out of notions of doing justice to the weaker sections of society. Sometimes it is contended that this extends from the time the labourer leaves home and till he returns home after completion of work. But this is not the definition and there would be various other aspects to bring this to the fore.

Recently there was a landmark judgment which is noteworthy for the Insurers – though this was under Motor Vehicles Act, this is very much pertinent under WC Act as well. Here are some facts of the impugned case :

The cause of action arose due to the death of a driver of a truck who left for a temple alongwith certain passengers as per directions of the owner of the truck. Upon reaching the pilgrimage centre, the deceased went to a pond and while taking bath slipped, fell down ,drowned and breathed his last. The wife of the deceased filed petition taking plea that the death had occurred during the course of and within the employment. The vehicle was the subject matter of insurance with the Insurer and it was claimed that Insurer was liable to pay compensation as the risk of the driver was covered under the Motor policy.

The WC commissioner allowed the petition and determined compensation of Rs.2,20,046/- with 12 % interest. It was held that the Insurer was liable to pay the compensation. The Insurer filed an appeal before the High Court, stating there was no connection between the accident causing death of the workman and the vehicle and, therefore, neither the insurer nor the insured had any liability to pay any compensation. The High Court allowed the appeal filed by the insurer holding that there was no casual connection and therefore the insurance company was not liable. Further, the High Court granted the liberty to recover the compensation awarded from the appellant.

The High Court accepted that the driver did not die as a result of an accident involving the vehicle. But the vehicle was taken by the deceased in the course of employment at the behest of the owner to the temple. The ultimate question according to the High Court was when the driver was taking a bath at the pond and gone there, the death had occurred out of an accident arisen out of and in the course of his employment. The High Court noted that there was no casual connection between the accident causing the death and the vehicle. The High Court also noted that since there was no such casual connection,  the insurer would not be liable in terms of the policy as the vehicle which was the subject matter of insurance was not involved in the accident and the insurer had no liability.

The owner filed appeal in the Supreme Court contending that the decision of High Court is clearly erroneous and that the High Court should not have directed claimant to recover the amount from the owner of the vehicle. The Counsel submitted that it has no liability in view of what is stated in Sec 147 (1)(b) (i) of Motor Vehicles Act, 1988. The Supreme Court observed that under Section 3(1) it has to be established that there was some casual connection between the death of the workman and his employment. If the workman dies a natural death because of the disease which he was suffering no liability would be fixed upon.

Citing various cases, the court observed "Nothing could be simpler than the words `arising out of and in the course of the employment'. It is clear that there are two conditions to be fulfilled. What arises `in the course' of the employment is to be distinguished from what arises `out of the employment'. The former words relate to time conditioned by reference to the man's service, the latter to causality. Not every accident which occurs to a man during the time when he is on his employment--that is, directly or indirectly engaged on what he is employed to do--gives a claim to compensation, unless it also arises out of the employment. Hence the section imports a distinction which it does not define” To come within the Act the injury by accident must arise both out of and in the course of employment. The words `in the course of the employment' mean `in the course of the work which the workman is employed to do and which is incidental to it'. 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."

The Court pronounced that in the specific case in view of the legal principles delineated there were no sufficient grounds to fasten liability on either the insurer or the insured. The High Court was not justified in holding that the truck owner liable to pay compensation. The appeal was allowed with no order as to costs.

As the saying goes, there are lessons to be learnt everywhere and this Judgment could impact the Insurers in more cases.

With regards
S. Sampathkumar


  1. Dear Sir,
    The courts have time and again stressed on the point "Out of Emmployment". The accident should have more nexus to the job assigned to the worker.
    Apply this test:
    "Whether the performance of the particular act has directly contributed value to the work assigned?'
    In this case, the driver was taking bath which is not out of employment.If has died whilst driving/something connected to the employment the claim would have been paid.

    During 2001, there was a case relating to Apollo Hospital whilst it was under construction. One worker during lunch time, saw a person struggling in the lift(don't remember} battling for life. The worker jumped and saved the person but in the course of the help, he lost his life. It is definitely in the course of employment. But the act of saving has not directly contributed to the work assigned to him.Hence the same is not out of employment.

    Similarly the accident to a Factory worker when he went to the lab to discuss something person with his friend has been held not arising out of employment.

    There are lot of similar decided case laws. My doubt is why the correct judgment was not pronounced by the lower courts. Why precedent were not cited by the legal experts of the parties?

    I observe there are lot of anomalies/mistakes which can be avoided at the initial stages. There are lot of such things in the General Insurance Field as expert opinions are not available.My suggestion is- there should be a forum consisting of Insurance Professionals. Any question referred to this forum can be analysed and an opinion can be given.

    This will avoid lot of litigation/ correspondence between Insurers and Consumers.
    For example, whether Overturning premium has to be charged for a Tipper and subsequent payment of such claims is a tricky question.

    Persons with knowledge can discuss and find a solution.

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