Supreme Court Denies Compensation Claim Due to Lack of Employer-Employee Relationship and Delay: Shantabai Ananda Jagtap vs. Jayram Ganpati Jagtap (2023)

Date of the Judgment: 04 July 2023
Citation: Civil Appeal No. 5786 of 2012
Judges: Abhay S. Oka, J., Rajesh Bindal, J.
Can a claim for compensation be sustained if the claimant fails to prove an employer-employee relationship and delays the claim significantly? The Supreme Court of India addressed this question in a case involving a fatal road accident. The Court ultimately dismissed the appeal, citing the absence of a proven employer-employee relationship and an unreasonable delay in filing the claim. The judgment was delivered by a two-judge bench comprising Justice Abhay S. Oka and Justice Rajesh Bindal, with Justice Rajesh Bindal authoring the opinion.

Case Background

On August 17, 1993, Machindra Ananda Jagtap tragically died in a road accident while driving a jeep owned by Jayram Ganpati Jagtap. Machindra’s legal heirs, Shantabai Ananda Jagtap and another, initially filed a claim before the Motor Accidents Claims Tribunal (MACT), which was decided on March 7, 2003. The Tribunal awarded compensation against the vehicle owner, but the award remained unexecuted as the vehicle was not insured. Subsequently, on August 2, 2004, the legal heirs filed a claim for compensation before the Commissioner for Workmen’s Compensation, asserting that Machindra’s death occurred during the course of his employment with Jayram Ganpati Jagtap. They sought ₹1,13,855 along with interest and penalty under the Employees Compensation Act, 1923.

Timeline

Course of Proceedings

The Commissioner for Workmen’s Compensation rejected the claim, citing both delay and a lack of merit. The Commissioner also held that the claim was not maintainable under Section 167 of the Motor Vehicles Act, 1988. The High Court of Judicature at Bombay upheld the Commissioner’s decision regarding the delay but found the claim to be maintainable. The High Court did not address the merits of the case, specifically the employer-employee relationship. The legal heirs of the deceased then appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and application of the Employees Compensation Act, 1923, and Section 167 of the Motor Vehicles Act, 1988. The Employees Compensation Act, 1923, provides for compensation to employees and their families in cases of injury or death during the course of employment. Section 167 of the Motor Vehicles Act, 1988, deals with the option of claiming compensation under either the Motor Vehicles Act or the Employees Compensation Act. The Supreme Court had to consider whether the legal heirs could claim compensation under the Employees Compensation Act after having already pursued a claim under the Motor Vehicles Act. The relevant sections are:

• “Section 167 of the Motor Vehicles Act, 1988”: This section allows a claimant to seek compensation under either the Motor Vehicles Act or the Employees Compensation Act but not both.
• “Employees Compensation Act, 1923”: This Act provides for compensation to employees and their families for injuries or death arising out of and in the course of employment.

Arguments

Arguments of the Appellants (Legal Heirs of the Deceased):

• The appellants argued that Machindra Ananda Jagtap’s death occurred during the course of his employment with Jayram Ganpati Jagtap.
• They stated that they had initially filed a claim before the Motor Accidents Claims Tribunal (MACT) on the advice they received.
• They contended that the MACT award was not executed because the vehicle was uninsured.
• They submitted that the delay in filing the claim before the Commissioner was not deliberate, and the family was in dire need of compensation after the death of their breadwinner.
• They argued that the High Court should have condoned the delay and granted relief.
• They claimed that the deceased was earning a monthly salary of ₹2000/-.
• The compensation should be calculated as per the formula laid down under the Employees Compensation Act, 1923.

Arguments of the Respondent (Insurance Company):

• The insurance company argued that there was no employer-employee relationship between the deceased and Jayram Ganpati Jagtap.
• They stated that the deceased and the vehicle owner were related and had a common ration card.
• They claimed that the employment record was created solely to claim compensation.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues:

1. Whether there was sufficient cause for condonation of approximately 9 years and five months delay in filing the application before the Commissioner under the Employees Compensation Act, 1923.
2. Whether the relationship of employer and employee has been proved between the deceased and Jayram Ganpati Jagtap.

Treatment of the Issue by the Court

Authorities

The court did not cite any specific cases or books in this judgment.

Judgment

How each authority was viewed by the Court?

• The Employees Compensation Act, 1923* was the basis of the claim, but the court found that the appellants did not meet the requirements for compensation under this Act due to the lack of an employer-employee relationship and delay in filing the application.
• The Motor Vehicles Act, 1988* was considered in the context of the appellants’ initial claim before the MACT. The court noted that the appellants had the option to claim under either the Motor Vehicles Act or the Employees Compensation Act but not both.

What weighed in the mind of the Court?

The court emphasized the lack of evidence for an employer-employee relationship and the significant delay in filing the claim. The court noted that the appellants had initially pursued a claim under the Motor Vehicles Act and only approached the Commissioner after failing to execute the MACT award. This conduct suggested a calculated move to claim compensation from the offending vehicle first, and then from the employer, which was not permissible.

Logical Reasoning:

The court reasoned that the appellants’ failure to prove the employer-employee relationship and the significant delay in filing the claim were fatal to their case. The court also noted that the appellants’ conduct suggested a calculated move to claim compensation from the offending vehicle first and then from the employer, which was not permissible under the law. The court stated:

“The relationship of employer and employee has not been proved before the Commissioner. In our opinion, the same being the basic requirement to be fulfilled for claiming compensation under the 1923 Act, the appellants may not be entitled to receive any compensation.”

“Once that was so, this fact being in their knowledge from the very beginning, delay of 9 years in filing application under the 1923 Act, is certainly fatal for consideration of the claim by the appellants for award of compensation.”

“In fact, the application before the Commissioner was filed only after the proceedings in the Motor Accident Claims Tribunal were concluded on 07.02.2003 and the appellants were not able to get any compensation in execution.”

The court found no reason to interfere with the High Court’s decision.

Key Takeaways

• A claimant must prove an employer-employee relationship to claim compensation under the Employees Compensation Act, 1923.
• Significant delays in filing a claim can be detrimental to the case, especially if there is no reasonable explanation for the delay.
• Claimants cannot claim compensation under both the Motor Vehicles Act and the Employees Compensation Act for the same incident.
• The conduct of the parties can be a factor in determining the outcome of the case.

Directions

No specific directions were given by the Supreme Court.

Specific Amendments Analysis

There was no specific amendment analysis in the judgment.

Development of Law

The ratio decidendi of this case is that a claimant must prove an employer-employee relationship and file the claim within a reasonable time to be eligible for compensation under the Employees Compensation Act, 1923. This judgment reinforces the existing legal principles regarding the requirements for claiming compensation under the Act and the importance of timely action.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision. The Court found that the appellants failed to prove an employer-employee relationship and that there was no sufficient cause to condone the significant delay in filing the claim. This case underscores the importance of establishing a clear employer-employee relationship and filing claims promptly to be eligible for compensation under the Employees Compensation Act, 1923.