FA-1424-2025-J.odt

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

FIRST APPEAL NO.1424 OF 2025

Bajaj Allianz General Insurance

A Limited Company incorporated under

the Indian Companies Act, having their

Head Office at GE Plaza, Airport Road,

Yerwada, Pune - 411 006

Insurer of M/s. Aditri Enterprises,

Policy No. OG-22-3135-2802-00000075.

Versus

1. Phulki Ramesh Dhondiya

Age: 65 years, Widow of the deceased.

Room No. 1, Jivala Devaji Chawal,

Nandlal Kaka Marg, Near Nalanda Society

Amberwadi, Kurar Village, Malad ((East))

Mumbai, Maharashtra 400022

2. M/s Aditri Enterprises

1, Dhinrendra Village, Corner of Road,

No. 3 and 4, Daulat Nagar, S.V. Road,

Borivali (E), Mumbai – 400066

… Appellant

...Respondents

WITH

INTERIM APPLICATION NO.12872 OF 2025

IN

FIRST APPEAL NO.1424 OF 2025

Phulki Ramesh Dhondiya

Age: 65 years, Widow of the deceased.

Room No. 1, Jivala Devaji Chawal,

Nandlal Kaka Marg, Near Nalanda Society

SQ Pathan 1/24 2026:BHC-AS:4475

FA-1424-2025-J.odt

Amberwadi, Kurar Village, Malad ((East))

Mumbai, Maharashtra 400022

IN THE MATTER OF :

Bajaj Allianz General Insurance

A Limited Company incorporated under

the Indian Companies Act, having their

Head Office at GE Plaza, Airport Road,

Yerwada, Pune - 411 006

Insurer of M/s. Aditri Enterprises,

Policy No. OG-22-3135-2802-00000075.

Versus

1. Phulki Ramesh Dhondiya

Age: 65 years, Widow of the deceased.

Room No. 1, Jivala Devaji Chawal,

Nandlal Kaka Marg, Near Nalanda Society

Amberwadi, Kurar Village, Malad ((East))

Mumbai, Maharashtra 400022

2. M/s Aditri Enterprises

1, Dhinrendra Village, Corner of Road,

No. 3 and 4, Daulat Nagar, S.V. Road,

Borivali (E), Mumbai – 400066

… Applicant

… Appellant

...Respondents

___________________

Ms. Harshada Srikhande a/w Mr. Vaibhav i/b Mr. Siddharth Mehta for the

Appellant

Mr. Jay D. Gupta for the Respondent No.1 in FA/1424/2025 and for the

Applicant in IA/12872/2025

___________________

CORAM : SHARMILA U. DESHMUKH, J.

RESERVED ON : 16

th

FEBRUARY 2026

PRONOUNCED ON :25

th

FEBRUARY 2026

SQ Pathan 2/24

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JUDGMENT :

1 Heard learned counsel appearing for the Appellant and

learned counsel appearing for the Respondent No.1. The First

Appeal was admitted under Section 30 of the Employees

Compensation Act, 1923 on the following substantial questions of

law:

(i) Whether the Appellant -insurance company, is statutorily or

contractually liable under the Employees' Compensation Act,

1923 for payment of compensation under the insurance

policy.

(ii) In event, it is held that the Insurance Company is not

statutory liable, whether the Commissioner of Employees

Compensation can determine the compensation and fix

liability on the insurance company.

(iii) Whether the finding of the Trial Court that the insurance

policy covered the risk of location at which the accident

occurred making the insurance company liable to payment of

compensation suffers from perversity.

SQ Pathan 3/24

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(iv) Whether the terms of the insurance policy did not cover

the employees of sub contractor

(v) Whether the evidence on record established that the

deceased was an employee of the sub contractor and not the

Respondent No 2.

2 With consent of parties, the First Appeal was taken up

forthwith for final hearing.

3 The First Appeal is at the instance of the original

opponent No.2 insurance company, in the application filed under

Section 22 of the Employees' Compensation Act, 1923 (for short,

`EC Act’). The application was filed by the widow of the deceased,

who had expired in an accident which occurred at a construction

site in Goregaon. The application pleaded that the deceased had

died in the course of his employment while carrying out his work on

second floor of the construction site, Empire Tower, Opposite

Bharat Bank, Near Jayprakash Hotel, Goregaon (West), Mumbai–

400 063. The deceased was receiving wages of Rs. 16,000/- at the

SQ Pathan 4/24

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time of the accident on 4

th

February 2022, and the age of the

deceased was 68 years.

4 The present Appellant, opposed the application

broadly on two grounds. Firstly, that the insurance policy does not

cover the risk of contractor and subcontractor, and therefore the

insurer is not liable to pay compensation; and secondly, on the

ground that the accident took place at the construction site at

Goregaon (West), whereas the risk of location covered by the

insurance policy is Goregaon (East). There was usual denial about

the existence of employer-employee relationship between the

deceased and Respondent No. 2, as also denial that the death of

the deceased had taken place during the course of employment.

5 The Respondent No 2 herein denied the employer employee

relationship. It was contended that the Respondent No 2 is the

contractor of the construction site and the Respondent No 2 has

nothing to do with the accident and the said project was sub

contracted to V.N. Enterprises through Dashtrath Patel. The

Respondent No 2 contended that the Respondent has taken out

insurance policy of its workers through the present Appellant.

SQ Pathan 5/24

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6 The Trial Court framed the necessary issues, including the

issue as to the entitlement of compensation and the persons from

which it can be recovered. It held the Appellant and Respondent

No. 2 jointly and severally liable to pay the compensation to the

Respondent No 1. It noted that the cross-examination of the

Respondent No. 1 that her husband was in employment of

Respondent No. 2 has not been shaken and the contention that sub

contract has been given is not found in the written statement. It

noted the definition of employer under Section 2(1)(e) and the

provision of contracting out under Section 12 to hold that the

Respondent No 2 had received contract from the builder and

declined to accept the case of sub contract. It held that the original

developer was the principal employer of deceased and Respondent

No 2 was employer of deceased. It further noted that the copy of

the contract between the developer and the Respondent No. 2

shows that the contract was received, and therefore the argument

that there was a subcontract cannot be accepted.

SQ Pathan 6/24

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7 The Trial Court noted that the Respondent No. 2 had taken

out an insurance policy which covered the risk location at Goregaon

(East), and as per the said policy, 12 employees were covered as per

salary of Rs.15,000/- per employee. It noted that the FIR mentions

the place of accident as Goregaon (East) and not Goregaon (West).

After considering the evidence on record, the Trial Court directed

payment of compensation of Rs.7,45,275/- jointly and severally by

the Appellant and Respondent No 2.

8 The Respondent No 2 has not challenged the impugned

judgment and the present Appeal is by the Insurance Company.

9 Learned counsel appearing for the Appellant would submit

that as per the insurance policy, the risk location was described by

city survey number located Village Pahadi at Goregaon (East),

Mumbai–400063, whereas in the application as well as evidence,

the Respondent No 1 has deposed that the place of accident was

Goregaon (West), Mumbai–400063, which was not covered by the

policy. She has taken this Court through the cross examination of

SQ Pathan 7/24

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Respondent No. 1 to point out the admissions about not having

produced any document to show employer-employee relationship.

She would further submit that there is no evidence produced by

the Respondent No. 1 to show with whom the deceased was

employed at the time of the accident.

10 She would further submit that the employees of the

subcontractor are not covered by the policy and points out the

general exceptions, which specifically excludes the persons

employed under a contractor or subcontractor unless specifically

covered in the Schedule. She submits that the policy specifically

carves out an exception as regards the insurer’s liability to

employees of contractor of the insured, and that this policy was

taken out by Respondent No. 2, whereas the deceased was

employed with one Dashrath Patel. She submits that the fact that

Dashrath Patel has been named in the FIR would show that the

deceased was employed with Dashrath Patel. She would further

point out to the cross-examination of witness for Respondent No.

2 admitting that the deceased was working on the instructions of

the subcontractor. She would further submit that the Respondent

SQ Pathan 8/24

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No. 2 has specifically denied that the deceased was working with

his company and that there was a contract agreement of November

2021 signed between the Respondent No. 2 and the firm of

Dashrath Patel. She would further point out the evidence of

Dashrath Patel, who has deposed about being arrayed as an

accused in the FIR.

11She has further taken this Court through the impugned order

to contend that there is no finding as to who is the contractor and

subcontractor. She submits that the Trial Court has rendered a

factually erroneous finding that there is no case in the written

statement that the sub-contract was given and points out to the

written statement of Respondent No. 2, which specifically speaks

of the contract agreement. She submits that the Trial Court has

wrongly relied upon the provisions of Section 12, which has no

application to the present case. She further submits that the

insurance company is not statutorily liable and relies upon the

decision in the case of New India Assurance Co. Ltd. vs.

Harshadbhai Amrutbhai Modhiya & Anr.

1

.

1(2006) 5 SCC 192

SQ Pathan 9/24

FA-1424-2025-J.odt

12Per contra, learned counsel appearing for the Respondent

submits that the finding as to the risk location is not a substantial

question of law. He would further submit that the insurance policy

gives details of employees covered, which includes all employees

engaged at the construction site, and as the accident had taken

place at the construction site, the deceased was covered. He

submits that there is no evidence on record that the deceased was

employed with the subcontractor. He would submit that, insofar as

the statutory liability of the insurance company is concerned, the

Hon’ble Apex Court in the case of Alok Kumar Ghosh vs. New India

Assurance Co. Ltd. & Anr.

2

has held that the insurer could be made

a party Respondent in the proceedings under the EC Act and

compensation can be awarded against it.

13He would further submit that in the case of National

Insurance Co. Ltd. vs. Shaikh Hasina Sharfuddin

3

, an identical

issue was raised as to whether the insurance company had insured

only the labourers of the contractor or the labourers working at

the site of construction. He points out the findings of the Court on

the insurance policy, that work of all kinds in the PMC were

22025 SCC OnLine SC 2249

3(2021) 5 Mh.LJ 590

SQ Pathan 10/24

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insured by the insurance company and that the insurance company

is liable to pay compensation as the deceased was covered. He

would further point out that the SLP against the said order has

been dismissed by the Hon’ble Apex Court.

QUESTION NO (i) and (ii):

14 Both the questions raise the issue of liability of the

insurance company and are interlinked. The Appellant Insurance

Company was impleaded as party Respondent to the original

application and the impugned order holds the Appellant and

Respondent No.2 jointly and severally liable for payment of

compensation. The provisions of E.C Act does not make the

insurance company statutorily liable as in the case of Section 147 of

Motor Vehicles Act. The liability of the insurance company is

contractual which arises by reason of the insurance policy and is

governed by the terms of the insurance policy. The absence of

statutory liability cannot result in extinguishing the contractual

liability, if proved. By reason of the contractual liability, the

insurance company can be impleaded as party to the original

application and compensation be determined and ordered against

the insurance company.

SQ Pathan 11/24

FA-1424-2025-J.odt

15 In the case of Alok Kumar Ghosh vs. New India Assurance

Co. Ltd. & Anr. (supra), the question which arose before the

Hon’ble Apex Court was whether, in a proceeding initiated under

the EC Act for compensation payable under the said Act, the

insurer could be made a party Respondent and whether

compensation can be awarded against it, if otherwise admissible

under the contract of insurance. The Hon'ble Apex Court

considered the provisions of Section 19 of the EC Act to hold that

there does not exist any bar under the EC Act, and Section 19 of

the EC Act specifically provides for the determination of the

liability of the person who is required to indemnify the employer in

the proceeding under the Act and not by way of a separate suit. It

held that Section 19 of EC Act enables the Commissioner to

determine the liability of the insurer.

16 It is therefore settled that even if the insurance company is

not statutorily liable, in contra-distinction to the liability under

Section 147 of the Motor Vehicles Act, the liability would arise

under the contract of insurance which has been entered into

between the insured and the insurance company and the insurer

SQ Pathan 12/24

FA-1424-2025-J.odt

could be made a party Respondent and the liability be fixed.

Question No (i) and (ii) are answered accordingly.

QUESTION NO (iii):

17 The insurance policy refers to the risk location address as

per the city survey numbers located at Goregaon (East), Mumbai

400 063. Reliance is placed by the learned counsel for appellant on

the on the application and the evidence of the Respondent No 1

who has deposed that the place of the accident as the

construction site near Jayprakash Hotel, Goregaon (West), Mumbai-

400063. The Respondent No 2 is the wife of the deceased and

would be unaware of the exact postal address of the site at which

the deceased was employed.

18 On record is the FIR lodged in respect of the death of the

deceased, which refers to the place of accident as Goregaon (East),

Mumbai-400063. There is no evidence adduced by the Appellant to

establish its case of the accident site being different from the risk

location site. Pertinently, it needs to be noted that the pin code of

the risk location site, as mentioned in the insurance policy as well

SQ Pathan 13/24

FA-1424-2025-J.odt

as in the evidence of the Respondent No.1, is the same, i.e.,

Mumbai-400063. Greater weightage will have to be given to the

FIR and not on the oral evidence of the Respondent No 1, who is

the dependent of the deceased, and may not be well informed or

literate considering that the deceased was a labourer working on a

construction site. In the cross-examination, the witness for the

insurance company has admitted that there is a possibility that the

place of accident and the address mentioned in the insurance

policy may be the same. He has also admitted that on basis of the

city survey number place of accident can be traced. The Trial Court

has rightly appreciated the evidence on record to arrive at a finding

that the insurance policy covered the location at which the accident

occurred. There is no perversity in the finding of the Trial Court.

Question No (iii) is answered accordingly.

QUESTION NO (iv) and (v):

19 The Respondent No. 1 examined herself and deposed

as to the contents of the application. She filed the certified copy of

the FIR, which came to be marked as Exhibit B-8, and the insurance

policy, which came to be marked as Exhibit B-9. The other

SQ Pathan 14/24

FA-1424-2025-J.odt

documents such as copy of spot panchnama, inquest panchnama,

death certificate and photographs were marked as Articles.

20In cross-examination by the insurance company, Respondent

No 1 has admitted that she has not filed any document, such as

salary certificate, muster roll, attendance register to show that the

deceased was working with the Respondent No. 2 as Centri Fitter

and that he was getting monthly wages of Rs. 16,000/-. She has

admitted that she has received Rs.1,00,000/- from one Shri

Dashrath Patel and that the FIR has also been filed against

Dashrath Patel.

21In cross examination, there is no admission elicited by the

Appellant that the deceased was working with the sub contractor

Dashrath Patel and not with Respondent No 2. There is not even a

suggestion to the Respondent No 1 that the deceased was the

employee of Dashrath Patel, who is the subcontractor of

Respondent No 2 and therefore not covered by the insurance

policy. The suggestion given is that Respondent No 2 is contractor

and Dashrath Patel is sub contractor. The suggestion does not

proceed further to the positive case of the insurance company that

SQ Pathan 15/24

FA-1424-2025-J.odt

the deceased was employed with sub contractor. The evidence of

the Respondent No 1 about the employment of the deceased with

the Respondent No 2 has not been shaken in the cross

examination.

22On behalf of the present Appellant, its Legal Officer was

examined, who deposed that the place of the accident is not

covered by the insurance policy and that the insurance policy does

not cover the employees' risk of contractor and subcontractor. He

deposed that there was no employer-employee relationship

between the deceased and the Respondent No. 2 and that the

deceased was not covered within the purview of the insurance

policy. He has further deposed that the death of the deceased has

not occurred out of and during the course of employment.

23Pertinently, the witness has not deposed that the deceased

was the employee of the subcontractor and was not covered by the

insurance policy.

24The Respondent No. 2 examined its Managing Partner, who

deposed that the deceased was never an employee of the

company. He has further deposed that his company is the

SQ Pathan 16/24

FA-1424-2025-J.odt

contractor of the construction site and that they had given the

project to a subcontractor company named V.N. Enterprises

through Dashrath Patel. He produced the copy of the contract

agreement dated 16

th

November 2021 executed between the

Respondent No 2 and V.N. Enterprises and copy of chargesheet. He

has deposed that in the charge-sheet, the prime accused is

Dashrath Patel. As the original contract and certified copy of

charge sheet were not produced, the copy of the contract came to

be marked as Article A and copy of the chargesheet came to be

marked as Article B. As such the contract cannot be read in

evidence.

25In the cross-examination by the insurance company, the

Respondent No 2’s witness has admitted that the deceased was

not working with the Respondent No. 2 and that his firm was not

making any payment to the deceased. He has further admitted that

the employees of the subcontractor are not covered under the

policy taken out by the company. He has admitted that the

deceased was working at the instructions of the subcontractor. He

has further deposed that no information was given to the

SQ Pathan 17/24

FA-1424-2025-J.odt

insurance company about the accident, as the deceased was not

the employee of the Respondent No. 2.

26The Respondent No. 2 examined Dashrath Patel, who

deposed that his company is the subcontractor at the construction

site. He has further deposed that the deceased was not the

employee of either Respondent No. 2 or his company, M/s V N

Enterprises, and that there is no employer-employee relationship

between the deceased and his company. He has further denied that

any amount was paid by him to the Respondent No 1 as

compensation.

27In cross-examination on behalf of the insurance company, the

suggestion given was that the deceased was not working in the

firm of Dashrath Patel. The witness has admitted that his firm was

providing labourers to Respondent No. 2. He has further stated

that he is not aware where the deceased was working and that the

deceased was not working with Respondent No 2 or in their firm.

28 The cross-examination of Dashrath Patel would show that it

SQ Pathan 18/24

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was the insurance company's own case that the deceased was not

working with the subcontractor.

29The evidence of Respondent No 2 and Dashrath Patel is that

the deceased was neither working with Respondent No 2 nor

Dashrath Patel, which evidence cannot be believed. The FIR shows

that the accident had taken place at the construction site in which

the deceased expired. The Respondent No 2 was the contractor of

the construction site and it is Respondent No 2’s case that sub

contract was given to Dashrath Patel. As the evidence shows that

the deceased had died at the construction site and there is no

explanation to justify his presence at the site, the only conclusion is

that the deceased was working at the site and as the evidence does

not prove that deceased was working with Dashrath Patel, the

evidence of Respondent No 2 that deceased was not his employee,

cannot be accepted.

30 The evidence of Respondent No 2 shows complete denial to

the employer-employee relationship, which apparently is in order

to avoid any criminal implications, as the FIR had already been

SQ Pathan 19/24

FA-1424-2025-J.odt

lodged. The witness for Respondent No. 2 has not deposed that

the deceased was the employee of the subcontractor and has

merely stated that the deceased was not the employee of the

Respondent No 2. The other witness- Dashrath Patel has also

denied that the deceased was the employee of his firm. As the

Respondent No 2 has failed to prove the contract executed by it

with Dashrath Patel, which was marked as Article, it cannot be

accepted that Dashrath Patel was sub contractor of Respondent

No. 2.

31 The insurance policy insuring the workers of the Respondent

No 2 has been admitted by the parties and marked as Exhibit.

Perusal of the insurance policy would indicate that the employees

which are covered, as mentioned in Clause 8, include all employees

engaged in the construction of the building, and the description of

the employees is civil construction workers. The terms and

conditions of the insurance policy define the “employee” to mean

such person or persons in direct employment under the insured in

the business, but shall not include any person employed under a

contractor or subcontractor of the insured unless specifically

SQ Pathan 20/24

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shown as covered in the Schedule and by an endorsement. There

are general exclusions excluding a person employed in the business

under a contractor or a subcontractor. Clause 8 of the insurance

policy, which has been referred to above, uses the expression

“employee”, which definition has been found in the policy terms

and conditions. The said expression came up for consideration

before a Coordinate Bench in the case of National Insurance Co.

Ltd. vs. Shaikh Hasina Sharfuddin (supra), and the specific

question which was answered by the Coordinate Bench was

whether the insurance company had insured only the labourers of

the Respondent No. 3/contractor or had insured all labourers

working at the site of construction. The Coordinate Bench

considered the insurance policy, which showed that all types of civil

work in the PMC area were covered by the policy and that the

policy does not say that only the labourers working on the payroll

of the contractor were insured by the insurance company. In that

case, the definition of “employee” was pressed into service to seek

exclusion of a person employed under a contractor or a

subcontractor, which did not find favour with the Court.

32 Similarly, in the present case, the insurance policy covers all

SQ Pathan 21/24

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employees engaged in construction/demolition of the building, and

the description of the employees is that of a civil construction

workers. The decision covers an identical situation and, as the

policy covers all civil construction workers engaged in the

construction/demolition of the building, the argument of exclusion

has no substance.

33 Even accepting that the insurance policy did not cover

employees of sub contractor, the evidence on record fails to

establish that the deceased was the employee of the sub

contractor. The Respondent No 1 has come with the positive case

that the deceased was employed with Respondent No 2. Even if

there is no document produced on record, such as salary

certificate, muster roll, or attendance register, to show that the

deceased was working with the Respondent No. 2, the presence of

the deceased at the construction site on the date of accident is not

disputed. There is no explanation tendered for the deceased’s

presence at the site if he was not the employee of Respondent No

2. Dashrath Patel has denied that the deceased was the employee

of his firm.

SQ Pathan 22/24

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34In the cross-examination, the witness for Respondent No. 2

has admitted that the deceased was working at the instructions of

the subcontractor. The admission has come in the cross-

examination by the advocate for the insurance company and proves

that the deceased was employed at the construction site. The

suggestion that the deceased was working under the instructions

of the subcontractor is not the same as saying that the deceased

was an employee of the subcontractor.

35 As the case of the insurance company is that the deceased

was an employee of the subcontractor, it was necessary for the

insurance company to bring positive evidence on record by calling

for the muster roll, attendance register etc of the sub contractor

Dashrath Patel, to demonstrate that the deceased was the

employee of the subcontractor. On the contrary, the suggestion

given by the insurance company is that the deceased was not

working with the subcontractor which demolishes the insurance

company’s own case of the deceased being employee of sub

contractor. There is no material on record to prove that the

SQ Pathan 23/24

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deceased was employee of Dashrath Patel and the case of

Respondent No 1 that deceased was employed by Respondent

No.2, deserves to be accepted on pre-ponderance of probability.

Question No (iv) and (v) are answered accordingly.

36 In light of the above discussion, the First Appeal fails

and stands dismissed. In view of the dismissal of the First Appeal,

pending Civil/Interim Application, if any, does not survive for

consideration and stand dismissed.

SHARMILA U. DESHMUKH, J.

SQ Pathan 24/24