REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3406 OF 2008
[Arising out of SLP (Civil) No. 12575 of 2008 (@ CC 1875 of 2008)]
State of Punjab & Ors. ...Appellants
Versus
Bhajan Kaur & Ors. ...Respondents
JUDGMENT
S.B. SINHA, J : 1. Delay condoned. 2. Leave granted. 3. Whether Section 140 of the Motor Vehicles Act, 1988 (for short "the 1988 Act") will have a retrospective effect is the question involved herein. 4. An accident took place on 8.01.1983. The deceased was a driver of a truck bearing No. PUC 9005. It collided with a bus belonging to the appellant bearing registration No. PBL-2310. It was being driven by one Sampuran Singh. A claim petition was filed in relation to the said accident purported to be in terms of Section 110-A of the Motor Vehicles Act, 1939 (for short "the 1939 Act"). 5. Appellants herein denied and disputed their liabilities. Several issues were framed by the learned Tribunal. The said claim petition was dismissed by an award dated 12.10.1984.
A First Appeal was preferred by the respondent No. 1 against the said award dated 12.10.1984. A learned Single Judge of the High Court disposed of the same awarding a sum of Rs. 15,000/- by way of compensation by way of no fault liability. An intra-court appeal was preferred thereagainst. Relying on or on the basis of a decision of the said Court in Mosmi and Another v. Ram Kumar and others [1992 ACJ 192], it was held:
"In view of the authoritative pronouncement, this
appeal is disposed of by holding that the claimant
would be entitled to a sum of Rs. 50,000/- (Rs.
Fifty thousand only) under "no fault liability". In
addition thereto, they would also be entitled to
interest @ 9% per annum from the date of
application till payment. However, in case, any
amount was paid to the claimant in view of the
order dated 31.8.1993 passed by this Court, the
same shall be deducted out of this amount." 6. Before adverting to the questions raised in this appeal, we may notice that a statement was made at the bar that the State is not interested in the matter but only intended to get the law settled. We, therefore, did not issue any notice to the respondents and requested Ms. Meenakshi Arora, learned counsel to assist us in the matter. 7. Section 92-A of the 1939 Act provided for payment of a sum of Rs. 15,000/- by way of no fault liability. It was raised to Rs. 25,000/- by reason of Section 140 of the 1988 Act. However, with effect from 14.11.1994, by Amending Act 54 of 1994, the quantum of the amount payable has been raised to Rs. 50,000/-. 8. Indisputably, under the 1939 Act only a sum of Rs. 15,000/- was payable by way of no fault liability.
The question which arises for consideration in this appeal is as to whether it has a retrospective effect. In our opinion, it does not have. 9. A statute is presumed to be prospective unless held to be retrospective, either expressly or by necessary implication. A substantive law is presumed to be prospective. It is one of the facets of rule of law.
Section 92-A of the 1939 Act created a right and a liability on the owner of the vehicle. It is a statutory liability. Per se it is not a tortuous liability. Where a right is created by an enactment, in absence of a clear provision in the statute, it is not to be applied retrospectively. 10. Ms. Arora, however, has drawn our attention to a decision of the Kerala High Court in United India Insurance Co. Ltd. v. Padmavathy and others [1990 ACJ 751]. The Kerala High Court referred to a decision of this Court in M.K. Kunhimohammed v. P.A. Ahmedkutty [AIR 1987 SC 2158] wherein the following observations were made:
"Having regard to the inflationary pressures and
the consequent loss of purchasing power of the
rupee we feel that the amount of Rs. 15,000 and
the amount of Rs. 7,500 in the above provision
appear to have become unrealistic. We, therefore,
suggest that the limits of compensation in respect
of death and in respect of permanent disablement,
payable in the event of there being no proof of
fault, should be raised adequately to meet the
current situation." In Padmavathy (supra), the Kerala High Court held:
"11. The said suggestion of the Supreme Court
was given due respect by the law-making
machinery when the Bill was finally introduced in
Parliament. This fact can be discerned from the
Statement of Objects and Reasons prefaced in the
new Act. Therefore, in effect, Parliament has only
retained the same right which was conferred on the
victims, through Chapter VIIA of the repealed
Act. The difference in the quantum of
compensation is only intended to make the right
realistic and on a par with the amount fixed earlier.
Hence, Section 6 of the General Clauses Act
would not impede the enforcement of Section 140
of the new Act in relation to an accident which
occurred prior to the coming into force of the new
Act.
12. For yet another reason, we can support the said
conclusion. Section 6 of the General Clauses Act
permits switching over to the repealed Act only if
a different intention does not appear in the new
statute. Such a different intention can be discerned
from the new Act. It is in Chapter X of the new
Act that provisions regarding "no fault liability"
have been included. The Chapter" starts with
Section 140 and ends with Section 144. The last
Section reads as follows : "The provisions of this
Chapter shall have effect notwithstanding
anything contained in any other provision of this
Act or of any other law for the time being in
force". The different intention manifested in the
new Act is that the provisions in Chapter X should
get predominance over all other laws. The
provisions contained in that Chapter must be given
effect to notwithstanding any contrary provision in
any other law including Section 6 of the General
Clauses Act. All other provisions, therefore, must
yield to the provisions contained in Chapter X of
the new Act. This is the legislative intention
manifested through Section 144 of the new Act." 11. In the decision of the Punjab and Haryana High Court in Mosmi (supra), reliance has been placed upon the judgment of the Kerala High Court. 12. With the greatest of respect to the learned Judges of the Kerala and Punjab & Haryana High Court, we could not persuade ourselves to agree with the said view. 13. No reason has been assigned as to why the 1988 Act should be held to be retrospective in character. The rights and liabilities of the parties are determined when cause of action for filing the claim petition arises. As indicated hereinbefore, the liability under the Act is a statutory liability. The liability could, thus, be made retrospective only by reason of a statute or statutory rules. It was required to be so stated expressly by the Parliament.
Applying the principles of interpretation of statute, the 1988 Act cannot be given retrospective effect, more particularly, when it came into force on or about 1.07.1989. 14. Reference to Section 6 of the General Clauses Act, in our opinion, is misplaced. Section 217 of the 1988 Act contains the repeal and saving clause. Section 140 of the 1988 Act does not find place in various clauses contained in Sub-section (2) of Section 217 of the 1988 Act. Sub-section (4) of Section 217 of the 1988 Act reads, thus:
"(4) The mention of particular matters in this
section shall not be held to prejudice or affect the
general application of section 6 of the General
Clauses Act, 1897 (10 of 1897) with regard to the
effect of repeals." 15. What is, therefore, otherwise saved in Section 6 of the General Clauses Act inter alia is the right. It reads as under:
"6 Effect of repeal.--Where this Act, or any
Central Act or Regulation made after the
commencement of this Act,
repeals any enactment hitherto made or hereafter
to be made, then, unless a different intention
appears, the repeal shall not--
(a) ***
(b) ***
(c) affect any right, privilege, obligation or
liability acquired, accrued or incurred under any
enactment so repealed;..." 16. Section 6 of the General Clauses Act, therefore, inter alia saves a right accrued and/ or a liability incurred. It does not create a right. When Section 6 applies only an existing right is saved thereby. The existing right of a party has to be determined on the basis of the statute which was applicable and not under the new one. If a new Act confers a right, it does so with prospective effect when it comes into force, unless expressly stated otherwise.
Section 140 of the 1988 Act does not contain any procedural provision so as to construe it to have retrospective effect. It cannot enlarge any right. Rights of the parties are to be determined on the basis of the law as it then stood, viz., before the new Act come into force. 17. It is now well-settled that a change in the substantive law, as opposed to adjective law, would not affect the pending litigation unless the legislature has enacted otherwise, either expressly or by necessary implication. 18. In Garikapati v. Subbaiah Chowdhary [AIR 1957 SC 540], the law is stated, thus:
"...The golden rule of construction is that, in
the absence of anything in the enactment to show
that it is to have retrospective operation, it cannot
be so construed as to have the effect of altering the
law applicable to a claim in litigation at the time
when the Act was passed..." 19. The question was considered by this Court in Gajraj Singh and Others v. State Transport Appellate Tribunal and Others [(1997) 1 SCC 650] and the law was stated in the following terms:
"22. Whenever an Act is repealed it must be considered, except as to transactions past and closed, as if it had never existed. The effect thereof is to obliterate the Act completely from the record of Parliament as if it had never been passed; it never existed except for the purpose of those actions which were commenced, prosecuted and concluded while it was an existing law. Legal fiction is one which is not an actual reality and which the law recognises and the court accepts as a reality. Therefore, in case of legal fiction the court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non-existent. The effect of such a legal fiction is that a position which otherwise would not obtain is deemed to obtain under the circumstances. Therefore, when Section 217(1) of the Act repealed Act 4 of 1939 w.e.f. 1-7-1989, the law in Act 4 of 1939 in effect came to be nonexistent except as regards the transactions, past and closed or saved.
23. In Crawford’s Interpretation of Law (1989) at p. 626, it is stated that:
"[A]n express repeal will operate to
abrogate an existing law, unless there is some
indication to the contrary, such as a saving
clause. Even existing rights and pending
litigation, both civil and criminal, may be
affected although it is not an uncommon
practice to use the saving clause in order to
preserve existing rights and to exempt pending
litigation." At p. 627, it is stated that:
"[M]oreover, where a repealing clause
expressly refers to a portion of a prior Act, the
remainder of such Act will not usually be
repealed, as a presumption is raised that no
further repeal is necessary, unless there is
irreconcilable inconsistency between them. In
like manner, if the repealing clause is by its
terms confined to a particular Act, quoted by
title, it will not be extended to an act upon a
different subject." Section 6 of the GC Act enumerates, inter alia, that where the Act repeals any enactment, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced. In India Tobacco Co. Ltd. v. CTO (SCC at p. 517) in paras 6 and 11, a Bench of three Judges had held that repeal connotes abrogation and obliteration of one statute by another from the statute-book as completely as if it had never been passed. When an Act is repealed, it must be considered, except as to transactions past and closed, as if it had never existed. Repeal is not a matter of mere form but is of substance, depending on the intention of the legislature. If the intention indicated either expressly or by necessary implication in the subsequent statute was to abrogate or wipe off the former enactment wholly or in part, then it would be a case of total or pro tanto repeal.
24. When there is a repeal and simultaneous reenactment, Section 6 of the GC Act would apply to such a case unless contrary intention can be gathered from the repealing Act. Section 6 would be applicable in such cases unless the new legislation manifests intention inconsistent with or contrary to the application of the section. Such incompatibility would have to be ascertained from
all relevant provisions of the new Act. Therefore,
when the repeal is followed by a fresh legislation
on the same subject, the Court would undoubtedly
have to look to the provisions of the new Act only
for the purpose of determining whether the new
Act indicates different intention. The object of
repeal and re-enactment is to obliterate the
Repealed Act and to get rid of certain obsolete
matters." 20. In Ramesh Singh and Another v. Cinta Devi and Others [(1996) 3 SCC 142] it has clearly been held that Section 217 of the 1988 Act does not expressly or by necessary implication make the relevant provision retrospective in operation. 21. In Zile Singh v. State of Haryana [(2004) 8 SCC 1], a Three-Judge Bench of this Court, stated the law, thus:
"17. Maxwell states in his work on
Interpretation of Statutes (12th Edn.) that the rule
against retrospective operation is a presumption
only, and as such it "may be overcome, not only
by express words in the Act but also by
circumstances sufficiently strong to displace it" (p.
225). If the dominant intention of the
legislature can be clearly and doubtlessly spelt out,
the inhibition contained in the rule against
perpetuity becomes of doubtful applicability as the
"inhibition of the rule" is a matter of degree which
would "vary secundum materiam" (p. 226).
Sometimes, where the sense of the statute
demands it or where there has been an obvious
mistake in drafting, a court will be prepared to
substitute another word or phrase for that which
actually appears in the text of the Act (p. 231)." 22. In Lohia Machines Ltd. and Anr. v. Union of India (UOI) and Ors. [(1985) 2 SCR 686], this Court held :
"On the other hand it is quite clear that if the relief
granted is to be withdrawn with retrospective
operation from 1972 the assessees who have
enjoyed the relief for all those years will have to
face a very grave situation. The effect of the
withdrawal of the relief with retrospective
operation will be to impose on the assessee a huge
accumulated financial burden for no fault of the
assessee and this is bound to create a serious
financial problem for the assessee. Apart from the
heavy financial burden which is likely to upset the
economy of the undertaking, the assessee will
have to face other serious problems. On the basis
that the relief was legitimately and legally
available to the assessee, the assessee had
proceeded to act and to arrange its affairs. If the
relief granted is now permitted to be withdrawn
with retrospective operation, the assessee may be
found guilty of violation of provisions of other
statutes and may be visited with penal
consequences..." 23. In M/s. Indian Metals and Ferro Alloys Ltd. & Anr. v. State of Orissa & Ors. [(1987) 3 SCC 189], it was opined :
"25...we hold that the High Court was not right in
observing that the orders under Section 22-B of
the Act imposing restrictions on consumption of
power could not legally and validly be passed by
the Government "with retrospective effect" in the
middle of a water year. But the position regarding
disallowance of clubbing stands on an entirely
different footing. If a consumer had been allowed
the benefit of clubbing previously, that benefit
cannot be taken away with retrospective effect
thereby saddling him with heavy financial burden
in respect of the past period where he had drawn
and consumed power on the faith of the orders
extending to him the benefit of clubbing..." 24. In Madishetti Bala Ramul (D) by LRs. v. The Land Acquisition Officer [2007 (8) SCALE 184], this Court observed:
"19. In Land Acquisition Officer-cum-DSWO,
A.P. v. B.V. Reddy and Sons, this Court opined
that Section 25 being not a procedural provision
will have no retrospective effect, holding:
6. Coming to the second question, it is a well-
settled principle of construction that a substantive
provision cannot be retrospective in nature unless
the provision itself indicates the same. The
amended provision of Section 25 nowhere
indicates that the same would have any
retrospective effect. Consequently, therefore, it
would apply to all acquisitions made subsequent to
24-9-1984, the date on which Act 68 of 1984 came
into force. The Land Acquisition (Amendment)
Bill of 1982 was introduced in Parliament on 30-
4-1982 and came into operation with effect from
24-9-1984...." 25. In Ashok Lanka and Anr. v. Rishi Dixit and Ors. [(2005) 5 SCC 598], this Court held:
"A statute must be read reasonably. A statute
should not read in such a manner which results in
absurdity, A statute, on its plain language,
although postulates a prospective operation, it
cannot be held to be retrospective only because it
would apply for the excise year for which
applications were invited despite the fact that the
selection process made thereunder is over." 26. The Kerala and Punjab & Haryana High Court proceeded on the basis that Section 6 of the General Clauses Act will apply. If the same applies, it would not affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. If that be so, the old Act shall apply and not the new one. Construction of a repeal and saving clause vis-‘-vis the statute providing for continuation of orders, etc. must be given the meaning which can be culled out from the statute in question. 27. In Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector & ETIO and Others [(2007) 5 SCC 447], this Court held:
"106. Furthermore, exemption from payment of
tax in favour of the appellants herein would also
constitute a right or privilege. The expression
"privilege" has a wider meaning than right. A
right may be a vested right or an accured right or
an acquired right. Nature of such a right would
depend upon and also vary from statute to statute.
It has been so held by this Court, while construing
Section 6 of the General Clauses Act, in M/s.
Gurcharan Singh Baldev Singh v. Yashwant Singh
and Others [(1992) 1 SCC 428] in the following
terms:
"...The objective of the provision is to ensure
protection of any right or privilege acquired under
the repealed Act. The only exception to it is
legislative intention to the contrary. That is, the
repealing Act may expressly provide or it may
impliedly provide against continuance of such
right, obligation or liability..."
We, therefore, are clearly of the opinion that the 1988 Act does not have any retrospective operation. 28. For the reasons aforementioned, the decisions of Kerala and Punjab & Haryana High Court do not lay down a good law. They are overruled accordingly. However, as the State has not asked for any relief against the respondents, this appeal is dismissed. No costs.
...............................J.
[S.B. Sinha]
................................J.
[Lokeshwar Singh Panta] New Delhi; May 08, 2008