The main legal point established in the given judgment is that the right accrues and liability is incurred on the date of the accident and not on the date of consideration of the claim. The court also established that the amended provision of S.140 cannot be made applicable to accidents that occurred before 14.11.1994. The court also established that S.6 of the General Clauses Act would apply, and the provisions contained under S.140 of Motor Vehicles Act, 1988, cannot be made applicable to a claim put forward on the basis of an accident happened before 1.7.1989. The court also established that the enactment of compensation by way of amendment to S.140 by Amendment Act, 57 of 1994, cannot be made applicable to claims as a result of accidents which had occurred before 14.11.1994.

Headnote:
S.140 Amendment - Motor Vehicles Act - [S.140, S.92A, S.217, S.6 of General Clauses Act] - The court considered whether the amendment to S.140 of the Motor Vehicles Act, 1988, enhancing the quantum of compensation, is applicable to claims for compensation in respect of death or permanent disablement resulting from accidents which occurred prior to 14.11.1994, the date on which the Amending Act came into force. The court held that the right accrues and liability is incurred on the date of the accident and not on the date of consideration of the claim. The court also held that the amended provision of S.140 cannot be made applicable to accidents that occurred before 14.11.1994. The court overruled previous decisions and approved the decision that S.6 of the General Clauses Act would apply, and the provisions contained under S.140 of Motor Vehicles Act, 1988, cannot be made applicable to a claim put forward on the basis of an accident happened before 1.7.1989. The court also held that the enactment of compensation by way of amendment to S.140 by Amendment Act, 57 of 1994, cannot be made applicable to claims as a result of accidents which had occurred before 14.11.1994.
Fact of the Case:

The court considered whether the amendment to S.140 of the Motor Vehicles Act, 1988, enhancing the quantum of compensation, is applicable to claims for compensation in respect of death or permanent disablement resulting from accidents which occurred prior to 14.11.1994, the date on which the Amending Act came into force.
Finding of the Court:

The court held that the right accrues and liability is incurred on the date of the accident and not on the date of consideration of the claim. The court also held that the amended provision of S.140 cannot be made applicable to accidents that occurred before 14.11.1994. The court overruled previous decisions and approved the decision that S.6 of the General Clauses Act would apply, and the provisions contained under S.140 of Motor Vehicles Act, 1988, cannot be made applicable to a claim put forward on the basis of an accident happened before 1.7.1989. The court also held that the enactment of compensation by way of amendment to S.140 by Amendment Act, 57 of 1994, cannot be made applicable to claims as a result of accidents which had occurred before 14.11.1994.
Ratio Decidendi: The court held that the right accrues and liability is incurred on the date of the accident and not on the date of consideration of the claim. The court also held that the amended provision of S.140 cannot be made applicable to accidents that occurred before 14.11.1994. The court overruled previous decisions and approved the decision that S.6 of the General Clauses Act would apply, and the provisions contained under S.140 of Motor Vehicles Act, 1988, cannot be made applicable to a claim put forward on the basis of an accident happened before 1.7.1989. The court also held that the enactment of compensation by way of amendment to S.140 by Amendment Act, 57 of 1994, cannot be made applicable to claims as a result of accidents which had occurred before 14.11.1994.
Final Decision: The court overruled previous decisions and approved the decision that S.6 of the General Clauses Act would apply, and the provisions contained under S.140 of Motor Vehicles Act, 1988, cannot be made applicable to a claim put forward on the basis of an accident happened before 1.7.1989. The court also held that the enactment of compensation by way of amendment to S.140 by Amendment Act, 57 of 1994, cannot be made applicable to claims as a result of accidents which had occurred before 14.11.1994.

Judgment :-

Usha, J.

The question referred for consideration of the Full Bench is whether amendment to S.140 of the Motor Vehicles Act, 1988 by the Motor Vehicles (Amendment) Act, 1994 enhancing the quantum of compensation is applicable to claims for compensation in respect of death or permanent disablement resulting from accidents which occurred prior to 14.11.1994, the date on which the Amending Act came into force. In New India Assurance Co, Ltd., v. Thankam, 1995 (1) KLT 323, a Bench of mis Court, while

considering a claim arising out of an accident which occurred prior to 1.7.1989, namely, the date on which Motor Vehicles Act, 1988, came into force, took the view that it is the provision contained under S.140 of Motor Vehicles Act, 1988 which should be applicable to the case and not the provisions contained under S.92A of the Motor Vehicles Act, 1939. The correctness of this decision is also under challenge.

2. The concept of no-fault liability was introduced for the first time in the Statute by way of amendment to the Motor Vehicles Act, 19 39 under Amending Act 47 of 1982, which came into force on 1.10.1982. S.92A provided that where death or permanent disablement of any person has resulted form an accident arising out of a use of motor vehicle, the owner of the vehicle shall be liable to pay compensation in respect of such death or disablement to the extent of Rs. 15,000/- and Rs. 7,500/- respectively. When the Motor Vehicles Act, 1988 came into force on 1st July, 1989, provision regarding 'no-fault liability' was incorporated in S.140. The amount of compensation was enhanced as Rs. 25.000/- and Rs. 12,000/- for death and permanent. disablement respectively. The above provision underwent amendment by Act 54 of 1994, which came into force on 14.11.1994, further enhancing the amount of compensation as Rs. 50,000/-and Rs. 25,000/- respectively. In all these cases, which have come up by way of reference, the accident had happened before 14.11.1994 and the proceedings were pending when the amendment came into force. The Tribunals applied the amendment provisions contained under S.140 and passing interim awards on that basis, relying on the principles laid down in thee Bench decision of this Court in 1995 (1) KLT 323 supra.

3. The question whether amount of Rs. 25,000/- fixed under the unamended S.140 of the Motor Vehicles Act, 1988 in case of death, can be applied where death has occurred in a motor accident which took place before the 1988 Act came into force, was considered by a Bench of this Court in United India Insurance Co. Ltd. v. Padmavathy, 1990 (1) KLT 750. The Division Bench took the view that even in respect of an accident happened before the coming into force of 1988 Act, the enhanced amount of compensation, as provided under S.140 of 1988 Act would apply. This view was sought to be reconsidered later at the instance of the New India Assurance Co. Ltd. relying on a Bench decision of the Bombay High Court in Prakash Chandumal Khatri and another v. Suresh Pahilajrai Makhija and another, 1992 ACJ 369. The arguments put forward by the Insurance Co. were rejected in 1995 (1) KLT 323 supra, affirming the view taken in 1990 (1) KLT 750 supra.

4. Before we go into the detailed discussion of the arguments put forward by both sides, we may refer to yet another Bench decision of this Court in Oriental Insurance Co. Ltd. v. Mitrugan, 1995 ACJ 164 where it was held as follows:

"When an accident has occurred before the commencement of 1988 Act no fault liability can be granted as per S.92A of the repealed Act and not under S.140 of the 1988 Act".

When the above decision was relied on in MFA No. 382/95, a Division Bench of this Court took the view that the above mentioned decision was rendered per incuriam without referring to 1990 (1) KLT 750 supra and the Division Bench reaffirmed the earlier decisions in 1990 (1) KLT 750 supra and 1995 (1) KLT 323 supra.

5. It is contended by the Insurance Companies who are appellants, that the a

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1996 Supreme(Ker) 302

Cases Referred (4)