Chanda Devi Shrivastava and ors. Vs. Madhya Pradesh State Road Trans. Corpn. and anr. - Court Judgment

Excerpt:
- section 2(f): [dipak misra, k.k. lahoti & rajendra menon, jj] service tax - packaging and bottling of liquor whether amounts to manufacture within meaning of section 2(f) of central excise act 1944? finance act 932 of 1994), section 65 (76 b) (as amended on 16.6.2005) - held, the first limb of the inclusive definition of the manufacture under section 2(f) of central excise act has a very wide connotation. as the definition clause lays down an inclusive facet, the term manufacture has to be construed in a natural and plain manner and would include any process incidental or ancillary to the completion of a manufactured product. keeping in view the context in which the term manufacture has been used, it would take in its fold incidental and ancillary process in the manufacture or finishing of any manufactured product. it does not leave any room for doubt that an allied process should be integral and inextricable part of manufacture of completeness and presentability of the manufactured product. section 65(76b) of finance act used the words but it does not include. thus it is a definition which has the inclusive as well as exclusive facet. by virtue of the same it may include certain things and exclude others. it is well settled principle of law that a definition is not to be read in isolation and has to read in context of phrase which it defines, releasing that function of a definition is to give precision and certainty to the word or phrase which would otherwise be vague and uncertain. regard being had to the exclusionary fact in the finance act, though a limited one it would exclude the manufacturing process as defined under section 2(f) of the 1944 act. keeping in view the aforesaid dictionary clauses and circulars issued by the c.b.e.c. it is quite luminescent that would manufacture has to be understood in a broader sense and not to be confined or restricted to the excisable product in the act. it would include all processes which amount to manufacture whether or not the final product is an excisable product. in the process of manufacturing of country spirit, the over proof spirit which is not potable is reduced to issuable strength, which is potable. colouring and flavouring agents are added at the time of maturation. thereafter the liquor is supplied in sealed bottles to the retail contractors. this is the process of treatment given to over proof spirit in order to render it fit for human consumption in the form of country liquor. if the process is analysed there cannot be any scintilla of doubt that the process involves the manufacturing one under the provisions of section 2(f) of central excise act, 1944. as per the m.p. country spirits rules as well as clause 6 of the tender conditions it is mandatory for a distiller to supply country liquor in sealed bottles and not otherwise. therefore, packaging and bottling of liquor come within the ambit and sweep of manufacture within the meaning of clause (f) of section 2 central excise act, 1944 in view of the definition contained in section 65(76b) of the finance act especially keeping in view the exclusionary facet and further regard being had to the circular issued by central board of excise and customs. - the tribunal rejected the application for compensation holding that the appellants have failed to establish rash and negligent act of the driver and held that the accident was because of the latent mechanical defect, therefore, the appellants are not entitled to claim any compensation. ashadevi 1988 acj 846 (mp), while considering the defence of sudden failure of brakes has observed that no amount of evidence can be looked into without the pleadings and issues. the plea of mechanical breakdown, sudden failure of brakes or the latent defect or of inevitable accident, is a special plea within the knowledge of the driver and the owner and it should be specifically pleaded, issue should be raised and that such plea should be proved by cogent and legal evidence that reasonable care in inspection and maintenance of the vehicle was properly taken, it was regularly checked and was checked on the ill-fated day of accident and the vehicle was found in order, but even after exercising due attention and care the accident could not be avoided and occurred due to the latent defect of the sudden failure of the brakes.s.k. dubey and usha shukla, jj.1. this is claimants' appeal against the award dated 7.3.1989 passed in claim case no. 16 of 1986 by first additional motor accidents claims tribunal, raisen.2. the appellant no. 1, the widow aged 32 years and three minor children, appellant nos. 2 to 4 as legal representatives of the deceased brij bihari, filed an application under section 110-a of the motor vehicles act, 1939 ('the act') and claimed compensation of rs. 4,25,000/- for the death of deceased arising out of the motor accident, on the averment that deceased brij bihari, aged 35 years, was a ghee vendor. on the fateful day of 11.6.1983 he was travelling as a passenger in bus no. cpd 8884 owned by respondent no. 1 and driven by respondent no. 2. when the bus was going from bhopal towards silwani, at about 2.10 p.m. the bus did not remain in control and could not be stopped even after applying the brakes and dashed with a tree, in that, deceased received severe injuries and died on the same day. the claim was contested on the ground that the accident occurred due to mechanical breakdown because of breakage of tie-rod end and vehicle did not remain in control, as a result of which it dashed with a tree. the appellants to establish their claim examined widow, aw 1; nawal kishore, aw 2; elder brother of the deceased; upendra kumar shukla, aw 3. the respondents examined ramnarayan, naw 1, the driver. the tribunal rejected the application for compensation holding that the appellants have failed to establish rash and negligent act of the driver and held that the accident was because of the latent mechanical defect, therefore, the appellants are not entitled to claim any compensation. however, the tribunal estimated the dependency at the rate of rs. 300/- per month, applying the multiplier of 25 calculated the compensation of rs. 90,000/-, wherein a deduction of '/6th was given for lump sum payment. rs. 75,000/- was considered to be just compensation. aggrieved of this award dated 7.3.1989 passed in claim case no. 16 of 1986 by the first additional motor accidents claims tribunal, raisen, the appellants have filed this appeal.3. mr. ashok lalwani, counsel for the appellants and mr. a.g. dhande and mr. yogesh dhande, counsel for the respondents heard.4. in a claim for compensation arising out of motor accident when a defence of mechanical defect is taken, it is the owner who has to establish the plea. the owner has to prove that he had taken all the necessary precautions and kept the vehicle in a roadworthy condition and that the defect occurred in spite of the reasonable care and caution taken by the owner. in order to sustain a plea that the accident was due to the mechanical defect the owner must raise a plea that the defect was latent and not discoverable by the use of reasonable care. the owner is not liable if the accident is due to a latent defect which is not discoverable by reasonable care. the burden of proving that the accident was due to mechanical defect is on the owner and it is his duty to show that he had taken all reasonable care and that despite such care the defect remained hidden. [see minu b. mehta v. balkrishna ramchandra nayan 1977 acj 118 (sc)].5. in the written statement filed by the respondents in reply to para 4, a vague plea has been raised that the driver of the vehicle was driving the vehicle with care and caution, but, as mechanical defect arose, the driver lost control, as a result of which the accident occurred. it is for the first time naw 1 stated in his oral testimony that the accident occurred due to breakage of tie-rod end. besides, the bare statement of naw 1, no evidence was led by the respondents that all necessary precautions were taken by the respondents and that the vehicle was in a roadworthy condition and that the defect occurred in spite of reasonable care and caution taken by the respondents. no evidence was led to the effect by the respondents that before the vehicle was put on road it was examined and the vehicle was found to be complete in roadworthy condition. besides, naw 1 has admitted that after the accident the vehicle was checked by the mechanical inspector of the respondents who prepared a report, that report was suppressed and was not produced. no evidence was adduced that after the vehicle was removed from the place of accident and was sent to repair, tie-rod end was found broken and it was replaced. breakage of tie-rod end, no doubt, is a latent defect which is not discoverable by reasonable care, however, to establish the said defence, it was the duty of the respondents to show that they had taken all reasonable care and that despite such care the defect remained hidden. here, even this is not established by the legal evidence, except to the oral testimony of the driver, naw 1, that the accident occurred due to breakage of tie-rod end. therefore, the tribunal committed an error in accepting the defence of breakage of tie-rod end on the bare statement of the driver and when the said defence was not raised in the written statement and no cogent evidence was led to establish the defence.6. this court in case of state of madhya pradesh v. ashadevi 1988 acj 846 (mp), while considering the defence of sudden failure of brakes has observed that no amount of evidence can be looked into without the pleadings and issues. the plea of mechanical breakdown, sudden failure of brakes or the latent defect or of inevitable accident, is a special plea within the knowledge of the driver and the owner and it should be specifically pleaded, issue should be raised and that such plea should be proved by cogent and legal evidence that reasonable care in inspection and maintenance of the vehicle was properly taken, it was regularly checked and was checked on the ill-fated day of accident and the vehicle was found in order, but even after exercising due attention and care the accident could not be avoided and occurred due to the latent defect of the sudden failure of the brakes.7. in the circumstances, we can safely apply the principle of res ipsa loquitur as accident and the death arising out of the accident is not disputed. see the decision of the supreme court in case of pushpabai purshottam udeshi v. ranjit ginning & pressing co. 1977 acj 343 (sc). therefore, we are of the view that the finding of the tribunal that the accident was because of mechanical breakdown cannot be sustained and we hold that the accident was caused due to rash and negligent driving of the bus as it was not in control and struck with a tree.8. as to compensation, the deceased was a ghee vendor, his widow and brother stated that the deceased was earning rs. 1,000/- per month. the tribunal, on the evidence adduced, calculated income of the deceased as rs. 500/- per month, dependency rs. 300/- p.m. in our view the dependency so estimated is low as the deceased was aged 35 years, who had 4 dependants. therefore, even for the sake of argument that the deceased was not earning rs. 1,000/- p.m., the minimum wages of a labour is taken into account as rs. 700/- per month, the dependency would come to rs. 500/-, after deducting '/3rd for the personal living expenses of the deceased. applying the multiplier of 16, the amount would come to rs. 96,000 added to it rs. 12,000/- under the head of consortium and rs. 2,000/- towards funeral expenses, total amount would come to rs. 1,10,000/- which the appellants would be entitled with interest thereon at the rate of 12 per cent per annum.9. however, at this stage, the learned counsel for the respondents submitted that the accident occurred on 11.6.1983 and application for compensation was filed on 27.10.1983 and the tribunal passed the award in the year 1989, against which the appeal was filed in the year 1989 which has come up for hearing on the last day of september 1996, as earlier it was dismissed for non-prosecution on 26.8.1994. the appeal was readmitted for hearing by this court on 25.9.1996, hence, for the delay so caused, the respondents should not be made to suffer. reliance was placed on oriental fire & genl. ins. co. ltd. v. ram singh 1995 acj 26 (mp).10. considering the circumstances, we are of the view that it would be unjust to burden the respondents to pay interest for a long period of 13 years. therefore, ends of justice would meet if the .respondents pay the interest for a total period of 10 years. accordingly, we direct the respondent corporation to deposit the amount of rs. 1,10,000/- with interest thereon at the rate of 12 per cent per annum for a total period of 10 years within a period of two months from the date of supply of certified copy, failing which the amount of compensation shall carry interest at the rate of 15 per cent per annum. after deposit, the amount shall be disbursed, keeping in mind the guidelines laid down by the supreme court in case of general manager, kerala state road trans. corporation v. susamma thomas 1994 acj 1 (sc) and lilaben udesing gohel v. oriental insurance co. ltd. 1996 acj 673 (sc).11. in the result, the appeal is allowed and the award passed by the tribunal is set aside. the appellants shall get the compensation and interest as directed in para 10 and also the costs. counsel's fee rs. 1,000/- if pre-certified. the record of the tribunal be sent post-haste with the copy of this order. c.c. as per rules to the parties.