Case Note & Summary
The dispute arose out of a claim for disablement benefit under the Employees' State Insurance Act, 1948 by an employee who met with an accident while commuting to his workplace. The employee, Francis De Costa, was employed at a factory at Koratty. On June 26, 1971 at 4:15 p.m., while riding his own bicycle to the factory, he was hit by a lorry belonging to his employer, M/s J and P Coats (P) Ltd. The accident occurred about one kilometre north of the factory, and his duty shift was to commence at 4:30 p.m. He suffered a fractured collar bone and was hospitalised for 12 days. The Employees' State Insurance Court allowed his claim for disablement benefit. The Kerala High Court dismissed the employer's appeal and also dismissed an application for a certificate of fitness to appeal to the Supreme Court. The Regional Director of the Employees' State Insurance Corporation filed a special leave petition before the Supreme Court on April 16, 1979. Special leave was granted and the Corporation was directed to pay the compensation in any event. The compensation money was paid. Because of a difference of opinion between the two judges who initially heard the appeal, the matter was placed before a larger Bench. The core legal question was whether the injury suffered by the employee constituted an 'employment injury' under Section 2(8) of the Employees' State Insurance Act, 1948, which requires that the personal injury must arise out of and in the course of employment. The employee, through his counsel Mr. Chacko, faintly suggested that the bicycle was purchased with a loan from the employer, but this was deemed irrelevant. The Corporation argued that the injury did not arise out of employment. The Court examined the statutory language and held that both conditions — 'arising out of' and 'in the course of' — must be fulfilled. The phrase 'out of' required a causal connection with employment, meaning the injury must have its origin in the employment. A mere road accident on the way to work did not satisfy this test. The phrase 'in the course of' referred to the period of employment; since the work shift had not yet begun, the accident was not in the course of employment. The Court relied on English and Indian precedents, including Regina v. National Insurance Commissioner, Ex parte Michael, South Maitland Railways Pty. Ltd. v. James, and Saurashtra Salt Manufacturing Co. v. Bai Valu Raja. The deeming provision of Section 51-C, which treats accidents while travelling in employer's transport as arising out of and in the course of employment, was held inapplicable because the employee was not a passenger in a vehicle provided by the employer. Accordingly, the Supreme Court allowed the appeal, set aside the orders of the High Court and the Employees' State Insurance Court, and held that the employee was not entitled to disablement benefit.
Headnote
A) Labour Law - Employment Injury - Definition and Scope - Employees' State Insurance Act, 1948, Section 2(8) - Personal injury must arise out of and in the course of employment; both conditions must be fulfilled. The employee suffered injury while riding his own bicycle to work, one kilometre from the factory and before his shift began. The court held that this was not an employment injury because there was no causal connection between the accident and employment, and the accident did not occur during employment. (Paras 1-10) B) Labour Law - Arising Out of Employment - Causal Connection - Employees' State Insurance Act, 1948, Section 2(8) - The phrase 'out of' requires that the injury had its origin in the employment. A mere road accident on the way to work lacks such origin. The court relied on South Maitland Railways Pty. Ltd. v. James and dictionary meaning to conclude that the injury was not caused by employment. (Paras 3-6) C) Labour Law - In the Course of Employment - Temporal and Spatial Limits - Employees' State Insurance Act, 1948, Section 2(8) - An accident must take place within or during the period of employment. The journey to the factory before shift commencement was not in the course of employment. The court rejected the argument that employment begins when the employee leaves home as leading to absurdity. (Paras 3-7) D) Labour Law - Deeming Provision - Employer's Transport - Employees' State Insurance Act, 1948, Section 51-C - Section 51-C deems an accident while travelling as a passenger in employer's transport as arising out of and in the course of employment. This legal fiction did not apply because the employee was not travelling in any vehicle owned or operated by the employer; he was riding his own bicycle. (Paras 8-9) E) Labour Law - Workmen's Compensation Act, 1923, Section 3(1) - Journey to and from work excluded - General rule that employment does not commence until the workman reaches the place of employment and ceases when he leaves; journey is excluded except in special circumstances. The court followed Saurashtra Salt Manufacturing Co. v. Bai Valu Raja to hold that the accident was not in the course of employment. (Paras 9-10)
Issue of Consideration
Whether an accident sustained by an employee while commuting to his place of employment on his own bicycle, one kilometre away from the factory and before his shift commenced, amounted to 'employment injury' under Section 2(8) of the Employees' State Insurance Act, 1948, and whether Section 51-C of the Act applied.
Final Decision
The Supreme Court allowed the appeal, set aside the orders of the Kerala High Court and the Employees' State Insurance Court, and held that the employee was not entitled to disablement benefit because the accident did not arise out of and in the course of employment under Section 2(8) of the Employees' State Insurance Act, 1948, and Section 51-C did not apply.
Law Points
- Employment injury under Section 2(8) of Employees' State Insurance Act
- 1948 requires both 'arising out of' and 'in the course of' employment. 'Arising out of' requires causal connection with employment
- 'in the course of' requires accident during employment. Journey to and from workplace generally excluded. Section 51-C deems travel in employer's transport as employment injury only when employee is passenger in employer's vehicle.
