DAIVSHALA & ORS.versusORIENTAL INSURANCE COMPANY LTD. & ANR

                 [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
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    not otherwise prevail – Very often, it is also used to put beyond
    doubt a particular construction that might otherwise be uncertain –
    Sometimes it is used to give a comprehensive description that
    it includes what is obvious, what is uncertain and what is, in
    the ordinary sense, impossible – The word “deemed” in s.51E
    is employed to put beyond doubt a particular construction, that
    hitherto was uncertain. [Paras 45-46]

    Employees’ Compensation Act, 1923 – s.3 – Employees’ State
    Insurance Act, 1948 – s.2(8) – Statutes ‘In Pari Materia’:
    Held: First of all, the operative phraseology occurring in s.3 of
    the EC Act is the same as the one that it occurs in s.2(8) of the
    ESI Act which defines, ‘employment injury’ – Secondly, as held by
    this Court and as noticed hereinabove, both Acts are beneficial
    legislations intended as social security measures to ameliorate
    the conditions of employees – The only difference between the
    two statutes was that while the ESI Act applied to factories and
    notified establishments, the EC Act applied to other employers,
    as defined – 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 –
    Therefore, the phrase “accident arising out of and in the course of
    his employment” occurring in s.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. [Paras 48, 49, 55]
    Employees’ State Insurance Act, 1948 – Beneficial nature of –
    Discussed. [Paras 18-21]
    Employees’ Compensation Act, 1923 – Beneficial Nature of –
    Discussed. [Paras 22-23]

                            Case Law Cited
    Regional Director, E.S.I. Corporation & Another v. Francis De Costa
    and Another [1996] Supp. 5 SCR 797 : (1996) 6 SCC 1; Bombay
    Anand Bhavan Restaurant v. Deputy Director, Employees’ State
    Insurance Corporation and Another [2009] 13 SCR 1139 : (2009)
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      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


     9 SCC 61; Jaya Biswal & Others v. Branch Manager, IFFCO Tokio
     General Insurance Company Limited & Another [2016] 1 SCR 299 :
     (2016) 11 SCC 201; K. Govindan and Sons v. CIT, Cochin [2000]
     Supp. 5 SCR 285 : (2001) 1 SCC 460; Mackinnon Mackenzie
     and Co. (P) Ltd. v. Ibrahim Mahmmed Issak [1970] 1 SCR 869 :
     (1969) 2 SCC 607; General Manager, B.E.S.T. Undertaking,
     Bombay v. Mrs. Agnes [1964] 3 SCR 930 : 1963 SCC OnLine
     SC 252; Saurashtra Salt Mfg. Co. v. Bai Valu Raja & Ors., 1958
     SCC OnLine SC 131 – relied on.
     Commissioner of Income Tax, Bombay and Others v. Podar Cement
     Pvt. Ltd. and Others [1997] Supp. 1 SCR 394 : (1997) 5 SCC 482;
     State Bank of India v. V. Ramakrishnan and Anr. [2018] 10 SCR
     974 : (2018) 17 SCC 394; State of Madras v. A. Vaidyanatha Iyer
     [1958] 1 SCR 580; State of Assam and Another v. Deva Prasad
     Barua & Another [1969] 1 SCR 698; Hira H. Advani v. State of
     Maharashtra [1970] 1 SCR 821 : (1969) 2 SCC 662 – referred to.
     In Sadgunaben Amrutlal v. ESI Corporation, 1981 Lab 1C 1653;
     Bhagubai v. Central Railway (1954) 2 LLJ 403; Regina v. National
     Insurance Commissioner, Ex Parte Michael (1977) 1 WLR 109;
     St. Aubyn v. Attorney-General (1951) 2 All ER 473; AG v. Prince
     Ernest Augustus of Hanover – referred to.

                      Books and Periodicals Cited
     Justice G.P. Singh’s Principles of Statutory Interpretation (14th
     Edition); 62nd Report of the Law Commission of India; Craies
     on Legislation (9th Edition) dealing with statutes in pari materia;
     International Labour Convention of 1964.

                                List of Acts
     Employees’ State Insurance Act, 1948; Employees’ Compensation
     Act, 1923; Workmen’s Compensation Act, 1923.

                             List of Keywords
     Accident; Claim for compensation; Accident of employee; Accident
     of employee going to work; Course of employment; Section 51E of
     Employees’ State Insurance Act, 1948; Accident arising out of and
     in the course of employment; Declaratory and clarificatory nature;
     Retrospective effect; Theory of notional extension; Compensation
     for injury by accident; ‘Deemed to have’ used in s.51E of Employees’
     State Insurance Act, 1948; Statutes ‘In Pari Materia’.
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                          Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6986
     of 2015
     From the Judgment and Order dated 01.12.2011 of the High Court
     of Bombay at Aurangabad in FA No. 2015 of 2011

                       Appearances for Parties
     Advs. for the Appellants:
     Atul Babasaheb Dakh, Siddharth Shinde, Diganta Gogoi, Bitu
     Kumar Singh.
     Advs. for the Respondents:
     Ms. Amrreeta Swaarup, Gaurav Malhotra.

               Judgment / Order of the Supreme Court

                              Judgment

     K.V. Viswanathan, J.

1.   Shahu Sampatrao Jadhavar was employed as a watchman in the
     Respondent no. 2-Sugar Factory. His duty hours were from early
     morning 3 am to 11 am. On 22nd April 2003, he left home on his
     Motorcycle to report for duty. However, unfortunately, he never
     reached his place of work. When he was 5 kms away from the
     factory, his motorcycle was involved in a fatal accident. He left a
     large family behind. A widow, four children and his mother.
2.   In a claim filed under the Employees’ Compensation Act, 1923
     (hereinafter the ‘EC Act’) 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. Overruling the same, the Commissioner
     for Workmen’s Compensation and Civil Judge, Senior Division,
     Osmanabad awarded a sum of Rs 3,26,140/- along with interest
     @ 12 per cent per annum from 22.05.2003 to the family members.
     The Insurance Company was directed to deposit the amount since
     there was a valid Insurance Policy. The employer was asked to pay
     50 per cent of the awarded amount as penalty. The employer and
     the Insurance Company were directed to pay the amount of penalty
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      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


     and the awarded compensation within one month from the date of
     the order.
3.   Aggrieved, the Insurance Company filed First Appeal No.2015 of 2011
     before the High Court of Judicature of Bombay, Bench at Aurangabad.
     The High Court has reversed the findings of the Commissioner and
     set aside the order holding that since the deceased was on his way
     to his employment, the accident cannot be said to have its origin in
     the employment. The aggrieved family members are in appeal by
     way of special leave.
4.   The High Court, to support its conclusion, relied on the judgment
     dated 11.09.1996 of this Court rendered in Regional Director, E.S.I.
     Corporation & Another vs. Francis De Costa and Another, (1996)
     6 SCC 1. The said judgment arose under the Employees’ State
     Insurance Act, 1948 (hereinafter the ‘ESI Act’). However, the crucial
     phrase employed in the operating Section of both the ESI Act and
     the EC Act, were the same. The Employees’ Compensation Act, 1923
     was originally known as the Workmen’s Compensation Act, 1923.
5.   We have heard Mr. Atul Babasaheb Dakh, learned counsel for the
     appellants and Ms. Amrreeta Swaarup, learned counsel for the
     respondent No.1-Insurance Company. Respondent No.2 employer,
     though served, has not entered appearance.
6.   Learned counsel for the appellant submitted that looking to the
     nature of the work of the deceased, the peril which he faced was
     not something personal rather it was incidental to his employment.
     Learned counsel contended that there was causal connection between
     the employment and the accident. Learned counsel relied on the
     theory of notional extension to support his plea. Learned counsel
     submitted that the EC Act is a beneficial legislation intended for
     the welfare of the employees. Learned counsel submitted that after
     the order of the trial Court, the Insurance Company had deposited
     the compensation with interest and the appellants were permitted
     to withdraw the principal amount. Learned counsel submitted that
     subsequent to the judgment in Francis De Costa (supra), Section
     51E has been introduced in the ESI Act and, as such, the judgment
     in Francis De Costa (supra) can no longer govern the situation.
7.   Learned counsel for the respondent No.1-Insurance Company
     submitted that the accident cannot be said to have its origin in the
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     employment. Learned counsel contended that the employment cannot
     commence until the employee has reached the place of work and
     what happened before that could not be said to be in the course
     of employment. Learned counsel strongly relied on the judgment
     in Francis De Costa (supra) and certain judgments relied upon in
     the said judgment. Learned counsel distinguished the judgment in
     General Manager, B.E.S.T. Undertaking, Bombay vs. Mrs. Agnes,
     (1964) 3 SCR 930 = 1963 SCC OnLine SC 252 and submitted that
     in the said case the employee was given the facility to travel back
     home in the bus by the employer therein and, as such, the theory
     of notional extension was applied. According to the learned counsel,
     the said theory can have no application to the facts of the present
     case. According to the learned counsel, the employee was engaged
     in “a purely personal matter while commuting to or from work”.
8.   We have carefully considered the submissions of the learned counsel
     for the parties and perused the records.

     QUESTIONS FOR CONSIDERATION:
9.   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?
10. Certain incidental questions also arise which have been set out later
    in the judgment.

     STATUTORY PROVISIONS: -
11. Before we advert to the holding in Francis De Costa (Supra), it will
    be useful to refer to the relevant statutory provisions in the EC Act
    as well as the ESI Act. Section 3 of the EC Act reads as under: -
          “3. Employer’s liability for compensation.- (1) If personal
          injury is caused to a employee by accident arising out of
          and in the course of his employment, his employer shall
          be liable to pay compensation in accordance with the
          provisions of this Chapter:
          Provided that the employer shall not be so liable ……….”
12. Section 46(1)(d) (which deals with ‘Benefits’) and Section 2(8)
    (which deals with ‘Employment Injury’) in the ESI Act, are set out
    hereinbelow: -
[2025] 7 S.C.R.                                                             1713

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


           “Section 46. Benefits
           (1) Subject to the provisions of this Act, the insured persons,
           their dependants or the persons hereinafter mentioned,
           as the case may be, shall be entitled to the following
           benefits, namely,-
           (d) periodical payments to such dependents of an
           insured person who dies as a result of an employment
           injury sustained as an employee under this Act, as are
           entitled to compensation under this Act (hereinafter
           referred to as dependants’ benefit);
           Section 2(8) “employment injury” means a personal
           injury to an employee caused by accident or an
           occupational disease arising out of and in the course
           of his employment, being an insurable employment,
           whether the accident occurs or the occupational disease
           is contracted within or outside the territorial limits of
           India.”
                                                   (Emphasis supplied)

13. It will be noticed that both under the EC Act and under the ESI Act
    the entitlement arises to the employee for recompense if the accident
    arises out of and in the course of his employment.

     HOLDING IN FRANCIS DE COSTA (SUPRA): -
14. In Francis De Costa (Supra) the employee met with an accident
    when he was on his way to the place of employment, at a distance of
    1 km, from the place of work. This Court found against the employee
    by holding as under: -
           “5. …… Therefore, the employee, in order to succeed in
           this case, will have to prove that the injury he had suffered
           arose out of and was in the course of his employment.
           Both the conditions will have to be fulfilled before he could
           claim any benefit under the Act. It does not appear that
           the injury suffered by the employee in the instant
           case arose in any way out of his employment. The
           injury was sustained while the employee was on
           his way to the factory where he was employed. The
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        accident took place one kilometre away from the
        place of employment. Unless it can be said that his
        employment began as soon as he set out for the
        factory from his home, it cannot be said that the
        injury was caused by an accident “arising out of
        … his employment”. A road accident may happen
        anywhere at any time. But such accident cannot be
        said to have arisen out of employment, unless it can
        be shown that the employee was doing something
        incidental to his employment.
        6. In our judgment, by using the words “arising out of
        … his employment”, the legislature gave a restrictive
        meaning to “employment injury”. The injury must be of
        such an extent as can be attributed to an accident or an
        occupational disease arising out of his employment. “Out
        of”, in this context, must mean caused by employment.
        Of course, the phrase “out of” has an exclusive meaning
        also. If a man is described to be out of his employment,
        it means he is without a job. The other meaning of the
        phrase “out of” is “influenced, inspired, or caused by: out
        of pity; out of respect for him” (Webster’s Comprehensive
        Dictionary — International Edition — 1984). In the context
        of Section 2(8), the words “out of” indicate that the injury
        must be caused by an accident which had its origin in the
        employment. A mere road accident, while an employee
        is on his way to his place of employment cannot be said
        to have its origin in his employment in the factory. The
        phrase “out of the employment” was construed in the case
        of South Maitland Railways Pty. Ltd. v. James [67 CLR
        496] where construing the phrase “out of the employment”,
        Starke, J., held
        “the words ‘out of’ require that the injury had its origin in
        the employment”.
        7. Unless an employee can establish that the injury was
        caused or had its origin in the employment, he cannot
        succeed in a claim based on Section 2(8) of the Act. The
        words “accident … arising out of … his employment”
        indicate that any accident which occurred while going to
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      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


           the place of employment or for the purpose of employment,
           cannot be said to have arisen out of his employment.
           There is no causal connection between the accident and
           the employment.
           8. The other words of limitation in sub-section (8) of
           Section 2 are “in the course of his employment”. The
           dictionary meaning of “in the course of” is “during (in
           the course of time, as time goes by), while doing” (The
           Concise Oxford Dictionary, New Seventh Edition). The
           dictionary meaning indicates that the accident must
           take place within or during the period of employment.
           If the employee’s work-shift begins at 4.30 p.m., any
           accident before that time will not be “in the course
           of his employment”. The journey to the factory may
           have been undertaken for working at the factory at
           4.30 p.m. But this journey was certainly not in the
           course of employment. If ‘employment’ beings from
           the moment the employee sets out from his house for
           the factory, then even if the employee stumbles and
           falls down at the doorstep of his house, the accident
           will have to be treated as to have taken place in the
           course of his employment. This interpretation leads
           to absurdity and has to be avoided.”
                                               (Emphasis supplied)

     ENACTMENT OF SECTION 51E WITH EFFECT FROM 01.06.2010
     IN THE ESI ACT: -
15. If Francis De Costa (Supra) is to be applied as it is, the appellants
    will be out of Court. However, a very important statutory intervention
    happened on 01.06.2010 in the ESI Act, wherein Section 51E was
    introduced. Section 51E reads as under: -
           “51E. Accidents happening while commuting to the
           place of work and vice versa. - An 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, shall
           be deemed to have arisen out of and in the course of
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            employment if nexus between the circumstances, time and
            place in which the accident occurred and the employment
            is established.”

     THE FURTHER INCIDENTAL QUESTIONS THAT ARISE IN THE
     CASE:
16. Section 51E clearly neutralised the holding in Francis De Costa
    (Supra) when it provided that an 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, shall be deemed to have arisen out of and in the
    course of employment. The only condition was that nexus between
    the circumstances, the time and place in which the accident occurred
    and the employment had to be established.
17. In considering the applicability of Section 51E of the ESI Act to the
    case of appellant certain threshold questions need to be addressed:-
     (i)    Does Section 51E of the 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 EC Act?
     (iii) Lastly, assuming both the above questions are answered in
           favour of the appellants are the ingredients of Section 51E
           attracted to the facts of the present case?

     BENEFICIAL NATURE OF THE ESI ACT 1948: -
18. The ESI Act was enacted to provide for certain benefits to employees
    in case of sickness, maternity and employment injury as well as
    for making provisions for certain other matters in relation thereto.
    Section 46 deals with the benefits that the insured persons, their
    dependents and other persons mentioned in the Act are entitled
    to. This Court in Bombay Anand Bhavan Restaurant v. Deputy
    Director, Employees’ State Insurance Corporation and Another,
    (2009) 9 SCC 61, while rightly characterizing the ESI Act as a
    beneficial legislation and a law intended to provide for social security,
    held as follows: -
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      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


           “20. The Employees' State Insurance Act is a beneficial
           legislation. The main purpose of the enactment as the
           Preamble suggests, is to provide for certain benefits to
           employees of a factory in case of sickness, maternity
           and employment injury and to make provision for certain
           other matters in relation thereto. The Employees’ State
           Insurance Act is a social security legislation and the
           canons of interpreting a social legislation are different
           from the canons of interpretation of taxation law. The
           courts must not countenance any subterfuge which would
           defeat the provisions of social legislation and the courts
           must even, if necessary, strain the language of the Act in
           order to achieve the purpose which the legislature had
           in placing this legislation on the statute book. The Act,
           therefore, must receive a liberal construction so as to
           promote its objects.”
                                                 (Emphasis supplied)

19. It was further held that the Act was intended to ameliorate various
    risks and contingencies which the employees face while working in
    an establishment or factory. This Court held that the Act was intended
    to promote the general welfare of the workers and, as such, called
    for a liberal interpretation: -
           “21. This Court (sic The High Court), in ESI Corpn. v.
           Jayalakshmi Cotton and Oil Products (P) Ltd. [1980 Lab
           IC 1078 (A.P.)] has observed that the ESI Act is a social
           security legislation and was enacted to ameliorate the
           various risks and contingencies which the employees
           face while working in an establishment or factory. It is
           thus intended to promote the general welfare of the
           workers and, as such, is to be liberally interpreted.”
                                                 (Emphasis supplied)

20. What is important to note is that the ESI Act applies to all factories,
    including factories belonging to the Government and also to
    establishments or class of establishments, industrial, commercial,
    agricultural or otherwise notified in the official gazette under Section
    1(5) of the Act. In fact, the principal difference between the ESI Act
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     and the EC Act is that while the ESI Act applied to the employees
     of factories and notified establishments as mentioned above, the
     EC Act applied to employees under all other employers as defined.
21. The 62nd report of the Law Commission on the EC Act submitted
    under the chairmanship of former Chief Justice of India, Justice P.B.
    Gajendragadkar, in Para 1.11, rightly noticed the distinction as under:
          “1.11. After the passing of the Employees’ State Insurance
          Act, the area of application of the Workmen’s Compensation
          Act has diminished, to a certain extent. But the Employees’
          State Insurance Act applies only to (i) factories, and (ii)
          notified establishments, and in the rest of the cases the
          Workmen’s Compensation Act still holds the field.”

     BENEFICIAL NATURE OF THE EC ACT: -
22. The EC Act was enacted to provide for the payment by certain
    classes of employers to their employees of compensation for injury
    by accident. Section 3, as set out earlier, provides that if personal
    injury is caused to an employee by accident arising out of and in
    the course of his employment, his employer shall be liable to pay
    compensation in accordance with the provisions of the Act. Section
    4 sets out that where death results from the injury an amount equal
    to 50 per cent of the monthly wages of the deceased employee
    multiplied by the relevant factor ought to be paid.
23. The EC Act is also a beneficial piece of legislation. In 2016, this
    Court in Jaya Biswal & Others v. Branch Manager, IFFCO Tokio
    General Insurance Company Limited & Another, (2016) 11 SCC
    201, while holding that the EC Act was a social welfare legislation
    meant to benefit the workers and their dependents and to give the
    employees a sense of security held as under: -
          “20. The EC Act is a welfare legislation enacted to
          secure compensation to the poor workmen who suffer
          from injuries at their place of work. This becomes clear
          from a perusal of the preamble of the Act which reads as
          under:
                “An Act to provide for the payment by certain classes
                of employers to their workmen of compensation for
                injury by accident.”
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      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


                This further becomes clear from a perusal of the
                Statement of Objects and Reasons, which reads as
                under:
                     “… The growing complexity of industry
                     in this country, with the increasing use
                     of machinery and consequent danger
                     to workmen, along with the comparative
                     poverty of the workmen themselves,
                     renders it advisable that they should
                     be protected, as far as possible, from
                     hardship arising from accidents.
                     An additional advantage of legislation
                     of this type is that, by increasing the
                     importance for the employer of adequate
                     safety devices, it reduces the number of
                     accidents to workmen in a manner that
                     cannot be achieved by official inspection.
                     Further, the encouragement given to
                     employers to provide adequate medical
                     treatment for their workmen should
                     mitigate the effects to such accidents as
                     do occur. The benefits so conferred on
                     the workman added to the increased
                     sense of security which he will enjoy,
                     should render industrial life more
                     attractive and thus increase the
                     available supply of labour. At the same
                     time, a corresponding increase in the
                     efficiency of the average workman may
                     be expected.”
           21. Thus, the EC Act is a social welfare legislation meant
           to benefit the workers and their dependants in case of
           death of workman due to accident caused during and in
           the course of employment should be construed as such.”
                                                (Emphasis supplied)

24. At this stage, it is important to notice one provision in the ESI Act
    which bars receiving or recovering compensation under any other law
1720                                                       [2025] 7 S.C.R.

                        Supreme Court Reports


     if compensation has been received under the ESI Act, viz. Section
     53, which is extracted hereinbelow: -
          “53. Bar against receiving or recovery of compensation
          or damages under any other law. -
          An insured person or his dependants shall not be entitled
          to receive or recover, whether from the employer of the
          insured person or from any other person, any compensation
          or damages under the Workmen’s Compensation Act, 1923
          or any other law for the time being in force or otherwise, in
          respect of an employment injury sustained by the insured
          person as an employee under this Act.”
     This is only set out to demonstrate how the ESI Act and the EC Act
     operate in close tandem.

     IS SECTION 51E OF THE ESI ACT CLARIFICATORY?
25. It is in this background that the question whether Section 51E,
    enacted on 01.06.2010, will have retrospective application needs
    to be decided. Thereafter, the further question of applying the said
    meaning to the EC Act will have to be addressed. Unless we find that
    Section 51E is clarificatory and declaratory in character, the question
    of applying it retrospectively will not arise. A declaratory Act is one
    which is enacted to remove doubts existing as to common law or the
    meaning or effect of any statute. Was Section 51E enacted to clarify
    and set at rest any serious doubt that obtained earlier? It has been
    held by this Court 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, this Court has held that the said
    statute being declaratory and clarificatory in nature, it can be given
    retrospective effect.
26. In the classic work, Justice G.P. Singh’s Principles of Statutory
    Interpretation (14th Edition), the following passage occurs to describe
    what declaratory statutes are. It will be useful to extract the same:-
          “(i) Declaratory statutes
          The presumption against retrospective operation is not
          applicable to declaratory statutes. As stated in CRAIES
          and approved by the Supreme Court: “For modern
[2025] 7 S.C.R.                                                           1721

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


           purposes a declaratory Act may be defined as an
           Act to remove doubts existing as to the common
           law, or the meaning or effect of any statute. Such
           Acts are usually held to be retrospective. The usual
           reason for passing a declaratory Act is to set aside
           what Parliament deems to have been a judicial error,
           whether in the statement of the common law or in
           the interpretation of statutes. Usually, if not invariably,
           such an Act contains a preamble, and also the word
           ‘declared’ as well as the word ‘enacted’. “ But the use of
           the words ‘it is declared’ is not conclusive that the Act
           is declaratory for these words may, at times, be used to
           introduce new rules of law and the Act in the latter case
           will only be amending the law and will not necessarily
           be retrospective. In determining, therefore, the nature of
           the Act, regard must be had to the substance rather than
           to the form. If a new Act is ‘to explain’ an earlier Act, it
           would be without object unless construed retrospective.
           An explanatory Act is generally passed to supply
           an obvious omission or to clear up doubts as to the
           meaning of the previous Act. It is well settled that if a
           statute is curative or merely declaratory of the previous
           law retrospective operation is generally intended. The
           language ‘shall be deemed always to have meant’ or ‘shall
           be deemed never to have included’ is declaratory, and is
           in plain terms retrospective. In the absence of clear words
           indicating that the amending Act is declaratory, it would
           not be so construed when the pre-amended provision
           was clear and unambiguous. An amending Act may be
           purely clarificatory to clear a meaning of a provision of
           the principal Act which was already implicit. A clarificatory
           amendment of this nature will have retrospective effect
           and, therefore, if the principal Act was existing law when
           the constitution came into force, the amending Act also
           will be part of the existing law.”
27. The said passage has been quoted with approval in several judgments
    of this Court, namely, Commissioner of Income Tax, Bombay and
    Others vs. Podar Cement Pvt. Ltd. and Others, (1997) 5 SCC 482
    and State Bank of India vs. V.Ramakrishnan and Anr., (2018) 17
    SCC 394.
1722                                                         [2025] 7 S.C.R.

                        Supreme Court Reports


28. It has also been held in Podar Cement Pvt. Ltd. (supra) applying
    the said interpretation as under:-
         “54. From the circumstances narrated above and from the
         memorandum explaining the Finance Bill, 1987 (supra),
         it is crystal clear that the amendment was intended
         to supply an obvious omission or to clear up doubts
         as to the meaning of the word “owner” in Section 22
         of the Act. We do not think that in the light of the clear
         exposition of the position of a declaratory/clarificatory Act
         it is necessary to multiply the authorities on this point. We
         have, therefore, no hesitation to hold that the amendment
         introduced by the Finance Bill, 1988 was declaratory/
         clarificatory in nature so far as it relates to Section 27(iii),
         (iii-a) and (iii-b). Consequently, these provisions are
         retrospective in operation. If so, the view taken by the
         High Courts of Patna, Rajasthan and Calcutta, as noticed
         above, gets added support and consequently the contrary
         view taken by the Delhi, Bombay and Andhra Pradesh
         High Courts is not good law.
                                                 (Emphasis supplied)

29. Equally so, in K. Govindan and Sons vs. CIT, Cochin, (2001) 1
    SCC 460 holding an explanation to sub-section (8) of Section 139
    of the Income Tax Act introduced with effect from 01.04.1986 to be
    applicable to Assessment Year 1984-85, this Court held as under:-
         “22. The view taken by us that a first or initial assessment
         under Section 147 of the Act is a “regular assessment”
         within the meaning of Section 139(8) of the Act, has been
         the position of law even before the explanation in Section
         139(8) was added by amendment. In that view of the matter
         the explanation merely clarified the position taking it beyond
         the pale of doubt. Parliament thought it necessary to
         add the explanation with a view to remove the doubt
         raised in certain decisions of different High Courts in
         which a contrary view was taken. Thus the explanation
         is merely a clarificatory provision and has application to
         the period of assessment in the case i.e. Assessment
         Year 1984-85.”
                                                 (Emphasis supplied)
[2025] 7 S.C.R.                                                      1723

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


30. It is now time to apply the said principle to the case at hand to
    examine whether Section 51E is clarificatory in character or not. The
    question whether any accident occurring while commuting from the
    residence to the place of work and vice versa constituted an accident
    arising out of and in the course of employment has vexed the Courts
    for very long, resulting in diverse findings based on individual facts.
31. As early as in 1958, this Court had to grapple with the said issue in
    Saurashtra Salt Mfg. Co. v. Bai Valu Raja & Ors., 1958 SCC OnLine
    SC 131. This Court recognized the theory of notional extension and
    set out the statement of law as under: -
           “7. 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, 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 in 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 in order 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.”
                                                (Emphasis supplied)

     Thereafter, on facts, it was held as under: -
           “8.…..A workman is not in the course of his employment
           from the moment he leaves his home and is on his
           way to his work. He certainly is in the course of his
           employment if he reaches the place of work or a point
           or an area which comes within the theory of notional
           extension, outside of which the employer is not liable
           to pay compensation for any accident happening to
1724                                                         [2025] 7 S.C.R.

                          Supreme Court Reports


           him. In the present case, even if it be assumed that the
           theory of notional extension extends upto point D, the theory
           cannot be extended beyond it. The moment a workman
           left point B in a boat or left point A but had not yet reached
           point B, he could not be said to be in the course of his
           employment and any accident happening to him on the
           journey between these two points could not be said to
           have arisen out of and in the course of his employment.
           Both the Commissioner for Workmen’s Compensation
           and the High Court were in error in supposing that the
           deceased workmen in this case were still in the course
           of their employment when they were crossing the creek
           between points A and B. The accident which took place
           when the boat was almost at point A resulting in the death
           of so many workmen was unfortunate, but for that accident
           the appellant cannot be made liable.”
                                                  (Emphasis supplied)

32. On facts, the claim for compensation was declined. What is however,
    significant is that this Court recognized the theory of notional extension
    which is to be applied to an area outside the precincts of the office
    premises. However, it was left to be determined in each case as to
    whether the area fell within the notional extension or not.
33. Jurists across the world were also grappling with this difficult question.
    Lord Denning in his inimitable style in Regina V. National Insurance
    Commissioner, Ex Parte Michael, (1977) 1 WLR 109 graphically
    described the scenario thus:-
           “So we come back, once again, to those all too familiar
           words ‘arising out of and in the course of his employment’.
           They have been worth, to lawyers, a king’s ransom. The
           reason is because, although so simple, they have to
           be applied to facts which vary infinitely. Quite often the
           primary facts are not in dispute; or they are proved beyond
           question. But the inference from them is matter of law. And
           matters of law can be taken higher. In the old days they
           went up to the House of Lords. Nowadays they have to
           be determined, not by the courts, but by the hierarchy of
           tribunals set up under the National Insurance Acts.”
[2025] 7 S.C.R.                                                        1725

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


34. Thereafter, the learned Judge recognized that the phrase “in the
    course of his employment” will include doing something which was
    reasonably incidental to the employment, when he held as under in
    Ex Parte Michael (supra).
           “11. Construing the meaning of the phrase “in the course
           of his employment”, it was noted by Lord Denning that
           the meaning of the phrase had gradually been widened
           over the last 30 years to include doing something
           which was reasonably incidental to the employee’s
           employment. The test of “reasonably incidental” was
           applied in a large number of English decisions. But,
           Lord Denning pointed out that in all those cases the
           workman was at the premises where he or she worked
           and was injured while on a visit to the canteen or other
           place for a break. Lord Denning, however, cautioned
           that the words “reasonably incidental” should be read
           in that context and should be limited to the cases of
           that kind. Lord Denning observed:
           “Take a case where a man is going to or from his place
           of work on his own bicycle, or in his own car. He might
           be said to be doing something ‘reasonably incidental’
           to his employment. But, if he has an accident on the
           way, it is well settled that it does not ‘arise out of and
           in the course of his employment’. See Alderman v. Great
           Western Rly. Co. [(1937) 2 All ER 408 : 1937 AC 454] ;
           Netherton v. Coles [(1945) 1 All ER 227] . Even if his
           employer provides the transport, so that he is going to
           work as a passenger in his employer’s vehicle (which
           is surely ‘reasonably incidental’ to his employment),
           nevertheless, if he is injured in an accident, it does
           not arise out of and in the course of his employment:
           see Vandyke v. Fender [(1970) 2 All ER 335, 340 :
           (1970) 2 QB 292, 305] . It needed a special ‘deeming’
           provision in a statute to make it ‘deemed’ to arise out
           of and in the course of his employment (see Section
           8 of the 1965 Act).”
                                               (Emphasis supplied)
1726                                                      [2025] 7 S.C.R.

                        Supreme Court Reports


35. It will be noticed that, in the extract above, towards the end a
    mention is made of special deeming provision which covered cases
    of accidents happening while travelling in employer’s transport. This
    scenario is very similar to Section 51C of the ESI Act which deals
    with accidents happening while on employer’s transport, which was
    introduced with effect from 28.01.1968.
36. However, before we discuss Section 51C of the ESI Act, we need
    to discuss the judgment of this Court dated 10.05.1963 in Agnes
    (Supra). In Agnes (Supra), one Nanu Raman a bus driver of the
    appellant company therein after finishing his work boarded another
    bus to go to his residence. That bus was involved in an accident
    resulting in his death. Agnes - his widow sued for compensation under
    the EC Act and contended that her husband died in an accident arising
    out of and in the course of employment. This Court, while affirming
    the judgment of the High Court, which granted compensation by a
    majority held as under: -
          “12. Under s. 3 (1) of the Act the injury must be caused
          to the workman by an accident arising out of and in the
          course of his employment. The ques-tion, when does an
          employment begin and when does it cease, depends
          upon the facts of each case. But the Courts have agreed
          that the employment does not necessarily end when
          the “down tool” signal is given or when the workman
          leaves the actual workshop where he is working. There
          is a notional extension of both the entry and exit by
          time and space. The scope of such extension must
          necessarily depend on the circumstances of a given
          case. An employment may end or may begin not only
          when the employee begins to work or leaves his tools
          but also when he uses the means of access and egress
          to and from the place of employment……
          14. ……….As the free transport is provided in the interest of
          ser-vice, having regard to the long distance a driver has to
          traverse to go to the depot from his house and vice versa,
          the user of the said buses is a proved necessity giving rise
          to an implied obligation on his part to travel in the said
          buses as a part of his duty. He is not exercising the right
          as a member of the public, but only as one belonging to
[2025] 7 S.C.R.                                                             1727

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


           a service. The entire Greater Bombay is the field or area
           of the service and every bus is an integrated part of the
           service. The decisions relating to accidents occur-ring
           to an employee in a factory or in premises be-longing to
           the employer providing ingress or egress to the factory
           are not of much relevance to a case where an employee
           has to operate over a larger area in a bus which is in
           itself an integrated part of a fleet of buses operating in
           the entire area. Though the doctrine of reasonable or
           notional extension of employment developed in the
           context of specific workshops, factories or harbours,
           equally applies to such a bus service, the doctrine
           necessarily will have to be adapted to meet its peculiar
           requirements. While in a case of a factory, the premises of
           the employer which gives ingress or egress to the factory is
           a limited one, one, in the case of a city transport ser-vice,
           by analogy, the entire fleet of buses forming the service
           would be the “premises”. An illustration may make our
           point clear. Suppose, in view of the long distances to be
           covered by the employees, the Corporation, as a condition
           of service, provides a bus for collecting all the drivers from
           their houses so that they may reach their depots in time
           and to take them back after the day’s work so that after the
           heavy work till about 7 p.m. they may reach their homes
           without further strain on their health. Can it be said that the
           said facility is not one given in the course of employment?
           It can even be said that it is the duty of the employees in
           the interest of the service to utilize the said bus both for
           coming to the depot and going back to their homes. If that
           be so, what difference would it make if the employer,
           instead of providing a separate bus, throws open his
           entire fleet of buses for giving the employees the said
           facility? They are given that facility not as members
           of the public but as employees; not as a grace but as
           of right because efficiency of the service demands
           it. We would, therefore, hold that when a driver when
           going home from the depot or coming to the depot
           uses the bus, any accident that happens to him is an
           accident in the course of his employment.”
                                                   (Emphasis supplied)
1728                                                       [2025] 7 S.C.R.

                        Supreme Court Reports


37. In Mackinnon Mackenzie and Co. (P) Ltd. vs. Ibrahim Mahmmed
    Issak, (1969) 2 SCC 607, this Court dealing with the phrase “arising
    out of and in the course of employment” held as under:-
          “5. To come within the Act the injury by accident must
          arise both out of and in the course of employment. The
          words “in the course of the employment” mean “in the
          course of the work which the workman is employed to
          do and which is incidental to it.” The words “arising out
          of employment” are understood to mean that “during
          the course of the employment, injury has resulted from
          some risk incidental to the duties of the service, which,
          unless engaged in the duty owing to the master, it is
          reasonable to believe the workman would not otherwise
          have suffered.” In other words there must be a causal
          relationship between the accident and the employment.
          The expression “arising out of employment” is again
          not confined to the mere nature of the employment.
          The expression applies to employment as such —
          to its nature, its conditions, its obligations and its
          incidents. If by reason of any of those factors the workman
          is brought within the zone of special danger the injury
          would be one which arises ‘out of employment’. To put it
          differently if the accident had occurred on account of a
          risk which is an incident of the employment, the claim for
          compensation must succeed, unless of course the workman
          has exposed himself to an added peril by his own imprudent
          act….”
                                                (Emphasis supplied)

     Here again, the court used the phrase to mean nature, condition,
     obligation and incidents of employment. It will be noticed that this
     Court in Agnes (supra) too, while applying the theory of notional
     extension, adapted it in its application to the facts of the said case.
38. Agnes (supra) was delivered on 10.05.1963. By an amendment with
    effect from 28.01.1968 (added by Act 44 of 1966), Section 51C was
    introduced in the ESI Act in the following terms:-
          “51C. Accidents happening while travelling in
          employer’s transport.
[2025] 7 S.C.R.                                                           1729

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


           (1) An accident happening while an employee is, with the
           express or implied permission of his employer, travelling
           as a passenger by any vehicle to or from his place of work
           shall, notwithstanding that he is under no obligation to his
           employer to travel by that vehicle, be deemed to arise out
           of and in the course of his employment, if
           (a) the accident would have been deemed so to have
           arisen had he been under such obligation; and
           (b) at the time of the accident, the vehicle
           (i) is being operated by or on behalf of his employer or
           some other person by whom it is provided in pursuance
           of arrangements made with his employer, and
           (ii) is not being operated in the ordinary course of public
           transport service.
           (2) In this section Vehicle includes vessel and an aircraft.”
39. It will be noticed that a law which came to be laid down in Agnes
    (supra) while interpreting the phrase “arising out of and in the
    course of employment” in the EC Act was given effect by a statutory
    recognition in the ESI Act. This is set out to demonstrate the cognate
    nature of the EC Act and the ESI Act. Both the statutes seek to
    ameliorate the conditions of workmen and provide them social security
    benefits and improve their conditions of service.
40. The 62nd Report of the Law Commission of India on the EC Act was
    submitted in October, 1974 under the Chairmanship of Chief Justice
    (Retired) P.B. Gajendragadkar. As rightly set out in the Report, the
    purpose of Workmen’s Compensation laws was to eliminate the
    hardship experienced under the common law system by providing
    for payment of benefits regardless of fault and with a minimum of
    legal formality. Further, the Law Commission Report analyzed several
    provisions of the ESI Act including Section 51A, 51B, 51C and 51D.
    In para 3.3 of the Report, while discussing Section 51C of the ESI
    Act, the following crucial observations were made:-
           “Having carefully considered all aspects of the matter, we
           are of the view that Section 51C of the ESI Act should be
           adopted with modification that it should not be necessary
           that the transport of provided by the employer if the
1730                                                       [2025] 7 S.C.R.

                         Supreme Court Reports


          workman is travelling directly to or from the place of
          employment.”
                                                 (Emphasis supplied)

41. These observations were made after exhaustive analysis of the legal
    position prevailing in different jurisdictions on the issue of accidents
    occurring outside the employer’s premises while the workman is
    on his way to and from his work. The Law Commission Report
    also discussed the International Labour Convention of 1964 for
    compensation on way to work accidents.
42. The High Courts in India were also engaged with this issue about
    the interpretation of the phrase “arising out of and in the course of
    employment” with regard to accidents occurring while proceeding to
    the place of work by the employee. In Sadgunaben Amrutlal vs.
    ESI Corporation, 1981 Lab 1C 1653 a judgment doubted by this
    Court in Francis De Costa (supra), the Division Bench of the Gujarat
    High Court took the view that the theory of notional extension is an
    elastic and flexible formula to be applied in a purposeful manner. The
    High Court in that case extended the benefits to the dependents of
    the employee even though the death occurred at a public bus stop
    while the employee was boarding the bus to reach the workplace.
43. Earlier in Bhagubai vs. Central Railway, (1954) 2 LLJ 403 even
    though the employee was proceeding to the workplace, since he
    was proceeding through the premises belonging to the employer,
    where he was stabbed the dependents were given the benefit. This
    Court in Francis De Costa (supra) did not adversely comment on
    the said judgment.
44. This parade of case law is only to 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 Section 51E was enacted in the
    ESI Act. In view of that, we have no manner of doubt that the said
[2025] 7 S.C.R.                                                          1731

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


     amendment is clarificatory in character and will have retrospective
     effect.

     MEANING OF THE PHRASE “DEEMED TO HAVE” IN SECTION
     51E OF THE ESI ACT: -
45. There is one more aspect to be dealt with here. The words “deemed
    to have” used in Section 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 not otherwise prevail. Very often, it is
    also used to put beyond doubt a particular construction that might
    otherwise be uncertain. Sometimes it is used to give a comprehensive
    description that it includes what is obvious, what is uncertain and
    what is, in the ordinary sense, impossible. [See Hira H. Advani vs.
    State of Maharashtra, (1969) 2 SCC 662]
46. In St. Aubyn vs. Attorney-General, (1951) 2 All ER 473, Lord
    Radcliffe felicitously explained the concept as under:-
           “The word ‘deemed’ is used a great deal in modern
           legislation. Sometimes it is used to impose for the purposes
           of a statute an artificial construction of a word or phrase
           that would not otherwise prevail. Sometimes it is used
           to put beyond doubt a particular construction that might
           otherwise be uncertain. Sometimes it is used to give a
           comprehensive description that includes what is obvious,
           what is uncertain and what is, in the ordinary sense,
           impossible.”
     It is very clear that the word “deemed” in Section 51E is employed to
     put beyond doubt a particular construction, that hitherto was uncertain.

     STATUTES ‘IN PARI MATERIA’: -
47. The question further remains whether assuming Section 51E is
    retrospective would the interpretation flowing out of 51E of the ESI
    Act be imported into the EC Act to interpret the phrase “accident
    arising out of and in the course of employment” to decide whether it
    will include accidents happening to employees while commuting to
    the place of work and vice versa. Before we answer the question,
    we would make it absolutely clear that it is not our endeavour to
    import Section 51E of the ESI Act into the EC Act. All that we are
1732                                                       [2025] 7 S.C.R.

                         Supreme Court Reports


     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.
48. First of all, the operative phraseology occurring in Section 3 of the
    EC Act is the same as the one that it occurs in Section 2(8) of the
    ESI Act which defines, ‘employment injury’. Secondly, as held by
    this Court and as noticed hereinabove, both Acts are beneficial
    legislations intended as social security measures to ameliorate the
    conditions of employees. As rightly noticed by Chief Justice (Retd.)
    Ganjendragadkar in the 62nd Law Commission Report the only
    difference between the two statutes was that while the ESI Act applied
    to factories and notified establishments, the EC Act applied to other
    employers, as defined. The case law, as noticed hereinabove, also
    indicates how Saurashtra Salt (supra) and Agnes (supra) which
    were under the EC Act was applied in Francis De. Costa (supra),
    a case arising under the ESI Act. Equally, the High Court of Gujarat
    in Sadgunaben Amrutlal (supra) a case under the ESI Act, had
    discussed the ratio in Saurashtra Salt (supra) which arose under
    the EC Act.
49. 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.
50. In Justice G.P. Singh’s Principles of Statutory Interpretation (14th
    Edition), dealing with statutes in pari materia, the following passage
    finds mention:-
          “Statutes in pari materia
          It has already been seen that a statute must be read as
          a whole as words are to be understood in their context.
          Extension of this rule of context permits reference
          to other statutes in pari materia, i.e. statutes dealing
          with the same subject-matter or forming part of the
          same system. VISCOUNT SIMONDS in a passage
[2025] 7 S.C.R.                                                          1733

      Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


           already noticed conceived it to be a right and duty to
           construe every word of a statute in its context and he
           used the word context in its widest sense including
           “other statutes in pari mate-ria”. As stated by LORD
           MANSFIELD: “Where there are different statutes in
           pari materia though made at different times, or even
           expired, and not referring to each other, they shall be
           taken and construed together, as one system and as
           explanatory of each other.”
                                                 (Emphasis supplied)

51. In the State of Madras vs. A. Vaidyanatha Iyer, 1958 SCR 580,
    this Court held as under:-
           “… Therefore where it is proved that a gratification has
           been accepted, then the presumption shall at once arise
           under the section. It introduces an exception to the general
           rule as to the burden of proof in criminal cases and shifts
           the onus on to the accused. It may here be mentioned
           that the legislature has chosen to use the words
           ‘shall presume’ and not ‘may presume’ the former
           a presumption of law and latter of fact. Both these
           phrases have been defined in the Indian Evidence
           Act, no doubt for the purpose of that Act, but s.4 of
           the Prevention of Corruption Act is in pari materia
           with the Evidence Act because it deals with a branch
           of law of evidence, e.g. presumptions, and therefore
           should have the same meaning….”
                                                 (Emphasis supplied)

52. In Craies on Legislation (9th Edition) dealing with statutes in pari
    materia has the following observation in para 20.1.26.
           “Statutes in pari materia
           Two Acts are said to be in pari materia if taking all their
           circumstances into account it is natural to construe them
           as if they formed part of a single code on a particular
           matter. Where this is found to be the case the result is
           that definitions in one may be applied to expressions found
1734                                                        [2025] 7 S.C.R.

                         Supreme Court Reports


          in another, and decided cases setting out principles of
          application to one will be applied to the other.
          The fact that two statutes have the same titles may be
          indicative of their being in pari materia. As Bridge L.J. said
          in R. v Wheatley-
          “Looking at the two statutes [the Explosives Act 1875
          and the Explosive Substances Act 1883], at the nature of
          the provisions which they both contain, and in particular
          at the short and long titles of both statutes, it appears to
          this court that clearly they are in pari materia, and that
          conclusion alone would seem to us to be sufficient to
          justify the conclusion which the judge reached that the
          definition of the word ‘explosive’ found in the 1875 Act is
          available to be adopted and applied under the provisions
          of the 1883 Act.”
53. In State of Assam and Another vs. Deva Prasad Barua & Another,
    (1969) 1 S.C.R. 698, this Court while construing Section 19 of the
    Assam Agricultural Income-tax Act, 1939 gave it the construction
    given to Section 22 of the Indian Income-tax Act and held as under:-
          “… Moreover s.19 is in pari materia with s.22 of the
          Income-tax Act and the law which has been laid down
          by this Court, while interpreting the provisions of that
          section, must govern the construction of the provisions
          of s.19 as well.”
54. In AG vs. Prince Ernest Augustus of Hanover, Lord Viscount
    Simonds observed as follows:-
          “For words, and particularly general words, cannot be read
          in isolation: their colour and content are derived from their
          context. So it is that I conceive it to be my right and duty
          to examine every word of a statute in its context, and I
          use “context” in its widest sense, which I have already
          indicated as including not only other enacting provisions
          of the same statute, but its preamble, the existing state
          of the law, other statutes in pari materia, and the
          mischief which I can, by those and other legitimate
          means, discern the statute was intended to remedy.”
                                                 (Emphasis supplied)
[2025] 7 S.C.R.                                                      1735

         Daivshala & Ors. v. Oriental Insurance Company Ltd. & Anr.


55. Applying the above principle, 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.
56. The following undisputed facts emerge in this case: -
     a)      The deceased – Shahu Sampatrao Jadhavar was employed
             with the respondent No.2-Sugar factory;
     b)      He was employed as watchman and his duty hours on
             22.04.2003 was 3 AM to 11 AM.
     c)      It is undisputed that he was proceeding to his workplace when
             the accident occurred at place which was 5 kms (approx.) from
             the workplace while the employee was proceeding towards the
             workplace.
     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.
57. The appeal is allowed and the judgment of the High Court of
    Judicature at Bombay, Bench at Aurangabad dated 01.12.2011 in
    First Appeal No. 2015 of 2011 is set aside and the judgment of the
    Commissioner for Workmen’s Compensation and Civil Judge, Senior
    Division, Osmanabad in Workmen’s Compensation Application No.
    28 of 2005 dated 26.06.2009 is restored. No order as to costs.

     Result of the case: Appeal allowed.




     †
         Headnotes prepared by: Ankit Gyan