Navigating Compensation: Is Y Company Liable for a Road Accident Death Under WC Policy?

A worker in X Company died in a road accident when his motorbike collided with a truck while returning from the market to purchase vegetables for his residence at 2230 hrs. The incident was reported to the police station, an FIR was filed, a postmortem was conducted, and arrangements were made to send his body to his hometown. Funeral expenses of Rs. 25,000 were provided, and his body was handed over to his dependents.

Additionally, efforts were made to settle his dues with X Company. However, after some time, X sent a legal notice seeking compensation, but Y replied stating that the death was not covered under the Workers' Compensation (WC) Act as it occurred during personal work on the road. Y claimed to be covered under a WC policy.

The dependents of X pursued the matter in the local court, leading to multiple hearings over two and a half years. Eventually, the court awarded Rs. 160,000 to the deceased's dependents, a ruling that Y Company did not comply with. Subsequently, the dependents approached the WC Commissioner's court, where an award of Rs. 10,75,000 was given as compensation, with added interest for the delayed payment and a penalty for disobedience.

Y Company appealed to the High Court to stay the Commissioner's order. As the HR Manager of Y Company, Mahesh Prasad Gupta, seeks clarification on several key points:

1. Is Y Company liable to pay under the WC policy in this scenario?

2. If the High Court upholds the payment order, can reimbursement be sought from the insurance company?

3. Will the High Court issue a stay against the Commissioner's order?

4. Can the insurance company be made a party to the court proceedings?

5. Can the case be considered under the Motor Vehicles (MV) Act, allowing the dependents of X to claim through that avenue?

6. What responsibilities does Y Company have to arrange for compensation under the MV Act?

Y Company possesses the WC Commissioner's order and can provide it if necessary for further guidance. Guidance is requested in this matter.

First of all, I would like to tell you one thing: do not type your query in full capital letters. It is like shouting with anger.

Questions to Consider

Please reply to the following questions:

1. What is the time and date of the accident?
2. Did the police register the FIR as per the MV Act?
3. Did the deceased attend the office on the day of the accident? What are his in-time and out-time from the office premises?
4. What is his nature of the job? Is he an office-based employee or a field-based employee?
5. Who informed the police and you about the accident?
6. Did he stay at your premises or in company-allotted accommodation?
7. What is the basis of Jan Adalat, and how did they derive the compensation amount?
8. Did the police investigate the accident and trace the culprit? (Hope the accident was not caused by your company vehicle)
9. Did the legal heir of the deceased receive the "NO FAULT LIABILITY" from the vehicle owner who caused the accident?
10. What was the final verdict given by the MACT Court?
11. How did the WC Commissioner suddenly declare that a huge amount? Have you explained that he was not on duty and the accident took place in his residential area, not while commuting to/from office hours?
12. To prove his off-duty hours, do you have any evidence to produce in court about the biometric attendance or any in-time and out-time system in your office? (If your office does not operate round the clock and follows general working hours, you can defend your case by producing data. The office opening and closing system and the register to that effect must have been maintained by the security deployed in your office.)

Furthermore, I would like to mention that one cannot claim a WC Claim as well as a Motor Accident Claim. If you have proof that the legal heir of the deceased settled with the MACT, you can use the same data for your defense, and you need not give any compensation. However, you must pay the terminal benefits to the legal heir of the deceased.

Regards

Thank you for your suggestion, I will take care of it moving forward.

1. Sunday, 6th March 2011, at 10:30 PM.

2. Yes, registered as per Motor Vehicles Act.

3. No, but staying on campus.

4. Send a blaster, field-based worker.

5. Inform the local public to contact the police, and the police will inform us.

6. Stay at the workers' hutment.

7. The dependent of the deceased approached Lok Adalat, and his lawyer has agreed on the amount of Rs. 160,000 to settle his various dues with the company.

8. The police caught the vehicle colliding with a bike, and the vehicle owner was able to retrieve the vehicle from the court after 1 month.

9. Not sure if the owner sent a "NO FAULT LIABILITY" statement, but the local area police station representative was present at the Jan Adalat and submitted a report upon the Jan Adalat's request to the local police.

10. May be available at the Police Station.

11. Calculated as per Workmen's Compensation Act, including the interest for the gap period.

12. Initially, he was a field worker, and our office HR operates during general shift hours only. Since it was a Sunday, there was no work taking place on that day (i.e., the period from after 6 PM on 5th March 2011 to 9 AM on 7th March 2011).

Terminal Benefits Inquiry

Please explain what falls under terminal benefits.

Current Case Status

Regarding the current status of the case, we have approached the High Court, and our Principal Employer has deposited the compensation amount to the Workmen's Compensation Commissioner through a Demand Draft. The reversal charge has been directed towards me. (It is noted that the Workmen's Compensation Commissioner ordered the Principal Employer to submit the compensation within 30 days, and the Principal Employer complied within the given timeframe.)

Please advise on how to explain this to the Principal Employer while also addressing the Workmen's Compensation Commissioner.

Regards,

Mahesh Prasad Gupta

Understanding Liability Under the Employees Compensation Act

As per the WC Act (now known as the Employees Compensation Act), the employer is liable to pay compensation if the personal injury is caused due to an accident arising out of and in the course of employment. In this case, since the accident took place not "out of and in the course of employment," there is prima facie no liability to pay compensation.

Theory of Notional Extension

The theory of notional extension is applicable for accidents arising on the way to the workplace or going from the workplace to home in the normal route. As per the details given above, this is not the case here. Therefore, I feel you should be able to win the case in the High Court if you engage a proper advocate.

Understanding the Notional Extension in Workmen's Compensation Act, 1923

Section 3(1) of the Workmen’s Compensation Act, 1923 provides that the injury must be caused to a workman by an accident arising out of and in the course of employment. Employment does not necessarily end when the tool-down signal is given or when the workman leaves the actual workshop. There is a notional extension at both the entry and exit time and space. Employment may end or begin not only when the employee starts to work or leaves his tools but also when he uses the means of access and egress to and from the place of employment.

As a rule, the employment of a workman does not commence until he has reached the place of employment and does not continue when he has left the place of employment, with the journey to and from the place of employment being excluded. It is now well-settled, however, that this is subject to the theory of notional extension of the employer’s premises so as to include an area which the workman passes and repasses in going to and leaving the actual place of work. There may be some reasonable extension in both time and place, and a workman may be regarded as in the course of his employment even though he had not reached or had left his employer’s premises. The facts and circumstances of each case will have to be examined very carefully to determine whether the accident arose out of and in the course of the employment of a workman, keeping in view at all times this theory of notional extension.

Various judgments of the Supreme Court and different high courts have considered the concept of notional employment and stated that if the employee dies due to an accident while going to the workplace from residence or while returning from the workplace to residence, it is considered an accident arising out of and during the course of employment, and as such, entitled for compensation in accordance with the provisions of the Workmen’s Compensation Act.

The concept of notional extension under the Workmen’s Compensation Act for granting compensation will be applicable when there has been unrebutted evidence to show that the death of the deceased has occurred due to stress and strain resulting in cardiac arrest on his way while he was returning after duty.

Although this doctrine is not specifically enshrined under the Workmen’s Compensation Act, it is an accepted legal principle. Under ESI, if any accident happens outside the premises within a one-kilometer radius from the work premises during reasonable office-related hours, it will be considered as employment injury. The same logic will be applicable for the Workmen’s Compensation Act as well.

If an accident happens in the company-provided vehicle, irrespective of the location and time, it is considered an employment injury for consideration under the Workmen Compensation Act.

Insurance Reimbursement and Strategy

In this case, will the insurance company reimburse Y Company while the WC Commissioner orders to pay the compensation? If the insurance company denies payment, what should be our strategy? Please describe.

Insurance Company's Payment Obligation

The insurance company will not make any payment. The accident took place on Sunday night at 10:30 PM. The person was given accommodation to support him, and there is no obligation for the company to provide any accommodation to the workers (specialized works).

Legal Heirs' Claims

The case is prima facie evident that the legal heirs of the deceased cannot claim anything except his terminal benefits like retrenchment compensation, notice pay, gratuity, etc. Once the legal heirs receive the No Fault Liability from the vehicle owner, they cannot claim any other benefits under the WC Act.

Now, the High Court in Cuttack, Odisha, has ordered to stop the disbursement of the deposited amount to the WC Commissioner until further notice.

Dear Sir,

Please share a further update on this case, as a similar incident has occurred in our company. One of the workers fell in the labor camp on Sunday while performing a task, sustained a head injury, and unfortunately, passed away. I would like to know if I am liable to pay compensation under the Workers' Compensation Act, considering the accident occurred on Sunday.

Vishal Saundankar