NEW INDIA ASSURANCE CO. LTD. versus M/S ABHILASH JEWELLERY

Citation: [2009] 1 S.C.R. 476 · Decided: 22-01-2009 · Supreme Court of India · Bench: MARKANDEY KATJU, RAJENDRA MAL LODHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2009] 1 S.C.R. 476 
A 
NEW INDIA ASSURANCE CO. LTD. 
v. 
M/S. ABHILASH JEWELLERY 
(Civil Appeal No. 7972 of 2002) 
B 
JANUARY 22, 2009 
[MARKANDEY KATJU AND R.M. LODHA, JJ.] 
CONTRACT OF INSURANCE: 
c 
"Employee" - Whether apprentice is an employee -
National Consumer Commission held he is an employee -
On appeal, Held: In common parlance an apprentice is a 
trainee and not an employee - Even if stipend is given, still 
there is no master and servant relationship - Hence an 
D apprentice is not an employee in the context of Contract of 
Insurance. 
WORDS AND PHRASES: 
"Employeew - Meaning of in the context of Contract of 
E Insurance. 
In this appeal, the correctness of the judgment of the 
National Consumer Disputes Redressal Commission 
holding that an apprentice is an employee is challenged. 
... 
F 
Allowing the appeal, the Court 
HELD: 1.1. The present case is covered solely by the 
contract of insurance. The contract of insurance no doubt 
uses the word 'employee', but it does not say that the 
G word 'employee' in the contract of insurance will have the 
same meaning as in the Kerala Shops and Commercial 
Establishments Act or the Employees State Insurance Act 
or any other enactment. In various enactments, the word 
'employee', has no doubt, been defined to include an 
H 
476 
• 
~ 
NEW INDIA ASSURANCE CO. LTD. v. ABHILASH 
477 
JEWELLERY 
apprentice, but that is only a deeming provision and a A 
legal fiction by which the meaning of the word 'employee' 
has been extended. [Paras 6 and 7] [478-D-E] 
1.2. Since the word 'employee' has not been defined 
in the contract of insurance, one has to give it the 
B 
meaning which it has in common parlance. In common 
parlance, an appref1tice is a trainee and not an employee. 
Even if he is given a stipend, that does not mean that 
there is a relationship of master and servant between the 
firm and the apprentice. [Para 10] [478-B-C] 
c 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
7972 of 2002. 
From the Order dated 15.3.2002 of the National Consumer 
Disputes Redr~~sal Commission, New Delhi in Revision 
D 
Petition No. 81Si,bf 1999. 
Salil Paul and Indra Sawhney for the Appellant. 
G. Prakash for the Respondent. 
E 
The following Order of the Court was delivered : 
ORDER 
1. Heard learned counsel for the parties. This appeal has 
been filed against the order of the National Consumer Disputes 
F 
Redressal Commission, New Delhi dated 15.03.2002. 
2. The respondent had a business establishment at 
Vellappad i~
1
Trissur District in the State of Kerala. It took a 
Jeweller's !:flock Policy for Rs. 1, 15,00,000/-. During the 
G 
currency of the policy, the complainant-respondent lodged a 
claim with the appellant for the loss of gold ornament weighing 
587.870 grams. The claim was repudiated by the appellant on 
the ground that the loss of gold was occasioned as it was in 
the custody of an apprentice, who was not an employee. 
H 
478 
SUPREME COURT REPORTS 
[2009] 1 S.C.R. 
A 
3. The relevant clause in the Insurance Policy stated; 
"S. 11(a) property insured whilst in the custody of the 
insured, his partner or his employees". 
4. The question, therefore, is whether an apprentice is an 
B employee. 
5. The National Consumer Disputes Redressal 
Commission has held that an apprentice is an employee 
because Section 2 (6) of the Kerala Shops and Commercial 
c Establishments Act defines an employee to include an 
apprentice. The National Commission has also relied on the 
definition in the Employees State Insurance Act and some other 
enactments. 
6. We are of the opinion that the view taken by the Natinal 
D Commssion is not correct. The present case is covered solely 
by the contract of insurance. That contract of insurance no doubt 
uses the word 'employee', but it does not say that the word 
'employee' in the contract of insurance will have the same 
meaning as in the Kerala Shops and Commercial 
E Establishments Act or the Employees State Insurance Act or 
any other enactment. 
7. In various enactments, the word 'employee', has no 
doubt, been defined to include an apprentice, but that is only a 
F deeming provision and a legal fiction by which the meaning of 
the word 'employee' has been extended. 
8. Legal fictions are well-knwon in law. For example, 
Section 43 (3) of the Income Tax Act defines 'plant' to include 
G a book. Ordinarily a plant means a factory, and by no stretch 
of imagination can we call a factory a book. However, the 
Income Tax Act deems a bo

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