Employees Compensation Act - Insurer Can't Deny Coverage Saying Deceased Was 'Helper' & Not 'Cleaner' Of Vehicle : Supreme Court

The Supreme Court has held that denying the insurance coverage under the Employees Compensation Act 1923 for the reason that deceased was engaged as a "helper" and not a "cleaner" is wholly unjustified, considering the absence of any clear demarcation of duties and the fact that the terms "Helper" and "Cleaner" are interchangeably used.

A Bench comprising Justice Hemant Gupta and Justice V Ramasubramanian observed that the High Court has accepted the Insurance Company's appeal on a "make-believe argument that Cleaner or Helper engaged by the employer are engaged in two different duties and that a Helper is not covered by the insurance policy".

"We find that the High Court has drawn a distinction between Helper and a Cleaner when none existed," the Bench said

The Bench made the observation while deciding a civil appeal challenging Rajasthan High Court's order allowing the Insurance Company to recover the amount paid from the Employer, holding that the deceased was a Helper and the policy covered Cleaner or Driver of the vehicle in question

The Apex Court has allowed the civil appeal to the extent that it absolved the Insurance Company of its responsibilities to pay the amount of compensation so as to indemnify the employer.

"We have heard learned counsel for the parties and find that the High Court has accepted appeal on a make-believe argument that Cleaner or Helper engaged by the employer are engaged in two different duties and that a Helper is not covered by the insurance policy. The High Court has recorded a finding that admittedly deceased was a Helper. In the absence of any clear demarcation of duties of a Helper or a Cleaner and in view of the fact that Helper and Cleaner are interchangeably used, therefore, declining claim for the reason that deceased was engaged as a helper and not Cleaner is wholly unjustified".

Facts:

 The deceased Tej Singh was engaged by the appellant as a Helper and he died in the course of employment of the appellant on his borewell vehicle. The petition was filed before the Employees Commissioner under the Act for grant of compensation who passed an award in 2005 awarding a sum of Rs.3,27,555 along with Rs.2,500 as expenses for the last rites. The legal heirs of the deceased were also granted interest @18% p.a. from the date of the accident.

The insurance company filed an appeal under Section 30 of the Act before the High Court which accepted the appeal holding that the deceased was a Helper though the policy covered Cleaner or Driver of the Vehicle in question. The High Court reduced the interest to 12% p.a. Since the insurance company has paid the amount, liberty was granted to it to recover the sum from the present appellant.

While noting that the employer sought indemnification of five other employees engaged in loading or unloading activities by paying an extra premium, the Supreme Court observed that it was for the insurance company to cross examine the witnesses produced by the claimant or by the owner to prove the fact that deceased was not engaged in loading or unloading activities.

Case: M/S Mangilal Vishnoi vs National Insurance Company Ltd, CA 291/2022 

Citation : 2022 LiveLaw (SC) 56