1. M.F.A.(ECC)No.86/2024 is filed by the second opposite party (insurer) in E.C.C.No.88/2018 of the Employees Compensation Commissioner and Industrial Tribunal, Thiruvananthapuram aggrieved by granting of compensation to the 1st respondent/applicant. M.F.A.(ECC)No.14/2025 is filed by the applicant in the E.C.C. aggrieved by limiting of interest for the medical reimbursement from the date of filing of the claim petition. Hereafter the parties will be referred to as they are arrayed in M.F.A.(ECC)No.86/2024.

2. The 1st respondent met with an accident on 5.6.2013 while he was driving a private car owned by the 2nd respondent. He suffered serious injuries and is now bedbound. He filed the compensation case through his mother acting as the power of attorney holder. The 2nd respondent is the sister-in-law of the 1st respondent.

3. Husband of the 2nd respondent is the elder brother of the 1st respondent. On 5.6.2013 around mid-night, the 1st respondent was driving the private car owned by the 2nd respondent from Thiruvananthapuram to Kanjiramkulam. The brother of the 1st respondent had parked the car in the railway station. The 1st respondent was bringing back the vehicle to Kanjiramkulam. On the way, the car dashed against a wall and was capsized. A relative of the 1st respondent who travelled with him died in the accident. The 1st respondent sustained very serious injuries.

4. Claiming that the 1st respondent was employed as a driver by the 2nd respondent for a monthly remuneration of Rs.9,000/- at the time of accident, the 1st respondent moved the Employees Compensation Commissioner under the provisions of the Employee's Compensation Act, 1923. It is to be noted that though the accident occurred in 2013, case was filed only in 2018.

5. Mother of the 1st respondent was examined as PW1. Exts.A1 to A9 were marked on the side of the 1st respondent. Second respondent was examined as DW1. Exts.B1 to B5 were marked on the side of the appellant. Exts.B6 and B7 were marked on the side of the 2nd respondent. Attested copy of case sheet of the Medical College Hospital was marked as Ext.X1. The appellant insurance company disputed the employer-employee relationship between the respondents 1 and 2 in its written objection. According to the company, the 1st respondent, the younger brother of the husband of the 2nd respondent, had driven the vehicle on the date of accident not as a paid employee. The company contended that the claim regarding the employer- employee relationship was raised without bonafides only to obtain compensation under the provisions of the Employee's Compensation Act, 1923.

6. The learned Commissioner, on evaluating the evidence and contentions of the parties concluded that there was employer-employee relationship. The Commissioner granted compensation of Rs.10,48,656/- with interest at the rate of 12% from the date of accident till realization of the amount. As costs, Rs.2,100/- was granted. Further, the Commissioner held that the 1st respondent was entitled for reimbursement of medical expenses of Rs.859355.67 with simple interest of 12% from the date of filing of the case, i.e., 29.1.2018 to the date of payment of the amount.

7.     M.F.A.(ECC)No.86/2024 was admitted on the following substantial question of law:-

                  Whether there is any perversity in the finding of the Commissioner in finding an employer-employee relationship between the applicant and the First Opposite Party when the vehicle involved is a private car and the applicant is the brother of the husband of the First Opposite Party?

8. M.F.A.(ECC)No.14/2025 was admitted on the following substantial question of law:-

                  Whether the appellant is entitled to claim interest on medical expenses from the date of the accident instead of the date of application?

9. Heard the learned Senior Counsel for the appellant and the learned counsel for the 1st respondent. There is no appearance for the 2nd respondent.

10. The learned Senior Counsel submitted that the Commissioner went wrong in holding that there was employer- employee relationship. Appreciation of evidence by the Commissioner on this fundamental facet was perverse. He pointed out that the claimant is the brother-in-law of the 2nd respondent. The unlikelihood of the claim that he was a paid employee of the 2nd respondent was lightly ignored by the learned Commissioner. He submitted that the admitted case was that the car was driven to the Railway Station by the husband of the 2nd respondent and it was being brought back by the claimant and another relative. The said fact would show that the claimant was not employed as a driver, but he was only bringing back the vehicle which was parked in the Railway Station by his brother. The learned Senior Counsel submitted that the first informant had told the police that the claimant was employed in a temporary tea shop. He further pointed out that though the accident occurred on 5.6.2013, the claim petition was filed long after. He submitted that the long delay in filing the claim petition clearly shows that the claim was not genuine. The learned Senior Counsel referred to the evidence of the case and submitted that the assumptions of the Commissioner are apparently without a proper scrutiny of the evidence. The learned Senior Counsel pointed out the ponderings in the impugned order and submitted that the learned Commissioner erred in holding that the burden to adduce evidence to show that the applicant was not an employee of the 2nd respondent was on the appellant. The learned Senior Counsel submitted that the approach of the Commissioner in this regard was highly improper and erroneous. The learned Senior Counsel relied on the following judgments of the Hon'ble Supreme Court:-

                  i) New India Assurance Co. Ltd. v. Sadanand Mukhi [(2009) 2 SCC 417]

                  ii) Gottumukkala Appala Narasimha Raju v. National Insurance Co. Ltd. [(2007) 13 SCC 446].

                  iii) Shantabai Ananda Jagtap v. Jayram Ganpati Jagtap [(2023) 8 SCC 171].

                  He also relied on an order of a learned Single Judge of this Court in M.F.A.(ECC)No.78/2024.

11. The learned counsel for the 1st respondent submitted that the findings and conclusions of the Commissioner are not liable to be interfered with in the instant case. He contended that no substantial questions of law are involved in the appeal filed by the insurer. The learned counsel contended that the evidence of PW1 and DW1 is sufficient to establish the employer-employee relationship. He further submitted that merely for the reason that the claimant is the brother of the husband of the 2nd respondent, it cannot be concluded that employer-employee relationship is implausible. The learned counsel submitted that the Commissioner has properly analysed the evidence and arrived at factual conclusions which cannot be lightly reversed by this Court in the appeal. The learned counsel further submitted that the only error in the order of the learned Commissioner is regarding granting of interest for the medical expenses limiting it from the date of filing of the application for compensation. The learned counsel submitted that restricting payment of interest from the date of filing of the application is opposed to the objectives and scheme of the Act. He therefore submitted that the claimant may be granted interest at 12% for the medical expenses from the date of accident. The learned counsel relied on the following judgments:-

                  1. T.S. Shylaja v. Oriental Insurance Co.

[(2014) 2 SCC 587].

                  2. M.G. Gineesh v. K.C. Ninan and Another

[2020 SCC OnLine Ker 655].

                  3. Oriental Insurance Co. Ltd v. Hanumant and another [2005 SCC OnLine Kar 205].

12. I shall now refer to the judgments cited by the learned Senior Counsel. In New India Assurance Co. Ltd. (supra) the Hon'ble Supreme Court considered a case of a road accident involving a motorcycle. Son of the owner of the vehicle met with an accident and died while driving the motorcycle. Application for compensation filed under the provisions of Motor Vehicles Act was allowed by the Tribunal. Challenge against the order of the Tribunal was rejected by the High Court. Contention of the Insurance Company before the High Court was that the deceased being the son of the insured was not a third party and therefore the insurer was not liable to pay compensation. The Hon'ble Supreme Court considered the contentions and discussed about the law laid down in various previous judgments. Reference was made to the judgment in Oriental Insurance Co. Ltd. v. Meena Variyal [(2007) 5 SCC 428]. In the said judgment the Hon'ble Supreme Court held that the company was not liable to indemnify the insured for paying compensation for the death of one of its employees. The Hon'ble Supreme Court observed as under:-

                  “14. …......Be it noted that the liability is not one arising under the Workmen's Compensation Act, 1923 and it is doubtful, on the case put forward by the claimant, whether the deceased could be understood as a workman coming within the Workmen's Compensation Act, 1923.    ”

13. The learned Senior Counsel referred to the judgment of Hon'ble Supreme Court in Gottumukkala Appala Narasimha Raju (supra). In the said case husband of the registered owner of a tractor died in an accident while driving the tractor. Claiming compensation under the Workmen’s Compensation Act, 1923 a petition was filed before the Commissioner. The claim was raised contending that the deceased was employed by the brother of the wife on monthly salary for driving the tractor. The insurance company contended that the deceased and the registered owner of the tractor were husband and wife and no relationship of employee and employer can arise between them. The company contended that the deceased was not a workman within the meaning of the provisions of the Workmen’s Compensation Act. The Hon'ble Supreme Court noted that no documentary proof to establish the contract of employment was produced and no independent witness was examined. The Apex Court accepted the contention of the company and held as under:-

                  “22. In our considered opinion, it is wholly absurd to suggest that the husband would be a “workman” of his wife in absence of any specific contract. We have no doubt in our mind that for the purpose of proceeding under the 1923 Act, only the appellants have concocted the story of husband and wife living separately. If they have been living separately in view of certain disputes, the question of husband being a “workman” under her appears to be a far-fetched one.

                  23. Technically, it may be possible that the husband is employed under the wife, but, while arriving at a conclusion that when a dispute has been raised by other side, the overall situation should have been taken into consideration. The fact, which speaks for itself shows that the owner of the tractor joined hands with the claimant for laying a claim only against the insurer. The claim was not bona fide.”

14. In Shantabai Ananda Jagtap (supra) relied on by the learned Senior Counsel, the deceased was the brother of the owner of the vehicle. A jeep driven by the deceased met with an accident and the contention of the applicants before the Employees Compensation Commissioner was that the deceased was working with the owner of the vehicle on a monthly salary. The Tribunal dismissed the application, holding that the delay in filing the application was not liable to be condoned and that the application was not liable to be allowed on merits. The Commissioner noted that the applicants had exercised the option for claiming compensation under the Motor Vehicles Act. The High Court held that the application was maintainable; however, finding of the Commissioner regarding delay was upheld. The applicants approached the Hon'ble Supreme Court. The Hon'ble Supreme Court noted that the issue of employer-employee relationship was not considered by the High Court. The Apex Court proceeded to consider the said issue first. On analysis of evidence, the Hon'ble Supreme Court held as under:-

                  “14. In the evidence led by the Appellant No.1, she admitted in her cross-examination that the owner of the vehicle was the brother of her husband. It was further admitted that they were having common ration card. They were members of the same joint Hindu family. Salary certificate of the deceased was produced on record, however the same was not proved. There is nothing to suggest that the so-called employer had admitted the relationship of master and servant. Even before this Court, the learned counsel for the appellants has not been able to refer the evidence produced on record to show that there existed the master and servant relationship between the deceased and the respondent No.1, namely, the owner of the vehicle who has not chosen to put in appearance despite service.

                  …............................................................................

                  16. The relationship of employer and employee has not been proved before the Commissioner. In our opinion, the same being the basic requirement to be fulfilled for claiming compensation under the 1923 Act, the appellants may not be entitled to receive any compensation.”

                  Relying on the said judgment, the learned  Senior Counsel contended that unless reliable materials are available, contention regarding employer-employee relationship cannot be accepted when the parties involved are near relatives.

15. The learned Senior Counsel relied on a judgment of a learned Single Judge of this Court in M.F.A.(ECC)No.78/2024 also. It was rendered in an appeal filed by the insurance company against granting of compensation. The deceased was the younger brother of the owner of a private car. While driving the car, the deceased met with an accident and succumbed to the injuries. The insurer contended that there was no employer- employee relationship. The learned Single Judge held that the applicants had not produced sufficient evidence to prove that the deceased was an employee of the owner of the car. The order of the Commissioner was set aside and the appeal was allowed.

16. The learned counsel for the 1st respondent relied on the judgment of the Supreme Court in T.S. Shylaja (supra). The Workmen’s Compensation Commissioner granted compensation for the death of a person in a motor vehicle accident. He met with the accident while driving the vehicle. It was claimed that he was employed by the owner of the vehicle. The owner was none other than the brother of the deceased. The Commissioner accepted the case of the claimants that the deceased was an employee of the owner of the vehicle and allowed the claim. In appeal, the High Court set aside the finding of the Commissioner. The Hon'ble Supreme Court held as under in the relied on judgment:-

                  “10. The Commissioner for Workmen's Compensation had, in the case at hand, appraised the evidence adduced before him and recorded a finding of fact that the deceased was indeed employed as a driver by the owner of the vehicle no matter that the owner happened to be his brother. That finding could not be lightly interfered with or reversed by the High Court. The High Court overlooked the fact that the respondent- owner of the vehicle had appeared as a witness and clearly stated that the deceased was his younger brother, but was working as a paid driver under him. The Commissioner had, in this regard, observed:

                  “After examining the judgment of the Andhra Pradesh High Court relied upon by the second opponent it is seen that the owner of the vehicle being the sole witness has been unsuccessful in establishing his case but in this proceeding the owner of the vehicle has appeared before this Court even though he is a relative of the deceased, and has submitted in his objections, even evidence that even though the deceased was his younger brother he was working as a driver under him, and has admitted that he was paying salary to him. The applicant in support of his case has submitted the Hon'ble High Court judgment in United India Insurance Co. Ltd. v. Yallappa Bhimappa Alagudi [ILR 2006 KAR 518] which I have examined in depth which holds that there is no law that relatives cannot be in employer-employee relationship. Therefore it is not possible to ignore the oral and documentary evidence in favour of the applicant and such evidence has to be weighed in favour of the applicant. For these reasons I hold that the deceased was working as driver under first opponent and driving Toyota Quails No. KA 02 C 423, that he died in accident on 3-9-2000, that he is a ‘workman’ as defined in the Workmen's Compensation Act and it is held that he has caused accident in the course of employment in a negligent fashion which has resulted in his death.”

                  11. The only reason which the High Court has given to upset the above finding of the Commissioner is that the Commissioner could not blindly accept the oral evidence without analysing the documentary evidence on record. We fail to appreciate as to what was the documentary evidence which the Commissioner had failed to appreciate and what was the contradiction, if any, between such documents and the version given by the witnesses examined before the Commissioner. The High Court could not have, without adverting to the documents vaguely referred to by it have upset the finding of fact which the Commissioner was entitled to record. Suffice it to say that apart from appreciation of evidence adduced before the Commissioner, the High Court has neither referred to nor determined any question of law much less a substantial question of law existence whereof was a condition precedent for the maintainability of any appeal under Section 30. Inasmuch as the High Court remained oblivious of the basic requirement of law for the maintainability of an appeal before it and inasmuch as it treated the appeal to be one on facts, it committed an error which needs to be corrected.

                  12. We accordingly allow this appeal, set aside the order [Oriental Insurance Co. Ltd. v. T.S. Shylaja, MFA No. 738 of 2009, decided on 25-3-2011 (KAR)] of the High Court and restore that passed by the Commissioner. We grant three months' time to the respondent to deposit the amount of compensation together with interest, if not already paid or deposited failing which the appellant shall be free to seek redress before the Commissioner for recovery of the amount awarded in her favour. No costs.”

                  Judgment of the High Court was set aside by the Hon’ble Apex Court and the order of the Commissioner was restored.

17. In M.G. Gineesh (supra) relied on by the learned counsel for the respondent, a learned Single Judge of this Court considered an appeal by the claimants aggrieved by rejection of the claim for interest by the Commissioner. The Court held that amount granted towards reimbursement of actual medical expenditure is certainly a component of compensation. It was held that payment of interest for reimbursement of actual medical expenses is also governed by the provisions of Section 4 of the Act. It was held as under: -

                  “14. The conspectus of the above inevitably progresses to the certain and unavoidable position that the reimbursement of actual medical expenses cannot obtain interest from the date of the accident but only from the date on which it was actually paid by the claimant. Even then, the employer will become liable to pay interest on the same only after the bills of such expenses are brought to his notice since, otherwise it would be a travesty to mulct him with such liability, even without him being aware of the same.

                  15. Therefore, it is without doubt that the words “as soon as it falls due”, which is used in the 4A of the Act, will have to be construed, in the case of reimbursement of actual expenses, to be the date on which the employer becomes aware or is made aware of the medical expenses suffered by the claimant. Any other interpretation with respect to the reimbursement of actual medical expenses would become inequitable and would cause grave prejudice to the employer, since otherwise, he would be burdened with an obligation to pay interest even on amounts which he was not aware had been spent by the claimant and consequently, being in no position either to accept or reject.

                  16. This is crucial because, going by Section 4-A of the Act, the employer has the right to refuse payment of compensation amounts or part of it, if he is of the view that he is not liable for the same and this option applies in para materia to the cases of reimbursement of actual medical expenses also. Therefore, unless the employer becomes aware that the claimant has paid or suffered medical expenses, it would not become available to him to either accept or reject it - in the latter case running the risk of having to pay interest if his refusal to honour the said expenses or part of it, as the case may be, is found by the Court to be illegal or improper.

                  17. Resultantly, I am left without any doubt that, as far as the reimbursement of actual medical expenses is concerned, a combined reading of Sections 4 and 4-A of the Act would render it irrefragable that the obligation to pay interest on it would arise on the employer only from the date on which he becomes aware or is made aware of such expenses by the claimant or through such other sources.”

18. In Hanumant and another (supra) cited by the learned counsel for the respondent, the Karnataka High Court considered an appeal filed by the insurance company against an order passed by the Commissioner granting compensation. Son of the owner of a jeep met with an accident while driving the vehicle. Compensation was sought contending that the son was employed by the father to drive the vehicle. Regarding the employer-employee relationship the High Court observed as under:-

                  “2. The contention of the insurer that there exists no relationship of employer and employee since the respondent No. 1 (driver) happens to be the son of the owner of the jeep, respondent No. 2, therefore, there cannot be a relationship of employer and employee is an untenable argument. It is not uncommon amongst the business family to engage their own kith and kin on employment for doing the business or commercial activity. Merely because in such a situation no wages are paid in cash is also not a ground to infer absence of a legal relationship of employer and employee, since there would always be consideration in kind computable in terms of money for the services rendered. The parties would not go for documentation of the contract nor create any documentary material to prove payment of wages in view of the peculiar family relationship. Therefore, the fact that the respondent No. 1 and respondent No. 2 are father and son, is not a ground in law to infer the absence of the relationship of employer and employee under Workmen's Compensation Act.”

19. Upon a thorough examination of the judgments cited by both parties, it is obvious that no absolute proposition has been set regarding probability and acceptability of employer- employee relationship between close relatives. It will be imprudent to assert that there can never be an employer- employee relationship between close relatives. It is possible for a variety of circumstances to arise, including the employment of close relatives by an employer. Nevertheless, such arrangements may not be common. The Commissioner has to perform an in- depth assessment of the claim and evidence when compensation is sought for an employment injury that is claimed to have occurred while the injured individual was allegedly an employee of a close relative and there is insurance coverage. The Commissioner has responsibility to provide compensation to employees or dependents in legitimate circumstances. However, it is also essential to reject fabricated claims in order to prevent the misuse of the provisions of the Act. Consequently, the Commissioner must exercise utmost caution when evaluating the facts and circumstances, as well as the evidence, in cases where the injured employee or the dependents assert that the injured was an employee of a close relative. Despite the fact that the strict principles of the Code of Civil Procedure and Evidence Act do not govern the proceedings before the Commissioner, it is indispensable to ensure that there are reliable materials on record that establish the employer-employee relationship. In this regard, it is impossible to develop rigid formulas or check lists for the analysis of evidence as also the pertinent facts and circumstances. The Commissioner is responsible for meticulously reviewing the materials, a task that can be in many cases akin to navigating a tightrope, like the one at hand. However, the scrutiny in this regard cannot be compromised although the Act is unquestionably a welfare legislation. Object of the legislation is to ensure payment of compensation in genuine cases of employment injuries and hence entertaining of fake claims would defeat the purpose of the enactment. The Commissioner should grant compensation unhesitatingly if the employer-employee relationship is discernible from the materials on record, even though the employer and employee are close relatives. Nevertheless, it is imperative to promptly eliminate bogus claims in order to prevent the abuse of the Act.

20. Turning to the evidence in the instant case, it is to be noted that both witnesses examined are close relatives of the applicant. PW1 is the mother of the applicant. DW1, the owner of the vehicle, is his sister-in-law. Other than the oral evidence there is no material to support the vital aspect – employer- employee relationship. In view of the nature of the question of law raised in this appeal, that the finding regarding the employer- employee relationship is perverse in the eye of law, being unsupported by any reliable evidence, it is indispensable to analyse the evidence on record.

21. The mother of the applicant, PW1 filed proof affidavit in tune with the contentions raised in the claim petition. In her cross-examination, she stated that the F.I.Statement was given by one Santhosh Kumar, a relative. She also stated that the statement was given by him as told by her husband. She admitted that her husband is running a tea shop. Further she stated that the car was parked in the railway station by her elder son employed in police department at Palakkad and the applicant was driving the vehicle back when he met with the accident. When she was asked about the statement given by the first informant to police wherein it was stated that the applicant was working with his father in the tea shop, she replied that she was not aware of it. Though she claimed that the applicant had got enrolled in Motor Workers Welfare Fund, she added that no document was available to prove it.

22. DW1 was the first opposite party before the Commissioner. As narrated earlier, she is the registered owner of the vehicle involved in the accident and is the wife of the elder brother of the applicant. In her cross-examination, she stated that her husband had gone to the railway station driving the car and parked it there. He thereafter went to his place of employment in Palakkad. She stated that the accident happened when the applicant was bringing the vehicle back. She also stated that she had been paying the applicant Rs.9,000/- per month for driving the car. She added that her father used to give her the amount to pay the salary to the applicant. It is pertinent to note that she replied in the affirmative when she was asked whether the applicant used to help his father in running the tea shop. She also admitted that she was concerned about ensuring that the applicant received compensation.

23. As noted earlier, there is absolutely no documentary evidence to show that the applicant was employed by the 2nd respondent. The oral evidence is of highly interested witnesses. Though the 2nd respondent was an opposite party, she is none other than the sister-in-law of the applicant, and she candidly admitted during her cross-examination that she is also interested to see that the applicant gains compensation. She is unemployed as per the evidence. According to her, her father was giving her money to pay the salary to the applicant. In the peculiar facts and circumstances of this case, in my view, it is not safe to accept the avowals of PW1 and DW1 to arrive at a conclusion regarding the employer-employee relationship without strict scrutiny of their evidence as well as the facts and circumstances.

24. A glaring aspect to be noted in this case is that admittedly the car was driven to the railway station by the brother of the applicant and he parked it there. He afterward went to Palakkad, his place of posting in the police department. The applicant along with one of his relatives went to the railway station to bring back the vehicle. While driving the car on his way back, the accident occurred. If the applicant was actually employed as a driver for monthly salary, why his brother drove the car to the railway station and parked it there is not clarified. If the applicant was actually employed as a full-time driver, he would have driven the vehicle to drop the brother at the railway station. The said aspect is a clear indication of the hollowness of the claim regarding employer- employee relationship.

25. The learned Senior Counsel pointed out that in the F.I. statement it was clearly stated that the applicant was helping his father in the tea shop. When PW1 was examined, she admitted that the 1st informant is a relative and that her husband had talked to him over the phone before he gave the F.I. statement. Hence, the F.I. statement was given by a person who knows the applicant very well and the father of the applicant had talked to him after the accident. The FIR was produced by the applicant as his evidence. The F.I. statement shows that the first informant had clearly stated to the police that the applicant was helping his father in the tea shop. If the applicant was actually employed as a driver, the informant would not have stated that he was working in the tea shop.

26. The above analysis shows that the case of the applicant that he was employed by the 2nd respondent is not reliable. There are clear indications in the evidence that he was actually helping his father in the tea shop. Version of the 2nd respondent that he was employed on monthly salary is not believable. Therefore, I find merit in the contention of the appellant that the conclusion of the Commissioner regarding employer-employee relationship is unsupported by any reliable evidence. I also find that the approach of the Commissioner in this regard was improper. The Commissioner has stated in the impugned order that the burden was heavily on the insurance company to establish that there was no employer-employee relationship. The said conclusion is apparently perverse. The primary burden to prove the employer-employee relationship is definitely on the applicant. Thus, I conclude that the Commissioner seriously erred in analysing the evidence and finding out whether the basic jurisdictional fact was prevailing or not. Therefore, I answer the substantial question of law raised in M.F.A.(ECC)No.86/2024 in favour of the appellant.

27. Certainly, the applicant deserves compassion. A young man has sustained grave injuries resulting in disabilities affecting the quality of his life. However, the object of Employee's Compensation Act is to ensure compensation in genuine cases of employment accidents. In the instant case, the vital aspect, the employer-employee relationship was claimed apparently in a desperate and delayed attempt to obtain compensation. However, the claim was untenable and hence the order passed by the Commissioner cannot be upheld.

                  In the result, M.F.A.(ECC)No.86/2024 is allowed and the impugned order is set aside. As a sequel M.F.A.(ECC) 14/2025 shall stand dismissed. The amount on deposit shall be released to the appellant in M.F.A.(ECC)No.86/2024.