Employees State Insurance Corp. & ... vs Smt. Poonam Sharma & Ors.
2014 Latest Caselaw 1905 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          FAO No. 177/2012 & CM No. 7366/2012

%                                                  16th April,2014

EMPLOYEES STATE INSURANCE CORP. & ANR.
                                                        ......Appellants
                           Through:    Mr. K.P.Mavi, Adv.


                           VERSUS

SMT. POONAM SHARMA & ORS.                 ...... Respondents

Through: Mr. Amiet Andley, Adv.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not? Yes

VALMIKI J. MEHTA, J (ORAL)

1. This first appeal is filed under Section 82 of the Employees'

State Insurance Act, 1948 (in short 'the Act') by the ESI Corporation

impugning the judgment of the ESI court below dated 27.9.2011. By the

impugned judgment, the ESI court has relied upon the provision of Section

51(E) of the Act to hold that an accident occurring to an employee while

commuting either to and fro from the place of duty, will be deemed to have

arisen out of and in the course of employment.

2. The only issue which is argued before this Court is whether the

benefit of Section 51(E) of the Act is available to such an employee who

suffers an accident prior to coming into force of Section 51(E) of the Act

which was brought in by Act 18 of 2010 w.e.f 1.6.2010. In the present case,

the accident happened on 10.12.1992 i.e before Section 51(E) of the Act

came into force.

3. Section 51E of the Act 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 duly 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 if nexus between the circumstances, time and place in which the accident occurred and the employment is established."

4. For interpretation of Section 51(E) as to whether its application

is to be taken prospectively i.e to accidents happening after 1.6.2010 or that

this Section is only declaratory or clarificatory, reference will be necessary

to the main provision of Section 2(8) of the Act which defines employment

injury. This provision reads as under:-

2(8) "employment injury" means a personal injury to an employee 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 contractual within or outside the territorial limits of India;"

5. A reading of the aforesaid provision being Section 2(8) of the

Act shows that for an employee to claim benefit of the provision of the Act,

the injury to the employee must be caused by the accident arising out of and

in the course of employment.

6. The Supreme Court in the case of Saurashtra Salt

Manufacturing Co. Vs. Bai Valu Raja, AIR 1958 SC 881 held that when an

employee is travelling to and fro from his place of work, if an accident is

caused while commuting to and fro from the place of work, the accident

cannot be said to arise out of and in the course of employment because the

accident does not happen within the premises of the employer. This

judgment of the Supreme Court was of a Division Bench of three Judges and

the ratio of this judgment was to an extent changed by the Constitution

Bench judgment of the Supreme Court in the case of G.M.,B.E.S.T

Undertaking, Bombay Vs. Mrs. Agnes, (1964) 3 SCR 930. The

Constitution Bench of the Supreme Court in the B.E.S.T Undertaking's

(supra) has held that since the service rules required the employees of the

B.E.S.T Undertaking to use official transport while going to and fro from

work, the accident which happened to an employee while commuting to and

fro from the place of work would be an accident arising out of and in the

course of employment. So far as appellant authority is concerned, the issue

is covered in its favour that injury caused to an employee while commuting

to and fro from the place of work is not included in the employment injury

as per the judgment of the Supreme Court in the case of Regional Director,

E.S.I.Corporation And Anr. Vs. Francis De Costa and Anr. (1996) 6 SCC

1. The judgment of the Supreme Court in the case of Francis De Costa

(supra) does not deal with Section 51(E) of the Act, and obviously that

could not be so, inasmuch as, the provision of Section 51(E) came into force

by virtue of the Act 18 of 2010.

7. In my opinion, the provision of Section 51(E) was brought in to

clarify and to remove any confusion with regard to the issue as to whether an

employee to whom the accidental injury is caused while commuting to and

fro from the place of work, such an employee would be entitled to claim that

the injury is an employment injury as per Section 2(8) of the Act. In a way,

the provision of Section 51(E) of the Act has been brought in contrary to the

ratios of the decisions in the judgments in the cases of Francis De Costa

(supra) and Saurashtra Salt Manufacturing Co.(supra). I must hasten to

observe that bringing in of Section 51(E) can be read as if it was to lay down

the law which is contrary to the judgments of the Supreme Court in the cases

of Francis De Costa (supra) and Saurashtra Salt Manufacturing

Co.(supra) , however, really the amendment does not intend to do that,

although the consequence of bringing in of Section 51(E) will be to define

the expression 'arising out of and in the course of employment' which would

be different than as held by the Supreme Court in the judgments passed till

the bringing in of Section 51(E). It is however an established position in law

that legislature does have the necessary powers to lay down the law, and

merely because laying down of the law may have the effect of the law being

taken to be different than as has been interpreted by the Supreme Court in its

judgments, enactment by the legislature cannot be interpreted to mean that

the legislature was not competent to bring in such an appropriate statutory

provision.

8. The issue therefore to be decided is as to whether the provision

of Section 51(E) is prospective or it is only declaratory and clarificatory so

far as definition of employment injury as found in Section 2(8) of the Act is

concerned i.e the clarification in Section 51(E) of the definition of

employment injury does or does not apply to accidents before Section 51(E)

was enacted.

9. Learned counsel for the appellant placed very strong reliance on

the judgment of the Supreme Court in the case of C. Gupta Vs. Glaxo-

Smithkline Pharmaceuticals Ltd. (2007) 7 SCC 171 to argue that the

provision of Section 51(E) must be held to be prospective i.e it does not

apply to accidents which happen before bringing in of this amendment w.e.f

1.6.2010 ie if accidents are caused to the employee while commuting to and

fro from the place of work if they occur before 1.6.2010, then, such

accidents should not be included in the expression 'employment injury' as

per Section 2(8) of the Act. Reliance is placed upon para 21 of the judgment

in the case of C.Gupta (supra) and which reads as under:-

"21. In the present case, we find that for determining the nature of amendment, the question is whether it affects the legal rights of individual workers in the context that if they fall within the definition then they would be entitled to claim several benefits conferred by the Act. The amendment should be also one which would touch upon their substantive rights. Unless there is a clear provision to the effect that it is retrospective or such retrospectivity can be implied by necessary implication or intendment, it must be held to be prospective. We find no such clear provision or anything to suggest by necessary implication or intendment either in the amending Act or in the amendment itself. The amendment cannot be said to be one which affects procedure. In so far as the amendment substantially changes the scope of the definition of the term "workman" it cannot be said to be merely declaratory or clarificatory. In this regard we find that entirely new category of persons who are doing "operational" work was introduced first time in the definition and the words "skilled" and "unskilled" were made independent categories unlinked to the word "manual". It can be seen that the Industrial Disputes (Amendment) Act, 1984 was enacted by

Parliament on 31.8.1982. However, the amendment itself was not brought into force immediately and in Sub-section (1) of Section 1 of the Amending Act, it was provided that it would come into force on such day as the Central Government may be Notification in the official Gazette, appoint. Ultimately, by a Notification the said amendment was brought into force on 21.8.1984. Although this Court has held that the amendment would be prospective if it is deemed to have come with effect on a particular day, a provision in the amendment Act to the effect that amendment would become operative in the future, would have similar effect." (underlining added)

10. In order to appreciate the ratio of the Supreme Court judgment

in the case of C.Gupta (supra), the facts of that case are required to be

examined. The facts of that case were that the employee was appointed as

an Industrial Relations Executive. The service of such person could be

terminated by virtue of Clause 17 of the appointment letter without assigning

any reason with notice period. This employee claimed that he was a

workman and that accordingly he was governed by the provisions of

Industrial Disputes Act, 1947. And once the said Act was applied, his

termination of service was pleaded to be illegal because as per Section 25-N

of the Industrial Disputes Act, 1947, no notice or retrenchment

compensation had been paid to him. The employee relied upon the

definition of workman which was amended by Parliament by Act 46 of 1982

which came into effect on 21.8.1984 and whereby in the definition of the

workman, delinking took place of the words 'skilled' and 'unskilled' from

the word 'manual' and by adding the word 'operational'. Employee pleaded

that he was entitled to the benefit of the amended provision of Section 2(s)

of the Industrial Disputes Act because his work was of 'skilled, technical

and clerical in nature apart from it being operational'. It is in this context

that the Supreme Court made observations in para 21 of its judgment which

is reproduced above, and as per which, a provision comes into effect only

from the date from which it is brought in.

11. Learned counsel for the appellant also in support of his

arguments placed reliance upon the amending Act 18 of 2010 by which

Section 51(E) was added and argued that since there were different dates for

bringing into effect different provisions of the Act by virtue of the

Amending Act , and Section 51(E) was brought into operation w.e.f

1.6.2010, the observations of the Supreme Court made in para 21 in

C.Gupta's case (supra) apply that the employee in this case cannot take

benefit of the provision of Section 51(E) because the accident in this case

happened in 1992 i.e before 1.6.2010 when Section 51(E) was brought into

the statute book.

12. I am unable to agree with the arguments urged on behalf of the

appellant because para 21 of the judgment in the case of C.Gupta (supra)

before making observations with respect to date of coming into effect of an

amended provision, has specifically observed that the position would be

different when the amending provision is merely declaratory and

clarificatory. Clarifying this further, the Supreme Court said that in the facts

of C.Gupta's case (supra) the definition of 'workman' was specifically

amended by adding expression 'operational' for the first time in the

definition and the expression 'skilled' and 'unskilled' were made

independent categories unlinked to the word 'manual'ie the amendment

hence touched substantive right which changed because of the amendment.

When we see the provision of Section 2(8) of the Act, which defines the

'employment injury', we find that there is no amendment carried out to this

provision in that any words have been taken away from the said provision

which would have taken away vested rights. The amendment is declaratory

or clarificatory and not stated by its language to be prospective. For

example, let us take a case where statutorily the definition provided that a

person who commutes to and fro from place of work when he suffers an

accident is excluded, and then such an accident does not arise out of and in

the course of employment. If these words are sought to be removed by

amendment by bringing in Section 51(E) by simultaneously deleting these

expressions if were found in Section 2(8), then, of course, it could have been

argued that originally by the definition itself of employment injury, accident

taking place while commuting to and fro from the place of employment

though was earlier excluded specifically, and which is sought to be included

by amendment, and consequently by its very nature amendment will be

prospective because the amendment is not clarificatory or declaratory but

there is a substantive amendment of the definition of employment injury by

removing specific words and adding specific words hence affecting

substantive rights. This however is not so. Therefore, in my opinion,

Section 51(E) is merely declaratory and clarificatory of the expression

'employment injury' and by virtue of the Section 51(E) it is only clarified

that an injury which takes place on account of an accident outside the

premises of the employment but when the employee is commuting to and fro

from the place of work, the accident will be included in the expression

'accident arising out of and in the course of employment'. In my opinion,

the fact that the provision of Section 51(E) uses the expression 'deemed'

also shows that the provision of Section 51(E) is clarificatory and

declaratory so far as definition of 'employment injury' as found in Section

2(8) of the Act is concerned. Merely because the Section is brought into

effect on a particular date will not take away the effect of the Section being

declaratory or clarificatory, and once the Section is only clarificatory and

declaratory with respect to the accident arising out of and in the course of

employment, then in such a case the date of bringing into operation of the

Section cannot in any manner change the aspect that the amendment is only

declaratory and clarificatory and is not a substantive amendment affecting

substantive rights.

13. It is required to be noted that this Court is dealing with a social

welfare legislation. It is necessary that in an interpretation being given of a

provision of Social Welfare Legislation, courts do not lose sight of the fact

that interpretation which otherwise furthers the intention of the legislature

must be adapted and not that the intention of the legislature is in any manner

scuttled. It must be noted that after all it is not as if the appellant ESI

Corporation did not receive the necessary ESI contribution from the

employer at the time of the accident, but the issue is only as to whether such

an employee should or should not be denied the benefit of the provisions of

the Act merely because the accident has taken place outside the premises of

the employer. Therefore, I would like to take a progressive and purposive

interpretation of the provision of Section 51(E) for holding that the same is

only declaratory and clarificatory and the same would apply to the accidents

caused even before 1.6.2010 when the provision of Section 51(E) was

brought into operation.

14. In view of the above, I hold that the provision of Section 51(E)

of the Act is only declaratory and clarificatory to the definition of

employment injury contained in Section 2(8) of the Act and benefit will be

given of the provision of Section 51(E) to an employee even if accident

happens before 1.6.2010 when the provision of Section 51(E) of the Act was

brought in.

15. In view of the above, there is no merit in the appeal, and the

same is therefore dismissed, leaving the parties to bear their own costs.

APRIL 16, 2014                                 VALMIKI J. MEHTA, J.
ib