Madhya Pradesh High Court
Life Insurance Corporation Of India vs Smt. Santosh Rani on 14 November, 2025
NEUTRAL CITATION NO. 2025:MPHC-JBP:60134
1 MA-1840-2023
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE HIMANSHU JOSHI
ON THE 14th OF NOVEMBER, 2025
MISC. APPEAL No. 1840 of 2023
LIFE INSURANCE CORPORATION OF INDIA
Versus
SMT. SANTOSH RANI AND OTHERS
Appearance:
Shri Pranay Choubey - Advocate for the appellant.
Shri Aman Chourasia - Advocate for the respondent no.1.
Shri Rakesh Kumar Kesharwani - Advocate for the respondent no.3.
ORDER
The instant appeal under Section 30 of the Employee's Compensation Act, 1923 has been filed by the appellant/insurance company being aggrieved with the impugned award dated 09.02.2023 in case No.C.0.C.B- 7/2013/W.C.F. passed by the Commissioner, Employee's Compensation Act, Labour Cout, Sagar whereby appellant has been directed to indemnify the claimant/respondent No. 1 on account of death of her husband Phool Singh while plucking tendu patta leave under the workmanship of respondent No. 2 and 3.
2. The learned counsel for the appellant argued that the deceased Phool Singh was engaged by respondent Nos. 2 and 3 in the work of plucking tendu patta leaves. On the date of the incident, while performing his duty, he fell from a tree and sustained fatal injuries. However, the respondent No. 2 and 3 Signature Not Verified Signed by: MANOJ NAIR Signing time: 24-11-2025 18:45:09 NEUTRAL CITATION NO. 2025:MPHC-JBP:60134 2 MA-1840-2023 denied their employee and employer relationship with the deceased. The respondent Nos. 2 and 3 had obtained a Group Insurance Policy covering their laborers upto the limit extent i.e. Rs. 25,000/-. The widow of the deceased, respondent No. 1, filed a claim under the Employee's Compensation Act, 1923 before the Labour Commissioner, Sagar seeking compensation for the death of her husband arising out of and in the course of employment. The Labour Court awarded compensation and held the present appellant-Insurance Company liable to indemnify the employer and pay the awarded amount which is incorrect, perverse and desreved to be set aside. He argued that the policy in question is merely a Group Insurance Scheme, not a workmen/Employee's Compensation Policy. The policy provides only a contractual benefit and does not indemnify the employer for statutory liability under the Employees' Compensation Act. The Labour Court erred in fastening statutory liability upon the insurer despite absence of coverage for such liability.
3. On the other hand counsel learned counsel appearing for Respondent No. 1 (widow of the deceased Phool Singh) opposes the appeal and support the judgment of the Labour Court submitting that the deceased Phool Singh was engaged in the work of plucking tendu patta leaves. He fell from the tree during the course of employment and died on the spot. These facts are admitted and not disputed by the Insurance Company. Thus, the liability to pay compensation under the Employees' Compensation Act unquestionably arose.
4. Learned counsel for the respondent No. 3 argued that however, they Signature Not Verified Signed by: MANOJ NAIR Signing time: 24-11-2025 18:45:09 NEUTRAL CITATION NO. 2025:MPHC-JBP:60134 3 MA-1840-2023 had taken the stand that the deceased was not an employee their under as he voluntary came to plucking the leaves under the scheme of Government even otherwise since the relationship found established by the learned Labaour Court, the insurance company is liable to pay the compensation as they had taken a Group Insurance Policy specifically for the benefit of labourers engaged in collection of tendu leaves. Premiums were regularly paid to the Insurance Company with the clear intention to secure their workers. The very purpose of taking insurance was that workers or their families should not remain uncompensated . Therefore, the insurer cannot now avoid its responsibility on technical grounds. He further submitted that even if the policy is titled as a "Group Insurance Scheme," the coverage extended to labourers should be liberally interpreted. The insurance policies in labour welfare matters must be interpreted to advance justice and not deny rightful compensation. The benefits of insurance should flow to workers, not be restricted by narrow interpretation. Thus, the Labour Court rightly fastened liability on the insurer.
5. Heard and perused the record.
6. The liability to pay compensation for injury or death arising out of and in the course of employment is a statutory liability imposed on the employer. This liability can be shifted to an insurer only through a policy which expressly covers statutory liability under the Act.
7. It is undisputed that Respondent Nos. 2 and 3 had obtained a Group Insurance Policy for their workers. A Group Insurance Scheme is a contract providing predetermined benefits viz. ex-gratia or fixed-sum insured and Signature Not Verified Signed by: MANOJ NAIR Signing time: 24-11-2025 18:45:09 NEUTRAL CITATION NO. 2025:MPHC-JBP:60134 4 MA-1840-2023 does not indemnify the employer for statutory liability unless such coverage is specifically incorporated. There is no material on record to show that the policy was a Workmen's Compensation Policy or that it contained any endorsement extending indemnity for statutory compensation.
8. A Group Personal Accident / Group Insurance Policy does not make an insurer liable for compensation under the Employees' Compensation Act. The statutory liability remains with the employer and cannot be transferred without an explicit contractual term. Thus, fastening Employees' Compensation liability upon an insurer under a mere Group Insurance Scheme is legal error.
9. Therefore, the impugned order of the Labour Court, to the extent that it holds the appellant-Insurance Company liable to pay compensation, is hereby set aside.
10. Respondent Nos. 2 and 3, being the employers of the deceased, are directed to deposit the entire amount of compensation as determined by the Labour Court within eight weeks from the date of this judgment.
11. Respondent No. 1 (claimant) shall be free to receive any benefits payable under the Group Insurance Policy, if admissible under its terms, but that would be in addition to and not it substitution of statutory compensation.
12. Accordingly, the appeal is allowed the extent indicated hereinabove.
(HIMANSHU JOSHI) JUDGE Signature Not Verified Signed by: MANOJ NAIR Signing time: 24-11-2025 18:45:09 NEUTRAL CITATION NO. 2025:MPHC-JBP:60134 5 MA-1840-2023 mn Signature Not Verified Signed by: MANOJ NAIR Signing time: 24-11-2025 18:45:09