Bombay High Court: In an appeal under the Employees’ Compensation Act, 1923 (Employees’ Compensation Act), a Single Judge Bench of Jitendra Jain, J., held that even brief engagement as a driver is sufficient to establish an employer-employee relationship. The Court emphasised that the FIR lodged by the vehicle owner described the deceased as a “driver”, which was adequate to prove employment. The Court further held that the absence of a written contract could not defeat legitimate claims under welfare legislation. Since the insurer’s objection based on Motor Accident Claims Tribunal (MACT) proceedings was found to be untenable, the Court directed that compensation be paid to the dependents within eight weeks.
Background
The deceased was engaged as a driver for a short period and met with a fatal accident on 29 March 2009 while driving the vehicle owned by the vehicle owner. A legal notice was issued by the dependents seeking compensation, but no reply was received, which led to the filing of an application under the Employees’ Compensation Act. The Labour Commissioner rejected the claim on 9 May 2012, holding that the applicants had failed to prove the employer-employee relationship.
The appellants argued that the FIR lodged by the vehicle owner clearly described the deceased as a “driver”, thereby establishing the relationship. On the other hand, the Insurance Company contended that the accident was caused by the negligence of the deceased, that no documentary proof of employment was produced, and that the burden lay on the applicants to prove the relationship. It was further argued that the absence of a written contract justified rejection of the claim.
Analysis and Decision
The Court emphasised that the FIR lodged by the vehicle owner, wherein the deceased was referred to as a “driver”, was crucial. The Court noted that the statement given at the first instance by a person at the time of lodging the FIR is the best piece of evidence in such cases, in the same way a dying declaration is at the time of death of a person. The Court further observed that if the deceased was a friend or relative of the vehicle owner, the vehicle owner would not have addressed the deceased as a “driver” before the police authorities when he expressly stated his relationship with another passenger. The contents of the FIR, when read as a whole, cannot be doubted.
The Court highlighted that a driver who is not regularly employed, or even if he is regularly employed, will rarely have a written contract unless hired by a corporate entity. The Court noted that in the present case, where an individual vehicle owner had hired and availed the services of the deceased to drive the vehicle to Rajasthan on an urgent basis for a short duration, there could never be a written contract or agreement between the parties to prove the relationship of employer and employee.
The Court emphasised that under the Employees’ Compensation Act, liability can be imposed on the owner and the insurance company jointly and severally. The Court noted that the legal notice issued by the appellants to the vehicle owner on 11 August 2009 seeking compensation was never replied to, and the only obvious conclusion for not replying was to avoid financial liability. The Court further noted that to absolve himself from liability, the vehicle owner filed a reply to the application on 14 February 2011, almost two years after the incident and notice, denying the employer-employee relationship.
The Court referred to Section 2(dd), Employees’ Compensation Act, which defines “employee” to mean a person recruited as a driver, helper, mechanic, cleaner, or in any other capacity in connection with a motor vehicle. The Court highlighted that Section 2(dd), Employees’ Compensation Act does not require a written contract or agreement between the employer and employee; what is material is “recruited as driver”, and the phrase “recruited” covers even a driver hired for a shorter duration.
Further, the Court noted that Section 2(dd)(iii) read with Entry (xxv) of Schedule II, Employees’ Compensation Act expands the definition of “employee” to a person employed as a driver, and it is expressly provided in clause (iii) of Section 2(dd), Employees’ Compensation Act that a contract can be implied or oral. The Court observed that the phrases “employed as a driver” and “recruited as driver” emphasise the nature of work for which a person is hired.
The Court also emphasised that the definition focuses on the act of employment or recruitment and not the duration for which a person is employed or recruited. It was noted that the expression “employed” has at least two known connotations, but as used in the definition, the context indicates that it is used in the sense of a relationship brought about by express or implied contract of service, in which the employee renders service for which he is engaged by the employer, and the latter agrees to pay him in cash or kind as agreed between them or as statutorily prescribed.
The Court highlighted that it is well established that the fact an individual is entirely free to work or not, and owes no contractual obligation to the person for whom the work is performed when not working, does not preclude a finding that the individual is a worker, or indeed an employee, at the time when he or she is working. The Court emphasised that merely because the period for which the driver was recruited or employed is not mentioned, that cannot be a ground to reject the claim. The Court further noted that merely because the Insurance Company thinks that MACT would not have given any relief cannot preclude the applicants from making an application under the Employees’ Compensation Act. Insofar as the civil suit is concerned, the Court held that there is a bar to making an application under Section 3(5), Employees’ Compensation Act if the civil suit is filed.
The Court also referred to Mahendra Shah v. Baldev Singh, 2011 SCC OnLine Raj 2775, wherein it was held that a person employed on a daily basis would also be covered by the definition of workman. Accordingly, the Court, while allowing the appeal, quashed the Labour Commissioner’s order. The Court further directed that compensation be calculated within 8 weeks of the applicants filing an application with the present order.
[Shakuntala Tilakdhari Gupta v. Jawaharlal R. Gupta, First Appeal No.1628 of 2012, decided on 18-2-2026]
Advocates who appeared in this case:
For the Appellants: Varsha Nichani a/w Roshil Nichani
For the Respondents: Sanjay Krishnan i/by Leges Consultus