Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Bom) 1001

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Firdosh P. Pooniwalla, J.
The New India Assurance Co. Ltd. - Appellant
Versus
Dineshkumar J. Dubey - Respondent
First Appeal No.1760 of 2009
Decided On : 15-04-2026
Advocates Appeared :
For the Appellant : Mr. S. M. Dange
For the Respondent : Mr. T. J. Mendon

Advocates:
For the Appellants/Petitioners: S. M. Dange
For the Respondents: T. J. Mendon

An employer-employee relationship may validly exist between relatives. The absence of a formal written contract does not invalidate such a relationship, especially in small business contexts. Appellate courts must not disturb factual findings regarding employment unless proven perverse or entirely unsupported by evidence.

Headnote:(A) Employee’s Compensation Act, 1923 - Section 30 - Appeal - Scope and ambit - Employer-employee relationship between relatives - Merely because a worker is a relative of the business owner does not preclude the existence of an employment relationship - Absence of a formal written contract of employment is not fatal to the claim, particularly in the context of family businesses - Welfare legislation requires a practical approach to evidence - Appellate authorities should not interfere with findings of fact unless they are perverse, illegal, or unsupported by any evidence. (Paras 9, 10, 11)

(B) Evidence - Burden of proof - Once a relationship is admitted by the employer, the burden to prove it as collusive or bogus shifts to the insurance provider, requiring substantial evidence to rebut the claim. (Paras 8, 12, 13)

Facts of the case:
The claimant sustained injuries while working as a driver during the course of employment and filed for compensation. The insurance provider contested the petition, asserting that no valid employer-employee relationship existed and that the claim was a collusive attempt by family members to illicitly obtain benefits. The lower authority allowed the claim, prompting an appeal.

Findings of Court:
The evidence, including sworn testimony and documentation of wage payments, sufficiently established the professional relationship. The insurer failed to produce any evidence to substantiate the claim of collusion or to disprove the employment status.\n

Issues: Whether the claimant’s familial relationship with the employer invalidates the existence of an employer-employee relationship and whether the proceedings were collusive.

Ratio Decidendi: There is no statutory or legal bar prohibiting a relative from being engaged as an employee. In a small-scale business environment, the lack of a formal written contract for services provided as a driver does not negate the existence of an employment contract. The authority below correctly appreciated the evidence, and in the absence of evidence led by the insurer, the factual findings regarding the employment relationship should remain undisturbed.

Result: Appeal dismissed.

JUDGMENT :

FIRDOSH P. POONIWALLA, J.

The present First Appeal is filed under Section 30 of the Employee’s Compensation Act, 1923 (hereinafter referred to as “the Act”), impugning the Judgement and Order dated 28^th February, 2007 passed by the Commissioner for Workmen’s Compensation and Judge, 6^th Labour Court, Mumbai in Application No. A (WCA) 644/ C-226/2003, allowing the Application.

2 In this Judgement, the parties will be referred to as per their description in the Original Application.

FACTS:-

3 The Applicant had filed the Application for getting compensation of an amount of Rs.5,20,584/- with interest and penalty from the Opposite Party and the Insurance Company.

4 The Applicant’s case is as under:-

(a) The Opposite Party is the owner of a vehicle bearing No. MH-02-QA-5370. The Opposite Party appointed the Applicant as a driver of the said vehicle and used to pay wages of Rs.4,000/- per month to him.

(b) The Applicant met with an accident in the course of employment with the Opposite Party on the highway road near Times of India signal on 13^th August, 2002. He sustained the following injuries:-

“(a) #(Lt) Fibula

(b) # Lat. Mallcola with Medical side ligament injury with unstable ankle.

(hereinafter referred to as “the said injuries”).

(c) The Applicant was admitted to Bhagwati Hospital on 13^th August, 2002. He was discharged from the hospital on 3^rd September, 2002. Due to the said injuries, the Applicant is not in a position to continue his occupation as a driver. He has lost his earning capacity. Therefore, he is entitled to receive compensation of Rs.5,20,584/- from the Opposite Party and the Insurance Company.

5 The Opposite Party filed a Written Statement at Exh. “C-3”. The Opposite Party admitted that he was the owner of the vehicle bearing No. MH-02-QA-5370. He admitted that he had employed the Applicant as a driver. He further submitted that he used to pay wages at Rs.4,000/- per month to the Applicant. He admitted that the Applicant met with an accident in the course of and arising out of the employment with the Opposite Party on 13^th August, 2002. The Opposite Party stated that the said vehicle was insured with the Insurer. Hence, he prayed that the Insurance Company be directed to pay the compensation, if any.

6 The Insurance Company contested the Application by filing a Written Statement at Exh. “CA-4”. The Insurer stated that the Applicant is not a workman. The Insurer further stated that there was no employer- employee relationship between the Applicant and the Opposite Party. The Insurer denied that the accident occurred in the course of, and arising out of, the employment with the Opposite Party. The Insurer denied that the Applicant was getting wages of Rs.4,000/- per month. Finally, the Insurer denied that the Applicant is entitled to receive an amount of Rs.5,20,584/- with interest and penalty from the Insurer.

7 Considering the pleadings of the parties, the following are the Issues framed by the Commissioner and his findings thereon:-

Issues	Findings
1. Does applicant proved that he sustained injuries in an accident arising out of and in the course of employment with opp. Party from 13.8.2002?	Proved
2. Does applicant proved that he is entitled for the compensation? If yes, what extend?	As per the final order
3. What Order?	As per the final order.

8 Before the Commissioner, the Applicant has examined himself. The Applicant also examined Dr. Azgaonkar. The Applicant produced the certified copies of the police statement, medical case papers and the follow up card of Bhagwati Hospital from September, 2002 to March, 2003, disability certificate, Insurance Policy, Tax Certificate, Driving License, Copy of the W.C. Claim Form and the Wage Certificate. Both the Opposite Party and the Insurer did not give any evidence.

9 By a Judgement and Order dated 28^th February, 2007, the Commissioner passed the following order:-

“ ORDER

1. Applicat

Click Here to Read the rest of this document

2026 Supreme(Bom) 1001

IN THE HIGH COURT OF JUDICATURE AT BOMBAYFirdosh P. Pooniwalla, J.The New India Assurance Co. Ltd. - AppellantVersus Dineshkumar J. Dubey - RespondentFirst Appeal No.1760 of 2009Decided On : 15-04-2026Advocates Appeared :For the Appellant : Mr. S. M. DangeFor the Respondent : Mr. T. J. Mendon

Cases Referred (5)