In a landmark judgment dated July 29, 2025, the Supreme Court of India has delivered much-needed clarity on whether employees injured or killed during their daily commute are entitled to compensation under the Employees’ Compensation Act, 1923.
In Davishala & Ors vs Oriental Insurance Company Ltd & Anr, a bench comprising Justice Manoj Misra and Justice K V Viswanathan held that if an accident occurs while an employee is reasonably commuting to or from work, it can be deemed to have arisen “out of and in the course of employment.”
✅ What Happened in the Case?
The case revolved around Shahu Sampatrao Jadhavar, a watchman at a sugar factory who had duty hours from 3 am to 11 am. On April 22, 2003, he left for work on his motorcycle but tragically met with a fatal accident just 5 kilometres away from his workplace.
His family—including his widow, four children, and mother—filed for compensation under the Employees’ Compensation Act. The Commissioner awarded them ₹3,26,140 plus 12% annual interest, recognizing the accident as work-related.
However, the Bombay High Court overturned this decision, ruling that an accident during a commute does not fall under the scope of employment.
The Supreme Court has now set aside the High Court’s ruling, restoring the compensation award to the bereaved family.
✅ Why This Judgment Matters
This ruling settles a long-standing ambiguity: Are accidents during commuting covered by the Employees’ Compensation Act?
Earlier judgments often conflicted, depending on whether the ‘notional extension’ doctrine applied—meaning whether travel to or from the workplace could be treated as an extension of employment.
The Supreme Court firmly held that when there is a clear nexus between the accident and employment, commuting accidents must be covered.
✅ How Section 51E of the ESI Act Helps
The Court referred to Section 51E of the Employees’ State Insurance Act, 1948, which explicitly says that accidents during the commute shall be deemed work-related if there’s a clear connection with employment conditions, time, and place.
Although Section 51E came into effect only in 2010, the Supreme Court clarified that it is clarificatory and hence can be applied retrospectively to similar cases under the Employees’ Compensation Act.
✅ What This Means for Employees
This landmark decision is a big win for India’s workforce, especially factory workers, security guards, and shift employees who travel at odd hours.
By reinforcing the principle of notional extension and reading the EC Act and ESI Act together, the Court has strengthened legal protection for employees and their families against tragedies that occur during their commute.
Key Takeaways
- Commuting accidents can be covered under the Employees’ Compensation Act, 1923.
- The ‘notional extension’ principle allows certain areas and times beyond the physical workplace to be treated as part of employment.
- Section 51E of the ESI Act clarifies the intention behind compensation laws and can be applied retrospectively.
- This ruling ensures better protection for India’s working class.
📌 Case Details at a Glance
- Case Title: Davishala & Ors vs Oriental Insurance Company Ltd & Anr
- Bench: Justice Manoj Misra & Justice K V Viswanathan
- Date of Judgment: July 29, 2025
- Judgement Copy: https://ghamdaanlawfirm.com/judgement/davishala-ors-vs-oriental-insurance-company-ltd-anr-2072126.pdf
Final Thoughts
The Supreme Court’s forward-looking interpretation highlights India’s commitment to labour welfare and employee protection. If you or someone you know faces similar circumstances, consult a legal expert to understand your rights under the Employees’ Compensation Act.
Stay informed. Stay protected.
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This is such an important and timely judgment! It’s reassuring to see the Supreme Court recognising the real challenges employees face while commuting. Thank you for sharing this detailed update — it really helps us understand our rights better. Keep posting such valuable information!
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