Killed on a highway, not at the plant: Bombay HC holds LPG firm liable as principal employer of dealer driver

Justice Pravin S. Patil upheld a Rs 14,77,950 award with 12 per cent interest against Confidence Petroleum India Ltd for the death of a driver employed by its Gondia distributor, holding that the premises exception in Section 12(4) of the Employees Compensation Act must be read broadly in a beneficial law.

An LPG company cannot escape liability for a distributor's driver killed on a national highway by arguing that the crash happened away from its premises, the Bombay High Court has held. Justice Pravin S. Patil, sitting at the Nagpur bench, dismissed an appeal by Confidence Petroleum India Ltd on 30 October 2026.

The Commissioner under the Employees Compensation Act had held the company and its Gondia distributor jointly and severally liable on 28 February 2024. They were to pay Rs 14,77,950 to the driver's family, with 12 per cent interest from the date of the accident.

Cylinders from Kalmeshwar, crash on NH 6

Confidence Petroleum fills LPG cylinders at a plant in Kalmeshwar, Nagpur district, and supplies them through authorised dealers. Bhushan Godhankar, proprietor of Arnav Go Gas in Gondia, was its dealer for Gondia and Gadchiroli. Under their agreement he collected filled cylinders from the plant against empties, sold them to customers and deposited the collections less his commission.

Rakesh Khandekar drove the dealer's Bolero pick-up van, which delivered cylinders door to door. On 1 September 2020 he and Rajkumar Lilhare were returning to Gondia with cylinders collected at Kalmeshwar. Lilhare was at the wheel and Khandekar sat beside him.

An unidentified truck hit the van from behind on National Highway No. 6. Khandekar died on the spot and Lilhare was injured. Lilhare lodged an FIR at Sakoli police station against the unknown truck driver.

Khandekar's widow, two minor sons and two other family members claimed compensation under Section 3 of the Act. They named the company as principal employer and the dealer as immediate employer.

Both sides denied employing him

The company told the Commissioner that the dealer was independent and that it had no employer-employee relationship with the deceased. It did not enter the witness box or lead any evidence.

The dealer admitted owning the van and that Lilhare was his driver, but denied appointing Khandekar. The claimants relied on the FIR, in which Lilhare himself described the deceased as the other driver of the van.

Mr V.P. Marpakwar appeared for the company, Mr S.W. Sambre for the family and Mr S.R. Burade for the dealer.

Two questions of law

The court framed two substantial questions of law under Section 30 of the Act. The first was whether the company was a principal employer. The second, on which its appeal really turned, was:

“whether in view of Section 12 (4) of the Employees Compensation Act, the appellant is entitled for exoneration from payment of compensation to the claimants” (para 11)

Section 12 makes a principal who engages a contractor liable for compensation to the contractor's workmen. Section 12(4) excludes cases where the accident happened elsewhere than on, in or about the premises where the principal undertakes the work or which are under its control or management.

For the meaning of an accident arising out of and in the course of employment, the judge relied on the Supreme Court in Daya Kishan Joshi v. Dynemech Systems Pvt Ltd, (2018) 11 SCC 642. Claimants must show an accident, a causal connection with the employment, and that it occurred in the course of employment.

Summing up the law, the judge said the connection between the accident and the employment need only be relevant and reasonable, however remote. If the death had a notional and proximate cause related to the employment, the employer is liable to pay.

A dealer driver, on the company work

On the evidence, the court found that Khandekar worked for the dealer as a driver. Lilhare's report described the deceased as a driver of the van, the two taking turns at the wheel, and the dealer's own deposition confirmed that the business needed a vehicle and labour to move the company's cylinders.

The cylinders and the gas belonged to the company, and the van carried them from its plant for distribution. That gave a causal connection between the company and the deceased, and the death arose out of employment.

The first question was answered in the affirmative. The company was held to be the principal employer of the deceased.

Premises read broadly

On Section 12(4), Justice Patil relied on a coordinate bench at Aurangabad in Shri Halasidhanath Sahakari Sakhar Karkhana Ltd v. Sunanda Aghav, decided on 5 February 2010.

There a sugar factory could not invoke Section 12(4) for a worker killed while carting sugarcane in a bullock cart, the court holding that premises in the Act must be given a broader effect.

The judge also cited Kerala High Court rulings in Vijayaraghavan v. Velu and K. Koodalingam v. Superintendent Engineer on the beneficial object of Section 12. Contracts between principal and contractor govern only their rights against each other, and the principal's protection lies in the indemnity under Section 12(2).

Drawing on the Supreme Court's demonetisation ruling in Vivek Narayan Sharma v. Union of India, (2023) 3 SCC 1, he said a statute must be read to advance its object and not become a dead letter. The company, as principal employer, “cannot be exonerated from payment of compensation to the claimants” (para 29).

A tin shed case distinguished

The company had leaned on this court's Division Bench ruling in Nitin v. Ramesh, 2015 (146) FLR 519. There, a contractor's worker was hurt while installing a tin shed at a godown, work outside the principal's trade or business, so the principal was not liable.

Justice Patil held that ruling did not apply. Carrying the company's cylinders was part of the very business between the company and its dealer, not some other work.

Order

The second question was answered in the negative. The first appeal was dismissed, leaving the Commissioner's award of Rs 14,77,950 with 12 per cent interest from 1 September 2020 payable jointly and severally by the company and the dealer.

The appeal was reserved on 17 September 2026 and pronounced on 30 October 2026.