Judgment:
Jagannadha Rao, C.J.
1. This reference is made to a Full Bench by a Division Bench of this court by order dated August 29, 1988, for consideration of the correctness of the decision of a Division Bench of this court in Vilasini v. Kerala State Road Transport Corporation [1988] 1 KLT 915, and other cases following it or taking the same view. The said Division Bench in Vilasini's case [1988] 1 KLT 915, had taken the view that Section 92A of the Motor Vehicles Act, 1939, is retrospective in application and was applicable to cases of accidents occurring prior to October 1, 1982, the date on which Section 92A came into force. The Division Bench, which has referred this matter to the Full Bench, has referred to the conflict of decisions in the various High Courts and thought that, prima facie, Vilasini's case [1988] 1 KLT 915, requires reconsideration.
2. Before we go into the main question, we shall briefly advert to the facts and findings in the referring order. One Damodaran died in a motor accident on April 9, 1977, and the claim was filed as M. V. (O. P.) No. 22 of 1979 on August 30, 1979, in the Motor Accidents Claims Tribunal, Thiruvananthapuram, by his wife, three sons and daughters seeking compensation in a sum of Rs. 40,000. Two other children of Damodaran were impleaded as respondents Nos. 4 and 5 in the M. V. O. P. The case stood transferred to the Motor Accidents Claims Tribunal, Alleppey, and was registered as M. V. (O. P.) No. 22 of 1982. The Motor Accidents Claims Tribunal, Alleppey, passed an award on January 15, 1983, holding the owner of the vehicle (first respondent) vicariously liable for the negligence of the driver (second respondent) and held that the insurance company (third respondent) was liable to indemnify respondents Nos. 1 and 2 for the compensation payable by them. The deceased, Damodaran, having died at the age of 68 years, the Motor Accidents Claims Tribunal arrived at a consolidated figure of Rs. 1950, towards the total compensation and apportioned the same between petitioners Nos. 1 to 4 only with interest at 6 per cent, from August 30, 1979, to date of payment. The third respondent was directed to pay the amount in three months. No argument was advanced before the Motor Accidents Claims Tribunal under Section 92A. In the appeal filed in this court on February 10, 1983, ground No. 12 was taken that the appellants were entitled to compensation under Section 92A of the Motor Vehicles Act, 1939. The balance of Rs. 38,050 was claimed in the appeal.
3. When the appeal came up before a Division Bench of this court, they went into the merits and held that the 'total compensation' as awarded by the Tribunal was just and fair and that 'no interference is called for in this appeal'. The Division Bench then considered the submission based on Section 92A and referred the matter to a Full Bench. That is how the matter has come up before us.
4. We have heard elaborate arguments by Sri Pirappancode V. S. Sudheer for the appellants and of Sri T. K. M. Unnithan for the insurance company, and of Smt. Elizabeth Mathai Idiculla for the owner of the vehicle and the driver. In the connected case, M. F. A. No. 358 of 1984, which we are dealing with separately, we found that the case could now be disposed of on other grounds. But counsel there, Sri. V. Chitambaresh for the appellants and Sri B. S. Krishnan also made submissions in regard to Section 92A.
5. Learned counsel for the appellants submitted that Section 92A in Chapter VIIA is retrospective and applicable to cases of accidents resulting in death or permanent disability even if such accidents occurred before October 1, 1982. The submission was that Section 92A(3) is merely procedural and lays down a rule of evidence as to the mode of proof of negligence and is, therefore, retrospective. Reliance was also placed on the words 'has resulted' in Section 92A(1) and the words 'arising out of' and ' has been ' in Section 92A(3) for contending that the death or permanent disablement could have even taken place before October 1, 1982, and also upon Section 92E which gives overriding effect to the provisions in Chapter VIIA. It is also contended that the statement of objects and reasons mentions that the provision is a piece of social welfare legislation meant for public good and that, therefore, a beneficent construction is to be given to Section 92A. It was also argued that a further award could be made towards loss to the estate under the head of pain, suffering, loss of amenities, and loss of expectation of life, loss of consortium, etc. Interest is claimed at 12 per cent. rather than at 6 per cent.
6. On the other hand, learned counsel for the respondents contended that Section 92A is not retrospective because the provision deals with a new liability created by the law. The provision is substantive in nature and neither procedural nor laying down a rule of evidence. The words ' arising out of', 'has resulted' in Section 92A(1) and 'has been' in Section 92A(3) merely refer to death or permanent disablement occurring after October 1, 1982, and before a claim for compensation is made. Section 109C(3) has no relevance. The statement of objects and reasons, whatever its relevancy, cannot lead to the inference of retrospectivity merely because Section 92A is a social welfare measure. It is argued that all social welfare measures intended for public good are not necessarily retrospective. It is pointed out that the amendment of 1982 postulates different dates of commencement of the provisions brought in and no anterior date is given so far as Section 92A is concerned and this indicates that the provision is not retrospective. It is also argued that if two interpretations are possible with respect to the question of retrospectivity, the interpretation that the provision is prospective is to be preferred.
7. The point that arises for consideration is whether Section 92A of the Motor Vehicles Act, 1939, is retrospective and applicable to cases of death or permanent disablement occurring before October 1, 1982, and whether the decision in Vilasini's case [1988] 1 KLT 915 holding that Section 92A is retrospective is correctly decided We shall initially refer to Section 92A(1) to (3) and then deal with the matters under separate heads.
' 92A. 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. '
No-fault liability. - It is outside the tort system
8. For several years, the system of tort-compensation has been under attack in several quarters. Many writers, judges and others have given various reasons as to why the tort-damages system is not always satisfactory.
9. Mr. T. G. Ison observes 'once a person has become disabled, the important thing is the consequence of the disability, not the cause of it. ( See T. G. Ison, Human Disability and Personal Income in L. Klar Studies in Canadian Tort Law [1977], page 427). Further, it has to be noted that a close connection between compensation and rehabilitation is to be established and prompt payment of compensation can always enhance successful rehabilitation. On the other hand, if eligibility for compensation is to be dependent on proof of cause, the result may be damaging delay in the commencement of payments, as well as in rehabilitation. There has also been criticism regarding undue delay in the determination of assessment of damages under the law of tort. It is, in fact, stated that the more serious the claim, the longer the litigation. Prof. P. S. Atiyah, referring to the thalidomide cases in England which could not be settled even after ten years, pithily observed (See his book, Accidents, Compensation and the Law, 1975, page 1973) :
'A system which takes longer to decide whether to compensate a few hundred thalidomide children than it took to fight a world war stands condemned by any reasonable standards.'
10. Yet another opinion by a Commission reads (Ontario Law Commission on Motor Vehicle Accident Compensation, page 375) :
' It is interesting that if one set out to design a system aimed at impeding the objective of rehabilitation, one could scarcely do better than invent the tort regions.'
11. Again, it is to be noted that the paucity of evidence in a tort action in regard to the time and place of the accident is likely to create a situation where, as Dean Wright said (Quoted by Chief Justice of Ontario at page 310 in A.M. Lindon's Studies in Canadian Tort Law, 1968) :
' The case that is actually tried by a jury is a case that never took place, and is the result of conjectural recall, imagination, colourful dramatisation, and pure inventiveness.'
12. Tort liability based on fault, in its origin, was initiated not to expand legal protection of the injured but rather to reduce it, in the wake of the Industrial Revolution. Prof. J. G. Fleming stated : (Prof. J. G. Fleming, The Law of Torts, 5th edition, 1977, page 8) :
' It was felt to be in' the better interest of an advancing economy to subordinate security of individuals, who happened to be causalties of the new machine age, rather than fetter enterprise by loading it with the cost of 'inevitable' accidents.'
13. In practice, it has been also found in the tort system that there is overlapping of different heads and there is criticism that some victims get more than they deserve while lack of evidence gives some others less than what is due to them. Case studies, collected by Commissions and others in all countries have revealed that this is mostly true. This was also the view of the Pearson Commission (1978) in England.
14. But, if there is a total replacement of tort regime by a no-fault scheme, the deterrence against negligent driving may go down and accidents may increase. After all, the guilty must be made to compensate the innocent victims. It is true that even within the tort system, the insurance protects the offender wholly or partly depending upon the nature and quantum of the insurance. In fact, in the abstract ' if a tort liability is to operate as a penalty or a deterrent, insurance should not even be allowed. '(C. Brown Deterrence and Accident Compensation, [1979] 17 U. N. O. L. Rev. III) but that may leave the victims or their heirs helpless if the insurance does not cover the entire award. Because of the unpredictability of the result in the assessment, the tort system has even been described as a 'forensic lottery and an absurd system of providing compensation for anyone' (Hansard H. C. Volume 958 at page 838 ( 17-11-1978).
15. Several countries have, therefore, opted for a compromise or a mixture of the tort damages and the no-fault liability. They have realised that the former which acts as a deterrent against negligence cannot be totally abolished but that at the same time, the victims must be assured of a quick and definite amount of minimal damages so as to help their rehabilitation. We shall now briefly survey the systems obtaining in various countries.
16. No-fault systems were pioneered in Canada the first ever being the one evolved in Saskatchewan in 1946 and thereafter the scheme was adopted in all provinces in Canada. In the United States of America, such a scheme was introduced in Massachusetts in 1971 and was adopted for nearly half of the States within six years. The first Australian State to introduce a 'no-fault' scheme was Victoria in 1974 followed by other States soon thereafter. In 1973, the Australian Government appointed a National Committee of Inquiry for inquiring into accident injuries, and later into incapacities and deformation from sickness, with Mr. Justice Woodhouse, the inspirer of the New Zealand Scheme, as Chairman for comprehensively replacing tort liability in respect of certain matters. The Committee gave its report in July, 1974, and the Scheme is for a 'total abolition' of the tort system. But, when the Bill based on the Scheme was passed by the House of Representatives and, then the Senate referred it to a sub-committee, the total abolition of tort damages was not favoured. The matter was shelved with the change in Government by the end of 1975.
17. The Pearson Commission (U. K. Royal Commission, 1978) advocated a compromise formula. The tort action was to remain unchanged and would be available to cover cases not covered by the no-fault scheme and as a consequence the compulsory system of third party insurance would continue. The Commission did not favour the Woodhouse method of wholly replacing the tort system.
18. The American scheme allows the tort system also to hold good in respect of specified types of injuries or above a particular limit of pecuniary loss. The schemes are modelled after the Keeton O' Connel Plan.
19. Since April, 1974, a universal, comprehensive and integrated accident compensation and personal rehabilitation plan has been operated in New Zealand under the Accident Compensation Act, 1972. It covers persons injured by any cause. It contains various provisions for compensating pecuniary and non-pecuniary losses also. There is an appeal to an appellate authority and also to the Supreme Court in certain situations and to the Court of Appeal.
20. The amendment to our Motor Vehicles Act, 1939, in 1982 by insertion of Chapter VIIA does not totally abolish the tort liability in regard to motor accidents. Section 92A and the related provisions seek to provide a limited relief by way of damages up to Rs. 15.000 in case of death and Rs. 7,500 in cases of permanent disability, irrespective of anything and at the same time, the claimants can recover the tort damages by action in the Tribunal. However, the amount granted under Section 92A, etc., will be deducted from the tort damages, if the latter are above the no-fault liability figures. In case the tort damages are less than the no-fault liability figures, the latter will, in any event, have to be awarded. The amendment of 1982 introducing the no-fault liability was, in fact, made consequent to the earlier observations of the Supreme Court between the years 1977 to 1980 in several cases as recounted in Shivaji Dayanu Patil v. Vatschala Uttam More, : [1991]3SCR26a ; [1992] 75 Comp Cas 141.
21. No-fault liability in Section 92A : Whether pertains to substantive law or is procedural dealing with the mode of proof :
What is meant by the word 'no-fault' liability is the next question. The ' no-fault liability ', as pointed out by W. L. Morrison and C. Sappideen (Torts, Commentary and Materials, 1978, Australia), is a misleading word. It is pointed out by the authors that traditionally, we think of 'no-fault' liability with in the law of tort as the absolute liability which is imposed on a defendant who causes harm independently of any fault of his. They point out further, referring to Pearson Report, 1978 : ' But, 'no-fault' compensation does not come from a source which necessarily had anything to do with causing the harm at all, with or withoutfault. It has been described as compensation obtainable without proving fault and is provided outside the tort system. ... ' (emphasis supplied )
22. The authors emphasise that 'no-fault' liability is ' outside ' the tort system. Therefore, it has nothing to do with causing or not causing harm, nor with fault or no-fault and is not akin to a theory of absolute liability such as the one in Rylands v. Fletcher [1868] 3 AC 330, within the tort-system. It is a new liability created by statute and upon such creation, gives rise to a corresponding right to the victim or his legal representatives to claim the amounts covered by Section 92A(2).
23. If, therefore, 'no-fault' liability is a new liability created by statutes outside the tort system, there can, in our view, be no doubt that it belongs to substantive law and, to that extent, it modifies the liability under the law of torts.
24. It is argued that Section 92A(3) merely states that in any claim for compensation under Section 92A(1), the claimant shall not be required to plead and establish that the death or permanent disablement was due to any wrongful act, neglect or default of the owner of the vehicle or any other person and, therefore, it merely refers to procedure and a rule of evidence and not to substantive law. In our view, this submission which has found favour in Vilasini's case [1988] 1 KLT 915 and other cases, ignores the fact that a new liability outside the tort system is created where negligence, etc., need neither be pleaded or proved. Section 92A(3) does not refer to dispensing with pleading and proof of negligence in a claim within the tort system. It refers to a claim under Section 92A(1) which is a creature of statute and outside the tort system and it is there-in the new system--that one need not plead or prove negligence, etc.
25. Again, Section 92A(3) does not deal with the mode of proof of a fact within the pre-existing tort-system. It does not say that negligence which requires to be proved in that system shall be presumed if certain other facts are proved. As stated above, Section 92A(3) explains how the claim in regard to the new liability created under Section 92A(1) could be imposed. Hence, Section 92A(3) does not deal with any matter relating to mode of proof of negligence within the tort system.
26. For the aforesaid reasons, it is clear that Section 92A 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 92A belongs to substantive law and that it modifies the existing substantive law. In Gujarat State Road Tranpsort Corporation v. Ramanbhai Prabhatbhai [1987] 62 Comp Cas 609 ; : [1987]3SCR404 . the Supreme Court has described that this part of the Act (viz., Section 92A), '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 Dayanu Patil v. Vatschala Uttam More, : [1991]3SCR26a . It is, therefore, clear that on principle and authority, Section 92A cannot be treated as a provision which is procedural or as a provision which merely lays down a rule of evidence.
27. For the aforesaid reasons, we cannot agree with the view of the Division Bench of this court in Vilasini's case [1988] 1 KLT 915, that Section 92A lays down a rule of procedure or refers to a rule of evidence within the tort system.
Whether Section 92A has retrospective effect
28. We have already held that Section 92A is part of the substantive law. The question is whether Section 92A is retrospective ?
29. Now, when a statute is amended, it is open to the concerned Legislature either to give effect to it prospectively or retrospectively. If the amendment is one dealing with procedure or a rule of evidence, there is a well-settled rule that, prima facie, the amendment is retrospective. But, if the amendment is dealing with substantive rights, there is again a well-settled presumption that the amendment is intended to be prospective only unless, of course, the amending law is either expressly given retrospective effect or is so by necessary implication. It is not in dispute that the Amending Act 47 of 1982 is not expressly retrospective so far as Section 92A is concerned.
30. The question then is whether, by necessary implication, Section 92A can be said to be retrospective. At this point, the following contentions are raised. It is argued that the statement of objects and reasons shows that the amendment is a piece of welfare legislation and, therefore, retrospective. It is also said that it is intended to 'protect the public' against evil or abuse and is intended to remedy some mischief existing before the amendment. It is also argued that the courts have to apply the law that has come into force during the pendency of the proceedings and must mould the relief on that basis. Reliance is also placed on the words 'has resulted' and 'arising out of' in Section 92A(1) and on the words 'has been' in Section 92A(3). We shall deal with these aspects one after the other.
31. The first argument is that Section 92A is a piece of beneficial legislation and is, therefore, retrospective. We shall first refer to the statement of objects and reasons of the bill. It reads thus ;
'There has been a rapid development of road transport during the past few years and large increase in the number of motor vehicles on the road. The incidence of road accidents by motor vehicles has reached serious proportions . . . The victims of these accidents are generally pedestrians belonging to the less affiuent Sections of society. The provisions of the Act as to compensation in respect of accidents can be availed of only in cases of accidents which can be proved to have taken place as a result of a wrongful, act or negligence on the part of the owners or drivers of the vehicles concerned. Having regard to the nature of circumstances in which road accidents take place, in a number of cases it is difficult to secure adequate evidence to prove negligence ... It is, therefore, considered necessary to amend the Act suitably to secure strict enforcement of road safety measures and also to make, as a measure of social justice, suitable provisions first for compensation without proof of fault or negligence on the part of the owner or driver of the vehicle and, secondly, for compensation by way of solatium in cases in which the identity of the vehicle causing an accident is unknown . . .' (emphasis supplied)
32. That Section 92A is a piece of beneficial or welfare legislation cannot be doubted. In fact, the Supreme Court in Shivaji Dayanu Patil's case : [1991]3SCR26a , has described Section 92A as a piece of ' beneficial legislation'. Their Lordships said that it was ' evident that Section 92A is in the nature of a beneficial legislation'.
33. But, the question is whether on that score alone, Section 92A can be regarded as having retrospective effect. This court in Vilansini's case [1988] ACJ 755 , held that because the provision was a piece of beneficial legislation, it was retrospective. In our view, such a generalisation cannot be made. The question whether a beneficial legislation is retrospective or not depends on the language of the statute from which the legislative intention is to be gathered. The Legislature might intend the beneficial legislation to be prospective only or it may intend to give it retrospectivity. This can be exemplified by two decisions. For example, in the industrial law, when beneficial provisions of a far-reaching nature were introduced by Section 11A of the Industrial Disputes Act, 1947, the Supreme Court in Workmen of Firestone Tyre and Rubber Co. v. Management [1973] 43 FJR 315 ; : (1973)ILLJ278SC , while holding that the provision was beneficial in nature, rejected the plea of the workmen that the provision could cover pending references made before December 5, 1971. But again, when the Supreme Court later came to deal with another beneficial provision, Section 17B introduced in 1982 in the Industrial Disputes Act, 1947, it held in Bharat Singh v. Management, NDTC, : (1986)IILLJ217SC , that the provision was retrospective and applied even to awards passed prior to August 21, 1984, a date appointed by the Central Government, if the awards had not become final. In each of these cases, the Supreme Court had referred to the particular statement of objects and reasons.
34. It is significant that in Firestone's case, : (1973)ILLJ278SC , the court referred to the statement of objects and reasons of the Bill preceding the 1971 amendment (see para 29) and held that Section 11A of the Industrial Disputes Act was not retrospective while in Bharat Singh's case, : (1986)IILLJ217SC , the court, while dealing with Section 17B of the Industrial Disputes Act, again referred to the relevant statement of objects and reasons preceding the 1982 amendment, and held that Section 17B was retrospective. In the former case, the court said that the statement of objects and reasons was not to be taken into account while interpreting the plain words of the section, but it would be useful in finding out the intention of the Legislature. In the latter case, the court held that the statement of objects and reasons could give an insight into the background as to why the provision was introduced but it could not be the 'ultimate' guide in the interpretation of statutes. That is why we held that every legislation described as beneficial in the statement of objects and reasons need not necessarily be retrospective. It depends on the language and intention.
35. The next submission for the appellants is that the statute is passed 'with the object of protecting the public against some evil or abuse', and, therefore, should be treated as retrospective (Sree Bank Ltd. v. Sarkar Dutt Roy and Co., AIR 1906 SC 1953).
36. This contention presupposes the existence of some evil or abuse existing before October 1, 1982, from which the public is to be protected. In our view, there was no such evil or abuse existing before the introduction of Section 92A. The tort system of awarding damages cannot, in our view, be described as an evil or abuse affecting the public. The system is, in fact, even after October 1, 1982, still continued under Sections 110, 110A to 110F, 111 and 111A. We, therefore, reject the theory based on protecting the public from evil or abuse.
37. It is then pointed out that Section 92A(1) uses the words 'arising out of' and that these words occurred in Section 110A of the Motor Vehicles (Amendment) Act of 1956 (Act 100 of 1956), and that in New India Insurance Co. Ltd. v. Shanti Misra, : [1976]2SCR266 , the Supreme Court construed the said words as being retrospective, irrespective of the question as to when the accident occurred, whether before the 1956 amendment or later. That case dealt with the change of the forum from the civil court to the Claims Tribunal. The reason as to why the words 'arising out of' were held retrospective was that the provision itself was treated as procedural. This is clear from the observations in that judgment that the 'change in law was merely a change of forum, i.e., a change of adjectival or procedural law and not of substantive law'. The above ruling in Shanti Misra's case [1976] ACJ 128 ; (1977] 47 Comp Cas 453 , cannot help the appellants because Section 92A is not procedural but is substantive.
38. Then comes the further contention that the words 'has resulted' in Section 92A(1) are intended to refer to accidents which have occurred prior to October 1, 1982, and that the words ' has been' in Section 92A(3) are intended to refer to claims pending on date of introduction of Section 92A. It is also argued, placing reliance on Mithilesh Kumari v. Prem Behari Khare, AIR 1989 1247 1254 ; : [1989]177ITR97(SC) , which dealt with the Benami Transactions ( Prohibition ) Act, 1988, that (at page 107 of 177 ITR) :
' a statute is not properly called a retrospective statute because a part of the requisites for its action is drawn from a time antecedent to its passing.'
39. The words 'has been' have come up for consideration in at least three cases of the Supreme Court. In State of Maharashtra v. Vishnu Ram Chandra, : 1961CriLJ450 , the said words have been given retrospective effect while in Workmen of Firestone Tyre and Rubber Co. v. Management, : (1973)ILLJ278SC and in Secretary, R. T. A., Bangalore v. D. P. Sharma, : AIR1989SC509 , the same words have been construed prospectively.
40. The leading case in regard to the interpretation of the words 'has been' is the English decision Athlumney, In re : Ex parte Wilson [1898] 2 QB 547. In that case, the words 'where a debt has been proved under the principal Act' in Section 23 of the Bankruptcy Act, 1890, came up for consideration. The point there was whether Section 23 of that Act operated so as to govern the distribution of dividend under a contract made under a scheme which had taken effect before the Act of 1890 was passed. Wright J. observed (at p. 553) :
'Then is the Section so expressed as to be plainly retrospective No doubt the words 'where a debt has been proved under the principal Act' are capable of such a meaning. But this form of words is often used to refer, not to a past time which preceded the enactment, but to a time which is made past by anticipation -- a time which will have become a past time only when the event occurs on which the statute is to operate. In former times, draftsmen would have used the words ' where a debt shall have been proved, but in modern Acts the past tense is frequently used where no retrospective operation can be intended.'
41. It was held that the words in Section 23 were prospective in nature. Applying the above said case, it has been held in Workmen of Firestotte Tyre and Rubber Co. v. Management, : (1973)ILLJ278SC , by Vaidyalingam J. that Section 11A of the Industrial Disputes Act altered the substantive rights of employers by giving a new jurisdiction to the Tribunal, that no inference that the provision applied to pending proceedings could be gathered from the Act. merely because of the use ,of the words 'has been'. Vaidyalingam J. then referred to other provisions of the Act to hold that the words 'has been' were intended to be not retrospective. His Lordship referred to the words :
' in any proceeding under this Section '
and observed that a 'proceeding under the section' could only be after the Section 11A had come into force. This showed that Section 11A was not applicable to cases where reference was made before December 15, 1971, to the Tribunal and which cases were pending.
42. In our view, the above decision under Section 11A of the Industrial Disputes Act is very much apposite in the present case. The provision in Section 92A(3) where the words 'has been' occur, refers to 'a claim for compensation under Sub-section (1)' of Section 92A. Therefore, the exemption from pleading and proving negligence is available only to a claim under Section 92A(1). There could be no claim under Section 92A(1) before Section 92A was introduced. It is for describing the accident which occurred on or after October 1, 1982, that the words 'has been' are used by the Legislature. So far as the words 'has resulted' in Section 92A(1) are concerned, their meaning depends upon the words 'from an accident arising out of the use of a motor vehicle. The words 'arising out of' in the context of the new substantive liability created under Section 92A outside the tort system, can only have prospective operation. The words 'arising out of', as already stated, cannot refer to accidents occurring prior to October 1, 1982, inasmuch as the provision in Section 92A is not procedural as in New India Assurance Co.'s case [1976] ACJ 128, where the words 'arising out of' were construed as applicable to accidents occurring before the 1956 Amendment because the said amendment was adjectival or procedural law.
43. We may also point out that the words 'has been' have been held not to apply retrospectively in yet another case, in Secretary, RTA, Bangalore v. D. P. Sharma, : AIR1989SC509 . After referring to the English case Athlumney, In re : Ex parte, Wilson [1898] 2 QB 547. Dutt J. observed that the, said words could not be given retrospective effect 'particularly in view of the legislative intent' apparent from Section 3(g)(ii) of the Karnataka Contract Carriage (Acquisition) Act, 1976.
44. It is true that in State of Maharashtra v. Vishnu Ramchandra, : 1961CriLJ450 , the words 'has been' are construed to have retrospective effect, but that case is clearly distinguishable. In that case, the Supreme Court was referring to Section 57 of the Bombay Police Act, which dealt with removal of persons convicted of certain offences. The words 'if a person has been convicted ...' could, it was held, take in convictions before the Act, for the purpose of externment under the Act. The court held that 'so long as the action taken against him is after the Act comes into force, the statute cannot be said to be applied retrospectively'. Hidayatullah J. (as he then was) observed (at p. 310) :
'The verb 'has been' is in the present perfect tense, and may mean either 'shall have been' or 'shall be'. Looking, however, to the scheme of the enactment as a whole and particularly the other portions of it, it is manifest that the former meaning is intended. . . '
45. Therefore, even as per this decision, the words 'has been' could apply either prospectively or retrospectively. As per Dutt J. it depends on 'legislative intent' and as per Hidayatullah J. (as he then was) it depends on the scheme of the Act read as a whole and the particular provisions in question. For the aforesaid reasons, we reject the appellant's contention based on the words in Section 92A(1) and 92A(3).
46. It is, lastly, contended that the court is bound to apply the statute which comes into force during the pendency of any case, whether the said statute is procedural or whether it relates to substantive law, irrespective of whether the substantive law is given retrospective effect expressly or by necessary implication. In our view, such a broad contention cannot be accepted. If the law is procedural, there is, no doubt, a presumption that it applies to pending proceedings. If the law is substantive in nature, the normal presumption against retrospectivity still holds good, subject to the principle that the court must look to the question whether the rights of the parties at the commencement of proceedings were intended to be modified, either expressly or by necessary implication. The decisions in this behalf being too numerous, we shall refer only to the principle of interpretation as applicable to pending proceedings and a few cases. After referring to the presumption against retrospectivity in respect of substantive law as above mentioned, Halsbury's Laws of England (volume 44, para 922) (4th edition) states as follows :
'It is also in reliance on the presumption that the courts have frequently held pending proceedings to be unaffected by changes in the law so far as they relate to the determination of substantive rights. In the absence of a clear indication of contrary intention in an amending enactment, the substantive rights of the parties to an action fall to be determined by the law as it existed when the action was commenced. ..'
47. This principle has been applied by the Supreme Court in a number of cases starting right from Garikapati Veerayya v. Subbaiah Chowdhury, : [1957]1SCR488 . There the modifications in the conditions as regards the right of appeal to the Supreme Court which were made pending the proceedings, were held not to interfere with the right of appeal as it obtained at date of the suit. This was because the relevant statute which modified the substantive rights as on the date of suit had not been given retrospective effect either expressly or by necessary implication. But, at the same time, there are other cases where the modifications in the statute made pending a suit or proceeding have been applied to pending suits or proceedings. This has happened where the modification is either purely procedural or where the Legislature has modified the substantive rights with retrospect either expressly or by necessary implication. To the latter category of modification by necessary implication belong cases like S.B.K. Oil Mills v. Subhash Chandra, : [1962]2SCR159 and Rafiquennessa v. Lal Bahadur Chetri, : [1964]6SCR876 , wherein the new provision which became applicable pending the proceedings as regards prohibition against eviction of tenants in certain situations, was applied to pending appeals because the said provision by implication inhibited the appellate courts also from passing orders of eviction. Again the Benami Transactions (Prohibition) Act, 1988, was applied at the stage of appeal in Mithilesh Kuwari v. Prem Behari Khare, : [1989]177ITR97(SC) . This is also on the basis that the vested rights as on date of suit or proceedings were impliedly taken away by the Act, pending the proceedings. These cases are sufficient to show that there is no absolute rule that all amendments to statutes made pending proceedings are to be deemed to vary the rights vested at the commencement of the action.
48. Further, as pointed out in State of Madhya Pradesh v. Rameshwar Rathod, : 1990CriLJ1756 , at 1850, and in New India Assurance Co. Ltd. v. Nafis Begum : AIR1991MP302 , when the Amending Act proposes to give different dates of commencement to different sections, there is presumption against retrospectivity.
49. 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, : AIR1990SC405 , at 408, para 5.
50. In the present case before us, Section 92A 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 92A(1) or 92A(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 92A has to be rejected.
51. Our conclusions are also fortified by observations of the Supreme Court in two rulings, regarding Section 92A. The observations show that Section 92A is not retrospective so as to apply to pending proceedings. These two cases (one reported and another unreported) are referred to by the Full Bench of the Madhya Pradesh High Court in New India Assurance Co. Ltd. v. Nafis Begum : AIR1991MP302 . The first case is R.L. Gupta v. Jupiter General Insurance Co, [1990] ACJ 280. 281, wherein it was observed :--'
'We assess compensation for each of them at Rs. 20,000 in the absence of any specific evidence. This is keeping in view the quantum of no-fault liability now provided by the statute prospective.'
52. The other case is unreported and it is National Insurance Co, Ltd. v. Bhagwandas (S. L. P. No. 11593 of 1989, decided on December 10, 1989), wherein it was observed :
'Heard Mr. Sharma in support of the special leave petition. We accept his submission that in view of the fact that the accident took place prior to insertion of Section 92A into the Motor Vehicles Act, 1939, the High Court has no jurisdiction to refer to that provision for fixing liability for the compensation on the insurer.'
53. Learned counsel contended that the abovesaid two decisions of the Supreme Court do not contain any reasoning and are obiter or per incuriam. We are afraid we cannot accede to such a contention in view of Article 141 of the Constitution of India. The abovesaid two rulings of the Supreme Court, therefore, fully support our conclusions.
54. In the result, we overrule the decisions in Vilasini's case [1988] ACJ 755 , K.P. Ali v. M. Madhavan and Fathima v. Sathish Kumar Jolly , wherein Section 92A was applied to cases of accidents occurring before October 1, 1982. We also disagree, with respect, with the view of the Patna, Andhra Pradesh, Gauhati and Bombay High Courts, viz.', Mohammad Arshad v. Naimuddin Nasimuddin [1990] 2 ACJ 696 , T. Srinivasulu Reddy v. C. Govardhana Naidu : AIR1990AP289 , Dorakonda Venkatrama Seshachalapathi v. Viyayawada Cooperative Central Bank [1990] 2 ACJ 746, New India Assurance Co. Ltd, v. Ramesh Kalita [1989] 2 ACJ 607 and Oriental Fire and General Insurance Co. Ltd. v. Shantabai S. Dhume [1987] ACJ 198 ; (1989] 65 Comp Cas 206 , to the extent they hold Section 92A is procedural or refers to a rule of evidence. We follow the contrary view of the Rajasthan, Allahabad and Madhya Pradesh High Courts in the following cases : Yashoda Kumari v. Rajasthan State Road Transport Corporation [1984] ACJ 716 , Ram Mani Gupta v. Mohammad Ibrahim [1985] ACJ 476 ; [1986] 60 Comp Cas 977, Karuram v. Omprakash [1989] ACJ 941, Bhagwan Das v. National Insurance Co. Ltd. : AIR1991MP235 and New India Assurance Co. Ltd. v. Nafis Begum : AIR1991MP302 , to the effect that Section 92A is part of the substantive law. We hold that Section 92A cannot apply to cases of accidents occurring before October 1, 1982. We should not, however, be understood as deciding anything concerning Section 140 of the Motor Vehicles Act, 1988.
55. On the facts, we feel bound by the conclusion in the referring order that the 'total' compensation payable is the sum referred to in the referring order. Inasmuch as Section 92A is not, according to us, applicable, the M.F. A. fails and is accordingly dismissed. No costs.