M.Y. Eqbal, J.
1. The question involved in this appeal is whether Section 140 of the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the Act of 1988’) shall have retrospective operation. In other words, whether the order of the Claims Tribunal awarding Rs. 25,000/- as interim compensation in proposed exercise of jurisdiction under Section 140 of the Act of 1988 in respect of a claim arising out of an accident occurred when the Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act of 1939') was in force, is in accordance with law?
2. The fact of the case before me is very short. The claimant-respondent No. 1 filed a claim petition before the District Judge, Purnia, under Section 110-A of the Act of 1939 for grant of compensation alleging therein that, on 24.6.1989, his son Dilip Kumar Yadav aged about 23 years, while going to Purnia on a bus bearing registration No. PHK 8919, fell down in a ditch near Roskagarh in village Baniapati, Purnia; as a result of which the said Dilip Kumar Yadav died. In the said claim, which was registered as Compensation Case No. 49 of 1989, the claimant-respondent No. 1 filed an application on 10.8.1990, claiming interim compensation of Rs. 25,000/- under Section 140 of the Act of 1988. The appellant opposite party, namely, the insurance company, filed rejoinder to the above petition stating therein that the accident took place on 24.6.1989, i.e., before the commencement of the Act of 1988. Therefore, the claimant is not entitled to get the benefit of Section 140 of the said Act of 1988.
3. Learned Claims Tribunal disposed of the said application in terms of the order dated 23.7.1992 which is impugned in this appeal. The learned Tribunal held that the claimants are entitled to get the benefit under Section 140 of the Act of 1988 and are entitled to interim compensation of Rs. 25,000/-. According to the Tribunal, although the said accident took place on 24.6.1989, the petition for interim compensation was filed on 23.8.1989, i.e., after the commencement of the Act of 1988, the petition shall be governed by the Act of 1988 and not by the Act of 1939. The Tribunal, while holding the same, relied upon the decision of the Rajasthan High Court in Rajasthan State Road Trans. Corporation v. Ogam 1992 ACJ 843 (Rajasthan).
4. The only point canvassed before me by the learned Counsel for the appellant is that the Tribunal was in error in applying the provision of Section 140 of the Act of 1988 and awarding Rs. 25,000/- instead of Rs. 15,000/- as compensation under the no-fault liability. He submitted that, since the accident took place when the Act of 1939 was in force the petition for grant of interim compensation shall be governed by Section 92-A of the Act of 1939 and not by Section 140 of the Act of 1988. He further submitted that the provision of Section 140 has no retrospective operation.
5. Before deciding the question, it is necessary to look into the legislative history under different Acts which deals with the grant of compensation as a result of fatal injury. Before 1939, there was no Act, namely, Motor Vehicles Act and cases for compensation as a result of death or injury were being governed by the Fatal Accidents Act, 1855. In 1939, Motor Vehicles Act, 1939, was enacted and by Chapter VIII of the said Act, an alternative forum was created for deciding the question of compensation payable for the death or injury caused on account of motor vehicle accidents and they have not modified in any manner a substantive law governing the said question. It is worth to mention here that when the Fatal Accidents Act was enacted, there was no motor vehicle on road in India. Today, lakhs of motor vehicles are put on road and the largest number of injuries and deaths are taking place on road on account of motor vehicle accidents. In view of fast and consistently increasing load of traffic, a number of 'hit and run' cases where the drivers of the motor vehicles who cause the accident are not known have also increased in number. In order to meet the social demand and recommendation of the Indian Law Commission, Chapter VII-A was introduced in the Act of 1939. Sections 92-A to 92-E of the Act form part of Chapter VII-A. Section 92-A of the Act of 1939 provides that where death or permanent disablement of any person as a result of accident arising out of the use of the motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the motor vehicles shall jointly and severally be liable to pay compensation in respect of such death or permanent disablement in accordance with the provisions of the said section. The amount of compensation, which was payable thereunder in respect of death of any person was fixed at a sum of Rs. 15,000/- and the amount of compensation payable in respect of permanent disablement of any person was fixed at a sum of Rs. 7,500/-. Sub-section (3) of Section 92-A of the said Act provided that in any claim for compensation under Sub-section (1) of Section 92-A, the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or fault of the owner or owners of the vehicle or vehicles concerned or of any other person.
6. Chapter VII-A as introduced in the Act of 1939 by the Amending Act, 1982 (Act 47 of 1982) is clearly a departure from the common law principle that the claimant should establish the negligence on the part of the owner of the vehicle before claiming any compensation for the death or permanent disablement caused on account of motor vehicle accident. Section 92-A which made the provision for liability to pay compensation in certain cases on the principle of 'no fault' reads as under:
92-A. Liability to pay compensation in certain cases on the principle of no fault.—(1) Where the death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
(2) The amount of compensation which shall be payable under Sub-section (1) in respect of the death of any person shall be a fixed sum of fifteen thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of seven thousand five hundred rupees.
(3) In any claim for compensation under Sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under Sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.
7. After the amendment made in 1982, a need was felt to replace the said Act by enacting a comprehensive law taking into account the changes in the road transport technology, the pattern of passenger and freight movements, development of road network in the country. In this way, a consolidated Act, namely, Motor Vehicles Act, 1988, was enacted and it came into force with effect from 1.7.1989. In the new Act of 1988, Chapter VII-A was renumbered as Chapter X, having five sections, i.e., Sections 140 to 144. Similarly, Chapter VII of the 1939 Act was rearranged as Chapter XI in the new Act of 1988. Section 140 of the new Act of 1988 corresponds to Section 92-A of the Act of 1939 as inserted by the Amending Act of 1982. Section 140 of the new Act is in pari materia with Section 92-A of the Act of 1939 save and except the quantum of such compensation was increased, for better appreciation. Section 140 of the new Act is reproduced herein below:
140. Liability to pay compensation in certain cases on the principle of no fault.—(1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
(2) The amount of compensation which shall be payable under Sub-section (1) in respect of the death of any person shall be a fixed sum of twenty-five thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of twelve thousand rupees.
(3) In any claim for compensation under Sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under Sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.
8. It is worth to notice Section 217 of the new Act of 1988 by which the Act of 1939 has been repealed. Section 217 reads thus:
217. Repeal and savings.—(1) The Motor Vehicles Act, 1939 and any law corresponding to that Act in force in any State immediately before the commencement of this Act in that State (hereafter in this section referred to as the repealed enactments) are hereby repealed.
(2) Notwithstanding the repeal by Sub-section (1) of the repealed enactments—
(a) to (f) xxx xxx xxx
(3) Any penalty payable under any of the repealed enactments may be recovered in the manner provided by or under this Act, but without prejudice to any action already taken for the recovery of such penalty under the repealed enactments.
(4) xxx xxx xxx
9. One more section, namely, Section 95 of the Act of 1939 is worth to be noticed before deciding the question in regard to the effect of the new Act retrospectively or prospectively. Section 95 of the Act of 1939 sets out the requirements of policy of the insurance which must be taken by the owner of the motor vehicle and the limits of the liability thereunder. A policy of insurance, subject to the proviso to Sub-section (1) of Section 95 of the Act of 1939 shall cover any liability incurred in respect of any one accident up to the limit specified in Sub-section (2) of Section 92 of the Act of 1939.
In the instant case, I am concerned with the question of liability of the insurance company under the Act of 1939 in a case where there is a death or injury of a passenger travelling in stage-carriage vehicle. If we see the history of the amendments made from time to time in the said Act of 1939, it would transpire that in the original Act of 1939, the liability of the insurance company under Section 95 of the said Act was limited to Rs. 2,000/- in respect of death or injury of each passenger and a maximum of Rs. 20,000/-. In the year 1969, the said provision was amended by Act 56 of 1969 whereby the minimum limit of Rs. 2,000/- was increased to Rs. 5,000/- in respect of individual passenger and the maximum limit was also increased to Rs. 50,000/- from Rs. 20,000. Again, in the year 1982, the provision of Section 95 was amended by Amending Act 47 of 1982. The said minimum limit of Rs. 5,000/- was increased to Rs. 15,000/-for each passenger and the maximum limit was also increased to Rs. 1,50,000/- from Rs. 50,000/-. The amendment made in the year 1982 continued till 1988 Act came into force with effect from 1.7.1989. The provisions of the Act read as under:
95 (2)(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,—
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;
(ii) in respect of passengers,—
(1) a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers;
(2) a limit of seventy-five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;
(3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and
(4) subject to the limits aforesaid, ten thousand rupees for each individual passenger where the vehicle is a motor cab, and five thousand rupees for each individual passenger in any other case.
10. After the new Act of 1988 came into effect, a question arose before various High Courts and the Supreme Court as to what would be the liability of the insurer in respect of death of or bodily injury to a passenger carried in a bus as a result of an accident which took place prior to 1.7.1989, i.e., when the Act of 1939 was in force. It has been consistently held that the liability of the insurance company in respect of death of or bodily injury to a passenger shall be restricted to a limit of Rs. 15,000/- as provided under Section 95(2)(b) of the Act of 1939. Reference may be made to the decisions in the cases of Sheikhupura Transport Co. Ltd. v. Northern India Transporters Insurance Co. Ltd. 1971 ACJ 206 (SC); M.K. Kunhi-mohammed v. P.A. Ahmedkutty 1987 ACJ 872 (SC); British Indian General Ins. Co. Ltd. v. Maya Banerjee 1986 ACJ 946 (SC). The view of the Supreme Court was followed by various High Courts in the cases of Automobile Transport (Rajasthan) Private Ltd. v. Dewalal 1977 ACJ 150 (Rajasthan); Gobinda Prosad Mukherjee v. Sujit Bhowmick 1978 ACJ 160 (Calcutta); New India Assurance. Co. Ltd. v. P. Mohalaxmi 1979 ACJ 400 (Orissa); and Noor Mohammad v. Phoola Rani 1984 ACJ 518 (Allahabad) and various other decisions.
11. Having regard to the law laid down by the Apex Court, 1 am of opinion that, if the provision of Section 140 of 1988 Act is to be given effect retrospectively, there shall be total departure from the settled principles of law. This can be explained by giving an illustration. Suppose, a stage-carriage vehicle was insured when the Act of 1939 was in force and the insurance company had undertaken to indemnify the insured under the policy, to the extent provided under Section 95 of the said Act of 1939. In case of an accident occurred prior to 1.7.1989 causing death or bodily injury to any of the passengers carried therein, the maximum liability whatsoever as against the insurance company under Section 95(2)(b) shall not be beyond Rs. 15,000/-. Merely because the claim petition was filed after 1.7.1989 when the Act of 1988 came into effect, the insurance company cannot be saddled with the liability in excess of what has been provided in Section 95 of the Act of 1939, that is, awarding interim compensation of Rs. 25,000/- by applying the provision of Section 140 of the Act of 1988. That was the reason the legislature, while enacting the new Act of 1988, took care of the situation that might have arisen and by repealing the Act of 1939 made a saving provision under Section 217 of the said Act of 1988.
12. Question arose before various High Courts after the amendment in the year 1982 as to whether the new inserted provision, namely, Section 92-A shall have retrospective effect meaning thereby whether the claimants would be entitled to get interim compensation of Rs. 15,000/-under Section 92-A in respect of an accident occurred prior to 1.10.1982, i.e., before the Amending Act 47 of 1982 came into force.
13. A Bench of the Rajasthan High Court in Yashoda Kumari v. Rajasthan State Road Trans. Corporation 1984 ACJ 716 (Rajasthan), held as under:
In the present case, there is no question of interpretation of any section. The only question is whether Section 92-A which came into existence and was inserted only in the year 1982 will have any effect on the present case where the accident took place in 1968 and the claim petition had been filed in 1972. The section has not been given retrospective effect and, therefore, in my opinion, the argument of the learned Counsel for the appellant has no force and deserves to be rejected.
14. A similar question arose before a Division Bench of the Allahabad High Court in Ram Mani Gupta v. Mohammad Ibrahim 1985 ACJ 476 (Allahabad), wherein it took notice of the principle laid down by the Supreme Court and held as under:
Section 92-A introduces a new principle of liability and makes the defendant liable to pay Rs. 15,000/- even if there is no negligence of the defendant, and also in cases where the accident took place due to the negligence of the deceased. The section itself came into operation on 1.10.1982. There is no express provision that it will operate retrospectively. The language also does not imply that retrospective effect is intended. It is not a case where the legislative intent is clear and compulsive. We are of the opinion that Section 92-A is prospective and it cannot be given effect to retrospectively. The appellants are not entitled to the benefit of this provision.
15. There cannot be any doubt that the provisions of Section 92-A of 1939 Act and/or Section 140 of the Act of 1988 for interim compensation under the no fault liability creates substantive right which generally operates prospectively and there is a presumption against the retrospectivity if they affect vested right and obligation unless the legislature intent is clear and compulsive, such retrospective effect may be given where there are express words giving retrospective effect or where the language necessarily implies that such retrospective operation is intended.
16. A similar question arose in a Division Bench of the Bombay High Court in the case of Prakash Chandumal Khatri v. Suresh Pahilajrai Makhija 1992 ACJ 369 (Bombay), the fact before the Division Bench was that a claim case under Section 110-A of 1939 Act was filed on 17.12.1988 before the Claims Tribunal claiming compensation in respect of an accident which took place on 1.7.1988. When the claim case was pending before the Claims Tribunal, the Act of 1988 came into force. Thereafter, an application was filed on 25.8.1989 claiming interim compensation of Rs. 25,000/- as provided under Section 140 of the said Act. The application was resisted by respondent No. 2, insurance company by pointing out that the liability to pay compensation on the principle of no fault liability accrued on the date when the accident took place, i.e., on 1.7.1988 and the statutory liability was only Rs. 15,000/- on that date. The contention raised by the insurance company was accepted and the Tribunal ordered for payment of Rs. 15,000/- as compensation on the principle of no fault liability. The appellant felt aggrieved by that order and moved an appeal before the High Court which was dismissed holding that Section 140 of 1988 Act cannot have retrospective effect. The court observed as under:
The question which falls for our determination is when the liability of the respondents to pay compensation on principle of 'no fault liability' arises the right to claim compensation and the corresponding liability to pay the compensation accrued on the date of the accident. The liability on that day was limited to Rs. 15,000/-. Indeed, the appellant demanded Rs. 15,000/- and in case the respondents had paid that amount, then the liability would have stood discharged. Merely because the application filed for seeking compensation under Section 92-A of 1939 Act was not disposed of before the enactment of Sub-section (2) of Section 140 of 1988 Act, that cannot create a fresh right in the appellants or a fresh liability against the respondents to pay additional amount of compensation. In cases where compensation of Rs. 15,000/- has already been paid before the enactment of 1988 Act, then surely the claimants could not have demanded additional compensation of Rs. 10,000/- in respect of death of a person because making such claim presupposes that fresh right to demand Rs. 10,000/- more and the fresh liability to pay Rs. 10,000/- more had accrued without reference to the date of the death. It is not possible to put such a construction on the provisions of Sub-section (2) of Section 140 of the 1988 Act. The right to receive compensation on the principle of 'no fault liability' and the corresponding liability accrues on the date of the accident and is not made dependent on the legislative change, that may take place during the pendency of the application seeking compensation. In our judgment on the first principle, it is not possible to accede to the submission of Mr. R.M. Agrawal that the provisions of Sub-section (2) of Section 140 of the Act are retrospective in operation and would cover all the cases which are pending before the Tribunal on the date of coming into operation of 1988 Act.
17. In the case of Padtna Srinivasan v. Premier Insurance Co. Ltd. 1982 ACJ 191 (SC), the Apex Court observed that the liability to pay compensation must be determined with regard to state of law obtained at the time of accident. In the case before the Supreme Court, the claim under Section 110-A of 1939 Act was filed and the insurance company pleaded that the liability of the insurer was only to the extent of Rs. 20,000/- as prescribed in the policy. The Tribunal relying upon the provision of amending Act 1969 held that the liability of the insurance company in respect of goods vehicle is Rs. 50,000/- as prescribed under Sub-section (2) of Section 95. Supreme Court noted that the insurance policy came into force on 30.6.1969. At the time of securing the policy the liability of the insurance company was limited by statute to a sum of Rs. 20,000/-. The amendment which came into force during the subsistence of policy whereby liability was increased to Rs. 50,000/- and thereafter the accident occurred on April 5, 1970. The Supreme Court examined the applicability of the law and held that the law which is applied for determining the quantum of compensation is the one which is in force on the date when the cause of action arises and not the law which was in force.
18. In a case before the Andhra Pradesh High Court in New India Assurance Co. Ltd. v. Kramtan Perinayagam 1992 ACJ 142 (AP), the question arose as to whether claimant is entitled to interim compensation of Rs. 15,000/- under Section 92-A of 1939 Act or Rs. 25,000/- under Section 140 of 1988 Act in respect of an accident which took place on 12.6.1989, i.e., before 1988 Act came into force. While deciding the question the court observed as under:
It is also to be seen that the Motor Vehicles Act, 1939, was repealed as per Section 217 of the Motor Vehicles Act, 1988. But it may be noted that Section 92-A of the Motor Vehicles Act, 1939 is in 'pan materia with Section 140 of the Motor Vehicles Act, 1988. The proviso under Sub-clause (2) of Section 110-A of the 1939 Act is similar to the proviso under Section 166(2) of the 1988 Act. Section 217 of the new Act is the repealing section and under which Motor Vehicles Act, 1939, was repealed. Section 6(c) of the General Clauses Act, 1897, provides that unless a different intention appears, the repeal shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. Section 92-A of 1939 Act applies even in regard to accidents occurred prior to 1.10.82. Therefore in spite of the repeal of the 1939 Act, the liability arising under Section 92-A is saved.
The Supreme Court in R.L. Gupta v. Jupiter General Insurance Co. 1990 ACJ 280 (SC), made a passing observation saying that the new Act is prospective. The case in General Manager, Western Railway, Bombay v. Lala Nanda 1985 ACJ 57 (Gujarat), is a case where a Table that has been given under the Workmen's Compensation Act has been considered and whether the new Table has to be applied or the old Table has to be applied and ultimately, the Gujarat High Court held that the rates of compensation as found in the Schedule at the time when the accidental injury takes place alone has to be applied. The Act is only prospective so far as the claim under Section 92-A is concerned. The crucial date to be taken is the date of the accident. In these circumstances, this Court feels that prior to the commencement of the Act, i.e., 1.7.1989, so far as Section 92-A is concerned, if the claim petitions are pending either before the Tribunal or in the High Court, the rate that was prescribed, i.e., Rs. 15,000/- alone is applicable.
19. In the instant case the learned Tribunal placed reliance on the decision of the Division Bench of the Rajasthan High Court in the case of Rajasthan State Road Trans. Corporation v. Ogam 1992 ACJ 843 (Rajasthan), where the Rajasthan High Court held that the crucial date for determining the quantum of compensation to be awarded under 'no fault liability' is the date on which the Tribunal or the court is required to award compensation though even for which compensation is to be measured as taken place on an accident death. The Rajasthan High Court was impressed by the fact that though Section 140 did not create a fresh right, it is provided for enhancement of compensation due to erosion of value of currency and inflation in price but with due respect to the Rajasthan High Court such a view overlooks that the right and the corresponding liability accrued on the date of accident and that the cause of action cannot be made dependent upon the legislative changes which may be affected during the pendency of proceeding for seeking compensation. The liability get crystallized the moment the accident takes place and the person discharging the liability knows the quantum of compensation payable. The judgment of the Rajasthan High Court upon which the learned Tribunal placed strong reliance did not notice the contrary view taken by the same High Court in the case of United India Insurance Co. Ltd. v. Nathu Singh 1992 ACJ 197 (Rajasthan), where the court held as under:
It is clear from the claim petition that the accident took place on 31.10.1988 and the claim petition itself was filed on 29.4.1989. As such the provisions of Section 92-A of the Motor Vehicles Act 1939 were applicable and not the provisions of Section 140 of Motor Vehicles Act, 1988. Under the former provisions, the Tribunal had jurisdiction to award Rs. 15,000/- only and not Rs. 25,000/-to the claimants. As such the appeal deserves to be allowed.
20. A similar question arose before the Full Bench of the Kerala High Court in the case of Neeli v. Padmanabha Pillai 1993 ACJ 188 (Kerala), as to whether the provision of Section 92-A is retrospective in application and is applicable to a case of death or permanent disablement arising out of an accident occurring before 1.10.1982 when the provision was brought on the statute book. Their Lordships observed as under:
For the aforesaid reasons, it is clear that Section 92-A deals with substantive law. In fact, this question is no longer res integra. The Supreme Court has held in two recent cases that the right created by Section 92-A belongs to substantive law and that it modifies the existing substantive law. In Gujarat State Road Trans. Corpn. v. Ramanbhai Prabhathhai 1987 ACJ 561 (SC), the Supreme Court has described that this part of the Act (viz. Section 92-A) is clearly a departure from the usual common law principle and that to that extent 'the substantive law' of the country stands modified. The passage containing the above observations as laying down the law has been extracted again in the recent case in Shivaji Day ami Patil v. Vatschala Uttarn More 1991 ACJ 777 (SC). It is, therefore, clear that on principle and authority, Section 92-A cannot be treated as a provision which is procedural or as a provision which merely lays down a rule of evidence.
XXX XXX XXX
We have already held that Section 92-A is part of the substantive law. The question is whether Section 92-A is retrospective?
XXX XXX XXX
Again, if a provision is capable of two interpretations, namely, prospective or retrospective, the former is to be preferred: P. Mahendran v. State of Karnataka AIR 1990 SC 405, at 408, para 5.
In the present case before us, Section 92-A cannot be invoked unless the provision is either procedural or if the amendment belongs to substantive law, the amendment contains provisions which either expressly or by necessary implication modify the rights vested at the very commencement of the action. The amendment is, as already held, not procedural law. Again, as pointed out above, the language of the provisions in Section 92-A (1) or 92-A (3) does not either expressly or by necessary implication affect the right of the respondents existing at the commencement of the proceedings, the right not to be burdened unless the ingredients of negligence are pleaded and established. Therefore, this argument based on pending proceedings being subject to Section 92-A has to be rejected.
21. In a case before the Madhya Pradesh High Court the question arose as to whether Section 140 of 1988 Act shall have retrospective application, their Lordships while deciding the case of United India Insurance Co. Ltd. v. Jhamku Bai 1993 ACJ 324 (MP), observed as under:
The interim award under appeal has been challenged by the appellant insurance company on two grounds: The first ground of challenge in that since the motor accident in question resulting in the death of deceased took place on 15.3.1989 when the new Motor Vehicles Act of 1988 had not come into force and the provisions of the old Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act') were applicable to the claim in question, the learned Tribunal committed a legal error in awarding Rs. 25,000 as interim compensation under Section 140 of the new Act. The interim compensation should have been awarded properly under Section 92-A of the Act which was applicable to the instant claim relating to the accident which occurred on 15.3.1989. As such, the submission of the learned Counsel for the appellant insurance company is that the learned Tribunal should have awarded Rs. 15,000/- on the principle of no fault liability under Section 92-A of the Act and not Rs. 25,000/- as provided under Section 140 of the Motor Vehicles Act of 1988 which was not operative on the date of the accident.
The above submission of the learned Counsel is valid and must be accepted. Section 140 of the Act of 1988 which came into force on 1.7.1989 cannot be made retrospectively applicable to the instant case of accident which took place on 15.3.89. The claimant should be allowed interim compensation of Rs. 15,000/- only as provided in Section 92-A of the Act. Accordingly, the amount of interim award deserves to be modified inasmuch as the claimant should be held entitled to interim compensation of Rs. 15,000/- instead of Rs. 25,000/- as awarded by the learned Tribunal.
22. In the case of Prahhavati Sharma v. Brijmohan Parihar 1990 ACJ 399 (MP), a Division Bench of the Madhya Pradesh High Court while deciding a question as to whether liability of insurance company shall be unlimited in view of Section 147(2)(a) of 1988 Act even in a case where accident took place when act of 1939 was in force has observed as under:
This court had occasion in Shivchand Amolakchand v. State, M.P. No. 293 of 1989; decided on 12.12.89, to construe the provisions extracted, albeit in a different context. The question was not of liability for compensation to be enforced in accordance with Section 147 of the new Act, raised in the instant case. Although that was a case of survival or otherwise of right in respect of a notification issued under the old Act inviting applications for stage carriage permit, it was observed that new rights cannot be derived from the clause and it must have the effect of protecting preexisting rights only. In the instant case, Section 217(2)(a) does not apply in terms. It does not speak of any 'liability' incurred under the old Act and does not also deal with adjudication thereunder in respect thereof. It has an entirely different purpose of dealing with cases other than those of tortious liability despite its wide sweep covering 'penalty or fine imposed' and 'other action taken under the repealed enactment'. It does not have the effect of imparting retrospective operation to Section 147(2)(a) so as to enlarge the scope of insurer's liability thereunder in regard to accidents occurring and claims lodged and decided under the old Act. It has not kept alive for adjudication under the new Act the liability with respect to which as per Section 6, General Clauses Act, 'Legal proceeding or remedy' contemplated under the old Act has to be continued or enforced. Clauses (b) and (c) of Section 6 are clear and categorical in that regard.
23. In the case of M.K. Kunhi-mohammed v. P.A. Ahmedkutty 1987 ACJ 872 (SC), the Supreme Court had occasion to decide the question with regard to liability of insurance company in case of motor vehicle carrying passenger in the light of provision of Section 95(2)(b) of 1939 Act. Their Lordships following its earlier judgment observed as under:
Having regard to the statute as it stood prior to the amendments by Act 47 of 1982 we hold that the insurer was liable to pay up to Rs. 10,000/- for each individual passenger where the vehicle involved was a motor cab and up to Rs. 5,000/- for each individual passenger in any other case. The judgment of the Kerala High Court against which this petition is filed has followed the above construction. We do not find any ground to interfere with it. This petition is, therefore, dismissed.
24. I am of the view that the intention of legislature is not to give retrospective effect to Section 140 of the Act of 1988 inasmuch as the section imposes a new and additional liability on the insurance company which was not in existence on the date of accident. Hence, the said provision cannot be construed as having retrospective effect. In other words, it is the date of accident which is relevant and the liability has to be computed with reference to the statutory provision in force as on the date of accident. I am further of the view that in a case where insurance company cannot be saddled with the liability beyond the statutory limit fixed under Section 95(2)(b) of 1939 Act even if the claim case is finally decided then there is no justification for award- ing interim compensation of Rs. 25,000/-against the insurance company merely because on the date of the passing of the order the Act of 1988 was in force.
25. In the result, this appeal is partly allowed and the interim award under appeal shall stand modified inasmuch as the amount of the interim compensation payable shall be Rs. 15,000/- and not Rs. 25,000/- as has been allowed by the learned Tribunal.
There shall be no order as to costs.