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PETITIONER:

THE REGIONAL DIRECTOR,E.S.I. CORPORATION & ANR.

Vs.

RESPONDENT:

FRANCIS DE COSTA & ANR.

DATE OF JUDGMENT: 11/09/1996

BENCH:

CJI, SUHAS C. SEN, SUJATA V. MANOHAR

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

SEN, J.

Francis De Costa, the first respondent herein, met with

an accident on June 26, 1971 while he was on his way to his

place of employment, a factory at a Koratty. The accident

occurred at a place which was about one kilometer away to

the north of the factory. The time of occurrence was 4.15

P.M, It has been stated that the duty-shift of the

respondent would have commenced at. 4.30 P.M . The

respondent was going to his place of work bicycle. He was

hit by a lorry belonging to his employers, M/S J and P

Coats(P) Ltd.

The respondent's collar- bone was fractured as a

result of the accident and he had to remain in hospital

for 12 days, His claim for disablement benefit was allowed

by the Employees' State Insurance Court. The appeal filed

against that order was dismissed by the Kerala High Court

which also dismissed an application for a certificate of

fitness to appeal to the Supreme Court. The petitioner filed

an application for Special Leave to this Court on 16,4.1979.

Special leave was given by this Court, but the employers'

state Insurance Corporation was directed to pay the first

respondent the compensation due to him in terms of the

order of the Employees' State Insurance Court and also of

this appeal in any event. It has been stated that the

compensation money has already been paid to the first

respondent.

Since there was difference of opinion between the two

Judges who heard the appeal, the matter was directed to be

placed before a larger Bench for deciding the controversy .

In order to appreciate the scope of the controversy, it

will be necessary to set out the relevant, provisions of

the Employees' State Insurance Act, 1948:

"2(8)" "employment injury" means

a personal injury to an employee

caused by accident. or an

occupational disease arising out of

and in the course of his

employment, being an insurable

employment, whether the accident

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occurs or the occupational disease

is contracted within or outside the

territorial limits of India;

51. Disablement benefit.- Subject

to the provisions of this Act-

(a) a person who sustains

temporary disablement for not

less than three days

(excluding the day of

accident) shall be entitled to

periodical payment at such

rates and for such period and

subject to such conditions as

may be prescribed by the

Central Government;

(b) a person who sustains

permanent disablement,

whether total or partial,

shall be entitled to

periodical payment at such

rates and for such period and

subject to such conditions as

may be prescribed by the

Central Government.

51-C. Accidents happening while

travelling in employer's

transport.-(1) An accident

happening while an insured person

is, with the express or implied

permission of his employer

travelling as a passenger by any

vehicle to or from his place of

work shall, notwithstanding that he

is under no obligation to his

employer to travel by that vehicle,

be deemed to arise out of in the

course of his employment, if-

(a) the accident would have been

deemed so to have arisen had

he been under such obligation;

and

(b) at the time of the accident,

the vehicle-

(i) is being operated by or on

behalf of his employer or

some other person by whom it

is provided in pursuance of

arrangements made with his

employer, and

(ii) is not being operated in the

ordinary course of public

transport service.

(2) In this section" vehicle"

includes a vessel and an aircraft."

That the first respondent has suffered a personal

injury is not in dispute. The only dispute is whether the

injury will amount to "employment injury" with in the

meaning of Section 2(8), so as to enable the respondent to

claim benefit under the Act. The definition given to

"employment injury" in sub-section (8) of Section 2

envisages a personal injury to an employee caused by an

accident or an occupational disease "arising out of and in

the course of his employment", Therefore, the employee, in

the order to succeed in this case, will have to prove that

the injury that he had suffered arose out of and was in the

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course of his employment. Both the condition will have to be

fulfilled before he could claim any benefit under the Act.

It does not appear that the injury suffered by the employee

in the instant case arose in any way out of his employment.

The injury was sustained while the employee was on his way

to the factory where he was employed. the accident took

place one kilometer away from the place of employment.

Unless it can be said that his employment began as soon as

he set out for the factory from his home, it cannot be said

that the injury was caused by an accident "arising out of

...his employment". A road accident may happen any where at

any time. But such accident cannot be said to have arisen

out of employment. unless it can be shown that the employee

was doing something incidental to his employment.

In our judgment, by using the words "arising out

of....his employment ", the legislature gave a restrictive

meaning to "employment injury ". the injury must be of such

an extent as can be attributed to an accident or an

occupational disease arising out of his employment. "Out

of" in this context, must mean caused by employment., Of

course, the phrase "out of" has an exclusive meaning also.

If a man is described to be out of his employment, it means

he is without a job. The other meaning of the phrase "out

of" is "influenced, inspired, or caused by: out of pity;

out of respect for him". (Webster Comprehensive Dictionary-

lnternational Edition-1984). In the context of Section 2(8),

the words "out of" indicate that the injury must be caused

by an accident which had its origin in the employment. A

mere road accident, while an employee is on his way to his

place of employment cannot be said to have its origin in his

employment in the factory. The phrase "out of-the

employment" was construed in the case of South Maitland

Railways Pty. Ltd. v. James, 67 C.L.R 496, where construing

the phrase "out or the employment", Starke, J,, held "the

words 'out of' require that the injury had its origin in the

employment".

Unless an employee can establish that the injury was

caused or had its origin in the employment, he cannot

succeed in a claim based on Section 2(8) of the Act. The

words "accident . . . arising out of . . . his employment"

indicate that any accident which occurred while going to the

place of employment or for the purpose of employment, cannot

be said to have arisen out of his employment. There is no

causal connection between the accident and the employment.

The other words of limitation in sub-section(8) of

Section 2 is "in the course of his employment". The

dictionary meaning of "in the course of" is "during (in the

course of time, as time goes by), while doing (The Concise

Oxford Dictionary, New Seventh Edition). The dictionary

meaning indicates that the accident must take place within

or during the period or employment. If the employee's work

shift begins at 4.30 P.M., any accident before that time

will not be "in the course of his employment". The journey

to the factory may have been undertaken for working at the

factory at 4.30 P.M. But this journey was certainly not in

course of employment. If employment begins from the moment

the employee sets from his house for the factory, then even

if the employee stumbles and falls down at the door-step of

his house, the accident will have to be treated as to have

taken place in the course of his employment. This

interpretation leads to absurdity and has to be avoided.

We were referred to a number of cases on this point. In

the case of Regina v. National Insurance Commissioner. Ex

parte Michael, (1977) 1 Weekly Law Reports 109 the Court

of Appeal in England had to construe a phrase "caused by

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accident arising out of and in the course of his employment"

in Section 5(1) of the National Insurance (Industrial

Injuries) Act, 1965. Lord Denning M.R. started his judgment

with the observation:-

"So we come back, once again, to

those all too familiar words

'arising out of and in the course

of his employment'. They have been

worth-to lawyers-a King's ransom.

The reason is because, although so

simple, they have to be applied to

facts which very infinitely. Quite

often the primary faces are not in

dispute: or they are proved beyond

question. But the inference from

them is matter of law. And matters

or law can be taken higher. In the

old days they went up to the House

of Lords. Nowadays they have to

be determined, not by the courts,

but by the hierarchy of tribunals

set up under the National

Insurance Acts."

Under the Employees' State Insurance Act 1948, a

tribunal has been set up to decide, inter alia, any claim

for recovery of a benefit admissible in this Act. A

reference lies to the High Court on a question of law. In

other words, the decision of the Insurance Court set up

under the statute is final and bindings, so far as the

findings of fact are concerned. But, if any error of law has

been committed the Courts are expected to correct it and to

give guidance to the Insurance Court.

Construing the meaning of the phrase "in the course

of his employment", it was noted by Lord Denning that the

meaning of the phrase had gradually been widened over the

last 30 years to include doing something which was

reasonably incidental to the employee's employment. The

test of "reasonably incidental" was applied in a large

number of English decisions. Buts Lord Denning pointed out

that in all those cases the workman was at the premises

where he or she worked and was injured while on a visit to

the canteen or other place for a break. Lord Denning,

however, caution that the words "reasonably incidental"

should be read in that context and should be limited to the

cases of that kind. Lord Denning observed:-

"Take a case where a man is going

to or from his place of work on

his own bicycle, or in his own

car. He might i.e said to be doing

something "reasonably incidental"

to his employment. But if he has

an accident on the way it is well

settled that it does not "arise

out of and in the course of his

employment". Even if his employer

provides the transport, so that he

is going to work as a passenger in

his employer's vehicle (which is

surely reasonably incidental" to

his employment) nevertheless if he

is injured in an accident, it does

not arise out of and in the course

of his employment. It needed a

special "deeming" provision in a

statute to make it "deemed" to

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arise out of and in the course of

his employment."

This is precisely the case before us. Here also, we

have at case of a person going from his home to his place of

work. But he suffers injury in an accident on the way. It

cannot be said that the accident arose out of and in the

course of his employment. It was faintly suggested by Mr.

Chacko, appearing on behalf of the respondent that the

bicycle was bought by taking a loan from the employer. That

however, is of no relevance. He might have borrowed money

from his Company or from somewhere else for purchasing the

bicycle. But the fact remains that the bicycle belonged to

him and not the employer. If he meets with an accident

while riding his own bicycle on the way to his place of

work, it cannot be said that the accident was reasonably

incidental to the employment and was in the course of his

employment. The deeming provision of Section 51-C which came

into force by way of an amendment effected by Employee's

Life Insurance (Amendment) Act of 1966 (Act No.44 of 1966),

enlarged the scope of the phrase "in the course of

employment" to include tavelling as a passenger by the

employer's vehicle to or from the place of work. The legal

fiction contained in Section 51-C, however, does not come

into play in this case because the employee was not

travelling as a passenger in any vehicle owned or operated

by or on behalf of the employer or by some other person in

pursuance of an arrangement made by the employer.

The meaning of the words "in the course of his

employment" appearing in Section 3(1) of Workmen's

Compensation Acts 1923. was examined by this Court in the

case of Saurashtra Salt Manufacturing Co. v, Bai Valu Raja,

AIR 1958 SC 881. There, the appellant, a salt manufacturing

company, employed workmen both temporary and permanent. The

salt works was situated near a creek opposite to the town of

Porbandar. The salt works could be reached by at least two

ways from the town, one an over land route nearly 6 to 7

miles long and the other via a creek which had to be crossed

by a boat. In the evening of 12.6.1952, a boat carrying some

of the workmen capsized due to bad weather and over-loading.

As a result of this, some of the workmen were drowned. One

of the questions that came up for consideration was whether

the accident had taken place in the course of the employment

of the workers. S. Jafer Imam, J., speaking for the court,

held "As a rule, the employment of a workman does not

commence until he has reached the place of employment and

does not continue when he has left the place of

employment, the journey to and from the place of employment

being excluded." After laying down the principle broadly, S.

Jafer Imams, J., went or to observe that there might be some

reasonable extension in both time and place to this

principle. A workman might be regarded as in the course of

his employment even though he had not reached or had left

his employer's premises in some special cases. The facts and

circumstances of each case would have to be examined very

carefully in order to determine whether the accident arose

out of and in the course of the employment of a workman,

keeping in view at all times this theory of notional

extension. But, examining the facts of the case in

particular, after noticing the fact that the workman used a

boat, which was also used as public ferry for which they had

to pay the boatman's dues, S.Jafer Imam, J. observed:-

"It is well settled that when a

workman is on a public road or a

public place or on a public

transport he is there as any other

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member of the public and is not

there in the course of his

employment unless the very nature

of his employment makes it

necessary for him to be there. A

workman is not in the course of

his employment from the moment he

leaves his home and is on his way

to his work. He certainly is in

the course of his employment if he

reaches the place of work or a

point or an area which comes within

the theory of notional extension,

outside of which the employer is

not liable to pay compensation for

any accident happening to him. In

the present case, even if it be

assumed that the theory of notion

extension extends upon point D,

the theory cannot be extended

beyond it. The moment a workman

left point B in a boat or left

point A but had not yet reached

point B, he could not be said to

be in the course of his employment

and any accident happening to him

on the journey between these two

points could not be said to have

arisen out of and in the course of

his employment. Both the

Commissioner for Workmen's

Compensation and the High Court

were in error in supposing that the

deceased workmen in this case

were still in the course of their

employment when they were crossing

the creek between points A and B.

The accident which took place when

the boat was almost at point A

resulting in the death of so many

workmen was unfortunate, but for

that accident the appellant cannot

be made liable."

The point raised before us can be answered on the basis

of the principle laid down in the aforesaid two cases. But

Mr. Chacko, appearing on behalf of the respondent has

contended that proximity of time end place is a factor to

the borne in mind. The employee was to report for duty at

4.30 P.M. The accident took place at 4.15 P.M. only one

kilometer away from the factory. In our view this cannot be

a ground for departing from the principle laid down by the

aforementioned cases that the employment of the workman does

not commence until he has reached she place of employment.

What happens before that is not in course of employment. It

was also pointed out by Lord Denning in the aforesaid case

of Regina v. National Insurance Commissioner, Ex. Parte

Michael (supra) that the extension of the meaning of the

phrase "in the course of his employment" has taken place in

some cases but in all those cases, the workman was at the

premises where he or she worked and was injured while on a

visit to the canteen or some other place for a break. The

test of what was "reasonably incidental" to employment, may

be extended even to cases while an employee is sent on

errand by the employer outside the factory premises. But in

such cases it must be shown that he was doing something

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incidental to his employment. There may also be cases where

an employee has to go out of his workplace in the usual

course of his employment. Latham, C.J. in South Maitland

Railways Proprietary Limited v. James (67 CLR 496) observed

that when the workmen on a hot day in course of their

employment had to go for a short time to get some cool

water to drink to enable them to continue to work without

which they could not have otherwise continued, they were in

such cases doing something in the course of their employment

when they went out for S water. But the case before us does

not fall within the exceptions mentioned by Lord Denning or

Latham, C.J. The case squarely comes within the proposition

of law propounded by S. Jafar Imam, J.

Strong reliance was placed by Shri Chacko on a

decision of this Court in General Manager, B.E.S.T.

Undertaking, Bombay v. Mrs. Agnes (1964 (3) SCR 930). In

this case, one bus driver of the appellant- Corporation

after finishing the day's work left for home in a bus

belonging to employer's undertaking which met with an

accident as a result of which he died. His widow claimed

compensation under the Workmen's Compensation Act and the

question was whether the accident had arisen out of and in

course of employment. It was held by Subba Rao and

Mudholkar, JJ. (Raghubar Dayal, J. dissenting) that the bus

driver was given facility by the management to travel in any

bus belonging to the undertaking. It was given because

efficiency of the service demanded it. Therefore, the right

of the bus driver to travel in the bus was to discharge his

duty punctually and efficiently. This was a condition of

service and there was an obligation to travel in the said

the buses as a part of his duty. It was held that in the

case of a factory, the premises of an employer was a limited

one but in the case of City Transport Service, the entire

fleet of buses forming the service would be "premises". This

decision in our view does not come to the assistance of the

employee's case. An employee of a Transport Undertaking was

travelling in a vehicle provided by the employer. Having

regard to the purpose for which he was travelling and also

having regard to the obligation on the part of the employee

to travel in the said buses as a part of his duty, the Court

came to the conclusion that this journey was the Course of

his employment because the entire fleet of buses formed the

premises within which he worked.

But in the case before us, the facts are entirely

different. The employee was not obliged to travel in any

particular way under the terms of employment nor can it be

said that he was travelling in a transport provided by the

employer.

In the case of Sadgunaben Amrutlal and others v. The

Employees State Insurance Corporation, Ahmedabad (1981 LAB.

I.C 1653), it was held by the Division Bench of the Gujarat

High Court that though as a rule, employment of a workman

did not commence until he reach the place of employment and

did not continue after he has left the place of

employment, the proposition was subject to the theory of

notional extension of the employer's premises. The notional

extension theory could not be related to the place of

employment only. It could also be taken recourse to in order

to extend the time in a reasonable manner. The court took

the view in the case, where an employee on his way to the

factory died of acute cardiac arrest, that it was caused by

accident arising out of and in course of employment. The

employee was employed as a jobber in the Wrapping Department

of the mill. He worked in the premise from 8 A.M. to 4.30

P.M. On December 22,1974, while was on duty in the mill, he

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felt unwell. He took medical treatment on the next day

(December 23,1974) which was an off-day for him. On December

24, 1974, he left his residence at about 7.20 A.M. i.e. 40

minutes before the reporting time. Hi walked a short

distance from his house to the nearest bus stop and was

waiting for a bus to take him to the mill. While waiting for

the bus, he felt unwell. He complained to an ex-employee of

the mill who was also waiting to board the that it was due

to the excessive and strenuous nature of work which he was

required to do at the mill that he was feeling unwell. When

the bus arrived, Amrut Lal, the employee was about to step

into the bus when he collapsed and became unconscious. The

postmortem reavealed that he died of cardiac failure. Both

the Employees Insurance Court and the single Judge of the

High Court held that the employee had not died as a result

of an accident in the course of employment. On appeal, the

Division Bench held that both the Employees Insurance Court

and the single Judge were in error in holding that the death

was not in course of employment.

It is doubtful whether this decision can be reconciled

with the principle laid down by S. Jafer Imam, J. in the

case of Surashtra Salt Manufacturing Co.(supra). It is also

to be noted that the death was not caused by an accident.

The death was due to acute cardiac failure. The causal

connection between the death and employment had not been

established. Moreover, walking to the bus stop from the

employee's residence and boarding the bus for going to the

place of work cannot be acts in course of employment.

In the case of Bhagubai v. Central Railway, Bombay,

(1954) L.L.J., a Division Bench of Bombay High Court dealt

with a case where a workman on his way to work was murdered.

There was no evidence to show that he murder was due to any

motive against the deceased workman. It was held that the

death took place because of an accident arising out of

employment. Chagla, C.J. emphasised that there must be a

causal connection between the accident and the death before

it could be said that the accident arose out of employment

of the concerned workman. In that case, the deceased was

employed by Central Railway at Kurla Station and he lived in

the railway quarters adjoining the station. It was found as

a fact that the only access for the deceased from his

quarters to the Kurla railway station was through the

compound of the railway quarters. On December 20,1952, the

decease left his quarters a few minutes before midnight in

order to join duty. While on his way, he was stabbed by some

unknown persons. It is not disputed by the railway company

that the deceased died as a result of an accident nor was it

disputed that the accident arose in the course of his

employment. The dispute was limited to the question whether

the accident arose out of the employment of the deceased.

It is of significance that the deceased used to live in

the railway quarters adjoining the railway station and the

compound through which he had to go the place of work

belonged to the railway company. In other words he died on

the premise belonging to the railways. It was found as a

fact that the stabbing which led to the death was not due

to any personal enmity. That means it was an occupational

hazard of the employee who went to join work at midnight

from the railway quarter to the railway station through the

railway compound. The facts of the case before us are quite

dissimilar to the facts on the basis of which the case of

Bhagubai (supra) was decided.

We were also referred to two American decisions. The

first case is J.J.O' Leary, Deputy Commissioner Fourteenth

Compensation District, Etc. v. Brown-Pacific-Maxon, Inc., et

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al (95 L.ed. 483=340 us 504-510). In this case an employee

of a Government contractor was at a recreation center

maintained by his employer near an ocean shore along which

ran a channel so dangerous for swimmers that its use was

forbidden and signs to that effect erected. On perceiving

that two men standing on a reef beyond the channel were

signalling for help, he undertook with others, to swim the

channel, and was drowned. The Administrative Tribunal found

that the employee's death arose "out of and in course of his

employment". Six member of the U.S. Supreme Court concurred

with the opinion of Frankfurter J. that the administrative

decision was supported by "substantial evidence" and

therefore was beyond the scope of permissible judicial

review. Minton, J., with whom Jackson and Burton ,JJ. agreed

was of the opinion that the administrative finding was

without any evidence.

This case really is an authority on the scope and

extent of power of judicial review of an administrative

order. The important fact which was noted in that case was

that the deceased along with other employees had discovered

that third persons who were in danger were in a recreation

area maintained by his employer for the benefit of the

employees. This finding was held to be based on substantial

evidence. Frankfurter, J. observed that "We do not mean that

the evidence compelled this interference; we do not suggest

that when the Deputy Commissioner had decided against the

claim, the court had been justified in disturbing his

conclusion. We hold only that on this record, the decision

of the District Court that the award should not be set aside

should be sustained". In other words, Frankfurter, J. was of

the view that from the evidence on record, either of the

two conclusion could have been drawn. It is well settled

that the Court will not disturb a finding of an

administrative tribunal merely because it could have taken a

contrary view had it heard the case on evidence, when the

view taken by the Tribunal is also a plausible view.

The other American decision is in the case of O'

Keeffe, Deputy Commissioner. v. Smith, Minchman & Grylls

Associates, Inc., et al.(13 L.ed.2d 895). In that case, a

private engineering concern's employee hired to work in

South Korea on a 365-day basis was drowned while boating on

a South Korea lake. The Deputy Workmen's Compensation

Commissioner determined that the employee's death arose out

of and in course of employment so as to entitle his widow

and minor child to death benefits. The decision being

challenged by a writ, a panel of the Court of Appeals for

the Fifth Circuit reversed the award. The Supreme Court held

that there was no scope for reviewing the decision of the

Deputy Commissioner. The Court of Appeal erred in summarily

reversing the judgment. It was observed that "while this

Court may not have reached the same conclusion as the Deputy

Commissioner, it cannot be said that his holding that the

decedent's death, in a zone of danger, arose out of and in

the course of his employment is irrational or without

substantial evidence on the record as a whole."

Here again, the U.S. Supreme Court declined to

intervene with the decision reached by the Deputy

Commissioner on evidence and reversed the decision of the

Court of Appeal for doing what it should not have done by

adopting what appeared to the Court to be a better view.

We fail to understand how these tow American decision

which really dealt with the scope and extent of judicial

review of a decision based essentially on finding of fact

can come to the aid of the employee in this case.

It has to be borne in mind that this is not a case of

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judicial review. The Employees' State Insurance Act, 1948

provides for reference to the High Court by the statutory

court set up under the Act, any question of law arising out

of its decision (Section 81). There is also a provision for

appeal in certain cases on a substantial question of

law(Section 82).

We are of the view that in the facts of this case, it

cannot be said that the injury suffered by the workman one

kilometer away from the factory while he was on his way to

the factory was caused by an accident arising out of and in

the course of his employment.

In the case of Dover Navigation Company Limited v.

Isabella Craig(1940 A.C 190), it was observed by Lord Wright

that-

"Nothing could be simpler than the

words" arising out of and in the

course of the employment." It is

clear that there are two condition

to be fulfilled. What arise "in

the course of" the employment is to

be distinguished from what arises "

out of the employment." The former

words relate to time conditioned by

reference to the man's service. the

latter to causality. Not every

accident which occur to a man

during the time when he is on his

employment, that is directly or

indirectly engaged on what he is

employed to do, gives a claim to

compensation unless it also arises

out of the employment . Hence the

section imports a distinction which

it does not define. The language is

simple and unqualified."

Although the facts of this case are quite dissimilar,

the principle laid down in this case, are instructive and

should be borne in mind. In order to succeed, it has to be

proved by the employee that (1) there was an accident,(2)

the accident had a causal connection with the employment and

(3) the accident must have bee suffered in course of

employment. In the facts of this case, we are of the view

that the employee was unable to prove that the accident had

any causal connection with the work he was doing at the

factory and in any event, it was not suffered in the course

of employment.

The appeal, therefore , succeeds. The judgement dated

25.11.1977 passed by the High Court is set aside. However,

in terms of the order passed by this Court on 16.4.1979, the

appellants will have to bear the costs of this appeal in any

event. The costs are assessed at Rs.3000/- and will be paid

by the appellant to the fist respondent within a period of

four week from date. The first respondent will also be

entitled to retain the money paid to them by the Regional

Director, Employees' State Insurance Corporation pursuant to

the order of this Court passed on 16.4.1979.