Fatal Accident During Work Commute Covered Under Employee Compensation Act : Supreme Court

In an important development, the Supreme Court on Tuesday (July 29) held that fatal accidents during an employee's commute to work can qualify for compensation under the Employees' Compensation Act, 1923 (“EC Act”).

The bench comprising Justices Manoj Misra and KV Viswanathan decided in favor of the deceased watchman, who was commuting at midnight to his workplace, when he met with an accident 5 km away from his workplace, leading to his death. The Court said that employment duties can extend to reasonable travel circumstances if a nexus exists between the commute and work.

The Commissioner for Workmen's Compensation awarded compensation, but the High Court reversed this, ruling the accident did not arise "out of and in the course of employment", prompting the Appellant to move to the Supreme Court.

The dispute centred around the interpretation of the words “arising out of and in the course of employment” employed under Section 3 of the EC Act. The insurance company and employer contested liability, asserting that the fatal accident did not arise "in the course of employment" under the Employees' Compensation Act, 1923, as the deceased had not yet arrived at the workplace when the incident occurred. They argued that the commute constituted a personal journey, unrelated to employment duties, and thus fell outside the Act's protective scope.

“All that we are examining here is whether a meaning given to the phrase “arising out of and in the course of employment” insofar as it dealt with accidents happening while commuting to the place of work and vice versa in the ESI Act, could be said to be the same for the phrase “accident arising out of and in the course of employment” occurring in Section 3 of the EC Act.”, the court stated.

Rejecting Respondent's contention, the judgment authored by Justice Viswanathan upon interpreting "arising out of and in the course of employment" under Section 3 of EC Act, noted that the provision is in Pari Materia with Section 51E of the Employees State Insurance Act, 1948 (“ESI Act”), introduced in 2010, which deems commuting accidents as employment-related if the journey is tied to work obligations.

“It is well settled that where statutes in pari materia serve a common object in absence of any provision indicating to the contrary, it is permissible for a court of law to ascertain the meaning of the provision in the enactment by comparing its language with the other enactment relating to the same subject matter.”, the court said.

The Court said that Section 51E ESI Act is clarificatory, and therefore would apply retrospectively, making compensation claims admissible for the accidents that occurred while commuting to the workplace.

“we interpret the phrase “accident arising out of and in the course of his employment” occurring in Section 3 of the EC Act to include accident 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 court observed.

“In view of the above, considering that 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, Senior Division, Osmanabad was justified in ordering the claim under the EC Act by his judgment of 26.06.2009.”, the court held.

In a nutshell, the Court said that the EC Act and ESI Act are beneficial legislations with similar phrasing, thus applied pari materia principles to align their interpretations, extending the benefit of Section 51E ESI Act to the EC Act.

Cause Title: DAIVSHALA & ORS. VERSUS ORIENTAL INSURANCE COMPANY LTD. & ANR.

Citation : 2025 LiveLaw (SC) 748

Click here to read/download the judgment

Appearance:

For Appellant(s) : Mr. Atul Babasaheb Dakh, AOR Mr. Siddharth Shinde, Adv. Mr. Diganta Gogoi, Adv. Mr. Bitu Kumar Singh, Adv.

For Respondent(s) :Ms. Amrreeta Swaarup, AOR Mr. Gaurav Malhotra, Adv.