The distinction between death ‘in the course of employment’ and death ‘arising out of employment’ lies at the heart of compensation law in India under the Employees’ Compensation Act, 1923. Though often used together and sometimes misunderstood as interchangeable, these twin requirements perform different legal functions and together determine whether an employer is liable to pay compensation for an employee’s death.
The recent judgment of the Bombay High Court in M/s Arjun Travels vs. Jamuna Devi Brijlal Yadav & Ors. (2025) provides a clear and detailed application of these principles.
Factual Background of the Case
The deceased, Brijlal Yadav, worked as a temporary driver for M/s Arjun Travels. He typically signed the muster roll on days he was called for duty. The muster showed his last attendance on 10 December 2021, though the employer stated that he actually worked until 15 December 2021.
On 16 December 2021, early in the morning, the supervisor of the transport undertaking found Brijlal lying dead inside the company bus. The police were informed and formalities completed.
The cause of death, as per the medical documents, was coronary artery disease. There was no external injury and no evidence of a vehicular incident or accident.
The deceased’s dependents claimed compensation, contending that:
- He was an employee of the company,
- He was on duty inside the bus,
- His death should be considered as arising out of and during employment.
The Commissioner awarded compensation. The employer appealed. The High Court framed substantial questions of law, primarily focusing on whether Brijlal’s death (a) occurred in the course of employment, and (b) arose out of employment.
Statutory Framework: Section 3 of the Employees’ Compensation Act
Section 3 mandates employer liability only when all elements are satisfied:
- Personal injury
- Accident
- Arising out of employment
- In the course of employment
Death is included within “personal injury.” But courts must determine:
- Whether the death is attributable to an accident, and
- Whether such an accident is sufficiently connected to employment.
A. “In the Course of Employment”
The Supreme Court in Mackinnon Mackenzie & Co. v. Ibrahim Mohammed Issak (1969) 2 SCC 607, defined it as:
“the workman must be engaged in the work he is employed to do, and the act must be incidental to it.”
Thus, the Court considers time, place, and circumstances.
B. “Arising Out of Employment”
This expression requires a causal connection between employment and injury. The injury must result from:
“some risk incidental to the duties of service, which the workman would not have suffered but for that employment.”
Thus, even if the injury occurs during working hours, it must also be linked to job-related risks or conditions.
High Court’s Analysis: Applying the Distinction
Bombay High Court applied the above principles step-by-step.
Status of the Deceased as an Employee on the Date of Death
The employer contended that Brijlal could not be treated as “on duty” on 16 December because his signature did not appear on the muster roll for that day. The Court rejected this contention, pointing out:
- Under the amended Section 2(1)(dd), even a temporary or casual worker falls within the definition of “employee.”
- The absence of a muster signature is not conclusive evidence of non-engagement, especially when the employee was found inside the employer’s bus.
- The law after the 2009 amendment, expressly broadens the coverage of employees, removing the earlier exclusion of casual workers.
On this basis, the Court held that Brijlal continued to be an employee, and his physical presence inside the employer’s vehicle was sufficient to establish that he was within the employment framework on the relevant date.
Whether the Death Occurred “In the Course of Employment”
The Court answered this in the affirmative.
Key factors considered:
- Place: The deceased was found inside the very bus he used to drive—undisputedly the employer’s premises or extended workspace.
- Circumstance: The employer was unable to clarify when or why he entered the bus, a fact that weighed against the employer.
- Nature of Duty: As a driver, remaining in or near the bus could be reasonably connected with his work; such acts may be incidental to the primary duty of driving.
Taken together, these circumstances satisfied the time–place–circumstance test traditionally applied to determine whether an act falls “in the course of employment.”
Whether the Death “Arose Out of Employment”
This formed the decisive turning point in the case. The Court concluded that the death did not arise out of employment, and therefore compensation was not payable.
The reasons were anchored in the requirement of a causal connection:
1. Cause of Death Was Natural, Not Occupational
Medical documentation confirmed that the death resulted from coronary artery disease, with no accompanying injury, trauma, or accident. There was no evidence of any work-related exertion immediately prior to the event.
2. No Link Between Work and the Fatal Event
The deceased was discovered sleeping on the bus.
He was not driving, performing strenuous tasks, or facing job-induced stress at the time of the incident. Thus, nothing like his duties could be shown to have triggered, accelerated, or aggravated the cardiac condition.
3. Mere Presence at Workplace Is Insufficient
The Court reiterated a crucial distinction:
“The mere fact that death occurred during the course of employment does not establish that the work itself caused or contributed to the death.”
The statutory formula requires both elements. One cannot substitute the other.
4. Total Absence of Causal Nexus
The Court was categorical:
“There is no evidence connecting the death to the employment.”
For liability to arise, employment must either:
- be the direct cause,
- contribute to the cause, or
- aggravate an existing medical condition.
None of these was proved.
Court’s Decision
Because the essential requirement—death arising out of employment—was not proved, the Court set aside the Commissioner’s award and dismissed the compensation claim.
However, on humanitarian grounds, the employer voluntarily agreed to allow withdrawal of ₹5,00,000 from the deposited compensation, which the Court permitted.
Major Lessons for Employers and Employees
1. The Two Expressions Are Distinct and Both Must Be Satisfied
- “In the course of employment” refers to time, place, and circumstance.
- “Arising out of employment” refers to causation.
An employee may satisfy one but not the other. Compensation is payable only when both are satisfied.
2. Natural Death ≠ Employment-Related Death
Unless the claimant proves:
- that the nature of the duties contributed to the death,
- or employment aggravated the pre-existing condition,
claims involving natural death fail.
3. Burden of Proof Lies on Claimant, Not Employer
The Court rejected the argument that the employer must disprove causation.
The claimant must establish:
- an accident,
- a causal link with employment,
- and personal injury arising from the accident.
4. Doctrine of Notional Extension Has Limits
Notional extension allows courts to treat employees as being in the course of employment in certain situations (e.g., waiting for goods, inside a transport depot), but this doctrine:
- does not extend to causation,
- cannot convert a natural death into an employment-related death,
- cannot override statutory requirements.
5. Welfare Legislation Must Be Interpreted Liberally—But Not Beyond Statutory Scheme
Citing Supreme Court precedents, the Court emphasised:
Beneficial statutes must be interpreted liberally, but courts cannot expand coverage beyond what the statute permits.
Thus, sympathy cannot justify compensation where statutory requirements are unmet.
Conclusion
Bombay High Court’s decision reiterates a crucial foundation of employees’ compensation jurisprudence: the mere fact that a death occurs at the workplace does not automatically translate into employer liability. For compensation to be awarded, the death must not only take place in the course of employment but must also arise out of employment—a dual requirement that demands both proximity and causation.
In the present case, although the deceased driver’s presence inside the employer’s bus satisfied the test of being “in the course of employment,” the claim failed because there was no causal link between his work and the coronary artery disease that led to his death. There was neither evidence of work-related exertion nor any material showing that the employment contributed to or accelerated the fatal condition.
The judgment strikes the right balance between the beneficial nature of the legislation, the limits imposed by statutory language, and the judiciary’s duty to avoid extending liability in the absence of proof. It reinforces that the Act requires both:
- a time-and-place connection, and
- a causal connection
before an employer can be fastened with liability.
By insisting on this two-fold test, the Court ensures that compensation remains available to genuinely employment-related injuries and deaths, while preventing unwarranted expansion of employer responsibility beyond the bounds of the statute.
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