Owner's Admission Cannot Be Brushed Aside to Deny Compensation: Supreme Court Reinstates ₹3.7 Lakh Award to Family of Deceased Driver

"Denial in Counter-Affidavit to Evade Liability Cannot Override Sworn Admission Before Court,"  In a significant ruling protecting the rights of employees and their families under the Workmen’s Compensation Act, 1923, the Supreme Court of India on January 5, 2026, set aside a Telangana High Court judgment that had reversed a compensation award to the widow of a deceased driver. The apex court reinstated the 2009 award of ₹3,73,747 with 12% interest passed by the Commissioner for Workmen’s Compensation, noting that the employer-employee relationship had been clearly admitted on oath by the vehicle owner, and the High Court had grossly erred in ignoring such vital evidence.

The decision in Panganti Vijaya v. United India Insurance Co. Ltd. & Ors., delivered by a bench of Justice Vikram Nath and Justice Augustine George Masih, highlights that employers cannot evade statutory liability by initially denying employment, especially when their later sworn testimony confirms the factual relationship.

"Owner Admitted Employment in Affidavit—Earlier Denial Meant to Evade Civil Liability": Supreme Court Rejects High Court’s Reasoning

The case involved the death of Panganti Suresh, who was driving vehicle No. AP-15L-4000 when it collided with a lorry on 10.09.2004, resulting in his fatal injury. His widow, Panganti Vijaya, filed a claim for compensation, stating that Suresh was employed as a driver by the vehicle owner (Respondent No. 5, Sathyanarayanan) and was returning from Hyderabad when the accident occurred during the course of his employment.

While the employer initially denied the employment relationship in a counter-affidavit before the Commissioner, he later admitted during cross-examination—and once again in an affidavit filed before the Supreme Court—that the deceased had indeed been employed at a monthly salary of ₹3,500 with ₹50 per day as batta, and had been hired just one day prior to the accident.

The Court took serious note of this inconsistency and observed:

"His denial of factum of employment in the counter-affidavit placed before the Commissioner was to avoid civil liability."

The Supreme Court held that once this admission was made on oath, there was no factual or legal justification for the High Court to disregard the same, and the Commissioner’s finding was based on correct appreciation of the evidence.

High Court’s Reversal Termed “Legally and Factually Flawed”: SC Restores Original Award

The High Court had reversed the Commissioner’s award in CMA No. 98 of 2010, erroneously relying on the earlier denial in the counter-affidavit and ignoring both the oral testimony of the owner and his subsequent judicial admissions. Additionally, the High Court misread key facts—wrongly noting the FIR as lodged by the deceased’s wife, when in fact it had been filed by the wife of another victim.

Condemning this factual and legal oversight, the Court observed:

"The finding recorded by the Commissioner was based on a correct appreciation of evidence and did not suffer from perversity or legal infirmity."

In holding the High Court’s interference unwarranted, the bench further reiterated:

“The deceased was employed as a driver and his death occurred during the course of and arising out of his employment.”

Accordingly, the apex court restored the original compensation award of ₹3,73,747 along with 12% interest, and permitted the appellant to withdraw the remaining compensation amount lying with the High Court Registry.

Insurance Company’s Appeal Fails – Supreme Court Directs Release of Compensation Within Four Weeks

The Court noted that the Insurance Company had already deposited the compensation amount at the time of filing its appeal before the High Court. While the claimant had been allowed to withdraw one-third of the amount, the remaining was still in deposit. The bench directed:

“The appellant is hereby permitted to withdraw the rest of the amount with accrued interest lying in deposit with the High Court. Registrar General of the High Court of Telangana shall ensure that the amount is released within four weeks of the filing of this order before the Registry.”

A Case Underscoring the Judicial Duty to Protect Statutory Compensation Rights

This judgment is a clear reaffirmation of the principle that evasive or inconsistent stands by employers will not defeat rightful compensation claims under the Workmen’s Compensation Act. The Court’s focus on judicial admissions, appreciation of evidence, and protection of the statutory rights of dependents reflects its strong commitment to safeguarding the welfare objectives underlying labour welfare legislation.

By ensuring that procedural missteps or strategic denials do not overrule substantive justice, the Supreme Court once again demonstrated that truthful admissions made in court cannot be overlooked merely to suit an insurer or employer’s legal defence.

Date of Decision: January 5, 2026