1. Insurance appeals against EV compensation awards — Employees dependency claim under ECA, 1923. (Para 1 , 2 , 3 )
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2026 Supreme(Telangana) 256
IN THE HIGH COURT FOR THE STATE OF TELANGANA, HYDERABAD
Gadi Praveen Kumar, J.
Go Digit General Insurance Company Limited - Appellant
Versus
Smt. C.Raneela and Others - Respondents
C.M.A.Nos.534 and 535 of 2023
Decided On : 18-03-2026
Advocates Appeared:
For the Appellant : Sri A.Ramakrishna Reddy
For the Respondent: Sri Ch.Indrasena Reddy
For the Appellant : Sri A.Ramakrishna Reddy
For the Respondent: Sri Ch.Indrasena Reddy
Labourers engaged via intermediaries for loading/unloading goods in a vehicle are deemed employees of the vehicle owner under the Employees' Compensation Act, 1923, provided the work is connected to the owner's trade or business.
Headnote:(A) Employees' Compensation Act, 1923 - Sections 2(1)(dd) and 2(1)(f) - Definition of 'employee' and 'managing agent' - Labourers engaged via intermediaries for loading and unloading goods in a vehicle are deemed employees of the vehicle owner if the work is connected to the owner's trade or business - The scope of 'employee' is wide and includes those engaged on a temporary or casual basis. (Paras 27, 29, 31)
(B) Employees' Compensation Act, 1923 - Section 30 - Scope of appeal - Findings relating to employer-employee relationship, occurrence of accident, nature of employment, and wages are essentially findings of fact and cannot be interfered with in appeal unless shown to be perverse or based on no evidence. (Paras 20, 22)
(C) Criminal Procedure Code - Sections 161 and 162 - Statements recorded under Section 161 Cr.P.C. are not substantive evidence and are admissible only for the limited purpose of contradiction under Section 145 of the Indian Evidence Act, 1872, and cannot be used to prove the truth of their contents. (Paras 24, 25)
Facts of the case:
Deceased were engaged as labourers for loading and unloading goods on a vehicle belonging to an employer. While transporting goods to a destination, the vehicle met with an accident, resulting in the deaths of the labourers. The insurance company contested liability, denying the existence of an employer-employee relationship and alleging a breach of policy conditions due to carrying more passengers than the registered capacity.
Findings of Court:
The court found that the deceased were employees within the meaning of the 1923 Act, as their work was directly connected to the employer's trade and business, regardless of whether they were engaged through a managing agent or intermediary. The accident occurred during and in the course of their employment.
Issues: The main issues were whether the deceased fell within the definition of 'employee' under the Employees' Compensation Act, 1923, and whether the insurance company could evade liability based on alleged policy violations and the nature of the employment evidence.
Ratio Decidendi: Under Section 2(1)(dd) of the 1923 Act, the definition of 'employee' includes any person recruited in connection with a motor vehicle, including casual labourers. If such workers are engaged for the employer's business via a managing agent, the vehicle owner is deemed the employer. Once employment and the accident are established, the insurer is bound to indemnify the liability.
Result: Civil Miscellaneous Appeals dismissed.
Legal Category Hierarchy
- practice and procedure
-
employment and labour law
-
employees compensation act
-
definition of employee
- person in connection with motor vehicle
- exclusions (Para 26)
- employer-employee relationship
- accident arising out of and in course of employment
- compensation
-
definition of employee
- insurance law
- tort law
-
employees compensation act
Table of Contents
2. Dispute over employer-employee relationship and breach of policy terms for coverage of labourers. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 )
3. Deceased were employees within ECA scope, engaged in loading/unloading, connected with owner's trade. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 )
4. Section 2(1)(dd) includes persons engaged for motor vehicle work; employer deemed for business purpose. (Para 26 , 27 , 28 , 29 , 30 , 31 )
5. Appeals dismissed; no illegality in Commissioner's findings on employment and award. (Para 33 , 34 )
6. What is the scope of 'employee' under Section 2(1)(dd) of the ECA, 1923?
Includes persons employed in connection with a motor vehicle, even temporarily or through a managing agent, for the employer's trade. (Para 26 , 27 , 28 , 29 , 30 , 31 )
7. Is a Section 161 CrPC statement substantive evidence for proving employment?
No, it is not substantive evidence under Section 162 CrPC; usable only for contradiction. (Para 24 , 25 )
8. What is the nature of findings in an appeal under Section 30 of the ECA, 1923?
Appeal lies only on substantial questions of law; findings of fact based on evidence are final. (Para 21 , 22 )
9. Does a policy breach (driving licence) absolve insurer of liability under the ECA?
No, once accident occurs during employment, employer's liability under Section 3 ECA is attracted; insurer must indemnify. (Para 32 )
10. When is an owner deemed employer of workers engaged through a managing agent?
If workers were working for the owner's trade or business at accident time, owner is deemed employer. (Para 29 , 30 , 31 )
JUDGMENT :
Gadi Praveen Kumar, J.
Since these appeals arise out of the same accident, they are being disposed of by this common judgment.
2. Heard Sri A.Ramakrishna Reddy, learned counsel for the appellant and Sri Ch.Indrasena Reddy, learned counsel for the respondents.
3. The present Civil Miscellaneous Appeals are filed by the Insurance Company assailing the orders dated 04.09.2023 passed in E.C.Nos.8 and 9 of 2019 by the Commissioner for Employees’ Compensation and Assistant Commissioner of Labour-III, Hyderabad, in partly allowing the claim of the claimants by granting compensation of Rs.7,77,504/- in E.C.No.8 of 2019 and Rs.7,27,825/- in E.C.No.9 of 2019, out of the claim amount of Rs.15,00,000/-, each, along with proportionate interest as claimed.
4. The facts leading to file both the ECs before the learned Commissioner are that: deceased were engaged as Labourers on a DCM Lorry bearing No.AP 28 TA 2410 under the employment of O.P.1; that on 22.11.2019, while the deceased along with other co-workers proceeding from Shamshabad to Thukkuguda ORR Exit-14 with load of marble stones on the said DCM Lorry of O.P.1 and when the said DCM Lorry was moving down from Thukkuguda ORR Exit-14, the driver of the DCM Lorry drove it in a rash and negligent manner at high speed and dashed against a cement pole resulting in an accident and in the said accident, the deceased sustained grievous injuries and succumbed to them during the course and out of their employment. The applicants stated that the P.S. Pahadi Shareef registered a case in Crime No.597 of 2019.
5. According to the applicants, both the deceased were being paid a wage of Rs.300/- per day, which amounted to Rs.9,000/-per month, each, and the deceased in E.C.No.8 of 2019 was aged 28 years, while the deceased in E.C.No.9 of 2019 was aged 40 years as on the date of accident. The applicants further stated that the DCM Lorry was insured with O.P.2 and the same was valid from 10.9.2019 to 09.09.2020 and therefore, the applicants in both the CMAs stated that O.P.1, being the owner and employer of the deceased and O.P.2 being the insurer of the DCM Lorry, are jointly and severally liable to pay compensation to them. The applicants in both the ECs claimed Rs.15,00,000/-, each, towards compensation along with interest at 12% per annum from the date of accident till the date of realization and costs, payable by O.P.1 and O.P.2 jointly and severally.
6. O.P.1, who is the owner of the DCM Lorry, remained exparte before the learned Commissioner in both the ECs and O.P.2 - the Insurance Company filed counter-affidavits denying the averments made by the applicants in the affidavits filed in support of the applications. The existence of employer and employee relationship between O.P.1 and the deceased was specifically denied. It is contended in the counters that the subject vehicle was a goods carriage vehicle having registered seating capacity of two including driver, whereas at the time of accident, the vehicle was carrying more than two persons, thereby, there is breach of terms and conditions of the insurance policy and violation of the provisions of the Motor Vehicles Act and the Rules made thereunder, and therefore, the Insurance Company denied its liability to pay the compensation to the applicants.
7. In the counters, it is further stated that in the event of any policy issued by the company for the DCM Lorry, the labourers are covered for the purpose of loading and unloading the goods only but not while travelling in the vehicle and hence, the deceased were not covered under the policy and O.P.1 has violated the terms and conditions of the policy as such, O.P.2 is not liable to pay the compensation.
8. It is also stated in the counters that it is mandatory duty of the insured to furnish the particulars of the insurance policy, date, time and place of accident, particulars of injured deceased, the name of the driver and particulars of driving licence of the driver, but the insured has not comp
