Insurance Company Can't Deny Compensation Citing Invalid Employer-Employee Relationship Between Family Members Without Evidence: HP High Court

The Himachal Pradesh High Court has held that close family ties do not prevent a valid employer–employee relationship under law if it is supported by credible evidence on record.Justice Vivek Singh Thakur observed “It has been categorically observed by the Supreme Court that technically there is possibility that husband and wife can have relation of employer and employee. It is apt to notice that relation of husband and wife is more closer than the relation of brother, as both of them being partners of life, in normal circumstances, cannot be expected to work as employee and employer, however, despite that it has been observed by the Supreme Court that such relationship is possible”.Thereafter, it was held that that engaging an unemployed brother by real brother is not unnatural or illegal if supported by credible evidence on record. The bench remarked: “Engaging an unemployed brother with Truck as a Attendant, Conductor, Manager, Caretaker or Cleaner, by his real brother, is not unnatural phenomena, rather it is natural for a brother to provide employment to his another brother in this Era of unemployment and every person is fighting with crises of getting employment.” The Appeal was filed by Rishi Raj, the claimant, against an award passed by Motor Accident Claims Tribunal, District Mandi. He contended that the Tribunal wrongly treated him as a gratuitous passenger rather than an employee, he stated that he was working as the Conductor-cum-Manager of the truck. The Court noted that even if it was considered that the claimant was engaged as a Conductor-cum-Manager, he can't be considered entitled for receiving benefit as conductor of the truck, as he did not have a driver's licence. However, the Court observed that it was admitted by the owner and driver that the claimant was engaged with the truck. This fact was not denied by the Insurance Company, they merely contended that the insurance policy did not cover injury of a conductor-cum-manager. The Insurance Company also contended that claimant and owner of the Truck were real brothers, so they couldn't have an employee-employer relationship between them. The Court rejected this contention stating that employing a brother, especially during economic hardship, was a practical arrangement and legally valid if proven. The Court remarked, “in absence of pleadings as well as evidence, oral and documentary, plea raised by the Insurance Company that claimant was not a person engaged by the owner is not sustainable”. The Court noted that even if the conductor did not have a valid license, his engagement with Truck as an employee, Caretaker, Helper or as Cleaner cannot be ruled out as it was admitted by the owner and driver that he was an employee. Further, the Court observed that the insurance policy covered liability towards any other employee other than the driver because an additional premium was paid. Thus, the Court allowed the appeal and directed the insurance company to pay compensation to the claimant. Case Name: Rishi Raj v/s Ram Krishan & Ors. Case No.: FAO (MVA) No.4016 of 2013 Date of Decision: 15.07.2025 For the Petitioner: Mr.Bimal Gupta, Senior Advocate, with Mr. Trigun Singh Negi, vice Ms. Kusum Chaudhary, Advocate. Advocate For the Respondents: None for respondents No.1 and 2. Ms. Seema Sood, Advocate, for respondent Click Here To Read/Download Order

Insurance Company Can't Deny Compensation Citing Invalid Employer-Employee Relationship Between Family Members Without Evidence: HP High Court

Mehak Aggarwal

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