New India Assurance
Co. Ltd. Vs. M/S. Abhilash Jewellery  INSC 125 (22 January 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(s). 7972 OF 2002 NEW
INDIA ASSURANCE CO. LTD. Appellant (s) VERSUS M/S. ABHILASH JEWELLERY
Respondent(s) O R D E R Heard learned counsel for the parties. This appeal has
been filed against the order of the National Consumer Disputes Redressal
Commission, New Delhi dated 15.03.2002.
The respondent had a
business establishment at Vellappad in Trissur District in the State of Kerala.
It took a Jeweller's Block Policy for Rs.
the currency of the policy, the complainant-respondent lodged a claim with the
appellant for the loss of gold ornament weighing 587.870 grams. The claim was
repudiated by the appellant on the ground that the loss of gold was occasioned
as it was in the custody of an apprentice, who was not an employee.
The relevant clause
in the Insurance Policy stated;
property insured whilst in the custody of the insured, his partner or his
therefore, is whether an apprentice is an employee.
The National Consumer
Disputes Redressal Commission has held that an apprentice is an employee
because Section 2 (6) of the Kerala Shops and Commercial Establishments Act
defines an employee to include an -2- apprentice. The National Commission has
also relied on the definition in the Employees State Insurance Act and some
We are of the opinion
that the view taken by the Natinal Commssion is not correct. The present case
is covered solely by the contract of insurance.
That contract of
insurance no doubt uses the word 'employee', but it does not say that the word
'employee' in the contract of insurance will have the same meaning as in the
Kerala Shops and Commercial Establishments Act or the Employees State Insurance
Act or any other enactment.
enactments, the word 'employee', has no doubt, been defined to include an
apprentice, but that is only a deeming provision and a legal fiction by which
the meaning of the word 'employee' has been extended.
Legal fictions are
well-knwon in law. For example, Section 43 (3) of the Income Tax Act defines
'plant' to include a book. Ordinarily a plant means a factory, and by no
stretch of imagination can we call a factory a book. However, the Income Tax
Act deems a book to be a plant for the purpose of depreciation.
illustrations of deeming clauses or legal fictions can be given. The definition
of employee in various enactments which include an apprentice within the ambit
of the definition is such a piece of legal fiction. That, however, does not
mean that in common parlance an apprentice is an employee.
In the present case,
since the word 'employee' has not been defined in the contract of insurance, we
have to give it the meaning which it has in common parlance. In common
parlance, an apprentice is a trainee and not an employee.
Even if he is given a
stipend, that does not -3- mean that there is a relationship of master and
servant between the firm and the apprentice. Hence, we cannot agree with the
view taken by the National Commission. In our view , the claim before the National
Commission was not maintainable.
Hence we set aside
the order of the National Commission.
The appeal is
allowed. No orders as to costs.