National Insurance Company Limited Vs. Puja Roller Flour Mills (Pvt.) Ltd. and Five ors. - Court Judgment

Excerpt:
- hindu law -- custom: [vijender jain, c.j., m.m. kumar, jasbir singh, rajive bhalla & rajesh bindal, jj] alienation of ancestral property - punjab and haryana - held, in respect of state of punjab by virtue of punjab amendment act, 1973 there is a complete bar to contest any alienation of ancestral or non-ancestral immovable property or appointment of an heir to such property on ground that such alienation or appointment was contrary to custom. in punjab the property in hands of a successor has to be treated as coparcenary property and its alienation has to be governed by hindu law except to the extent it is regulated by sections 6 and 30 of the hindu succession act. in haryana, property in hands of successor has to be treated as coparcenary property as well as ancestral property. parties can fall back upon hindu law in case they fail to establish that rule of decision is custom. therefore, in haryana both under hindu law and the customary law, the alienation would be open to challenge. custom was given precedent over uncodified hindu law presumably for reason that custom has been consistently replacing the hindu law. however, it was soon realized that ancestral immovable property, which ordinarily held to be inalienable amongst jats of punjab by virtue of custom except for necessity, no limitation was placed on degrees of collateral, eligible to contest such alienation. it was, therefore, felt necessary to engraft certain restriction on degrees of collateral, eligible to contest an alienation, which under the custom itself was not limited. accordingly, the punjab custom (power to contest) act, 1920 (act no.2 of 1920) was enacted. the hindu succession act was extended to the state of punjab. act 2 of punjab act defined expression alienation to include any testamentary disposition of property and appointment of an heir was to include any adoption made or purporting to be made according to custom. a further provision was made by section 3 that hindu succession act was to apply only in respect of alienation of immovable property or appointment of heirs made by persons who in regard to such alienation or appointment were governed by custom. whereas section 4 declared that hindu succession act was not to affect any right to contest any alienation or appointment of an heir made before the date on which the succession act was to come into force. in other words, act, no.2 of 1920 was not to affect alienation or appointments of heir made before date on which it came into force. it also preserved the rights of any alienation or appointment of an heir made by a family. after section 7 was inserted in act of 1920 by the punjab amendment act of 1973 right of contest being contrary to custom had been totally effaced and taken away. therefore, no person has any right to contest any alienation of immovable property whether ancestral or non-ancestral on ground of being contrary to custom after january 23, 1973. in haryana, the situation as enunciated by act no.2 of 1920 continued to prevail in respect of alienation because no reforms parallel to punjab as brought by amendment act of 1973, had been enacted although right to pre-emption has been substantially abolished in haryana also. no steps even have been taken in that regard. therefore, situation in haryana have to be regarded as it existed under act no. 2 of 1920. hindu succession act,1956[c.a.no.30/1956] -- sections 6 & 30: [vijender jain, c.j., m.m.kumar, jasbir singh, rajive bhalla & rajesh bindal, jj] alienation of coparcenary property - law laid down by full bench in joginder singh kundha singh v kehar singh dasaundha singh [air 1965 punjab 407] and pritam singh v assistant controller of estate duty, patiala [1976 punj lr 342] -whether there is any conflict? - held, the basic controversy in the full bench decision of joginder singhs case was regarding constitutional validity of section 14 of hindu succession act and as to whether it infringes article 14 of constitution. it was held that the estate held by male and limitation on his power of alienation were in no way removed and the reversioners were not debarred from challenging such alienations. the full bench held that section 14 of hindu succession act postulates that estate held by a hindu female before enforcement of succession act either by inheritance or otherwise, was enlarged and on date of enforcement of succession act, she became a full owner. likewise, if she has inherited any estate after the commencement of the act, she was to be regarded as absolute owner rather than a limited owner. consequently, the limitations on power of alienation automatically vanished. this was the necessary result of the provisions made in section 14 of the act. the full bench further held that in respect of male proprietors, no corresponding provision was made either enlarging their estate in ancestral property or enlarging their power of alienation over property inherited by them. however, it noticed section 30 and observed that it only deals with power of his share in coparcenary property by will, which prior to enforcement of the act, he had no right to do. the only provision made in respect of male proprietor regarding alienation of property was his power of alienation by will. in so far as persons governed by custom are concerned, they continued to be governed by the restriction on the power of alienation of a male holder as existed before enforcement of the act. likewise, other restriction on alienation other than disposal by will also continued. the full bench, thus, recognized the superior right of hindu females by virtue of section 14 and upheld the provision as intra vires. the argument that reversioners have ceased to exist after enactment of provisions of section 14 of succession act, was rejected as there was no provision pointed out to that effect. the proposition laid down by the full bench in pritam singhs case was that the hindu succession act has not abolished joint hindu family with respect to rights of those who were members of mitakshara coparcenary, except in the manner and to the extent mentioned in sections 6 and 30 of the act, this statement should also imply, though it does not say so expressly, the succession act to this extent does not affect the rights of the members governed by dayabhaga coparcenary. the full bench in pritam singh;s case expressly noticed the judgment of earlier full bench in joginder singhs case but construed the same as irrelevant by observing that it dealt with the power of alienation of a person governed by customary law and constitutional validity of section 14 of hindu succession act. thus there is no real conflict between the two full bench judgments. both the full bench judgments have been delivered on the assumption that joginder singhs case dealt with question of alienation whereas pritam singhs case had decided the question concerning succession. even on fact in joginder singhs case the issue was validity of alienation by consent decree by a father to his two sons, which was challenged by third son, whereas in pritam singhs case the question of nature of property in hands of sons on death of their father had arisen for purposes of assessment of estate duty. in pritam singhs case the property in the hands of the sons was held to be coparcenary property and only 1/3rd of property belonging to deceased father was considered eligible for estate duty. therefore, there was no question of alienation in pritam singhs case. - the policy issued clearly specifies that the insurance company is liable to pay such amount as is payable under the statute.t.h.b. chalapathi, j.1. the only point that arises in this appeal filed by the insurance company is whether the liability of the appellant is limited to the extent of rs. 1,50,000/-.2. the motor vehicle accident took place on 29.9.1989 in which one a.r. jain died. his widow satya bala jain and children namely kumari chetna jain and master vikas jain and his mother bhulan devi filed an application under sections 166 and 140 of the motor vehicles act in mact case no. 148 of 1994 on the file of motor accident claims tribunal, karnal which awarded a sum of rs. 6,72,000/- (rs. six lacs seventy two thousands) as compensation, but the tribunal held that the insurance company was liable to pay the compensation to the extent of rs. 1,50,000/- as per statutory provisions contained in the motor vehicles act, 1939 and the balance of the amount of the compensation to the extent of rs. 5,22,000/- was to be paid by the owner of the vehicle namely. puja roller flour mills (pvt.) limited. the owner of the offending vehicle filed an appeal bearing fao no. 303 of 1995. the learned single judge vide his judgment dated 6.9.1995 set aside the finding of the tribunal whereby the tribunal determined the liability of the national insurance company (appellant in this lpa) to the extent of rs. 1,50,000/- and held that the liability of the insurance company is unlimited and directed the appellant insurance company to pay the full amount of compensation to the claimants. aggrieved by the said judgment of the learned single judge, the insurance company preferred this letters patent appeal.3. the learned counsel for the appellant insurance company contended that sub-section (2) of section 147 of the motor vehicles act gives an option to opt for the provisions of the contract of insurance and if the option was not exercised, the liability of the insurance company will be under the provisions of the new act namely under the provisions of section 147 of motor vehicles act, 1988. the learned single judge relied upon the judgment of the division bench of this court rendered in fao no. 1174 of 1991 decided on 22.11.1991. the division bench in the aforesaid appeal observed as follows:-'the accident took place on july 14, 1989. the amending act came into force on july 1, 1989. section 147 of the amending act makes the liability of the insurance company unlimited. under section 95a of the old motor vehicles act, in the case of public carriers, the liability of the insurance company was limited to the extent of rs. 1,50,000/-. under the amending act, four months' period was allowed to the insurance company to opt to be governed by old provisions or the new provisions of the act. admittedly, they did not exercise the option to revise the policy under the act. as far as the policy in dispute is concerned, that being the position, now the amending act would apply to the case in hand and the motor accident claims tribunal rightly fixed the liability of the insurance company alongwith this for the entire amount of rs. 1,70,000/-'.4. according to the counsel for the appellant, the reasoning of the division bench of this court in fao no. 1174 of 1991 decided on 22.11.1991 is contrary to the provisions as contained in proviso to sub-section (2) of section 147 of the motor vehicles act. according to him, the said proviso does not give any option to the insurance company either to opt to be governed by the old act or the new act. the proviso to sub-section (2) of section 147 of the new act reads as follows;-'provided that any policy of insurance issued with any limited liability and in force immediately before the commencement of this act, shall continue to be effective for a period of four months, after such commencement or till the date of expiry of such policy whichever is earlier.'5. we find sufficient force in the contention of the learned counsel for the appellant, but on a consideration of other provisions of the act, we need not go into that question in this appeal. therefore, we leave this question open and decide the matter whether the provisions of the motor vehicles act, 1988 will apply to the insurance policies which are in force at the time of the accident though issued prior to the commencement of the motor vehicles act, 1988. undoubtedly, the amount of liability of the insurance company is unlimited under the provisions of sub-section (2) of section 147, but the contractual liability under the policy will continue to be in force for a period of four months in respect of the policy issued immediately before the commencement of the 1988 act.6. the condition in the policy in regard to liability reads as follows:-'the liability of the insurance company extends to such amount as is necessary to meet the requirements of the motor vehicles act 1939'.7. thus the insurance company has undertaken to reimburse the amount of the loss of the owner of the vehicle to the extent of the liability imposed by the statute. admittedly, the accident in this case took place on 29.9.1989 and the amending act came into force on july 1, 1989. the contract of insurance does not provide any specific limited liability. therefore, there is no limit of contractual liability under the terms of the policy. the policy issued clearly specifies that the insurance company is liable to pay such amount as is payable under the statute. the motor vehicles act 1988, as already stated, came into force from ist july, 1989 i.e. before the accident, in this case, took place. under clause 2(c) of section 217 any document referring to any of the repealed enactments or the provisions thereof shall be construed as referring to 1988 act or to the corresponding provisions of 1988 act. therefore, a legal fiction created under section 217(2)(c) is that the provisions of 1988 act are to be read as the corresponding provisions of the motor vehicles act, 1939 which were referred to in the policy of insurance. in other words, the reference to 'the requirement of the motor vehicles act 1939 are to be taken as referring to the 1988 act.' therefore, any reference made to the. provisions of 1939 act is to be read as provisions of the new act. if so read, the liability of the insurance company will be under the provisions of the new act. as the policy of the insurance stipulates that the liability of the insurance company is the same as fixed by the statute on the date of the accident, the provisions of the new act have come into force, therefore, the provisions of the new act have to be read into the policies which are in force at the time when 1988 act came into force. when the policy itself refers to the statutory liability, it means the liability as fixed by the provisions of the new motor vehicles act, 1988. if the contract of insurance itself fixes the liability i.e. the contractual liability, the same will be in force for a period of four months after the commencement of the 1988 act according to proviso to sub-section (2) of section 147 of the act. but in this case, admittedly, the contract of insurance does not provide any contractual liability nor does it say that the liability of the insurance company is limited to a particular amount. the contract of policy speaks of statutory liability and when there is change of law on the date of accident, the provisions of the changed law will apply.8. this view of ours finds support from the following decisions:in mulka vengamma and ors. v. k. durvasalu and ors., (1978) a.c.j. 180 (a.p.) justice jeevan reddy (as his lordship then was), observed as follows:-'prima facie, it would appear that the insurer's liability is only to pay the amount mentioned in the policy, and nothing more. but, if such an interpretation is placed, sub-section (4) of section 96 becomes otiose. we have, therefore, to harmonize the said words occurring in sub-section (1) of section 96 with the other provisions and the scheme of the said chapter. once we hold,- as we have already done herein before that the insurer's liability towards third parties is governed exclusively by the provisions of law, and not by the terms of the contract, it would follow that the limits, if any, mentioned in the insurance policy with respect to the liability towards third parties shall automatically be deemed to have been modified with any modification in law. in other words, an amendment has the necessary effect of raising the limits of insurer's liability. the words 'to the extent specified in sub-section (2) occurring in section 95(l)(b) have to be understood and read as 'to the extent specified from time to time in sub-section (2). so read, the words afore-mentioned occurring in section 96(1) will become consistent with the rest of the provisions and spirit of chapter viii.'a full bench of the karnataka high court in sanjiv shetty v. anantha and anr., (1978 acj 508) dissenting from an earlier view expressed by a division bench of that court in 1976 a.c.j. 190 observed as under:-'we hold that the material date for ascertaining the extent of liability of the insurer is the date of the accrual of the cause of action for a certain claim arising out of an accident, which in general would be the date of the accident and so in respect of a claim arising out of an accident on 2.3.70 the extent to the pecuniary limit of liability of the insurer is to be determined on the basis of the provisions of section 95, as at that date and in the instant case the higher limit provided by section 95 as amended with effect from 2.3.70 is attracted.'9. in this view of the matter, we are of the opinion that the liability of insurance company is unlimited because of the provisions contained in sub-section (2) of section 147 read with section 217(2)(c) of the motor vehicles act, 1988. we, therefore, do not find any ground warranting interference with the judgment under appeal. consequently, the appeal fails and is, accordingly, dismissed. however, there will be no order as to costs.