'Accident While Commuting To Office To Be Compensated': SC Clarifies Legal Position

Last Updated:July 30, 2025, 16:39 IST

SC holds that accidents during commute to work are compensable under EC Act if a clear nexus with employment is established, restoring benefits to a deceased worker’s family.

SC said an accident occurring to an employee while commuting to or from the place of employment may be considered as one arising out of and in the course of employment under Section 3 of the Employees’ Compensation Act, 1923. (AI generated image)

The Supreme Court on July 29 clarified a key aspect of labour law by holding that an accident occurring to an employee while commuting to or from the place of employment may be considered as one arising out of and in the course of employment under Section 3 of the Employees’ Compensation Act, 1923, provided a clear nexus exists between the employment and the circumstances of the accident.

A division bench comprising Justice Manoj Misra and Justice KV Viswanathan delivered the judgment in Davishala & Ors vs Oriental Insurance Company Ltd & Anr, setting aside the decision of the Bombay High Court and restoring the award passed by the Commissioner for Workmen’s Compensation and Civil Judge, Senior Division, Osmanabad.

The deceased, Shahu Sampatrao Jadhavar, was employed as a watchman in a sugar factory. His working hours were from 3 am to 11 am. On April 22, 2003, he left home on his motorcycle to report for duty but was involved in a fatal accident five kilometres from the factory. A claim was filed under the Employees’ Compensation Act by his dependants including his widow, children and mother.

The Commissioner awarded compensation of Rs 3,26,140 with interest at 12 per cent per annum from May 22, 2003. On appeal by the insurance company, the High Court reversed the decision, holding that the accident did not occur in the course of employment and, therefore, fell outside the statutory scope of compensation.

The Supreme Court noted that the core issue involved the interpretation of the phrase “arising out of and in the course of employment" and whether it could include accidents during the commute to the place of work. The Court referred to Section 51E of the Employees’ State Insurance Act, 1948, which provides that accidents occurring while commuting are deemed to arise out of and in the course of employment if a nexus is established between the accident and the employment.

Although Section 51E was introduced by way of an amendment in 2010, the Court held that it is clarificatory in nature and therefore has retrospective application. The Court noted that statutes that are pari materia and deal with a similar subject matter can be used to interpret each other when legislative intent is aligned and there is no express bar.

The Court reiterated that both the Employees’ Compensation Act and the Employees’ State Insurance Act are welfare legislations aimed at providing benefits to employees in case of injury, death or sickness arising from employment. In such cases, the interpretation must be purposive and liberal in order to fulfill the object of the legislation.

The Court observed that Indian jurisprudence has long recognised the principle of notional extension which permits certain areas and periods outside the physical premises of employment to be treated as an extension of the workplace under specific circumstances. The applicability of the doctrine depends on establishing a proximate connection between the employment and the accident in terms of time, place and purpose.

In the present case, the deceased was travelling to his place of work to report for duty at 3 am. The accident occurred on a direct route without deviation and within reasonable temporal proximity to his shift timing. The Court found that the nexus required under the statute was satisfied.

The Court also cited settled principles of statutory interpretation which hold that declaratory or clarificatory statutes aimed at removing ambiguity or filling legislative gaps are retrospective in operation unless expressly stated otherwise. It held that Section 51E of the ESI Act served to clarify existing law rather than introduce a new obligation or right.

Restoring the order of the Commissioner, the Court concluded that the accident arose out of and in the course of employment and that the claim under the Employees’ Compensation Act had been rightly allowed.

Sanya Talwar

Sanya Talwar, Editor at Lawbeat, has been heading the organisation since its inception. After practising in courts for over four years, she discovered her affinity for legal journalism. She has worked previousl...Read More

Sanya Talwar, Editor at Lawbeat, has been heading the organisation since its inception. After practising in courts for over four years, she discovered her affinity for legal journalism. She has worked previousl...

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