DAIVSHALA V. THE ORIENTED INSURANCE CO. LTD 2025 INSC 904
Authored by:– S.Thakira Banu
Vel Tech Rangarajan Dr. Sagunthala R&D Institute of science and Technology B.com LLb(hons)-5th year
CITATION
Daivshala vs The oriented Insurance Co. Ltd Citation: 2025 INSC 904
COURT AND BENCH
Supreme Court of India
Justice Manoj Misra and Justice K V Viswanathan Date of judgment : July 28,2025
CONTEXT
In this case, the Supreme Court expanded the scope of the employees’compensation act by interpreting the principle of ‘ arising out of or in the course of employment’ more broadly .
FACT OF THE CASE
Mr. Shahu Sampatrao Jadhvar (deceased) was employed as a watchman at Sugar Factory(Respondent). His working hours are from 3 am to 11 am. The case arose on 22nd April 2003, Mr. Shahu left his home on his motorcycle for his duty, However, unfortunately his journey to work was never complete. When he was 5 Kms away from the working place , he met with a fatal accident and his family became deserted i.e his wife, four Children and his Mother.
PROCEDURAL HISTORY
- June 26,2009:The commissioner for Workmen’s Compensation and Civil Judge (senior Division) ordered payment of compensation of ₹3,26,240 with 12% of interest to the dependents
- December 1, 2011:The Oriental Insurance Company appeal the award to the Bombay High Court,Aurangabad Bench, there the court reverse the lower court’s decision, stating that the accident doesn’t falls under ‘arsing out of and in the course of employment’
- On 2025: The dependent filed appeal to Supreme Court Of India on special leave petition
- July 28,2025:The Supreme Court Of India ,delivers its judgment ,overturning the decision of Bombay High Court and restoring the compensation awarded by the commissioner of Workmen’s Compensation .
LEGAL ISSUE/QUESTION PRESENTED
Whether the principle of arising out of or in the course of employment also cover the accident occurred during commuting to work under EC Act
SECTIONS INVOLVED
-Section 3 : Employer’s liability for compensation
-Section 4:Calculation of compensation amount
-Section 51E: Occurrence of accident while commute to employment
ARGUMENTS
Petitioner’s contention
-The accident occurred while commuting to work; therefore, it is also considered as having a nexus with his employment duties
– Cited the Doctrine of notional Extension,to argue that the accident occurred during course of employment
Respondent’s contention
-The accident occurred outside of the working premises doesn’t make employer liable
-There is no nexus between the accident and the employment
JUDGMENT
The Supreme Court observed that the main objective of EC Act was to protect the welfare of the employees and to ensure the financial security for their family and their dependents .The court further stated that an accident occurred during the course of commuting to the workplace falls under the ambit of ‘arsing out of and in the course of employment’.Accordingly ,the employer and the insurance company held liable to pay compensation to the dependents of the deceased employee.
COURT ANALYSIS
-Interpret the section 3 of EC Act
Under the section 3 , it stated about the employers liability for compensation , which is subjected to two conditions
- the injury or death must arise out of employment
- the accident occurred in the course of employment
The court said that there is a nexus between the accident and the course of employment because the deceased went out to perform his work duties. Therefore, it falls under the doctrine of ‘arising out of and in the course of employment’.
– Doctrine of Notional Extension
The court applied this doctrine , extended the scope of ‘employment’,the inclusion of risk caused not only in workplaces but also if the injury or accident occurs away from the workplace. Thus the accident falls under the course of employment.
SIGNIFICANT
This case is a landmark ruling in Employee compensation law, by expanding the concept of ‘arising out of and in the course of employment’ to include the commuting accident .especially when the travelling is duty related .
CONCLUSION
The Supreme Court’s ruling in this case marked as a significant development in Indian labour law .it extended the scope of labour right on employee’s compensation by including the commuting work is also fall under the doctrine of ‘arising out of and the course of employment’ to ensure the employee welfare and to provide the financial security for their dependence .1
1 Daivshala vs The oriented Insurance Co. Ltd [2025] https://indiankanoon.org/doc/132806011/
