Calcutta High Court (Appellete Side)
Urmila Halder vs New India Assurance Co. Ltd. & Ors on 9 August, 2018
Author: Dipankar Datta
Bench: Dipankar Datta
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
PRESENT :
Hon'ble Justice Dipankar Datta
and
Hon'ble Justice Shampa Sarkar
FMA 446 of 2010
(earlier FMAT 278 of 2009)
Urmila Halder
v.
New India Assurance Co. Ltd. & ors.
For the appellant : Mr. Ashique Mondal, Advocate
For the respondent no. 1 : Mr. Rajesh Singh, Advocate
Heard on : June 19 and 21, 2018
Judgment on : August 9, 2018
DIPANKAR DATTA, J.:
1. A road accident involving the use of a motor vehicle on December 11, 2004 claimed the life of the appellant's daughter (hereafter 'the victim' for short) at a relatively young age of 22 years. Distressed by such premature death, the appellant presented a claim application dated February 8, 2005 for compensation under Section 163-A of the Motor Vehicles Act, 1988 (hereafter 'the 1988 Act' for short) before the relevant motor accident claims tribunal (hereafter 'the MACT' for short). The application was decided by the MACT by its judgment and award dated December 17, 2008. The opposite party no.2 before the MACT, i.e., the insurer of the offending vehicle (hereafter the insurer), was held liable to compensate the appellant in a sum of Rs.1,14,000.00. Such sum was directed to be paid to the appellant by the insurer within 30 (thirty) days, failing which the insurer was required to pay simple interest @ 6% per annum on the said sum from the date of presentation of the claim application till payment is made.
2. Dissatisfied with the paltry sum awarded by the MACT as compensation as well as its omission to award interest from the date the claim application was presented, the appellant exercised the right guaranteed by Section 173 of the 1988 Act and preferred this appeal on February 27, 2009.
3. It is not in dispute that the insurer effected payment of compensation, as determined by the MACT, in favour of the appellant within 30 days of the award and thereby evaded payment of interest to her.
4. Mr. Ashique Mondal, learned advocate for the appellant contended that the MACT erred in determining compensation and in not awarding interest and, therefore, she is entitled to enhanced compensation.
5. First, it was contended that the MACT, without justification, discarded the evidence of the appellant that the victim was earning Rs.2,000.00 per month and proceeded to determine loss of dependency as if the victim was a non-earning person. Mr. Mondal urged that instead of reckoning Rs.15,000.00 as the notional annual income of the victim as per the Second Schedule appended to the Act, the loss of dependency ought to have been worked out by the MACT on the basis of Rs.24,000.00 as the victim's notional annual income.
6. Secondly, Mr. Mondal contended that the MACT selected a wrong multiplier, i.e., 11, based on the age of the appellant. Having regard to the age of the victim and the Second Schedule, the appropriate multiplier was 17 and the MACT, he contended, grossly erred in not so selecting for determination of compensation.
7. Thirdly and finally, the omission of the MACT to grant interest from the date of presentation of the claim application was challenged relying on the provisions of Section 171 of the 1988 Act and the decisions of coordinate Benches of this Court in Purnima Saha v. United India Insurance Company Ltd. 2007 (1) CHN 537 : Kohinur Begum v. New India Assurance Co. Ltd. : AIR 2008 Calcutta 84 and, Rekha Dutta v. Ram Avatar Lohia : 2009 (3) T.A.C. 783.
8. Mr. Mondal was also heard to advance a submission based on a development of recent origin. He brought to our notice a notification dated May 22, 2018 issued by the Central Government in exercise of power conferred by sub-section (3) of Section 163-A of the 1988 Act (hereafter 'the said notification' for short), and prayed for application thereof to determine compensation payable to the appellant.
9. Sub-section (1) of Section 163-A of the 1988 Act ordains that notwithstanding anything contained therein or in any other law for the time being in force, upon proof of death in an accident involving the use of a motor vehicle, compensation is payable either by the owner of such vehicle or the authorized insurer thereof as indicated in the Second Schedule to the legal heirs of the victim. The Second Schedule appended to the 1988 Act, referring to Section 163-A thereof, provides the structured formula for determining compensation.
10. Bare perusal of the said notification revealed substitution of the original Second Schedule providing for a structured formula (hereafter the 'old schedule' for short) and replacement thereof by a new schedule (hereafter the 'new schedule' for short). The said notification appears to have done away with the multiplier method of determination of quantum of compensation and prescribes lump-sum compensation. Separate lump-sum amounts have been introduced for claims arising out of death and injury replacing the structured formula, which was prevalent earlier. We have, however, noticed that the marginal note of Section 163-A of the 1988 Act is to the effect that Section 163-A is a special provision for "payment of compensation on structured formula basis". With the structured formula ceasing to exist, one would have expected the marginal note to be amended too to bring it in conformity with the substance of Section 163-A read with the Second Schedule but the same has not been amended. It is also noticed that the English version of the said notification is not totally free from printing error. While giving effect to any law from a particular date, the words "come into force" are used and not "come into form". Looking at the Hindi version of the said notification which uses the word "pravritta", we feel that the word "form" in the last line is inapt and should be read as "force". We hope and trust that the relevant department would do well to bring out an amendment to iron out the creases, if steps have not been taken as yet.
11. As it stands now, the Second Schedule after its amendment by the said notification prescribes lump-sum compensation in the following manner:
1. Fatal accidents - Rs. 5,00,000.00 is payable as compensation in case of death;
2. Accidents resulting in permanent disability - Rs. 5,00,000.00 × percentage of disability as per Schedule I of the Employee's Compensation Act, 1923 (8 of 1923), provided that the minimum compensation in case of permanent disability of any kind shall not be less than Rs. 50,000.00;
3. Accidents resulting in minor injury - A fixed compensation of Rs.
25,000.00.
12. It is, thus, evident from the new schedule that Rs.5,00,000.00 is payable under sub-section (1) of Section 163-A of the 1988 Act for a claim arising out of death. Should the appellant succeed in her contention that the new schedule ought to apply, she ought to be entitled to it. This has been the thrust of Mr. Mondal's contention.
13. Upon noticing the said notification and considering that numerous claim applications under Section 163-A of the 1988 Act have been pending before the various motor accident claims tribunals of this State and that this Court is also in seisin of a good number of appeals under Section 173 thereof, wherein awards under Section 163-A are under challenge, we thought of rendering a decision upon hearing all the learned advocates who generally appear before us to argue appeals under Section 173 of the 1988 Act. This was intended to avoid repetition of arguments every time a quantum appeal challenging an award under Section 163-A comes up for consideration as well as to facilitate speedy disposal of all the pending claim applications and the appeals in the light of our findings and observations.
14. With that in view, we invited such learned advocates to address us on the following issue :
Whether, after the amendment brought about by the said notification, the new schedule would be applicable to pending claim applications under Section 163-A before the motor accident claim tribunals as well as the appeals arising out of awards delivered thereunder prior to May 22, 2018?
15. The response was heartening, to say the least. The learned advocates who appeared to argue before us were found to have made thorough research on the subject and ably assisted us by advancing arguments for and against the issue noticed above. We appreciate and acknowledge their efforts with a deep sense of gratitude.
16. We also take this opportunity of extending our heart-felt gratitude to Mr. L. K. Gupta, learned senior advocate and Mr. Kaushik Chanda, learned Additional Solicitor General for assisting us, at our request, with their thoughts on the subject matter under consideration.
Contentions of Mr. Ashique Mondal
17. Mr. Mondal commenced his argument by submitting that in the practice of interpretation of statutes, one established rule is that unless a contrary intention appears, the presumption is that the legislation is not intended to have a retrospective operation. However, he sought to explain that the general presumption of prospective operation of any law can be offset by various other factors. According to him, the rule that while substantive law is prospective in operation but procedural law is retrospective can be traced back to several English decisions which form the basis of this principle in Common Law and has also been followed by the Supreme Court in several decisions. Reliance in this connection was placed by him on the following decisions:
a. King v. Chandra Dharma : [1905] 2 K.B. 335, where Lord Alverstone, C.J. observed as follows:
"The rule is clearly established that, apart from any special circumstances appearing on the face of the statute in question, statutes which make alterations in procedure are retrospective. It has been held that a statute shortening the time within which proceedings can be taken is retrospective (The Ydun, 1899 p. 236.), and it seems to me that it is impossible to give any good reason why a statute extending the time within which proceedings may be taken should not also be held to be retrospective."
b. James Gardner v. Edward A. Lucas : [1878] 3 App. Cas. 582, where Lord Blackburn stated:
"Now the general rule, not merely of England and Scotland, but, I believe, of every civilized nation, is expressed in the maxim, 'Nova constitutio futuris formam imponere debet non prateritis' -- prima facie, any new law that is made affects future transactions, not past ones. Nevertheless, it is quite clear that the subject-matter of an Act might be such that, though there were not any express words to show it, it might be retrospective. For instance, I think it is perfectly settled that if the Legislature intended to frame a new procedure, that instead of proceeding in this form or that, you should proceed in another and a different way; clearly there bygone transactions are to be sued for and enforced according to the new form of procedure. Alterations in the form of procedure are always retrospective, unless there is some good reason or other why they should not be. Then, again, I think that where alterations are made in matters of evidence, certainly upon the reason of the thing, and I think upon the authorities also, those are retrospective, whether civil or criminal."
c. Maxwell v. Murphy : (1957) 96 C.L.R. 261, where the principles to be adopted in determining the retrospective effect to be given to a statute, when no clear indication of intention appears from the language of the statute itself, was explained. In this case, following Dixie v. Royal Columbian Hospital : (1941) 2 D.L.R. 138, the following principles have been set out:
(1) a statute divesting a person of vested rights is to be construed as prospective only;
(2) a statute which is merely procedural is, however, to be construed retrospectively; and (3) a statute which, whilst procedural in its character nevertheless affects vested rights adversely, is to be construed as prospective only.
d. Indiabulls Housing Finance Limited Vs. Deccan Chronicle Holdings Limited & Ors. : 2018 (3) SCALE 399, where the rule that substantive law is prospective in operation, while procedural law is retrospective, was reiterated by the Supreme Court, as recently as in February, 2018.
18. Mr. Mondal then outlined the factors that could offset the general presumption of prospective operation of any law, viz. doctrine of fairness, principle of beneficial legislation, rule applicable for declaratory and clarificatory statutes, etc.
19. On the doctrine of fairness, Mr. Mondal placed the decision in L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. : (1994) 1 AC 486 where, while deciding the issue of retrospective operation of new section 13A of the Arbitration Act, 1950 conferring power on the arbitrator to dismiss a claim on the ground of the claimant's inordinate or inexcusable delay in pursuing arbitration, it was held that fairness must be the basis of every legal rule.
20. According to Mr. Mondal, the doctrine of fairness ensures that in a case where the effect of a beneficent statute is sought to be extended keeping in view the fact that the benefit was already availed of by the others, it would be highly unfair if the benefit granted to them is taken away, although the same was meant to be extended to them also. For such purposes the statute need not be given retrospective effect by express words but the intent and object of the legislature in relation thereto can be culled out from the background facts. In other words, it was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature.
21. To buttress the contention that the doctrine of 'fairness' was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation, the following decisions were cited :
a. Government of India v. Indian Tobacco Association : (2005) 7 SCC 396 (paragraph 18);
b. Vijay v. State of Maharashtra : (2006) 6 SCC 286 (paragraph 7);
c. Commissioner of Income Tax v. Vatika Township Private Limited :
(2015) 1 SCC 1 (paragraphs 30 - 35).
22. Mr. Mondal submitted that in Commissioner of Income Tax (supra), a legislation which confers a benefit has been given a completely different footing from the general rule of prospective operation. It has been clarified that if a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This has been held as "exactly" the justification to treat procedural provisions as retrospective. It has been held that "(D)ogmatically framed, the rule (of prospective operation of a law) is no more than a presumption, and thus could be displaced by out weighing factors".
23. Moving on to the intention of the legislature while introducing the new schedule, Mr. Mondal contended that in order to understand such intention the very purpose and intent of the 1988 Act and the Motor Vehicles (Amendment) Act, 1994 (hereafter the 1994 Amendment Act for short) need to be understood. The 1988 Act, inter alia, was introduced to make "provision for enhanced compensation in cases of 'no fault liability' and in 'hit and run' motor accidents". The Statement of Objects and Reasons of the 1988 Act were placed, more particularly point (i) in the unnumbered paragraph 5.
24. The 1994 Amendment Act, Mr. Mondal continued, was enacted based on the Transport Development Council's recommendations which, inter alia, relate to providing adequate compensation to victims of road accidents without going into long drawn procedure. The Statement of Objects and Reasons of the 1994 Amendment Act were placed, more particularly paragraphs 3 (b) and (f), and 4
(k). According to him, the legislation (Section 163-A) was prepared in the light of the above background and, inter alia, provided for a new pre-determined formula for payment of compensation to road accident victims on the basis of age/income, which is more liberal and rational, on the principle of 'no fault' liability. In the light of the above, he contended that the intention of the legislature is amply clear. The ultimate goal of the legislature was to avoid long drawn procedures and to enable the victims of road traffic accident to get hassle free compensation.
25. Mr. Mondal further sought to assert that the overall scheme of providing compensation to road traffic accident victims percolate from the Directive Principles of State Policy as enshrined in Articles 38 and Article 39(a) of the Constitution of India. It is clear from such directives that the State has a duty to achieve those objects while legislating. It has a more active role to see that there is less number of destitute in the society. As such, when a particular amendment provides a compensation scheme keeping in mind the cost of living and in line with the constitutional mandate to the legislature contained in the Directive Principles of State Policy, it could not have been the intention of the legislature not to extend the benefit retrospectively.
26. Next, it was argued by Mr. Mondal that the new schedule has been introduced in exercise of power vested in the Central Government by Section 163-A(3) which clearly enables it to review the Second Schedule from time to time. Since 1994, when Section 163-A was introduced in the 1988 Act by the 1994 Amendment Act, the Government had not made any changes in the old schedule for all these years. He emphasized that the Government, even in 1994, while enacting the old schedule, was aware of the changing economic landscape and had foreseen the necessity to review it. Now that the Government, taking into consideration the cost of living, price index, inflation, etc. has substituted the old schedule with a new compensation structure, it would be absurd to presume that the intention was to give benefit to future litigants only and deprive the litigants whose claim applications are pending. The said inference would be absolutely contrary to the intention of the legislature, the purpose of the 1988 Act as well as the constitutional mandate on the State.
27. Adverting to the effect of substitution vis-à-vis repeal, Mr. Mondal cited the decision in State of Rajasthan v. Mangilal Pindwal : AIR 1996 SC 2181, where the Supreme Court relying on the decision in Koteshwar Vittal Kamalh v. K. Rangappa : [1969] 3 SCR 40, held that the process of substitution of statutory provision consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. In other words, the substitution of a provision results in repeal of the earlier provision and its replacement by the new provision.
28. Mr. Mondal then cited the decision in Zile Singh v. State of Haryana : (2004) 8 SCC 1, where the above view has been fortified. In the said case, the Supreme Court considered Craies (Statute Law, Seventh Edition, page 388), which stated that in the absence of a retrospective operation having been expressly given, the Courts may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the statute retrospectivity. Four factors were thereafter suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and what it was the legislature contemplated.
29. It was brought to our notice that Zile Singh (supra) has been followed in Indian Tobacco Association (supra).
30. The statutory provision recognizing this principle of prospective operation of repeal was next traced to Section 6A of the General Clauses Act, 1897, which reads as follows:
Act making textual amendment in Act or Regulation -
Where any Central Act or Regulation made after the commencement of this Act repeals any enactment by which the text of any Central Act or Regulation was amended by the express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal.
31. Mr. Mondal urged that the above provision is in line with the general rule of prospective operation of an amendment that can be achieved by the literal rule of statutory interpretation. However, the same could be offset by doctrine of fairness, principle of beneficial legislation, rule for declaratory and clarificatory statutes etc. As such, even if the process of substitution of the old schedule by the new schedule involves the repeal of the old schedule, the provision of Section 6A of the General Clauses Act, 1897 would not apply.
32. In the light of the above discussions, specifically with respect to the effect of substitution of a particular law, Mr. Mondal sought to impress us that once a law is substituted, the previous law is repealed. As such the old schedule which was effective from November 14, 1994 does not exist as on date. Consequently, the new schedule should be given effect to from November 14, 1994 when the 1994 Amendment Act became effective and Section 163-A along with the Second Schedule (old schedule) came into existence.
33. Insofar as the fate of pending appeals is concerned, the decision in Smt. Dayawati v. Inderjit : AIR 1966 SC 1423 was placed by Mr. Mondal which, according to him, clarifies the issue. The Supreme Court, while deciding whether an amendment would apply to appeals, held that the only difference between a suit and an appeal is this that an appeal "only reviews and corrects the proceedings in a cause already constituted but does not create a cause". As it is intended to interfere in the cause by its means, it is a part of it and in connection with some matters and some statutes it is said that an appeal is a continuation of a suit. It was also held that the appeal is a part of the cause because the preliminary decree which emerges from the appeal will be the decree, which can become the final decree. Such an appeal cannot have an independent existence.
34. Nani Gopal Mitra v. The State of Bihar : AIR 1970 SC 1636 was the next decision which was placed, where the Supreme Court upon discussing the effect of repeal has held that the pending cases although instituted under the old enactment (the Prevention of Corruption Act, 1947) but still pending are governed by the new procedure under the amended law, but whatever procedure was correctly adopted and concluded under the old law cannot be opened again for the purpose of applying the new procedure.
35. Extensive arguments were then advanced by Mr. Mondal on the methodology adopted by the judiciary in case of the period of limitation under the 1988 Act.
36. First, he cited the decision in Vinod Gurudas Raikar v. National Insurance Co.
Ltd. : (1991) 4 SCC 333. There, the accident took place on January 22, 1989 when the Motor Vehicles Act, 1939 (hereafter the '1939 Act' for short) was in force. The claim petition was filed in March 15, 1990 when the 1988 Act was effective and hence the delay of more than six months could not be condoned. The Supreme Court refused to let the appellant avail the benefit of the previous law which was in force and was beneficial for the appellant and held that the subsequent law would prevail.
37. In Wilfred v. Maniyar : 1995 ACJ 673, the accident took place on January 10, 1988 when the 1939 Act was prevailing and the claim was preferred on July 10, 1989 after the 1988 Act came into force. Under the 1988 Act, the claim was barred by limitation, but while the appeal was pending, the 1994 Amendment Act was enacted and sub-section (3) of Section 166 of the 1988 Act was omitted. The Karnataka High Court applied the 1994 Amendment Act retrospectively and held that the effect of the partial repeal of the 1988 Act by omitting sub-section (3) of Section 166 without a saving clause in favour of pending suit is that, all proceedings pending should be disposed of as if sub-section (3) of Section 166 did not exist.
38. The decision in Dhannalal v. D.P. Vijayvargiya : (1996) 4 SCC 652 was the next which was heavily relied on. There, the accident occurred on December 4, 1990 and the claim application was filed under the 1988 Act on December 7, 1991, i.e., a delay of 4 days had occurred. Although the tribunal had condoned the delay, the High Court of Madhya Pradesh by its order dated July 31, 1995 set aside the order on the ground of repeal of sub-section (3) of Section 166 by the already effective 1994 Amendment Act. The Supreme Court set aside the order of the High Court by holding that when sub-section (3) of Section 166 has been omitted, then the tribunal has to entertain a claim petition without taking note of the date on which such accident had taken place. The claim petitions cannot be thrown out on the ground that such claim petitions were barred by time when sub-section (3) of Section 166 was in force.
39. It was also brought to our notice that Dhannalal (supra) has been followed subsequently by a coordinate Bench of this Court in Sushana Minj v. M/s. Duncon Agro Industries Ltd. : 2000 (2) CLJ 545.
40. In New India Assurance Co. Ltd. v. C. Padma : (2003) 7 SCC 713, the accident occurred on February 18, 1989 when the 1939 Act was in force. The claim application was filed on November 2, 1995 when the 1988 Act had come into operation and sub-section (3) of Section 166 deleted w.e.f. November 14, 1994 by the 1994 Amendment Act. The Supreme Court allowed the claim application to be admitted by following the ratio laid down in Dhannalal (supra) and also clarifying why Section 6A of the General Clauses Act, 1897 would not apply.
41. On the question of relevance of the date of accident vis-à-vis the date of filing of the claim application, Mr. Mondal contended that based on his aforesaid contentions it would be clear that such dates are irrelevant. The date on which the claim is adjudicated, either in the Court of the first instance or in the court of appeal, is relevant; and the laws, as it stand on the date of final adjudication, would be applicable. This view is fortified by Dhannalal (supra). Rathi Menon v. Union of India : (2001)3 SCC 714 was another decision that Mr. Mondal cited wherein the Supreme Court, dealing with a railway claim, held that the date on which the final order is made should be the relevant date for deciding which law should apply.
42. Mr. Mondal also submitted that the awards which have become final and have not been challenged would not be liable to challenge on the anvil of the amended provisions. This principle is fortified by Lekh Raj (dead) through L.R.s and Ors. Vs. Ranjit Singh : AIR 2017 SC 4015, as also Nani Gopal Mitra (supra), based on the principle that once a lis ends amongst the parties, the same cannot be resurrected only to avail a benefit which originates from a subsequent law. Since the rights of the parties have already crystallized under the old law, the new law would not be applicable.
43. While concluding his address, Mr. Mondal submitted that the new schedule has been brought to compensate the victims of motor accident under the principle of "no-fault" liability commensurate with the "cost of living". The purpose is to recompense the victims for the devaluation in money's worth since 1994. Unless the new schedule is given retrospective effect, the pending cases would require to be adjudicated under the old schedule. The same having been repealed by way of substitution, simultaneous operation of the old and the new schedule for different cases on the basis of date of accident or the date of claim would make the entire exercise impractical and unworkable.
44. In the light of the above submissions, Mr. Mondal urged that the appellant should be awarded Rs. 5,00,000.00 along with interest from the date of filing of the claim application till actual payment as compensation for the accidental death of her 22 year old daughter.
Contention of Mr. Jayanta Banerjee, advocate
45. Mr. Banerjee referred to the decision of a coordinate Bench of this Court in Radha Yadav Vs. Union of India : 2018 ACJ 310 wherein, following the decision of the Supreme Court in Rathi Menon (supra), it was held that amount of fixed compensation as made available by law as on the date of the decision is relevant, and not the amount on the date the application was filed before the tribunal. The coordinate Bench in such case considered an amendment in the Railway Accidents and Untoward Incidents (Compensation) Rules, 1990 (hereafter the 1990 Rules) revising the fixed rate of compensation from Rs.4,00,000.00 to Rs.8,00,000.00 and applied such rule while awarding enhanced compensation for a railway accident although the accident had occurred before the amendment came into force.
Contention of Mr. Jayanta Kumar Mondal, advocate
46. Mr. Mondal chipped in with the decision dated May 9, 2018 of the Supreme Court in Union of India v. Rina Devi : AIR 2018 SC 2362 and contended that the Court may consider whether the approach adopted by the Supreme Court while dealing with a claim under Section 124-A of the Railways Act, 1989 (hereafter the 1989 Act) read with Sections 16 and 13 of the Railway Claims Tribunal Act, 1987 (hereafter the 1987 Act) may be adopted in deciding the issue under consideration. Our attention was drawn to paragraphs 15.1 to 15.4 and 18 of the said decision, to which we shall refer at a later part of this judgment. Submissions of Mr. L.K. Gupta, senior advocate
47. Mr. Gupta handed over to us a short written note containing his understanding of whether the new schedule would apply prospectively or retrospectively. It is recorded that the concerned learned advocates were given copies of the same. We reproduce below Mr. Gupta's submissions.
48. Section 163A (1) of the 1988 Act is a substantive law as it creates and regulates the right to receive compensation. This is by applying the law laid down in Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa v. N.C. Budharaj (deceased) by LRs. : (2001) 2 SCC 721. Read with the Second Schedule, it also provides for the extent of compensation and is thus the soul of the substantive right created by sub-section (1). It is not a procedural provision but a substantive one. The right of the victim to receive and the obligation of the owner/insurer of the offending vehicle to pay compensation accrues on the date of the accident resulting in death/permanent disablement. As on the date of the accident, it becomes a vested right for the victim to get the amount of compensation, to be calculated by following the Second Schedule. So also, as on that date the extent of obligation of the owner/insurer to pay is fixed. A subsequent change in the quantum of compensation is authorized by Section 163-A(3) keeping in view the cost of living. Such provision appears to be based on the suggestion of the Supreme Court in M.K. Kunhimohammed v. P.A. Ahmedkutty : (1987) 4 SCC 284. Whether the enhancement of compensation is by a new legislation repealing an earlier one or by amendment of an existing law, makes no difference in finding out whether such law is substantive or procedural. Legislation providing for compensation is a substantive law. A change in the quantum of compensation or in the basis of its computation brought about by the replacement of the schedule in terms of the enabling provision in this regard provided for in Section 163-A(3) of the 1988 Act still retains the character of the law as a substantive one, notwithstanding the change in the procedure of computation.
49. In the absence of any express words or necessary implication to the contrary, such change in substantive law is prospective and the new schedule can apply only to accidents occurring on or after the same is brought in. An almost similar situation arose in regard to Section 140 of the 1988 Act, which raised the no fault liability from Rs.15,000/- as was provided for in Section 92-A of the 1939 Act and by the Amendment Act of 1994 it was further raised to Rs.50,000/-. This provision was held not to be procedural and hence not retrospective and so the enhancement was not to apply to accidents, which took place before the date the amendment came into force [see State of Punjab v. Bhajan Kumar : (2008) 12 SCC 112]. Similar view was taken in Pratap Narain Singh Deo v. Srinivas Sabata : AIR 1976 SC 222 in dealing with compensation under the Workmen's Compensation Act, 1923 (hereafter the 1923 Act in short).
50. It is true that provision for compensation is a beneficial legislation and such legislations, because of their very nature, are generally applied retrospectively so as to confer more benefit. However, there is no rule of construction that beneficial legislation is always retrospective [see Shyam Sunder v. Ram Kumar : (2001) 8 SCC 24. The very words used in Section 163-A(3) "... may ... from time to time amend the Second Schedule" throw light that the amendment of the compensation may be made by the Central Government keeping in view the cost of living. Thus, an amendment made today on consideration of the present day cost of living is not intended to apply to the past. In Shyam Sunder (supra), it was held that the rule of beneficent construction is not to be applied where (i) result would be re-legislation of a provision by addition, substitution or alteration of words and violence would be done to the spirit of the provision; (ii) where words of provision are capable of being given only one meaning and (iii) where there is no ambiguity in a provision.
51. Applying such test, replacement of the Second Schedule to the 1988 Act in exercise of the authority vested in the Central Government by Section 163-A(3) cannot operate retrospectively so as to apply the new schedule to accidents which took place prior to the date the old schedule was replaced. Contentions of Mr. Rajesh Singh, advocate
52. Mr. Singh represented the contesting respondent before us. The view of Mr. Gupta was echoed by Mr. Singh while addressing us on the effect of substitution of the old schedule by the new schedule. His contentions, in addition to Mr. Gupta's submissions, are noted below.
53. It is well recognized rule of interpretation of statute that the Court's jurisdiction to interpret a statute can be invoked only when the same is ambiguous. However, by interpretation, the Court cannot enlarge the scope of legislation or intention when the language of the provision is plain and unambiguous. It cannot add or subtract words of a statute or read something into it which is not there. It cannot rewrite or recast legislation. Reliance was placed on the decision in Nasiruddin v. Sita Ram Agarwal : AIR 2003 SC 1543.
54. Similarly, it is well settled that while interpreting the statutory provision, the Court should consider each word, phrase, or sentence of the said provision inasmuch as each of them has a meaning and purpose and none of them can be treated as redundant or useless. The decisions in Poppatlal Shah v. State of Madras : AIR 1953 SC 274, State of Orissa v. Joginder Patjoshi : (2004) 9 SCC 278 and Nathi Devi v. Radha Devi Gupta : (2005) 2 SCC 271 were cited to draw support.
55. On the basis of the above judicial decisions, the phrases "keeping in view the cost of living" and "may from time to time" used in Section 163-A(3) of the 1988 Act have a definite purpose and meaning, i.e., to amend the quantum of compensation in future by way of delegated authority through a gazette notification by the Central Government and as such the same would always be prospective only.
56. It was brought to our notice that Section 163-A of the 1988 Act, when introduced in November, 1994, was held to be prospective in the decisions in United India Insurance Co. Ltd. v. Smt. Mehtab Bai : AIR 1999 Rajasthan 293 and Kanhaiyalal v. Sita Bai : 2004 (1) Civil LJ 95 and, therefore, the amendment to the Second Schedule also ought to apply prospectively.
57. The decision in Padma Srinivasan v. Premier Insurance Co. Ltd. : (1982) 1 SCC 613 was heavily relied on in support of the contention that in case of adjudication of claim applications under the 1939 Act or the 1988 Act for awarding compensation to the heirs of a deceased victim or to an injured victim, it is the date of the accident that is most relevant. The decision in Maitri Koley v. New India Assurance Co. : (2003) 8 SCC 718 was also placed where Padma Srinivasan (supra) was followed.
58. Introduction of a predetermined structured formula for determining the compensation, it was next contended, was a creation of substantive right to the claimants and corresponding obligation of the owner/insurer to pay such amount of compensation determined by the tribunal, and as such principle of substantive law and not of procedural law is squarely applicable by making the said provision as prospective only and not retrospective. The decision in Guruanna Vadi v. The General Manager, Karnataka State Road Transport Corporation : AIR 2001 Karnataka 275 was relied on in support of the aforesaid proposition.
59. Next, Section 212 of the 1988 Act dealing with publication, commencement and laying of delegated laws, i.e., rules, notifications, etc. was placed. The enabling authority of the delegate, i.e., the Central Government to make such subordinate law is statutorily prospective one and no authority is provided to make the same retrospective. Express language used clearly postulates the same as it appears from sub-sections (2) and (4) of Section 212 of the 1988 Act.
60. Now considering the enabling provision of amendment by way of subordinate law, here "notification", the Central Government cannot make any change in substantive right of the claimant to receive the compensation amount and corresponding substantive obligation of the owner/insurer retrospectively and as such it ought to be so read to give effect to the same only on and from May 22, 2018.
61. Further, the amendment of the Second Schedule is effected by the Central Government by way of issuing a notification, that is, by a subordinate/delegated law and as such the same cannot have retrospective operation until the statute itself expressly confers such right to the delegate, and the same has not been conferred as per Section 212 of the 1988 Act. Reliance was placed on the decisions in Panchi Devi v. State of Rajasthan : (2009) 2 SCC 589 (Para - 9) and M.D. University v. Jahan Singh : (2007) 5 SCC 77 (Para - 19 to 22).
62. The decision of the Division Bench of this Court in New India Assurance Co.
Ltd. v. Ullashinni Bhoumik (F.M.A.T. 384 of 1998) was next placed wherein while dealing with a similar issue due to amendment made in 1995 in the 1923 Act, it was specifically held that the compensation amount would be reassessed on the basis of the law in the pre-amended Act for the accident caused prior to amendment of the said Act. In arriving at such finding, the Division Bench followed the decisions in Pratap Narain Singh Deo (supra) and Kerala State Electricity Board v. Valsala : (1998) 8 SCC 254.
63. In this connection, the provisions of Sections 34 and 36 read with Section 4 of the 1923 Act were also placed which are similar to Section 212 of the 1988 Act (rule making power) read with section 163-A thereof (predetermined compensation) and based on the aforesaid two decisions, it was contended that for an accidental death occurring prior to the new schedule coming into force, it is the old schedule that has to be applied.
64. Moreover, it was stressed that the Supreme Court denied applying the amended statute in a pending matter by giving retrospective operation while dealing with amendment of Section 140 of the 1988 Act even though vide amendment in 1994 the same was made beneficial to the claimants. Reference was made to the decision in Bhajan Kaur (supra).
65. Although in the recent decision in Rina Devi (supra) the Supreme Court did not consider Bhajan Kaur (supra) while dealing with the issue of application of the provisions of the 1990 Rules in pending cases for determining the amount of compensation payable to the claimant, it came to a final conclusion that :
"15.3 *** Wherever it is found that the revised amount of applicable compensation as on the date of award of the tribunal is less than the prescribed amount of compensation as on the date of accident with interest, higher of the two amounts ought to be awarded on the principle of beneficial legislation. ***"
However, the Supreme Court in the earlier part of the said decision categorically held :
"Once concept of interest has been introduced, principles of Workmen Compensation Act can certainly be applied and judgment of 4-Judge Bench in Pratap Narain Singh Deo (supra) will fully apply".
66. The scheme of awarding compensation to the victim under the 1987 and the 1989 Acts, Mr. Singh contended, is not pari materia with either the 1923 Act or the 1988 Act due to absence of separate statutory provision of awarding interest under Section 171 of the 1988 Act and Section 4 of the 1923 Act over and above the assessed compensation in an appropriate case. As such the conclusion in Rina Devi (supra) cannot be applied to the cases under the 1988 Act or the 1923 Act in as much as -
(I) A conclusion without reference to the relevant provision of law is nothing more than a casual observation. No provision of the 1988 Act was dealt with in the said decision by the Supreme Court, and for this proposition reliance was placed on the decision in State of Uttar Pradesh v. Synthetics and Chemicals Ltd. : (1991) 4 SCC 139 (P - 41).
(II) The enunciation of reasons being the principle upon which a question before a Court has been decided, it alone is binding as a precedent and not the final result of the decision, and for this proposition reliance was placed on the decisions in Sanjay Singh & anr. v. Uttar Pradesh Public Service Commission, Allahabad : (2007) 3 SCC 720 and Islamic Academy of Education v. State of Karnataka : 2003 (6) SCC 697.
67. It was further contended that a catena of decisions of the Supreme Court has categorically decided that the benefit of the statute cannot be enlarged by way of judicial interpretation in the garb of treating the same as beneficial legislation beyond the scheme of the statute itself. Reliance in this regard was placed on the decisions in Jnan Ranjan Sen Gupta v. Arun Kumar Bose : (1975) 2 SCC 526, Deepal Girishbhai Soni & Ors. v. United India Insurance Co. Ltd. : (2004) 5 SCC 385 and Maruti Udyog Ltd. v. Ram Lal : (2005) 2 SCC 638.
68. Considering the above legal position and the words used in Section 212 and Section 163-A(3) of the 1988 Act, the amendment effected to enhance compensation/substitution of fixed amount of compensation could not be applied to any pending case either before this Court or before the tribunal in the pending cases where the cause of action occurred before coming into force of the said amended provision, i.e., May 22, 2018. Otherwise the words "price index" used in section 163-A(3) or in the notification itself would be meaningless and an absurd situation would arise by equating the price index of 2018 with the price index of 1994.
69. Moreover, judicial propriety demands that a Bench of a high court/Supreme Court should not bypass the law laid down by an earlier coordinate Bench or larger Bench of the same Court and if it is done, the latter decision cannot be considered good law. The Constitution Bench decision in National Insurance Company Limited v. Pranay Sethi : 2017 (4) TAC 673 (SC) was placed in this regard.
70. On the aspect of awarding interest on compensation determined to be payable, it was submitted that the Court has to act in a just, fair and equitable manner so that none is allowed to gain by default or the insurer is not subjected to a greater burden than what it should be. Reference was made to the decision in Standard Chartered Bank Ltd. v. B.N. Raman (Dr.) : (2006) 5 SCC 727.
71. Continuing on the topic of interest, Mr. Singh submitted that the rate of interest that the compensation awarded would carry and the date from which it is to be calculated are both in the realm of discretion of the Court. For such proposition, reliance was placed on the decisions in National Insurance Co. Ltd. v. Keshav Bahadur : (2004) 2 SCC 370 and Abati Bezbaruah v. Deputy Director General, Geological Survey of India : (2003) 3 SCC 148.
72. Mr. Singh further submitted that equating the price index in 2018 with the price index of 1994 by way of judicial interpretation, is not what the legislature intended. The decision in Nathi Devi (supra) was relied on.
73. The final submission of Mr. Singh was that clause 2 of the said notification specifically provides for increase in compensation @ 5% annually 'on and from the date of 1st day of January, 2019'. This clause specifically clarifies the intention of legislature to make it prospective and any other interpretation would be irrational and meaningless.
74. Addressing us on the merits of the appeal vis-à-vis the contentions of Mr. Ashique Mondal, it was submitted by Mr. Singh that the appeal may be disposed of by modifying the award of the tribunal but the quantum of compensation to be paid to the appellant ought to be determined in accordance with the old schedule.
Contentions of Mr. Samim Ahammed, advocate
75. On the issue as to whether the amendment made in the Second Schedule appended to Section 163A of the 1988 Act vide the said notification can be given retrospective effect, it was submitted by Mr. Ahmed as follows:
1. The amendment vide the said notification is prospective in nature. As per clause 3 of the said notification it shall come into effect from the date of publication in the official gazette i.e. May 22, 2018. A claim case has to be decided on the basis of the law as it was prevailing on the date of its institution. Therefore the appeal court cannot look into the amended legislation unless the same is made expressly or impliedly retrospective.
Reliance was placed on paragraph 28 of the decision in Shyam Sunder (supra).
2. The said notification is a piece of delegated legislation. The statute does not permit the delegate to make retrospective legislation. Therefore, the notification dated May 22, 2018 has to be read as prospective in nature. Reference was made to the decisions in Federation of Indian Mineral Industries v. Union of India : (2017) 16 SCC 186, Jahan Singh (supra) and Regional Transport Officer v. Associated Transport Madras (P) Ltd. :
(1980) 4 SCC 597.
3. Section 163A embodies a substantive right and is prospective in nature. The decision in Guruanna Vadi (supra) was relied on to draw support.
4. The said notification creates new obligation upon the insurance companies and, thus, is substantive in nature and such notification ought to be applied prospectively. In support of such argument, reliance was placed on the decisions in Krishi Utpadan Mandi Samiti v. Kanhaiya Lal : (2000) 7 SCC 756 and Videocon International v. SEBI : (2015) 4 SCC 33.
5. Merely because the legislation is beneficial, it does not have to be retrospective in nature unless provided specifically. The decisions in Kanhaiya Lal (supra) and Shyam Sunder (supra) were relied upon.
6. The decision in Rina Devi (supra) was passed without considering paragraph 16 of the decision in Jiju Kuruvilla v. Kunjujamma Mohan : (2013) 9 SCC 166, Bhajan Kaur (supra) and Kerala SEB v. Valsala. In fact the observation regarding motor accident claim cases is an obiter.
7. It is well settled that if a subsequent Bench wishes to take a view different from the one taken by a Bench of equal strength, it can only refer the matter to a larger Bench, otherwise the prior decision of a coordinate Bench is binding on the subsequent Bench of equal strength. Reference was made to the decisions in Union of India v. S.K. Kapoor : (2011) 4 SCC 589 and P. Suseela v. University Grants Commission : (2015) 8 SCC 129.
8. Pratap Narain Singh Deo (supra), Valsala (supra) and Oriental Insurance Co. Ltd. v. Siby George : (2012) 12 SCC 540 are authorities for the proposition that compensation payable on the date of the accident is relevant. Submissions of the Additional Solicitor General
76. The learned solicitor too submitted a written note, on whether the amendment to the Second Schedule framed under Section 163-A of the 1988 Act shall apply to pending proceedings. Such note was also circulated amongst the learned advocates. Relevant excerpts from such written note read as follows:
1) Section 163-A of the 1988 Act has been incorporated by the 1994 Amending Act with effect from November 14, 1994 under a welfare scheme to provide benefits to the victim or his family in cases of death or permanent disablement arising out of motor accidents. Section 163-A is intended to provide social security to the victims of accidents or their heirs, who are in dire need of relief.
2) Sub-section (3) of Section 163-A empowers the Central Government to amend the Second Schedule from time to time in view of "cost of living".
3) The old schedule laid down the formula to determine the amount of compensation. The amendment has been incorporated keeping in view the "cost of living" and a simpler method of computing compensation has been prescribed, which entails enhancement of compensation as compared to the old schedule.
4) The formula prescribed in the Second Schedule to the 1988 Act is procedural in nature. Section 163-A confers substantive right towards grant of compensation in motor accident cases while the Second Schedule thereto only prescribes for mode of calculation of compensation. Through the amendment, merely the method of compensation has been substituted in terms of sub-
section (3) of Section 163-A, to make the compensation amount commensurate with the prevalent "cost of living".
5) In support of the contention that the procedure prescribed in the Second Schedule is only procedural in nature and in aid of the substantive right conferred under Section 163-A of the 1988 Act, the decision of the Supreme Court in Commissioner of Wealth Tax, Meerut v. Sharvan Kumar Swarup : (1994) 6 SCC 623 was referred to.
6) The principal question in that case was whether Rule 1BB of the Wealth Tax Rules, 1957 providing a formula for the determination of the fair market value of a house used wholly or mainly for the purpose of residence, is a provision of substantive law, and, therefore, only prospective or whether it is merely procedural and, therefore, attracted to all pending cases. (Paragraph-5).
7) The Supreme Court had observed that Section 3 of the Wealth Tax Act is the charging section which seeks to bring to charge for every assessment year the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company. Section 7 of the said Act, as referred by the Supreme Court, lays down as to how the value of the assets has to be determined. Section 7(1), as it stood prior to April 1, 1989, provided:
"7(1): Subject to any Rules made in this behalf the value of any asset other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth Tax Officer it would fetch if sold in the open market on the valuation date."
The Central Board of Revenue, promulgated rules known as the Wealth Tax Rules, 1957. Rule 1-BB came to be inserted by the Wealth Tax (Amendment) Rules, 1979 with effect from April 1, 1979. (Paragraph 2, 3 & 4)
8) In order to answer the principal question as to whether the said rule is a provision of substantive law or merely procedural, the Supreme Court had approved the decision of the Gujarat High Court in CWT v. Kasturbhai Mayabhai : (1987) 164 ITR 107, which took the view as hereunder:
"There is, therefore, no doubt that while Section 3 is the charging section, the machinery for the purpose of computing the net wealth is provided in Section 7 of the Act.
xxxxxxx Pursuant thereto Rule 1BB came to be introduced in the Rules providing a formula for the determination of the fair market value of a house used wholly or mainly for the purpose of residence. It became necessary for the Board to provide a formula for determining the market value of a house in order to speed-up the disposal of cases involving questions of valuation of such an asset.
xxxxxxx Since Section 7(1) is a machinery Section and since the rule to be made under Section 46(2) must relate to the manner in which the market value of any asset may be determined, it can be safely inferred that the rule making authority can lay down the method or mode of determining the market value of each asset. When a rule sets out the method for formula for determining the market value of any particular asset, it can only be considered to be procedural and not substantive. Rule 1BB with which we are concerned also lays down the formula for determining the market value of a house used wholly or mainly for residence. Since the rule provides a formula or mechanical method of valuation, it is difficult to agree with learned Counsel for the Revenue that it is substantive in character. It has not the effect of impairing any vested right or creating any new obligation."
(Paragraph 8).
9) On a consideration of the matter, the Supreme Court had held that Rule 1BB is essentially a rule of evidence as to the choice of one of the well accepted methods of evaluation in respect of certain kinds of properties with a view to achieving uniformity in valuation and avoiding disparate valuations resulting from application of different methods of valuation respecting properties of a similar nature and character.
10) The aforesaid decision of the Supreme Court was subsequently relied upon by a Bench of three learned Judges in the decision in Gaj Singh v. Settlement Commissioner : (2001) 9 SCC 708.
11) It was pointed out that recently in Commissioner of Income Tax, Mumbai v. Essar Teleholdings Ltd. : (2018) 3 SCC 253 dealing with the retrospective operation of an amendment to the Rules made under the Income Tax Act, 1961, the decision in Sharvan Kumar Swarup (supra) has been distinguished.
12) If, for argument's sake, it is accepted that the Second Schedule is substantive in nature, the same cannot be a ground for reading the amendment of the said schedule as being prospective in nature.
13) It has been held by the Supreme Court in its decision in N.K. Bajpai v. Union of India : (2012) 4 SCC 653 as follows:
"64. Earlier, the nature of law, as substantive or procedural, was taken as one of the determinative factors for judging the retrospective operation of a statute. However, with the development of law, this distinction has become finer and of less significance. Justice G.P. Singh, in his Principles of Statutory Interpretation (12th Edn., 2010) has stated that the classification of a statute, as either a substantive or procedural law, does not necessarily determine whether it may have retrospective operation. For example, a statute of limitation is generally regarded as procedural, but its application to a past cause of action has the effect of reviving or extinguishing a right to sue. Such an operation cannot be said to be procedural. It has also been noted that the rule of retrospective construction is not applicable merely because a part of the requisites for its action is drawn from a time antecedent to the passing of the relevant law. For these reasons, the rule against retrospectivity has also been stated, in recent years, to avoid the classification of statutes into substantive and procedural and the usage of words like 'existing' or 'vested'.
65. ***
66. In such matters, in judiciously examining the question of retrospectivity or otherwise, the relevant considerations include the circumstances in which legislation was created and the test of fairness. The principles of statutory interpretation have expanded. With the development of law, it is desirable that the courts should apply the latest tools of interpretation to arrive at a more meaningful and definite conclusion.
67. The doctrine of fairness has also been applied by this Court in Vijay v. State of Maharashtra : (2006) 6 SCC 289. A restriction was introduced providing that a person shall not be a member of a panchayat or continue as such, if he has been elected as a Councillor of Zila Parishad or as a member of the Panchayat Samiti. This restriction was held to be retrospective and applicable to the existing members of the panchayat also. Applying the rule of literal construction, this Court held that when a literal reading of the provision giving retrospective effect does not produce absurdity or anomaly, the same would not be construed only prospective. This was further strengthened by the application of the rule of fairness."
14) The observations of the Supreme Court in paragraphs 13, 15 and 22 of the decision in Zile Singh v. State of Haryana (supra) were next referred to, where it has been held as under :
"13. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only -- 'nova constitutio futuris formam imponere debet non praeteritis' -- a new law ought to regulate what is to follow, not the past. (See Principles of Statutory Interpretation by Justice G.P. Singh, 9th Edn., 2004 at p. 438.) It is not necessary that an express provision be made to make a statute retrospective and the presumption against retrospectivity may be rebutted by necessary implication especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole (ibid., p. 440).
****
15. Though retrospectivity is not to be presumed and rather there is presumption against retrospectivity, according to Craies (Statute Law, 7th Edn.), it is open for the legislature to enact laws having retrospective operation. This can be achieved by express enactment or by necessary implication from the language employed. If it is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the courts will give it such an operation. In the absence of a retrospective operation having been expressly given, the courts may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the statute retrospectivity. Four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what it was the legislature contemplated. (p. 388) The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right. (p. 392) ****
22. The State Legislature of Haryana intended to impose a disqualification with effect from 5-4-1995 and that was done. Any person having more than two living children was disqualified on and from that day for being a member of a municipality. However, while enacting a proviso by way of an exception carving out a fact situation from the operation of the newly introduced disqualification the draftsman's folly caused the creation of trouble. A simplistic reading of the text of the proviso spelled out a consequence which the legislature had never intended and could not have intended. It is true that the Second Amendment does not expressly give the amendment a retrospective operation. The absence of a provision expressly giving a retrospective operation to the legislation is not determinative of its prospectivity or retrospectivity. Intrinsic evidence may be available to show that the amendment was necessarily intended to have retrospective effect and if the Court can unhesitatingly conclude in favour of retrospectivity, the Court would not hesitate in giving the Act that operation unless prevented from doing so by any mandate contained in law or an established principle of interpretation of statutes."
(italics in original)
15) Dhannalal (supra) was the next decision, which was referred to again, where the Supreme Court had held that the benefit of deletion of Section 166(3) of the 1988 Act can be given to pending claim cases and the delay should be condoned in such cases and the claim pursued.
16) A Division Bench decision of the Kerala High Court in K.P. Ali v. V.M. Madhavan : 1990 ACJ 373 was placed where the learned Judges held that the benefit of Section 92-A of the 1939 Act, which came into force from October 1, 1982, can be granted though the accident took place in September 1, 1979, and thus the appellants were entitled to compensation on the basis of "no- fault" liability as per Section 92-A. Decision with Reasons
77. We have heard the arguments advanced by the learned advocates as well as perused the written submissions of the learned senior advocates. We have also considered the various authorities cited by them. The task at hand is no doubt onerous, having regard to the complexities the issue presents. The matter under consideration is of immense significance, calling for clear understanding of the public law remedy of compensation as envisaged in the 1988 Act, and then proceeding to decide the issue formulated in paragraph 12 (supra) bearing in mind the different perspectives.
78. Our reading of the 1988 Act reveals that the scheme of compensating victims of road accidents involving the use of motor vehicles can be broadly placed in 3 (three) distinct categories. The first is aimed at providing "just compensation" in terms of Sections 165 and 166 read with Section 168; the second is relatable to providing compensation based on the principle of "no-fault" liability, i.e., regardless of any wrongful act, neglect or default of the person for whose death the claim is made, compensation is payable by the owner of the offending motor vehicle or its authorized insurer, as the case may be, which is traceable in Section 163-A; and the third concerns providing compensation in 'hit and run' motor accidents where the identity of the wrongdoer cannot be identified despite reasonable efforts therefor, as in Section 161 read with Sections 162 and 163. There is also another provision in the 1988 Act that conceives of payment of compensation in certain cases on the principle of "no-fault" liability but for reasons to be discussed later in this judgment, we would hold that an application under Section 140 could be filed as an interim application for compensation in proceedings initiated under Section 166 and, therefore, does not form a separate category. However, it seems to be clear that the principle of "no-fault" liability based on which compensation in terms of Section 140 is payable is quite the same as in Section 163-A. While reading Section 163-A of the 1988 Act together with the old and the new schedules, it reveals that there is a cap in both the schedules beyond which compensation cannot be determined by the tribunals, whereas Section 166 read with Section 168 imposes no such cap. The underlying reason for the former seems to be that the claimants are not required to prove rash and negligent driving of the offending vehicle, which is involved in the accident. However, since the latter requires proof of rash and negligent driving as the cause of the accident thereby resulting in death or bodily injury, the quantum of compensation would vary depending upon the age and earning of the victim ~ younger the age of the victim coupled with how much he earns, would result in the highest compensation being determined as payable.
79. While applications under Section 166, Section 140 and Section 161 could be filed by the victim himself having suffered injury, in case of death of the accident victim all or any of his legal representatives may file such applications. However, an application under Section 163-A could be filed by the injured victim or by the legal heirs of the deceased victim. This is just a minor difference as to who can lodge a claim that we have noticed. Although the appeal before us concerns a claim arising out of death, it would not be off the track for us to refer to one big difference in all the 3 (three) provisions for payment of compensation that we have referred to above. We strongly believe that such difference could make our task of answering the issue easy. While an application under Section 166 can be made by a person who has sustained "bodily injury" (reading Section 165 and 166 together), for an application to be maintainable under Section 163-A as well as Section 140, bodily injury is not enough. He must have sustained injury of a higher degree in the sense that unless the injury sustained in the accident results in "permanent disablement", no application under Section 163-A, or for that matter under Section 140, for payment of compensation on the principle of "no-fault" liability would be maintainable. Section 163-A provides that "permanent disability" shall have the same meaning as in the 1923 Act. The term permanent disability is not defined in the 1923 Act, ~ what such enactment defines is "partial disablement" and "total disablement". Section 161, however, does not refer either to bodily injury or physical disablement. For a victim to be entitled to compensation on the principle of "hit and run", sub-section (3) of Section 161 refers to "grievous hurt" which he must have suffered and in terms of clause (a) of sub-section (1), it shall have the same meaning as in the Indian Penal Code.
80. At this stage, it would not be inapt to refer to two decisions of the Supreme Court on the principle behind grant of/determining compensation.
81. The first decision is Malay Kumar Ganguly v. Dr. Sukumar Mukherjee : (2009) 9 SCC 221, arising out of a claim for compensation in a medical negligence case instituted under the Consumer Protection Act, 1986. It was held therein as follows:
"170. Indisputably, grant of compensation involving an accident is within the realm of law of torts. It is based on the principle of restitutio in integrum. The said principle provides that a person entitled to damages should, as nearly as possible, get that sum of money which would put him in the same position as he would have been if he had not sustained the wrong. [See Livingstone v. Rawyards Coal Co. : 1880 5 AC 25 (HL)].
171. When a death occurs the loss accruing to the dependent must be taken into account; the balance of loss and gain to him must be ascertained; the position of each dependent in each case may have to be considered separately [see Davies v. Powell Duffryn Associated Collieries Ltd. v. (1942) All E R 657 (HL)]. The said principle has been applied by this Court in Gobald Motor Service Ltd. v. R.M.K. Veluswami : AIR 1962 SC 1.
(italics in original) The decision in R.D. Hattangadi v. Pest Control (India) (P) Ltd. : (1995) 1 SCC 551 was thereafter referred to by the Court, wherein it was held :
"9. Broadly speaking while fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which are capable of being calculated in terms of money; whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may include expenses incurred by the claimant: (i) medical attendance; (ii) loss of earning of profit up to the date of trial; (iii) other material loss. So far non-pecuniary damages are concerned, they may include (i) damages for mental and physical shock, pain and suffering, already suffered or likely to be suffered in future; (ii) damages to compensate for the loss of amenities of life which may include a variety of matters i.e. on account of injury the claimant may not be able to walk, run or sit; (iii) damages for the loss of expectation of life i.e. on account of injury the normal longevity of the person concerned is shortened; (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life."
82. Apart from the above, we also find an enlightening discussion in the decision in Yadava Kumar v. National Insurance Co. Ltd. : (2010) 10 SCC 341 on why compensation under the 1988 Act is different from damages. The relevant paragraphs read as follows:
"14. While assessing compensation in accident cases, the High Court or the Tribunal must take a reasonably compassionate view of things. ***
15. It goes without saying that in matters of determination of compensation both the tribunal and the court are statutorily charged with a responsibility of fixing a 'just compensation'. It is obviously true that determination of a just compensation cannot be equated to a bonanza. At the same time the concept of 'just compensation' obviously suggests application of fair and equitable principles and a reasonable approach on the part of the tribunals and the courts. This reasonableness on the part of the tribunal and the court must be on a large peripheral field. Both the courts and the tribunals in the matter of this exercise should be guided by principles of good conscience so that the ultimate result becomes just and equitable [see Helen C. Rebello v. Maharashtra SRTC : (1999) 1 SCC 90].
16. This Court also held that in the determination of the quantum of compensation, the court must be liberal and not niggardly inasmuch as in a free country law must value life and limb on a generous scale (see Hardeo Kaur v. Rajasthan State Transport Corpn.: (1992) 2 SCC 567].
17. The High Court and the Tribunal must realise that there is a distinction between compensation and damages. The expression compensation may include a claim for damages but compensation is more comprehensive. Normally damages are given for an injury which is suffered, whereas compensation stands on a slightly higher footing. It is given for the atonement of injury caused and the intention behind grant of compensation is to put back the injured party as far as possible in the same position, as if the injury has not taken place, by way of grant of pecuniary relief. Thus, in the matter of computation of compensation, the approach will be slightly more broad based than what is done in the matter of assessment of damages. At the same time it is true that there cannot be any rigid or mathematical precision in the matter of determination of compensation."
(highlighted by us for emphasis)
83. Keeping these principles in mind, we need to resolve the issue that has emerged before us. But while deciding a claim arising out of an accident under the 1988 Act or any other legislation providing for compensation, one must not forget that it is practically impossible to precisely measure in terms of money the loss that is suffered by an accident victim and/or his family members. It is he who suffers who realizes what he has lost. However, in the absence of any other acceptable option, compensation in money is the only solace. We would also wish to preface our discussion by reminding ourselves that the Supreme Court found the old schedule to be defective in UP State Road Transport Corporation v. Trilok Chandra : (1996) 4 SCC 362 and Sarla Verma (Ms.) v. Delhi Transport Corporation : (2009) 6 SCC 121. Ultimately, it has been observed in one of its later decisions in Puttamma v. K.L. Narayana Reddy : (2013) 15 SCC 45 as follows:
"54. In view of findings recorded above, we hold that the Second Schedule as was enacted in 1994 has now become redundant, irrational and unworkable due to changed scenario including the present cost of living and current rate of inflation and increased life expectancy."
84. The necessities of the case before us demand that we consider the decision in Rina Devi (supra) first. The claim arose out of an application under the 1987 Act read with the 1990 Rules. While the claim application before the Railway Clams Tribunal failed, the high court reversed the decision and allowed the claim by awarding Rs.4,00,000.00 as compensation. The Union of India preferred the appeal mainly on the ground that the claim of the respondent was not admissible in the absence of an "untoward incident" as defined in Section 123(c) of the 1989 Act which, according to the appellant, was a correct finding of the tribunal. According to the appellant, mere presence of the dead body in the precincts of the railway was not enough to presume that the deceased was a bona fide purchaser particularly when no ticket was found on him. At the hearing of the civil appeal, submission was, however, made on behalf of the appellant that it was interested only in the law being laid down on the subject even if the impugned judgment were not disturbed. The Court too proposed not to disturb the impugned judgment but proceeded to consider certain legal issues that were raised in a "submission" of the Registrar, Principal Bench, Railway Claims Tribunal seeking clarification. One of the issues canvassed was, whether the quantum of compensation should be as per the prescribed rate of compensation as on the date of application/incident or on the date of order awarding compensation. The Court having noticed an apparent conflict between the decisions in Rathi Menon (supra) and Kalandi Charan Sahoo v. General Manager, South-East Central Railway, Bilaspur (Civil Appeal No.5608 of 2017 decided on April 25, 2017), had appointed a former Attorney General for India as amicus curiae. The learned amicus curiae submitted that the view taken in Rathi Menon (supra) ought to be preferred and "rate of compensation as on the date of the order should be applied". Upon consideration of various precedents, the Supreme Court held that by reason of subsequent decisions the premise on which the decision in Rathi Menon (supra) was based, had changed; and that once the concept of interest has been introduced, the principles of the 1923 Act can certainly be applied and the decision in Pratap Narain Singh Deo (supra) will fully apply. It was then held in paragraphs 15.3 and 15.4 as follows :
"15.3 **** We are of the view that law in the present context should be taken to be that the liability will accrue on the date of the accident and the amount applicable as on that date will be the amount recoverable but the claimant will get interest from the date of accident till the payment at such rate as may be considered just and fair from time to time. In this context, rate of interest applicable in motor accident claim cases can be held to be reasonable and fair. Once concept of interest has been introduced, principles of Workmen Compensation Act can certainly be applied and judgment of 4-Judge Bench in Pratap Narain Singh Deo (supra) will fully apply. Wherever it is found that the revised amount of applicable compensation as on the date of award of the Tribunal is less than the prescribed amount of compensation as on the date of accident with interest, higher of the two amounts ought to be awarded on the principle of beneficial legislation. Present legislation is certainly a piece of beneficent legislation. 15.4 Accordingly, we conclude that compensation will be payable as applicable on the date of the accident with interest as may be considered reasonable from time to time on the same pattern as in accident claim cases. If the amount so calculated is less than the amount prescribed as on the date of the award of the Tribunal, the claimant will be entitled to higher of the two amounts. This order will not affect the awards which have already become final and where limitation for challenging such awards has expired, this order will not by itself be a ground for condonation of delay. Seeming conflict in Rathi Menon (supra) and Kalandi Charan Sahoo (supra) stands explained accordingly. The 4-Judge Bench judgment in Pratap Narain Singh Deo (supra) holds the field on the subject and squarely applies to the present situation. Compensation as applicable on the date of the accident has to be given with reasonable interest and to give effect to the mandate of beneficial legislation, if compensation as provided on the date of award of the Tribunal is higher than unrevised amount with interest, the higher of the two amounts has to be given."
Taking into consideration that interpretation of a beneficent legislation was involved, the Supreme Court evolved a formula for awarding compensation in a manner that would benefit the heirs of a deceased victim.
85. Although following the decision in Rina Devi (supra) was an available option for easy and quick disposal of this appeal, we are of the view that it may not be prudent to do so considering the decisions in Regional Manager, Food Corporation of India v. Pawan Kumar Dubey : AIR 1976 SC 1766, State Financial Corporation v. Jagdamba Oil Mills : AIR 2002 SC 834 and Sanjay Singh v. Uttar Pradesh Public Service Commission : 2007 3 SCC 720. We may be wrong, but find little argument having been advanced in Rina Devi (supra) on the aspect as to whether the law governing compensation is substantive or procedural as well as change in the quantum of fixed compensation payable, brought about by an amendment in the 1990 Rules, being prospective or retrospective, by referring to authorities on the point. The precedential value of the decision in Pratap Narain Singh Deo (supra), rendered by a Bench of four learned Judges, was respected by the Court. However, the scheme of compensation adumbrated in Chapter II of the 1923 Act is manifestly different from other enactments providing compensation for accidents, particularly the scheme of compensation envisaged in the 1988 Act, which we have noticed above.
86. Under Section 4A of the 1923 Act, compensation under Section 4 thereof shall be paid as soon as it falls due. The question that arose for consideration in Pratap Narain Singh Deo (supra) was whether the appellant was bound to pay compensation to the respondent as and when such compensation fell due, or when the quantum of compensation was settled by the Commissioner upon being approached by the respondent. While accepting the former proposition as the answer, the Court proceeded to hold that :
"8. It was the duty of the appellant, under Section 4-A(1) of the Act, to pay the compensation at the rate provided by Section 4 as soon as the personal injury was caused to the respondent. He failed to do so. What is worse, he did not even make a provisional payment under sub-section (2) of Section 4 for, as has been stated, he went to the extent of taking the false pleas that the respondent was a casual contractor and that the accident occurred solely because of his negligence. Then there is the further fact that he paid no heed to the respondent's personal approach for obtaining the compensation. It will be recalled that the respondent was driven to the necessity of making an application to the Commissioner for settling the claim, and even there the appellant raised a frivolous objection as to the jurisdiction of the Commissioner and prevailed on the respondent to file a memorandum of agreement settling the claim for a sum which was so grossly inadequate that it was rejected by the Commissioner. In these facts and circumstances, we have no doubt that the Commissioner was fully justified in making an order for the payment of interest and the penalty."
87. The 1923 Act provides an option to the employee to approach his employer for paying him compensation for injury caused in course of the former's employment and an obligation of the latter to pay compensation. If the employee is aggrieved by the quantum of compensation paid by the employer, the remedy of approaching the Commissioner (appointed under Section 20 of the 1923 Act) is available. There, the appellant had not paid heed to the respondent's request for payment of compensation, far less provisional payment. The facts and circumstances were such that the Court had no other option but to deprecate the stand of the appellant; and ultimately it upheld the order of the Commissioner that the liability of the appellant arose as and when the compensation fell due, i.e., on the accident resulting in injury suffered by the respondent.
88. Such decision concerning the 1923 Act was held to be applicable in a claim arising out of a claim under the 1989 and the 1987 Acts. With respect, we hold that neither is the 1988 Act on the one hand nor the 1987 Act read with the 1990 Rules and the 1989 Act, pari materia with the provisions of the 1923 Act, insofar as claims for compensation are concerned. The decision in Rina Devi (supra) is the final word on the 1987 Act read with the 1989 Act and the 1990 Rules, but having regard to the settled law that it is the rule deducible from the application of law to the facts and circumstances of a case which constitutes its ratio decidendi and not some conclusion based upon facts which may appear to be similar, we hold the view that deciding the present controversy based on Pratap Narain Singh Deo (supra) may not be proper. More importantly, the decision in Rina Devi (supra) did not involve consideration of the provisions of the 1988 Act which has dual provisions for award of compensation on "no-fault" liability. We propose to deal with such aspect a little later, which obviously did not come up for consideration in Rina Devi (supra). As such, we are inclined to the view that whatever law has been laid down therein must be confined to the statutory provisions under consideration and may not be applicable ex proprio vigore in respect of a claim arising under the 1988 Act. We, therefore, respectfully dissuade ourselves to be guided by Rina Devi (supra) and venture to adjudicate upon the controversy considering the thorough research based arguments advanced by the learned advocates who rendered valuable assistance to us.
89. Authorities have been cited in numbers for the proposition that amendment of substantive law is always prospective in the absence of a contrary intention being expressed, whereas amendment of procedural law is normally retrospective in its operation unless such a construction is textually inadmissible. While the learned advocates seeking application of the new schedule to the pending claim applications and appeals have sought to impress us that the amendment brought about by the said notification is in respect of a procedural law, the learned advocates representing the insurance companies as well as Mr. Gupta have contended that Section 163-A along with the old schedule is substantive law and hence would apply to claims arising out of death in accidents happening post May 22, 2018.
90. It would, therefore, be apt to refresh our memory by delving into what are meant by substantive and procedural laws. It admits of no doubt that while substantive law, which signifies 'a right of action' and is a vested right, is concerned with the ends of administration of justice, procedural laws are designed to facilitate justice and deal with the means and instruments by which the ends of justice are sought to be attained. The Supreme Court in MV 'Vali Pero' v. Fernandeo Lopez : AIR 1989 SC 2206, ruled that procedure is a means to sub-serve and not rule the cause of justice.
91. It has also to be remembered that "right of action" and "cause of action" are not synonymous and interchangeable. A cause of action is a fact or a combination of facts, which give rise to a right of action. A right of action is a right to enforce a cause of action. Without a cause of action, the right of action would be meaningless. On the other hand, there could be several rights of action arising out of a cause of action. What is important for a decision here would be to construe the said notification replacing the old schedule by the new schedule remaining alive to the aforesaid distinction between "right of action" and "cause of action".
92. In N.C. Budharaj (supra), the Constitution Bench by a majority of 3:2 answered the reference by holding that the arbitrator appointed with or without intervention of the Court has jurisdiction to award interest. Dealing with substantive and procedural law, it was held in paragraph 23 as under :
"23. *** 'Substantive law', is that part of the law which creates, defines and regulates rights in contrast to what is called adjective or remedial law which provides the method of enforcing rights. ***"
Our understanding of what is substantive and what is procedural law is not inconsistent with the law laid down in N.C. Budharaj (supra).
93. Guided by the settled principle of law we have noticed in the preceding paragraphs, we hold that Section 163-A of the Act has both substantive and procedural aspects. That part of sub-section (1) of Section 163-A which confers the right on the legal heirs to bring an action against the owner of the offending motor vehicle or the authorized insurer thereof for compensation is substantive law, while the means by which enforcement of the right to receive compensation can be attained, i.e., determination of compensation by the tribunal as indicated in the Second Schedule, is procedural law. In other words, while the substantive part of the law confers the right, the procedural part of the law provides the relief.
94. We may deal with Mr. Gupta's view in some more detail from another perspective.
95. As noticed earlier, the 1988 Act contains two provisions embodying award of compensation on the principle of "no-fault" liability. Such provisions are Section 140 included in Chapter X of the Act and Section 163-A included in Chapter XI thereof.
96. For the purposes of a comparative study as well as facilitating proper and effective discussion on the issue, the relevant portions of Sections 140 and 163-A are set out in a table below:
140. Liability to pay 163-A. Special provisions as to compensation in certain cases on payment of compensation on the principle of no fault.--(1) structured formula basis.--(1) Where death or permanent Notwithstanding anything contained disablement of any person has in this Act or in any other law for resulted from an accident arising out the time being in force or instrument of the use of a motor vehicle or motor having the force of law, the owner of vehicles, the owner of the vehicle the motor vehicle or the authorised shall, or, as the case may be, the insurer shall be liable to pay in the owners of the vehicles shall, jointly case of death or permanent and severally, be liable to pay disablement due to accident arising compensation in respect of such out of the use of motor vehicle, death or disablement in accordance compensation, as indicated in the with the provisions of this section. Second Schedule, to the legal heirs (2) The amount of compensation or the victim, as the case may be.
which shall be payable under sub- Explanation.--For the purposes of section (1) in respect of the death of this sub-section, 'permanent any person shall be a fixed sum of disability' shall have the same fifty thousand rupees and the meaning and extent as in the amount of compensation payable Workmen's Compensation Act, 1923 under that sub-section in respect of (8 of 1923).
the permanent disablement of any (2) In any claim for compensation person shall be a fixed sum of under sub-section (1), the claimant twenty-five thousand rupees. shall not be required to plead or (3) In any claim for compensation establish that the death or under sub-section (1), the claimant permanent disablement in respect of shall not be required to plead and which the claim has been made was establish that the death or due to any wrongful act or neglect or permanent disablement in respect of default of the owner of the vehicle or which the claim has been made was vehicles concerned or of any other due to any wrongful act or neglect or person.
default of the owner or owners of the (3) The Central Government may,
vehicle or vehicles concerned or of keeping in view the cost of living by
any other person. notification in the Official Gazette,
**** from time to time amend the Second
Schedule.
97. Deepal Girishbhai Soni (supra) lays down the law that the non-obstante clause in Section 163-A of the 1988 Act would mean that the provisions of such section would apply despite the contrary provisions existing in the 1988 Act or any other law for the time being in force. It is also laid down therein that right to claim compensation under Section 140, having regard to the provisions in Section 141, is in addition to any other right to claim compensation on the principle of fault liability, whereas Section 163-A nowhere provides that the payment of compensation on no-fault liability in terms of the structured formula is in addition to the liability to pay compensation in accordance with the right to get compensation on the principle of fault liability.
98. We are, thus, clear in our minds that Section 163-A can be invoked independent of any other provision in the 1988 Act. However, we wish to now reason why an application under Section 140, though included in Chapter X of the Act, can be made in proceedings for claim under Section 166, included in Chapter XII thereof. This view of ours is formed on the basis of our reading of the proviso to sub-section (2) of Section 166, which ordains that if "no claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant". In our view, "in such application" would obviously mean an application for claim under Section 166. The position, therefore, is that if an application under Section 140 is made in an application under Section 166 on which an order for payment of fixed compensation is made, which is in the nature of an interim relief, but no compensation is determined to be payable to the legal heirs of the deceased victim of a motor accident on account of 100% contributory negligence of the deceased, any amount paid on the basis of such order passed on the application under Section 140 need not be refunded. This is because of the 'no-fault' liability principle that such section embodies.
99. Significantly, Section 140 itself provides the right as well as the relief ~ sub-
section (1) is relatable to the right while sub-section (2) to the relief ~ which is unlike section 163-A of the Act. In our view, sub-sections (1) and (2) of Section 140, providing for the right as well as the relief, are substantive law and any amendment seeking to enhance the compensation amount in sub-section (2) would obviously apply prospectively. This is exactly the reason why in Bhajan Kaur (supra), the Supreme Court held that enhancement of quantum of compensation would be prospective. Bhajan Kaur (supra) dealt with a substantive law and hence, has no application here. As seen from the juxtaposition of Section 140 and Section 163-A, provisions of the former are not quite the same as the latter. Had the legislature intended sub-section (1) of Section 163-A to be substantive in its entirety, we wonder why lump-sum amount which is now payable either in case of death or physical disablement with yearly increases as specified in the new schedule were not incorporated in sub-section (1) of Section 163-A itself, as in sub-section (2) of Section 140, doing away with the Second Schedule once and for all. This is one reason why we consider the method of determining compensation under Section 163-A to be procedural law.
100. For the self-same reasons as aforesaid, we hold that the Constitution Bench decision in K.S. Paripoornan v. State of Kerala : AIR 1995 SC 1012 is distinguishable. The Bench was constituted to consider the correctness of the decision in Union of India v. Zora Singh : (1992) 1 SCC 673, rendered by three learned Judges, holding that the payment of additional amount payable @ 12% per annum on the market value under sub-section (1-A) inserted in Section 23 of the Land Acquisition Act, 1894 (hereafter the 1894 Act) by the Land Acquisition (Amendment) Act, 1984 (hereafter the 1984 Amending Act) is to be ordered in every case where the reference was pending before the reference Court on the date of commencement of the amending Act even though the award of the Collector was made prior to April 30, 1982. The following question arose for an answer:
"Whether the additional amount payable @ 12% per annum on the market value under Section 23(1-A) is restricted to matters referred to in clauses
(a) and (b) of sub-section (1) of Section 30 of the amending Act or is to be awarded in every case where the reference was pending before the reference Court on 24-9-1984 (the date of the commencement of the amending Act) irrespective of the date on which the award was made by the Collector."
By a majority of 3:2, it was concluded that in respect of acquisition proceedings initiated prior to date of commencement of the 1984 Amending Act, the payment of the additional amount payable under Section 23(1-A) of the 1894 Act will be restricted to matters referred to in clauses (a) and (b) of sub-section (1) of Section 30 of the 1984 Amending Act. Zora Singh (supra) was also held not to lay down good law.
Provision for payment of solatium can be traced to Section 23 of the 1894 Act. Additional amount payable was introduced by the 1984 Amending Act by inserting Section 23(1-A) in the 1894 Act. The majority view in K.S. Paripoornan (supra) was that Section 23(1-A) deals with substantive rights and must be construed accordingly. That is, however, not the case here. The provisions of the two statutes, i.e., compensation for acquisition of land and compensation for accidental death/injury by reason of involvement of a motor vehicle, are demonstrably different. That apart, the relevant statutory provision in such case required that "the Court shall in every case" award the amount, whereas Section 163-A mandates that the "owner of the motor vehicle or the authorised insurer shall be liable to pay compensation, as indicated in the Second Schedule, ***". The difference, though fine, is real.
101. The other decision that deserves consideration at this stage is the one in Shyam Sunder (supra). Reading of paragraph 28 reveals that the Court discussed whether a new law repealing an earlier law, coming into force after the final decision has been rendered in a particular case, could be considered by the appeal court. It was held that :
"28. From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation, such legislation does not affect the substantive rights of the parties on the date of the suit or adjudication of the suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in an appeal are determined under the law in force on the date of the suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned, they remain unaffected by the amendment in the enactment. ***"
(underlining for emphasis by us) The underlined portion of the aforesaid extract provides the answer to the problem and hence further discussion is considered unnecessary.
102. At this stage, we may also consider the effect of substitution of the old schedule by the new schedule. Decisions cited by Mr. Ashique Mondal are authorities relying on which this question can be answered. We also find a similar view expressed by a coordinate Bench of this Court in its decision in Narayan Baidya v. District Inspector of Schools (S.E.), South 24-Parganas : (2000) 1 CAL LT 487 (HC). There, Hon'ble S.B. Sinha, J. (as His Lordship then was) speaking for the Bench had observed that "(A) substitution may amount to an amendment but the normal rule of interpretation of substitution is that it will have effect as if the same was existing from the beginning". We wish to add that when the new schedule contained in the said notification substituted the old schedule w.e.f. May 22, 2018, the old schedule ceased to exist except as regards the transactions, past and closed or saved.
103. An interesting feature is discernible in the new schedule which is quite dissimilar to the old schedule. The age of the victim of an accident caused by the use of a motor vehicle and his earning, on the date of such accident, were very important for determining the compensation payable by the tortfeasor on the basis of the structured formula. An appropriate multiplier had to be selected considering the victim's age. The new schedule makes no provision for determination of compensation based on the age of the victim. Regardless of who the accident victim is, ~ an adult or a minor ~ and whether the victim was an earning member or not, if the accident causes death, the compensation would be a fixed amount of Rs.5,00,000.00. Therefore, the victim's age and earning are no longer relevant. A fortiori, the date of the accident too may not be of much relevance having regard to the plain language of the section which does not give any additional importance to the aspect of 'the date of accident' except that the 'accident' causing either death or physical disablement must have involved the use of a motor vehicle, which have to be proved. These are the only proof required for a claimant to succeed in a claim application under Section 163-A of the Act. In view of our finding that the Second Schedule is not part of substantive law but is procedural law, there is no difficulty in holding the new schedule to be applicable for claim cases which are alive either before the tribunal or are pending adjudication before the high courts in appeal but with the caveat that it will not apply to claim cases which stand closed by reason of attainment of finality of the awards upon acceptance by the parties of the tribunal's determination made therein.
104. Leaving aside the legalistic discourse as to whether Section 163-A is substantive law or partly substantive and partly procedural and also as to whether the new schedule would apply retrospectively, we feel persuaded to consider and answer the issue on the basis of our reading of the plain and simple language used in sub-section (1) of Section 163-A. Even if the new schedule were considered to have prospective application only, there are good and sufficient reasons to hold that it would apply to pending claim applications/appeals. We may now elaborate why we are inclined to hold so.
105. First, having regard to the said notification, it is clear as crystal that the Central Government, in its wisdom, has done away with the structured formula contemplated by the old schedule and replaced it with a new schedule in terms whereof lump-sum amount of Rs. 5,00,000.00, as noticed above, is to be paid as compensation to the legal heirs of a deceased victim. Importantly, though the said notification has come into force on and from May 22, 2018, it does not expressly or by necessary intendment make it inapplicable to claim applications/appeals which are pending before the judicial for a as on that date. Further still, sub-section (1) of Section 163-A of the Act makes no reference to the date of the accident as relevant for determining compensation that is payable. This, in our view, is of paramount importance. Death or physical disablement caused by an accident involving the use of a motor vehicle being the sine qua non for award of compensation under Section 163-A of the 1988 Act and upon the same being proved before the tribunal, the statute ordains that the owner of the offending motor vehicle or the authorized insurer shall be liable to pay ... compensation, as indicated in the Second Schedule (underlining for emphasis by us). It is not that by the amendment, a new or additional obligation is being imposed on the owner/authorized insurer of the offending vehicle. What the said notification has brought about is a change in the methodology for determining compensation, without affecting the obligation. The obligation, i.e., the words underlined above, would mean whatever sum for which there is an existing obligation to pay in praesenti or in other words, what is presently payable. Sub- section (1) of Section 163-A read with sub-section (3) thereof sufficiently puts the owner/authorized insurer on guard that whatever compensation is payable according to the Second Schedule has to be paid. It is not that the Second Schedule as on date the accident occurs is decisive. In our view, the words underlined above are wide enough to cover all cases in future, post May 21, 2018 (a day prior to issuance of the amending notification), where awards are made by the tribunals notwithstanding what the contents of the old schedule were and notwithstanding that when the claim applications had been filed, the Second Schedule was different in its contents than what it is on the date of the award. Whatever is there in the Second Schedule on the date the award is to be pronounced being the legislative mandate, has to be followed by the tribunal in determining compensation. The law does not cast a duty on the tribunal to look into the contents of the Second Schedule which has ceased to exist by reason of substitution vide the said notification while dealing with claim applications that were filed when the old schedule was in force. The same position would prevail when the high court considers an appeal where the quantum of compensation determined by the tribunal is challenged by the claimant(s) as insufficient and not in accordance with the structured formula available in the old schedule. An appeal being a continuation of the original proceedings, we are inclined to the view that while deciding a claim for compensation under the said section, it is also for the high court to look into the Second Schedule as it stands on the date the appeal comes up for final decision and to award compensation in line with it subject of course to a preceding finding based on the evidence on record that the death of the victim had occurred due to an accident involving the use of a motor vehicle. However, the beneficial effects of the said notification cannot be taken advantage of by claimants who have accepted an award based on the structured formula in the old schedule and have not carried the award in an appeal, thereby giving it finality, or in appeals where the challenge is confined only to omission of the tribunal to award interest on the sum determined as payable on account of compensation.
106. Let us now consider the issue from yet another angle.
107. It cannot be disputed that the value of Rupee in time has seen a steady downward slide. Our research (source : inflationtool.com) shows that the inflation rate in India between 1990 and the present times has been 661.88%, which translates into a total increase of Rs.661.88. What it means is that Rs.100 in 1990 is equivalent to Rs.761.88 in 2018. The value of Rupee since 1990 till date, calculated by using the Cost Price Index formula (the CPI in 1990 was 21.56 whereas today it is 164.28), shows the following results:
Period Value Period Value
1990 100 1991 113.71
1992 128.57 1993 138.86
1994 150.86 1995 165.14
1996 181.14 1997 200
1998 212.57 1999 245.14
2000 246.29 2001 254.86
2002 268 2003 276.57
2004 286.86 2005 297.71
2006 314.29 2007 334.8
2008 353.26 2009 387.53
2010 445.53 2011 487.71
2012 519.34 2013 577.34
2014 630.06 2015 666.97
2016 709.15 2017 724.97
2018 753.97
108. Therefore, the purchasing power of Rs.100 in 1990 equals to Rs.150.86 in 1994 (when Section 163-A together with the Second Schedule were introduced in 1994), Rs.286.86 in 2004 (when the victim, in this case, died), Rs. 353.26 in 2008 (when the tribunal rendered its award) and Rs.753.97 in 2018 (when the appeal has been heard and is awaiting delivery of judgment). The rise in "cost of living", there can be little doubt, is huge by normal standards.
109. Sub-section (3) of Section 163-A confers power on the Central Government to amend the Second Schedule keeping in view the "cost of living" by notification in the Official Gazette, from time to time. While in a proceeding under Section 166 of the Act interim relief could be claimed under Section 140 on the principle of 'no-fault' liability, the law does not recognise interim relief if a tribunal is approached under Section 163-A. The relief that is granted, if at all the claim case so permits, is a final relief. If the tribunal is approached in early 2008 with a claim for a death occurring in late 2007 and the tribunal decides the claim application following the old schedule after the notification amending the old schedule was issued, say on May 23, 2018, would the compensation that is awarded be sufficient to take care of the cost of living in May, 2018 and onwards? It can never be ignored that the legal heirs of the deceased victim have to live in the future, when the cost of living would increase manifold, and not in the past when it was much on the lower side. In the absence of any interim compensation being payable, the claimants may have survived with whatever little they could manage either by engaging in any avocation or with the blessings of others or even by lending. The compensation that is finally determined to be payable would provide them the means for their sustenance in future. If the legal heirs are made to accept the compensation determined on the basis of the cost of living in late 1994 as per the old schedule, which the Supreme Court as far back as in 1996 while deciding Trilok Chandra (supra) found to be defective and in 2013 has observed in Puttamma (supra) to have become redundant, irrational and unworkable, it would be a cruel joke for them to have compensation determined on the basis of the old schedule, being a pittance, having been left high and dry with the death of possibly the sole bread winner in the family, and not administered justice upon application of the new schedule.
110. We are, thus, of the clear view that while deciding claim applications under the 1988 Act, be it under Section 166 or Section 163-A, the ordinary rule of litigation that the rights of the parties stand crystallized on the date of commencement of litigation and the right to relief should be decided by reference to the date on which the plaintiff entered the portals of the Court, may not apply. The claim applications under Section 166 and Section 163-A, for a limited purpose, form a class of its own in the sense that contrary to other jurisdictions where the Court considering the facts and circumstances proceeds to grant relief to the suitor either wholly or partially but not in excess of what is claimed, the tribunals functioning under Section 165 of the 1988 Act are under no compulsion to award compensation restricted to the claimed amount before it at the instance of the claimants. If any authority is needed, one may profitably refer to the decision in Nagappa v. Gurdayal Singh : (2003) 2 SCC 274, which also arose out of a claim application under Section 163-A of the 1988 Act.
111. The scheme relating to grant of compensation under Chapters XI and XII of the 1988 Act being beneficial legislation, a liberal construction has always been resorted to. Padma Srinivasan (supra) is one decision where, to give effect to an amendment in Section 95(2) of the 1939 Act, the date of the accident was considered relevant. However, one can hardly overlook that a decision is an authority for what it decides and not what logically follows therefrom. We thoughtfully refuse to consider the date of the accident to be relevant now, in respect of a claim application under Section 163-A. As we have noticed earlier, the age and earning of the victim on the date of his death under the old schedule were relevant considerations for determining compensation based on selection of the appropriate multiplier but the date of death and the earning capacity of the victim presently have lost all relevance with the introduction of the new schedule.
112. Since Section 163-A read with the new schedule in its present form makes the date of accident, and age and earning of a death victim, totally irrelevant, we are also of the view that if the new schedule is made applicable to cases where the accident occurred prior to May 22, 2018 but physical disablement occurred thereafter, the same would lead to incongruous results. It is here that our discussion on "physical disability", "right of action" and "cause of action" would assume significance.
113. Take the instance of a person who while travelling in a motor vehicle on May 1, 2018 suffers multiple injuries on his person. He could be shifted to a hospital but in a very critical condition, where he battles for life. Best effort put in by the attending doctors saves the life of the said person but he becomes a paraplegic and is discharged from hospital on June 30, 2018. The doctors rule that he would be confined to bed for the rest of his life and a certificate is issued certifying 100% total disablement as defined in Section 2(l) of the 1923 Act. Such physical disablement, obviously, renders him incapable of earning. Without a certificate that the injury sustained in the motor accident has rendered him physically disabled, no application could be moved by him under Section 163-A before the motor accident claims tribunal immediately after the accident. Thus, an application could be moved after June 30, 2018 before the tribunal for compensation exercising the "right of action". The question, having regard to the language in Section 163-A that would arise if such an application were filed, is what gives rise to the "cause of action", ~ the accident or the physical disablement? In the manner we have construed the new schedule, the accident is relevant only for the purpose of involvement of a motor vehicle in it and not for any other purpose. If the arguments of Mr. Singh that the date of the motor accident is relevant and that the new schedule does not apply to a pre-May 22, 2018 accident are accepted, the said person would have to rest content with compensation payable in terms of the old schedule; but if the date on which the certificate has been issued certifying 100% total disablement is considered to have given him the "cause of action", and thereafter the "right of action" is exercised, the new schedule becomes squarely applicable. We do not see logic in accepting Mr. Singh's argument based on the nature of the legislation under consideration. Any bodily injury, not amounting to physical disablement, would not give rise to a cause of action to move the tribunal under Section 163-A. In terms thereof, only those injured victims of motor accidents who suffer physical disablement would be entitled to apply. Therefore, the date of the accident pales into insignificance. We have ventured to discuss this aspect to demonstrate that the date of the accident is relevant, as held in Padma Srinivasan (supra), may not be relevant even in respect of a claim application under Section 163-A.
114. The decision in Dhannalal (supra) was heavily relied on by Mr. Ashique Mondal as well as referred to by the learned solicitor. Since the issue therein related to limitation, which is not the issue before us, we have consciously refrained from relying on such decision as well as other decisions on similar point while drawing our conclusions.
115. Various decisions of the several high courts of the country have been cited in course of arguments, viz. Wilfred (supra), Mehtab Bai (supra), Sita Bai (supra), Guruanna Vadi (supra), K.P. Ali (supra), etc. The views expressed therein by the learned Judges have been relied on by the learned advocates to persuade us to hold either way, i.e., the new schedule should and should not be made applicable to pending claim applications/appeals. Although all such decisions have great persuasive value, we do not wish to deal with these decisions separately since the issue before us was not directly an issue before such courts. We may, however, note that Hon'ble M. Jagannadha Rao, C.J. (as His Lordship then was) speaking for the Division Bench of the Delhi High Court in Rattan Lal Mehta v. Rajinder Kapoor : 1996 ACJ 372 held that the multiplier system of determining compensation introduced vide the 1994 Amendment Act could be applied to cases instituted prior to November 11, 1994. Be that as it may.
116. A submission had faintly been advanced on behalf of the contesting respondent (though not mentioned in Mr. Singh's written argument) that application of the new schedule in pending claim applications under Section 163-A of the Act would make discharge of its liability onerous. We do not quite agree. The maximum compensation that can be awarded on an application under Section 163-A of the Act in terms of the old schedule is Rs.5,04,000.00 in a death case, if the following conditions are satisfied. A victim of an accident caused by the use of a motor vehicle prior to his death resulting from the injuries suffered in such accident must have (i) had an annual income of Rs.40,000.00 (the maximum in terms of the old schedule), (ii) been aged above 25 years but not exceeding 30 years (thereby attracting the highest multiplier of 18), (iii) left an estate and a spouse behind him, (iv) spent at least Rs.15,000.00 on account of medical expenses prior to his death and (v) not donated his body for medical education/research, so as to entitle his legal heirs claim Rs.2,000.00 for funeral expenses. Cases would be extremely rare where a tribunal would determine the compensation payable at Rs.5,04,000.00 but the possibility of one such case coming before the tribunal cannot be altogether ruled out.
117. Now, if such a claim application comes up before a tribunal for consideration post May 22, 2018 where all the five conditions as in the preceding paragraph are fulfilled, proceeding by our reasoning it can award only a lump-sum amount of Rs.5,00,000.00, which would obviously be lesser than what could have been determined under the old schedule. Considering the language in which sub- section (1) of Section 163-A is couched, the Second Schedule as on date of the award invariably has to be looked into and a lesser sum, if required, would have to be determined as payable to the legal heirs of such a victim. It is, therefore, not correct to contend that since the new schedule intends to provide greater relief compared to the relief available under the old schedule, following the new schedule would be onerous for the insurance companies in all cases. Conclusion
118. Therefore, the conclusion seems to be inescapable that while deciding pending claim applications/appeals post May 22, 2018, the new schedule ought to be applied by the tribunals/this Court for determining compensation payable to the legal heirs of an accident victim or to the victim himself regardless of whether the new schedule is beneficial to them or not. The issue framed in paragraph 12 is, accordingly, answered.
Relief
119. In view of the aforesaid discussion, there cannot be any doubt that the appellant is entitled to compensation of a fixed sum of Rs.5,00,000.00 on account of accidental death of the victim, being her daughter, in a road accident involving the use of a motor vehicle.
120. The other question that would require an answer is relatable to the rate of interest on the compensation determined to be payable. In view of the authorities cited by the parties, award of interest is a discretion vested in the tribunals/Courts by Section 171 of the 1988 Act. There are, however, decisions of this Court that unless the claimant is responsible for the delay in conclusion of proceedings before the tribunal, awarding interest from the date of filing of the claim application should be the rule and denial an exception. The decisions in Purnima Saha (supra), Kohinur Begum (supra) and Rekha Dutta (supra) are the authorities in this regard. We share the views expressed therein.
121. Abati Bezbaruah (supra) is a decision dealing with the 1988 Act. On the aspect of awarding interest, we find the following observations in the concurring judgment authored by the learned Judge :
"18. *** The rate of interest must be just and reasonable depending upon the facts and circumstances of each case and taking all relevant factors including inflation, change of economy, policy being adopted by Reserve Bank of India from time to time, how long the case is pending, permanent injuries suffered by the victim, enormity of suffering, loss of future income, loss of enjoyment of life etc., into consideration. No rate of interest is fixed under Section 171 of the Motor Vehicles Act, 1988. Varying rates of interest are being awarded by Tribunals, High Courts and the Supreme Court. Interest can be granted even if a claimant does not specifically plead for the same as it is consequential in the eye of law. Interest is compensation for forbearance or detention of money and that interest being awarded to a party only for being kept out of the money which ought to have been paid to him. No principle could be deduced nor can any rate of interest be fixed to have a general application in motor accident claim cases having regard to the nature of provision under Section 171 giving discretion to the Tribunal in such matter. In other matters, awarding of interest depends upon the statutory provisions, mercantile usage and doctrine of equity. Neither Section 34 CPC nor Section 4-A(3) of the Workmen's Compensation Act are applicable in the matter of fixing rate of interest in a claim under the Motor Vehicles Act. The courts have awarded the interest at different rates depending upon the facts and circumstances of each case. Therefore, in my opinion, there cannot be any hard-and-fast rule in awarding interest and the award of interest is solely on the discretion of the Tribunal or the High Court as indicated above."
122. In Alok Sanker Pandey v. Union of India : (2007) 3 SCC 545, it has been held by the Supreme Court that :
"8. We are of the opinion that there is no hard-and-fast rule about how much interest should be granted and it all depends on the facts and circumstances of each case. ***
9. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence, equity demands that A should not only pay back the principal amount but also the interest thereon to B."
123. It is clear from the above extracts that interest is awarded by the Courts if a party is adjudged as entitled to a sum of money which the other party to the lis had withheld; and while directing payment of such principal sum, the interest thereon that the latter had pocketed is made good by directing payment of the principal sum together with interest.
124. Based on the aforesaid authorities, we hold that the MACT committed grave error in not awarding interest.
125. Having regard to the discretionary element involved in awarding interest, which must depend on the facts and circumstances of each case, we are also of the considered view that a pragmatic approach is called for. The rate of interest and the date from which interest is to be awarded are matters definitely within the realm of discretion. While long pendency of proceedings before a Court of law may result in either benefit accruing or causing harm to a party, the competing interests have to be balanced. Giving due regard to these principles, we now proceed to consider the question of awarding interest.
126. Turning to the facts in the appeal, we find that had this appeal been decided prior to May 22, 2018, the appellant would have been entitled to whatever sum were determined as payable in terms of the old schedule. Admittedly, Rs.5,00,000.00 was not payable to the appellant by the respondent no.1 any time prior to May 22, 2018 and, therefore, she was not entitled to such sum as on date she exercised her "right of action". Therefore, in each case where the claim is pending before the tribunal or if this Court has been approached in appeal as on May 22, 2018, we feel it to be the duty of the tribunal/Court to determine the amount of compensation payable to the claimant in terms of the structured formula and award interest at such rate it considers proper thereon from the date of filing of the claim application till May 21, 2018. To avoid any charge of arbitrariness, it would be safe to award interest at the prevailing bank rate of interest on term deposits on the date the award is made. Thereafter, that is from May 22, 2018, interest on Rs.5,00,000.00 may be directed to be paid till realization as per the prevailing bank rate of interest on term deposits.
127. To determine what the appellant could have lawfully claimed as compensation based on the old schedule, we need to look into the evidence. The version of the appellant that the victim was earning Rs.2,000.00 per month could not be dislodged by the respondent no.1 in cross-examination. The victim being self- employed in the unorganized sector, the tribunal put an onerous burden on the appellant to produce documentary evidence to prove her monthly income. Having regard to the decision in Syed Sadiq v. United India Insurance Co. Ltd. : (2014) 2 SCC 735, we hold that it was not necessary for the appellant to prove the income of the victim by producing documentary evidence. The loss of dependency, thus, has to be worked out reckoning Rs.24,000.00 as the notional yearly income of the victim. Capitalizing it on a multiplier of 17, the resultant amount would be Rs.4,08,000.00. Deducting 1/3rd in consideration of the expenses which the victim would have incurred towards maintaining herself had she been alive, and adding Rs.4,500.00 on account of loss of estate and funeral expenses, we arrive at the sum of Rs.2,76,500.00.
128. In the final analysis, we hold that the appellant shall be entitled to Rs.5,00,000.00 on account of compensation under Section 163-A of the 1988 Act read with the new schedule. However, since she has received Rs.1,14,500.00 that was awarded by the tribunal, the respondent no.1 shall pay Rs.3,85,500.00 more to the appellant within 2 (two) months from date of service of a copy of this judgment and order on it. The appellant is further held entitled to interest as follows:
(i) @ 9% per annum on Rs.2,76,500.00 from the date of filing of the claim application, i.e., February 8, 2005 till May 21, 2018; and
(ii) @ 6% per annum on Rs.5,00,000.00 from May 22, 2018 till such time payments of Rs.3,85,500.00 and interest as in (i) above are effected in favour of the appellant.
129. The award of the tribunal under challenge in this appeal stands modified accordingly. The appeal stands allowed, without order for costs.
130. Before parting, we make it abundantly clear that by reason of our reading and interpretation of the notification dated May 22, 2018 and the conclusions recorded in this judgment and order, proceedings which have concluded and attained finality shall not be reopened.
(Shampa Sarkar, J.) (Dipankar Datta, J.)