Supreme Court of India
CIVIL APPELLATE JURISDICTION
New India Assurance Company Limited
CIVIL APPEAL NO(s). 7972 OF 2002
[III (2009) CPJ 2 (SC)]
Date of Decision: 22.01.2009
The complainant/respondent, who had taken a jeweller’s block policy, lodged a claim with the opposite party insurer for loss of gold ornaments. The insurer repudiated the claim on the ground that the loss occurred when the gold was in the custody of an apprentice, who was not an employee (because the policy stipulated that for indemnification of the loss, the property insured had to be “in the custody of the insured, his partner or his employee”).
Held by National Commission :-
The National Commission allowed the complaint holding that an apprentice was an ’employee’ since section 2(6) of the Kerala Shops and Commercial Establishments Act (as well as some other statutes) defined an ’employee’ to include an ‘apprentice’.
Held by Supreme Court:-
The Supreme Court, however, held that the word ’employee’ in the contract of insurance mentioned had to be given the meaning in common parlance. The definition in the local Act, including an ‘apprentice’ in the category of ’employee’, was only a ‘legal fiction’, which is a concept in law and could not be applied to an insurance contract.
In common parlance, an apprentice is a trainee and not an employee. Even if he is given a stipend, that does not mean that there is a relationship of master and servant between the firm and the apprentice.
The Court, therefore, allowed the appeal.