High Court Allows Compensation Appeal Under Employees' Compensation Act -- Temporary Driver Hiring Establishes Employer-Employee Relationship -- Labour Commissioner's Order Reversed

Sub Category: Bombay High Court Bench: BOMBAY
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Case Note & Summary

The High Court allowed an appeal challenging the Labour Commissioner's rejection of a compensation claim under the Employees' Compensation Act, 1923. The appellants, dependents of a deceased driver, claimed compensation after the driver died in an accident while driving a vehicle owned by opponent no.1. The Labour Commissioner had rejected the claim, finding no employer-employee relationship. The High Court analyzed the statutory definitions under the Act and found that temporary hiring of a driver for a specific journey constituted employment. The Court relied on opponent no.1's statement in the FIR that he had hired the deceased to drive to Rajasthan for a funeral. The Court held that the relationship was established and reversed the Labour Commissioner's order, awarding compensation to the appellants.

Headnote

The High Court of Judicature at Bombay allowed the first appeal filed under Section 30 of the Employees' Compensation Act, 1923 -- The Court reversed the order dated 9 May 2012 passed by the Labour Commissioner -- The Labour Commissioner had rejected the compensation application on the ground that employer-employee relationship was not established -- The Court held that temporary hiring of a driver for a specific journey constitutes employment under the Act -- The deceased was driving vehicle belonging to opponent no.1 when the accident occurred on 29 March 2009 -- The Court analyzed Section 2(dd) and Section 2(e) of the Employees' Compensation Act, 1923 -- The definition of 'employee' includes persons recruited as drivers under Section 2(dd)(ii)(c) -- Schedule II(xxv) specifically includes 'employed as a driver' -- The Court found that opponent no.1's statement in the FIR established the hiring arrangement -- The Insurance Company's argument about negligence was irrelevant under the Employees' Compensation Act -- The appeal was allowed with costs and compensation was awarded

Issue of Consideration: Whether the Labour Commissioner was justified in rejecting the application for compensation on the ground that the relationship between the deceased and opponent no.1 of employer-employee was not established

Final Decision

The appeal was allowed -- The Labour Commissioner's order dated 9 May 2012 was set aside -- Compensation was awarded to the appellants under the Employees' Compensation Act, 1923 -- Costs were awarded to the appellants

 

 

2026 LawText (BOM) (02) 86

First Appeal No. 1628 of 2012

2026-02-18

Jitendra Jain, J.

2026:BHC-AS:8700

Mrs. Varsha Nichani a/w Mr. Roshil Nichani for the appellants, Mr. Sanjay Krishnan i/by Leges Consultus for respondent no.2

Shakuntala Tilakdhari Gupta, Kum. Avina Tilakdhari Gupta, Kumar Arun Tilakdhari Gupta, Kumar Vishal Tilakdhari Gupta

Shri Jawaharlal R. Gupta, The New India Assurance Co. Ltd.

Nature of Litigation: First appeal under Section 30 of the Employees' Compensation Act, 1923 challenging the Labour Commissioner's order

Remedy Sought

Appellants sought reversal of the Labour Commissioner's order and award of compensation under the Employees' Compensation Act

Filing Reason

Labour Commissioner rejected compensation application on the ground that employer-employee relationship was not established

Previous Decisions

Labour Commissioner's order dated 9 May 2012 rejected the compensation application

Issues

Whether temporary hiring of a driver for a specific journey establishes employer-employee relationship under the Employees' Compensation Act, 1923

Submissions/Arguments

Appellants argued that temporary hiring constituted employment under the Act, relying on opponent no.1's FIR statement Insurance Company argued that appellants failed to prove employer-employee relationship and that negligence of the deceased barred compensation

Ratio Decidendi

Temporary hiring of a driver for a specific purpose constitutes employment under the Employees' Compensation Act, 1923 -- The definition of 'employee' in Section 2(dd) includes persons recruited as drivers -- Employer-employee relationship can be established through implied or oral contracts -- The Act provides compensation regardless of negligence in causing the accident

Judgment Excerpts

The deceased was driving vehicle no.MH 04 BH 6522 belonging to the original opponent no.1 Temporary hiring of a driver by opponent no.1 would constitute an employer-employee relationship between the deceased and opponent no.1 Section 2(dd) 'employee' means a person recruited as driver Schedule II(xxv) employed as a driver

Procedural History

Application filed under Employees' Compensation Act -- Rejected by Labour Commissioner on 9 May 2012 -- First Appeal No. 1628 of 2012 filed on 28 February 2017 -- Appeal admitted on 28 February 2017 -- Heard finally on 18 February 2026

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