JUDGMENT

S.B. Sinha, J.—

1. Delay condoned.

2. Leave granted.

3. Whether Section 140 of the Motor Vehicles Act, 1988 (for short “the 1988 Act”) will have a retrospective effect is the question involved herein.

4. An accident took place on 8.01.1983. The deceased was a driver of a truck bearing No. PUC 9005. It collided with a bus belonging to the appellant bearing registration No. PBL-2310. It was being driven by one Sampuran Singh. A claim petition was filed in relation to the said accident purported to be in terms of Section 110-A of the Motor Vehicles Act, 1939 (for short “the 1939 Act”).

5. Appellants herein denied and disputed their liabilities. Several issues were framed by the learned Tribunal. The said claim petition was dismissed by an award date 12.10.1984. A First Appeal was preferred by the respondent No. 1 against the said award dated 12.10.1984. A learned Single Judge of the High Court disposed of the same awarding a sum of Rs. 15,000/- by way of compensation by way of no fault liability. An intra-court appeal was preferred thereagainst. Relying on or on the basis of a decision of the said Court in Mosmi and Another v. Ram Kumar and others1, it was held:

“In view of the authoritative pronouncement, this appeal is disposed of by holding that the claimant would be entitled to a sum of Rs. 50,000/- (Rs. Fifty thousand only) under “no fault liability”. In addition thereto, they would also be entitled to interest @ 9% per annum from the date of application till payment. However, in case, any amount was paid to the claimant in view of the order dated 31.8.1993 passed by this Court, the same shall be deducted out of this amount.”

6. Before adverting to the questions raised in this appeal, we may notice that a statement was made at the bar that the State is not interested in the matter but only intended to get the law settled. We, therefore, did not issue any notice to the respondents and requested Ms. Meenakshi Arora, learned counsel to assist us in the matter.

7. Section 92-A of the 1939 Act provided for payment of a sum of Rs. 15,000/- by way of no fault liability. It was raised to Rs. 25,000 by reason of Section 140 of the 1988 Act. However, with effect from 14.11.1994, by Amending Act 54 of 1994, the quantum of the amount payable has been raised to Rs. 50,000/-.

8. Indisputably, under the 1939 Act only a sum of Rs. 15,000/- was payable by way of no fault liability. The question which arises for consideration in this appeal is as to whether it has a retrospective effect. In our opinion, it does not have.

9. A statute is presumed to be prospective unless held to be retrospective, either expressly or by necessary implication. A substantive law is presumed to be prospective. It is one of the facets of rule of law. Section 92-A of the 1939 Act created a right and a liability on the owner of the vehicle. It is a statutory liability. Per se it is not a tortuous liability. Where a right is created by an enactment, in absence of a clear provision in the statute, it is not to be applied retrospectively.

10. Ms. Arora, however, has drawn our attention to a decision of the Kerala High Court in United India Insurance Co. Ltd. v. Padmavathy and others.2 The Kerala High Court referred to a decision of this Court in M.K. Kunhimohammed v. P.A. Ahmedkutty3 wherein the following observations were made:

“Having regard to the inflationary pressures and the consequent loss of purchasing power of the rupee we feel that the amount of Rs. 15,000 and the amount of Rs. 7,500 in the above provision appear to have become unrealistic. We, therefore, suggest that the limits of compensation in respect of death and in respect of permanent disablement, payable in the event of there being no proof of fault, should be raised adequately to meet the current situation.”

In Padmavathy (supra), the Kerala High Court held:

“11. The said suggestion of the Supreme Court was given due respect by the law-making machinery when the Bill was finally introduced in Parliam