Court applies statutory presumption under Section 51A, ruling death arose out of employment despite natural cause finding; ESI Corporation's appeal dismissed.
In a significant judgment dated September 28, 2026, the Madras High Court dismissed the appeal filed by the Deputy Director of the Employees State Insurance Corporation (ESI Corporation), Coimbatore, affirming the entitlement of the deceased employee's widow to dependants' benefits under the Employees State Insurance Act, 1948. The case arose from the death of M. Sakthivel, an insured employee deputed by his employer to a factory in Himachal Pradesh, who died suddenly while on duty.
The dispute centered on whether the death, attributed by the Corporation to a ruptured liver abscess with sepsis-a natural disease-could be considered as an "employment injury" under the ESI Act, thereby entitling the widow to benefits. The ESI Corporation contended that the death was not caused by an accident or occupational disease and thus fell outside the scope of employment injury as defined under the Act.
The ESI Court, Coimbatore, had earlier ruled in favor of the widow, relying on the statutory presumption under Section 51A of the ESI Act that an accident arising in the course of employment shall be presumed to have also arisen out of employment, unless rebutted by evidence to the contrary. The Corporation failed to produce any such contra evidence regarding pre-existing ailments or any other factor to rebut this presumption.
The Madras High Court upheld this finding, emphasizing that the deceased was undeniably in insurable employment and died during deputation while performing his duties. The Court noted that the expressions "arising out of employment" and "in the course of employment" are distinct yet cumulative requirements, relating respectively to a causal connection with employment and to the time, place, and circumstances thereof.
The Court applied the "notional extension theory," which extends the scope of employment injury to incidents occurring during the course of employment, even if not on the employer's premises, such as deputations or travel related to work. It further recognized the ESI Act as a social welfare legislation that must be liberally construed in favor of employees and their dependants.
Notably, the Court observed the appellant's non-compliance with a conditional stay order requiring the deposit of 50% of the compensation amount, interpreting this as a lack of diligence in prosecuting the appeal. Despite this, the Court proceeded to examine the merits and found no valid reason to overturn the ESI Court's decision.
The judgment also referred to precedents from the Supreme Court and other High Courts elucidating the meaning of "accident" and employment injury, reinforcing that an unexpected natural death occurring in the course of employment can be presumed to be an employment injury in absence of contrary evidence.
In conclusion, the Madras High Court confirmed the ESI Court's order awarding dependants' benefits with interest at 7.5% per annum from the date of the claim petition until payment. The judgment sends a clear message that the ESI Act's protective ambit covers employees who die during deputation or while performing employment duties, even if death results from natural causes, unless convincingly disproved.
Bottom Line:
Employees' State Insurance Act, 1948 - Dependants' benefit - Death of insured employee during deputation while on duty - In absence of rebuttal evidence from Corporation, presumption under Section 51A can be invoked and death held to have arisen out of and in the course of employment - ESI Act being a social welfare legislation must be liberally construed in favour of employees/dependants.
Statutory provision(s):
Employees State Insurance Act, 1948 Sections 2(8), 51A, 52, 52A
