SC Asks Law Commission to Consider Amendment to ‘Dependent’ Definition in Employees Compensation Act

The Supreme Court has called upon the Law Commission of India to examine and recommend suitable amendments to the Employees Compensation Act, 1923, particularly to the definition of the term “dependent” under Section 2(1)(d)(iii)(d). The direction came from a bench of Justices Rajesh Bindal and Manmohan, which noted that the definition is outdated and inconsistent with contemporary realities.

The court observed that the Employees Compensation Act was enacted over a century ago and that some expressions used in it, such as “a widowed sister if a minor,” have lost practical relevance in today’s social and legal context. The bench said that in modern times, especially after the enactment of the Hindu Marriage Act, 1955, it would be rare to find a situation where a widowed sister is still a minor.

"In our view, the matter needs to be considered by the Law Commission of India for suitable amendment of the aforesaid provision or any other in the 1923 Act," the bench observed in its order. The court directed that a copy of the judgment be forwarded to the Secretary, Ministry of Law and Justice, to take necessary steps for referring the matter to the Chairperson of the Law Commission of India.

The order came while dismissing a civil appeal filed by the New India Assurance Company Ltd challenging the Karnataka High Court’s decision of October 5, 2009. The High Court had upheld the award of compensation in favour of two widowed sisters of a deceased employee, treating them as dependents under the Employees Compensation Act, 1923.

The appeal arose from an order passed by the Commissioner for Workmen’s Compensation, which had recognised the widowed sisters of the deceased as dependents and granted compensation. The insurance company had contended that the sisters could not be considered dependents within the meaning of Section 2(1)(d)(iii)(d), since they were adults at the time of the employee’s death and did not meet the statutory condition of being “minors.”

Section 2(1)(d) of the Employees Compensation Act defines the term “dependent” by listing specific categories of relatives entitled to compensation upon the death of an employee. Clause (iii)(d) includes “a minor brother, or an unmarried sister or a widowed sister if a minor.” The insurer argued that since both sisters were widowed but not minors, they fell outside the ambit of the definition.

The Supreme Court noted that while the statutory language may not explicitly cover the situation of adult widowed sisters, the legislative intent behind such provisions was to extend financial protection to close relatives who were genuinely dependent on the deceased employee. The bench also recognised that statutory interpretation cannot rewrite the law but can bring attention to legislative anomalies that require formal correction through amendment.

Taking note of the social changes that have taken place since the Act’s enactment, the court remarked that the continued use of phrases such as “widowed sister if a minor” reflects a legislative time warp that does not correspond with current realities. The bench found merit in the High Court’s reasoning that dependency should be assessed on factual circumstances rather than restricted solely by literal age-based qualifiers that no longer hold logical or practical relevance.

Emphasising the need for legislative modernisation, the court observed that the Employees Compensation Act was conceived in a colonial era to provide compensation to dependents of workers for death or injury in the course of employment. While the core intent remains relevant, certain provisions have not evolved with changing family structures, gender roles and statutory marriage laws.

Accordingly, the bench requested the Law Commission of India to examine the definition of “dependent” in Section 2(1)(d) in the light of these developments and consider suitable recommendations to the Government of India for amendment. The court also noted that the Union of India would be required to provide appropriate assistance on the matter during the process.

Having dismissed the insurer’s appeal, the Supreme Court directed its Registry to inform the respondents about the dismissal, enabling them to withdraw the compensation amount lying deposited with the Karnataka High Court. The bench clarified that in the event any of the respondents has since passed away, their legal heirs shall be entitled to withdraw the deposited amount along with the accrued interest.

The decision underscores the continuing judicial emphasis on ensuring that labour welfare statutes remain in tune with contemporary social conditions and constitutional principles of fairness. It also highlights the judiciary’s role in flagging outdated statutory language for legislative reconsideration rather than judicial re-drafting.

The Employees Compensation Act, 1923 (formerly the Workmen’s Compensation Act), remains one of India’s earliest social-welfare legislations, designed to secure financial relief for workers and their dependents in cases of death or injury arising out of employment. With the Supreme Court’s reference to the Law Commission, a broader review of definitions within the Act may now be on the anvil to align them with modern socio-legal realities.

Case Title: The New India Assurance Company Ltd vs Kogga & Ors

Bench: Justices Rajesh Bindal and Manmohan

Judgment Date: October 2025