Divisional Manager, United India Insurance Co. Ltd. Vs. Nagendra Sethi and ors. - Court Judgment

Excerpt:
- mining direction to state government to consider all applications afresh in light of interpretation of section 11 of the act and rules 35, 59 and 60 of mc rules main issue : whether the state government's recommendation dated 06.12.2004 and the proceedings of the chief minister are contrary to the provisions of section 11 of the act and rules 59 and 60 of mc rules and not valid in law. a perusal of the proceedings of the chief minister shows that no clear reasons were given to show as to why jindal and kalyani were preferred over other applicants.[para 18]--the proceedings of the chief minister, at no level, consider the various guiding criteria mentioned in section 11(3)[para 19] b) whether the respondent-jindal's application dated 24.10.2002 made prior to the notification dated 15.03.2003 is capable of being entertained along with the applications made pursuant to the said notification -- applications made prior to the notification cannot be entertained because they are premature.[para 21] if such premature applications are allowed to be entertained, it would result in the state government giving out mining leases to favoured persons without notice to the general public.[para 53] c) whether the order of the high court of karnataka in ziaulla sharieff's case permit the consideration of the respondent-jindal's application dated 24.10.2002 made prior to the notification dated 15.03.2003. the order of the high court of karnataka in ziaulla sharieff's case does not permit the consideration of jindal's application dated 24.10.2002 which was made prior to the notification dated 15.03.2003.[para 42] d) whether rule 35 of the mc rules justify the recommendation of the state government in favour of the respondents-jindal and kalyani -- as discussed above, rule 35 only permits the state government to take additional factor of the "end use" of the minerals and not the existing investments made by the applicants. moreover, relying on the existing investments made, the respondents also does not satisfy the requirements under section 11(3)(d) which talks solely about proposed investments to be made and not the existing ones.[para 44] e) whether the criterion of "captive consumption" referred to in tata iron and steel co. ltd. vs. union of india, (1996) 9 scc 709, have any application in this case despite not being one of the factors referred to in section 11 (3) of the mmdr act or rule 35 of the mc rules -- we have already held that section 11(3) specifies the matter relevant for purposes of second proviso to section 11(2). we also referred to the committee's report. in accordance with the recommendation in the said report, section 11(3)(d) was added as part of the substitution of section 11 in the year 1999. sub-section (d) provides that "the investment which the applicant proposes to make in the mines and in the industry based on minerals" and it speaks about investment proposed to be made and not past investments. thus it confines the concept of "captive consumption of minerals to proposed investment and not past investments". even the residuary clauses in section 11(3)(e) are limited to "matters as may be prescribed", which would necessarily mean matters prescribed by rules. this is fortified by decision of this court in bsnl ltd. & anr. vs. bpl mobile cellular ltd. & ors., (2008) 13 scc 597, para 45.[para 35] f) whether factors such as the past commitments by the state government to applicants who have already set up steel plants, matter for consideration for grant of lease despite the mmdr act and the mc rules constituting a complete code -- it is not open to the state government to justify grant based on criteria that are de hors to the mmdr act and the mc rules. the exercise has to be done strictly in accordance with the statutory provisions and if there is any deviation, the same cannot be sustained. it is the normal rule of construction that when a statute vests certain power in an authority to be exercised in a particular manner then the said authority has to exercise it only in the manner provided in the statute itself.[para 28] in view of the specific parliamentary declaration as discussed and explained by this court in various decisions, there is no question of the state having any power to frame a policy de hors the mmdr act and the rules.[para 25] central and the state government act as mere delegates of parliament while exercising powers under the mmdr act and the mc rules.[para 27] g) whether the recommendation in favour of respondents-jindal and kalyani saved by the operation of the law of equity. the law of equity cannot save the recommendation in favour of jindal and kalyani because it is a well settled principle that equity stands excluded when a matter is governed by statute. this principle was clearly stated by this court in the cases of kedar lal vs. hari lal sea, (1952) scr 179 at 186 and raja ram vs. aba maruti mali (1962) supp. 1 scr 739 at 745. it is clear that where the field is covered expressly by section 11 of the mmdr act, equitable considerations cannot be taken into account to assess jindal and kalyani, when the recommendation in their favour is in violation of statute.[para 50] h) whether the learned single judge as well as the division bench are justified in arriving at such conclusion. though the learned single judge in his order dated 07.08.2008 quashed the communication/recommendation of the state government dated 06.12.2004 proposing to grant mining lease to jindal and kalyani, however, the learned single judge traveled much beyond the reliefs sought for in the writ petition and quashed the entire notification no. ci.16:mmm.2003 dated 15.03.2003. in our view, while approving earlier part of his order and quashing the communication/recommendation of the state government dated 06.12.2004, the other observations/directions are not warranted in the light of the provisions of the act and the rules. the said observations/directions are deleted.[para 55] the division bench has erred in concluding that the jindal's application made prior to the notification can be entertained along with the applications made pursuant to the said notification because it is not section 11(4) which covers the said notification under rule 59(1) but the first proviso to section 11(2). as a matter of fact, the division bench did not even mention section 11(4) in its reasoning apart from stray references even though the conclusion of the learned single judge hinged on how section 11(4) would be rendered otiose and redundant if the first proviso to section 11(2) was taken as governing the consideration of applications under a notification pursuant to rule 59(1) [para 52] i) whether it is advisable to remit it to the central government. [para 6] the central government considers only the materials forwarded by the state government along with its recommendation. as rightly pointed out, if the recommendation of the state government cannot be upheld in law, all consequential orders including the subsequent approval by the central government are also liable to be quashed. we reject the request for remitting the matter to the central government for its decision. --[para 56] held : in the light of the above discussion, the impugned order of the division bench of the high court dated 05.06.2009 in writ appeal no. 5084 of 2008 and allied matters as well as the decision of the state government dated 26/27.02.2002 and the subsequent decision of the central government dated 29.07.2003 are quashed. we direct the state government to consider all applications afresh in light of our interpretation of section 11 of the act and rules 35, 59 and 60 of mc rules and make a recommendation to the central government within a period of four months from the date of receipt of the copy of this judgment. it is made clear that we have not expressed anything on the eligibility or merits of any of the parties before us and our conclusion as to the decision of the state government is based on the interpretation of the statutory provisions mentioned above for which we adverted to certain factual details of the parties. the state government is free to consider the applications and take a decision one way or other in accordance with law, as discussed above, within the time scheduled. all the appeals are allowed to the extent mentioned above. no costs.[para 57,58]b.n. mahapatra, j.1. these ten appeals are directed against orders dated 30.04.1996 passed in misc. case nos. 47/88 (c) 94/92, 37/86(c) 94/92, 35/85(c) 94/92, 62/84(0)94/92 & 38/87(c) 94/92 by the 3rd mact-cum-additional district judge, balasore (for short 'the tribunal').2. since all these appeals involve common question of law, with consent of the learned counsel for the parties, they were heard analogously & are disposed of by this common judgment.3. the facts & circumstances giving rise to these appeals are that in the above five misc. cases the legal heirs of the deceased persons, who died in a vehicular accident on 14.06.1992 because of head on collision between a trekker & a truck, filed claim petitions before the tribunal for compensation under the motor vehicle act, 1988 (for short 'the act 1988'). thereafter, the legal heirs of the deceased filed applications under section 140 of the act 1988 for interim relief of rs. 50,000 (rupees fifty thousand) under 'no fault liability'. the tribunal in each of these five misc. cases awarded a sum of rs. 50,000 (rupees fifty thousand) to the legal heirs of the deceased persons under section 140 of the act 1988 & directed the insurers of both the vehicles to pay the said compensation amount of rs. 50,000 to the claimants proportionately within one month from the date of the interim award with a condition that in the event of failure to pay the award amount within the stipulated time of one month, the award amount would carry interest @ 12% per annum from the date of filing of the petitions under section 140 of the act 1988 till realization. learned tribunal relying on a decision of the madhya pradesh high court in the case of national insurance co. ltd. v. ram kishore sani and ors. : 1991 acj 878, held that the complainants petitioners are entitled to get rs. 50,000 instead of rs. 25,000 as the amendment act 54 of 1994 has retrospective application. hence, the present appeals.4. learned counsel appearing on behalf of the appellants-insurance companies argued that under the un-amended provisions of section 140 of the act 1988, the quantum of compensation was fixed at rs. 25,000 (rupees twenty-five thousand) in case of death. after the amendment act 54 of 1994 came into force with effect from 14.11.1994, the said amount of compensation has been enhanced to rs. 50,000. the tribunal is not justified to hold that the amendment act 54 of 1994 has retrospective application & the claimants are entitled to get compensation of rs. 50,000. the provisions of the m.v. act are substantive in nature. the liability of the insurer cannot be stretched beyond the law prevalent on the date of accident. it is further argued that since the compensation awarded under section 140 of the act 1988 is an interim one, the learned tribunal is not justified in awarding interest on the same. the learned counsel cited some decisions in support of his contention.learned counsel appealing on behalf of the claimants-respondents strenuously urged that the motor vehicles act being a benevolent legislation, the interim compensation of rs. 50,000 as provided in the amendment act 54 of 1994 has retrospective application. therefore, the legal heirs of the deceased persons who died due to the accident on 14.06.1992, i.e., prior to the date the amendment act came into force, are entitled to get compensation of rs. 50,000 under section 140 of the act 1988. in support of his contention he relied on the decision of the apex court in rathi menon v. union of india : air 2001 sc 1333. it is contended that section 171 of the act 1988 provides for award of interest on the amount of compensation directed to be paid to the claimants. the said provision does not make any distinction among the compensations paid under section 140 of the act 1988, section 163-a & compensation awarded under section 168 of the act 1988. therefore, no illegality has been committed by the tribunal by awarding interest on the amount of compensation as prescribed under section 171 of the act 1988.5. on the rival contentions, the following two questions fall for consideration by this court:(i) whether the amendment act 54 of 1994 that came into force with effect from 14.11.1994 has retrospective application & is applicable to the instant cases, where the alleged accident took place on 14.06.1992, i.e., much prior to the date the amendment act came into force, entitling the claimants to compensation of rs. 50,000 as envisaged under section 140 of the act, 1988.(ii) whether the claimants are entitled to interest on the amount of compensation awarded under section 140 of the act, 1988 from the date of filing of the application under the said act till the date of payment?6. for better appreciation, it is necessary to reproduce here the relevant provisions of section 140 of the act, 1988 prior to the amendment act 54 of 1994 came into force on 14.11.1994.140. 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 & 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 rs. 25,000 & the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of rs. 12,000.xx xx xx provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this section or under section 163-a.the amounts of 'twenty-five thousand rupees' & 'twelve thousand rupees' appearing in sub-section (2) above have been raised to 'fifty thousand rupees' & 'twenty-five thousand rupees' respectively in the amendment act 54 of 1994.7. a plain reading of section 140 of the act, 1988 reveals that the amount of compensation on the principle of no fault liability in case of death was rs. 25,000 prior to 14.11.1994 when the amendment act 54 of 1994 came into force & subsequently it has been enhanced to rs. 50,000 by introduction of the amendment act. the claimants shall not be required to plead & 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 on the part of the owner or owners of the vehicle or vehicles involved in the accident or any other person.8. it is not in dispute that the accident took place on 14.06.1992 i.e. prior to the amendment act came into force. the question remains whether the appellants are entitled to compensation to the tune of rs. 25,000 under section 140 of the act, 1988 as it stood on the date of the alleged accident or they are entitled to get rs. 50,000 under the provisions of section 140 of the amendment act 54 of 1994 which were prevailing on the date the impugned award was passed.9. the apex court in gujarat state road transport corporation, ahmedabad v. ramnanbhai prabhatbhai and anr. 1987 acj 561 held that the provisions of the motor vehicles act, are not merely procedural provisions. they substantially affect the rights of the parties. law is well settled that unless legislature by expression or necessary implication indicates retrospective application of any act, the application shall only be prospective. right to pay compensation has been created by the statute itself see united india insurance co. ltd. v. alavi 1998 (2) tac 330 (ker).the apex court in r.l. gupta v. jupitor general insurance co. : (1990) 1 scc 356, held that the quantum of liability is provided by the statute prospectively. the apex court in pepsu road transport corporation, patiala v. kulwant kaur and ors. : (2009) 4 scc 32, held that the amount of compensation payable as 'no fault liability' under section 140 of the act 1988 was as per the law prevailing on the date of accident. this court in divisional manager, new india assurance co. ltd. v. nandara bawa and ors. reported in : 1997(2) acj 200 (orissa), held that the provisions of section 140 of the motor vehicles act are not retrospective. the golden rules of all the statutes are prospective unless statutes prescribe otherwise. the amending act 54 of 1994 which came into force w.e.f. 14.11.1994 does not prescribe for its retrospective application. thus the amendment, which came into force w.e.f. 14.11.1994 providing for compensation of rs. 50,000, has no retrospective operation. it is also well settled that the liability of the insurer can be stretched within the law that was prevailing on the date of accident, see padma srinivasan v. premier insurance co. ltd. : air 1982 sc 836.10. the matter can also be considered from another angle. for example, two persons died in an accident which took place prior to the date the amendment act 1994 came into force. accordingly, two claim cases were filed. in one case, if compensation of rs. 25,000 is awarded under section 140 to be paid prior to the amendment act 54 of 1994 came into force &, in other case, rs. 50,000 is awarded to be paid after the amendment act 54 of 1994 came into force, then it will amount to discrimination. the apex court in national insurance co. ltd. v. beharilal and ors. : (2000) 7 scc 137, held that the object of fixing liability at a fixed amount for some period is to maintain uniformity, the compensation cannot be different to the persons who suffered accident only because of the fact that some cases were not disposed of earlier.11. the decision cited by learned counsel for the claimant-respondent in rathi menon v. union of india : air 2001 sc 1333 has no application to the case of the claimant. the said judgment was rendered in connection with one claim case under the indian railways act. the act does not provide for any fixed amount of compensation; the same is left with the central government to fix the amount of compensation from time to time. section 140 of the m.v. act. act itself provides for the amount of compensation. moreover, this decision of the apex court had no occasion to refer to the padma srinivasan (supra).12. for the reasons stated above, this court is of the considered view that since the accident in question took place on 14.06.1992 i.e. prior to the amendment act 54 of 1994 came into force, the legal heirs of the deceased persons are entitled to get compensation of rs. 25,000 under section 140 of the act 1988, i.e., as per the law prevailing on the date of accident. the tribunal is, therefore, not justifies directing payment of rs. 50,000 merely because the said payment was directed to be made after the amendment act 54 of 1994 came into force.13. the next question relates to payment of interest on the amount of compensation awarded under section 140 of the act, 1988. this court in new india assurance company represented through divisional manager, khurda division v. radha bewa and ors. 1997 (2) t.a.c. 96 orissa, held that in respect of no fault liability, the question of awarding interest does not arise as interest may be awarded at the time of final award.in view of the above decision of this court, no interest is payable on the amount of compensation awarded under section 140 of the m.v. act., at this juncture. the appeals are allowed accordingly.