LexDAIVSHALA & ORS. versus ORIENTAL INSURANCE COMPANY LTD. & ANR
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[2025] 7 S.C.R. 1706 : 2025 INSC 904 Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr. (Civil Appeal No. 6986 of 2015) 28 July 2025 [Manoj Misra and K.V. Viswanathan,* JJ.] Issue for Consideration The primary question that arises for consideration in this case is whether the accident which caused the death of the deceased could be said to have arisen out of and in the course of employment. Also, certain incidental questions also arise for consideration: (i) Does s.51E of the Employees’ State Insurance Act, 1948 (ESI Act) have retrospective effect so as to cover an accident that has taken place on 22.04.2003 when the Section was enacted on 01.06.2010; (ii) Assuming Section 51E of the ESI Act applies, would the said interpretation enure to the benefit of the appellants whose claim arises under the Employees’ Compensation Act, 1923; (iii) Lastly, assuming both the above questions are answered in favour of the appellants are the ingredients of s.51E attracted to the facts of the present case. Headnotes† Employees’ Compensation Act, 1923 – Employees’ State Insurance Act, 1948 – Victim-watchman died in an accident while going to the factory-place of work – Claim filed – The employer and the insurance company set up the defence that the accident had not arisen out of or in the course of his employment, since the accident occurred outside the precincts of the factory – The Commissioner for Workmen’s Compensation and Civil Judge allowed compensation – However, the High Court reversed the findings of the Commissioner and held that since the deceased was on his way to his employment, the accident cannot be said to have its origin in the employment – Correctness: Held: The phrase “accident arising out of and in the course of his employment” occurring in s.3 of the EC Act to include accident * Author [2025] 7 S.C.R. 1707 Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr. occurring to an employee while commuting from his residence to the place of employment for duty or from the place of employment to his residence after performing duty, provided the nexus between the circumstances, time and place in which the accident occurred and the employment is established – The deceased was a night watchman and was dutifully proceeding to his workplace to be well on time, there was a clear nexus between the circumstances, time and place in which the accident occurred and his employment as watchman – The accident having clearly arisen out of and in the course of employment, the Commissioner for Workmen’s Compensation and Civil Judge was justified in ordering the claim under the EC Act. [Paras 55-56] Employees’ State Insurance Act, 1948 – s.51E – Is s.51E of the ESI Act Clarificatory – Whether s.51E, enacted on 01.06.2010, will have retrospective application: Held: It is settled that an Act will be declaratory if it is intended to remove doubts and if its object was to supply an obvious omission or to clear up any ambiguity as to the meaning of a previously existing statute – In such an event, the said statute being declaratory and clarificatory in nature, it can be given retrospective effect – s.51E, enacted on 01.06.2010 – There is a parade of case law which highlight that there was considerable doubt and ambiguity surrounding the phrase “accident arising out of and in the course of employment” insofar as cases concerning accident occurring to employees while proceeding to work and vice versa, and different rulings had, depending on facts, interpreted them differently – Even the theory of notional extension had its own peculiarities – It was to clarify and put beyond doubt the meaning of the phrase “accident arising out of and in the course of employment” insofar as accidents occurring to employees while proceeding to the workplace and vice versa that s.51E was enacted in the ESI Act – In view of that, there is no manner of doubt that the said amendment is clarificatory in character and will have retrospective effect. [Paras 25, 44] Employees’ State Insurance Act, 1948 – s.51E – “Deemed to have” – Meaning of – Discussed: Held: The words “deemed to have” used in s.51E is not in the context of legal fiction – It is well settled that the expression “deemed” is sometimes used to impose for the purpose of a statute an artificial construction for a word or phrase that would 1708 [2025] 7 S.C.R. Supreme Court Reports not otherwise prevail – Very often, it is also u
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