# NEW INDIA ASSURANCE CO. LTD v. M/S. ABHILASH JEWELLERY

- **Citation:** [2009] 1 S.C.R. 476
- **Court:** Supreme Court of India
- **Decided:** 2009-01-22
- **Case number:** Civil Appeal No. 7972 of 2002
- **Bench:** Markandey Katju, R.M. Lodha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/new-india-assurance-co-ltd-v-m-s-abhilash-jewellery-25424
- **Pages:** 4

## Headnote

CONTRACT OF INSURANCE:
c
"Employee" - Whether apprentice is an employee -
National Consumer Commission held he is an employee -
On appeal, Held: In common parlance an apprentice is a
trainee and not an employee - Even if stipend is given, still
there is no master and servant relationship - Hence an
D apprentice is not an employee in the context of Contract of
Insurance.
WORDS AND PHRASES:
"Employeew - Meaning of in the context of Contract of
E Insurance.
In this appeal, the correctness of the judgment of the
National Consumer Disputes Redressal Commission
holding that an apprentice is an employee is challenged.
...
F
Allowing the appeal, the Court
HELD: 1.1. The present case is covered solely by the
contract of insurance. The contract of insurance no doubt
uses the word 'employee', but it does not say that the
G word 'employee' in the contract of insurance will have the
same meaning as in the Kerala Shops and Commercial
Establishments Act or the Employees State Insurance Act
or any other enactment. In various enactments, the word
'employee', has no doubt, been defined to include an
H
476
•
~
NEW INDIA ASSURANCE CO. LTD. v. ABHILASH
477
JEWELLERY
apprentice, but that is only a deeming provision and a A
legal fiction by which the meaning of the word 'employee'
has been extended. [Paras 6 and 7] [478-D-E]
1.2. Since the word 'employee' has not been defined
in the contract of insurance, one has to give it the
B
meaning which it has in common parlance. In common
parlance, an appref1tice 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. [Para 10] [478-B-C]
c

## Text

[2009] 1 S.C.R. 476
A
NEW INDIA ASSURANCE CO. LTD.
v.
M/S. ABHILASH JEWELLERY
(Civil Appeal No. 7972 of 2002)
B
JANUARY 22, 2009
[MARKANDEY KATJU AND R.M. LODHA, JJ.]
CONTRACT OF INSURANCE:
c
"Employee" - Whether apprentice is an employee -
National Consumer Commission held he is an employee -
On appeal, Held: In common parlance an apprentice is a
trainee and not an employee - Even if stipend is given, still
there is no master and servant relationship - Hence an
D apprentice is not an employee in the context of Contract of
Insurance.
WORDS AND PHRASES:
"Employeew - Meaning of in the context of Contract of
E Insurance.
In this appeal, the correctness of the judgment of the
National Consumer Disputes Redressal Commission
holding that an apprentice is an employee is challenged.
...
F
Allowing the appeal, the Court
HELD: 1.1. The present case is covered solely by the
contract of insurance. The contract of insurance no doubt
uses the word 'employee', but it does not say that the
G word 'employee' in the contract of insurance will have the
same meaning as in the Kerala Shops and Commercial
Establishments Act or the Employees State Insurance Act
or any other enactment. In various enactments, the word
'employee', has no doubt, been defined to include an
H
476
•
~
NEW INDIA ASSURANCE CO. LTD. v. ABHILASH
477
JEWELLERY
apprentice, but that is only a deeming provision and a A
legal fiction by which the meaning of the word 'employee'
has been extended. [Paras 6 and 7] [478-D-E]
1.2. Since the word 'employee' has not been defined
in the contract of insurance, one has to give it the
B
meaning which it has in common parlance. In common
parlance, an appref1tice 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. [Para 10] [478-B-C]
c
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7972 of 2002.
From the Order dated 15.3.2002 of the National Consumer
Disputes Redr~~sal Commission, New Delhi in Revision
D
Petition No. 81Si,bf 1999.
Salil Paul and Indra Sawhney for the Appellant.
G. Prakash for the Respondent.
E
The following Order of the Court was delivered :
ORDER
1. Heard learned counsel for the parties. This appeal has
been filed against the order of the National Consumer Disputes
F
Redressal Commission, New Delhi dated 15.03.2002.
2. The respondent had a business establishment at
Vellappad i~
1
Trissur District in the State of Kerala. It took a
Jeweller's !:flock Policy for Rs. 1, 15,00,000/-. During the
G
currency of the policy, the complainant-respondent lodged a
claim with the appellant for the loss of gold ornament weighing
587.870 grams. The claim was repudiated by the appellant on
the ground that the loss of gold was occasioned as it was in
the custody of an apprentice, who was not an employee.
H
478
SUPREME COURT REPORTS
[2009] 1 S.C.R.
A
3. The relevant clause in the Insurance Policy stated;
"S. 11(a) property insured whilst in the custody of the
insured, his partner or his employees".
4. The question, therefore, is whether an apprentice is an
B employee.
5. The National Consumer Disputes Redressal
Commission has held that an apprentice is an employee
because Section 2 (6) of the Kerala Shops and Commercial
c Establishments Act defines an employee to include an
apprentice. The National Commission has also relied on the
definition in the Employees State Insurance Act and some other
enactments.
6. We are of the opinion that the view taken by the Natinal
D Commssion is not correct. The present case is covered solely
by the contract of insurance. That contract of insurance no doubt
uses the word 'employee', but it does not say that the word
'employee' in the contract of insurance will have the same
meaning as in the Kerala Shops and Commercial
E Establishments Act or the Employees State Insurance Act or
any other enactment.
7. In various enactments, the word 'employee', has no
doubt, been defined to include an apprentice, but that is only a
F deeming provision and a legal fiction by which the meaning of
the word 'employee' has been extended.
8. Legal fictions are well-knwon in law. For example,
Section 43 (3) of the Income Tax Act defines 'plant' to include
G a book. Ordinarily a plant means a factory, and by no stretch
of imagination can we call a factory a book. However, the
Income Tax Act deems a book to be a plant for the purpose of
depreciation.
9. Many such illustrations of deeming clauses or legal
H fictions can be given. The definition of employee in various
•
.+
NEW INDIA ASSURANCE CO. LTD. v. ABHILASH
479
JEWELLERY
enactments which include an apprentice within the ambit of the
A
definition is such a piece of legal fiction. That, however, does
not mean that in common parlance an apprentice is an
employee.
10. In the present case, since the word 'employee' has not
8
been defined in the contract of insurance, we have to give it
the meaning which it has in common parlance. 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
C
apprentice. Hence, we cannot agree with the view taken by the
National Commission. In our view , the claim before the National
Commission was not maintainable.
11. Hence we set aside the order of the National
Commission.
12. The appeal is allowed. No orders as to costs.
G.N.
Appeal allowed.
D