13 February 2024 Insurance Claim/Money Rejected >> Insurance  

The deceased, Ganga Ram Choudhary, a 19-year-old employed as a loader, tragically perished in an accident while travelling in a truck owned by M/s Jauhar Logistics Pvt. Ltd. ("Employer"). The Respondents, as the legal heirs of the deceased, filed a compensation claim under the EC Act. The Commissioner, after due consideration, ruled in favor of the Respondents, awarding them a sum of Rs. 8,69,574. Dissatisfied with this decision, the Appellant, the Employer's insurance company, filed an appeal before the Court.

Grounds of Appeal

The Appellant challenged the Commissioner's order on two primary grounds. Firstly, they contended that the deceased was not directly employed by the Employer but rather by a separate entity, (M/s. Fidelity Man Power Services Pvt. Ltd.) ("Placement Agency"). Secondly, they argued that the deceased was covered under the Employees' State Insurance Act, 1948 (the "ESI Act"), rendering the EC Act inapplicable.

Court's Reasoning

The Court, in a well-reasoned judgment, dismissed the appeal on the following grounds:

• Failure to Discharge Burden of Proof: The Court emphasized that the burden of proving the deceased's employment with the Placement Agency and his coverage under the ESI Act rested on the Appellant. The Court found that the Appellant failed to present any substantial evidence to substantiate these claims.
• Presumption of Employment: The Court, acknowledging the deceased's presence in the Employer's vehicle while travelling for work purposes, presumed an employer-employee relationship between the deceased and the Employer in the absence of any countervailing evidence from the Appellant.

Additional Observations

The Court further expressed strong disapproval of the Appellant's conduct for failing to produce crucial "OD Claim Records" during the proceedings. This omission was viewed as an attempt to suppress material facts. Consequently, the Court imposed a cost penalty of Rs. 50,000 on the Appellant for such conduct.

Legal Significance

This judgment reinforces the well-established legal principle that the onus of proving exceptions or exemptions under the EC Act lies with the employer or insurance company. Furthermore, it clarifies that an employer-employee relationship can be presumed based on the nature of activities undertaken by the deceased, especially when travelling in a work vehicle. The case also highlights the potential consequences for parties who attempt to suppress relevant evidence during legal proceedings.