The main legal point established in the judgment is that the compensation under 'no fault liability' should be paid as per the new Act, even for accidents that occurred before its enforcement, as the new Act only updated the right with the prevailing money value.

Thomas, J.

The only question raised in these appeals is, whether the amount of Rs. 25,000/- fixed under S.140 of the Motor Vehicles Act, 1988 (for short 'the new act) as "no fault liability" (in case of death resulting in a motor accident) should be paid in respect of a motor accident which took place before the enforcement of the new Act? A Division Bench of this Court has answered that question in the affirmative in United India Insurance Co.Ltd., v. Padmavathy (1990(1) KLT 750 - it will be referred to hereinafter as Padmavathy's case).But learned counsel for the appellant - insurance company - made an endeavour to have the said answer reconsidered. Learned counsel invited our attention to the decision of a Division Bench of the Bombay High Court in Prakash Chandumal Khatri v. Suresh Pahilajrai Makhija (1992 A.C.J. 369) in which the decision in Padmavathy's case was considered and dissented from.

2. In this batch of cases the accident occurred on 4-5-1988. The new Act came into force only on 1-7-89. Compensation under "no fault liability" was directed to be paid after the new Act came into force at the rate mentioned in S.140 of the new Act. On the date of accident the provision which was in force was S.92A of the Motor Vehicles Act, 1939 (for short the old act) as per which compensation in death cases under "no fault liability" was fixed at Rs. 15,000/-. These appeals are in challenge of the award passed by the Motor Accidents Claims Tribunal directing the insurer to pay the compensation under "no fault liability".

3. In Padmavathy's case the Division Bench approached the question from two different angles. First was by considering the effect of repeal of the old Act as provided in S.217 of the new Act. Sub-sec. (1) of the said Section says that the old Act and any law corresponding to mat Act in force in any state immediately before the commencement of the new Act in that state would stand repealed. Sub-section (4) provided that the mention of particular matters in S.217 "shall not be held to prejudice or affect the general application of S.6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeals." The Division Bench in Padmavaihy's case proceeded to consider the effect of S.6 of the General Clauses Act on such repeal of the old Act, particularly with reference to the following words in the Section "unless a different intention appears the repeal shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed". The Bench discussed whether S.140 of the new Act has created a new right by increasing the amount of compensation under no fault liability or whether the new Act has only updated a right created under S.92-A of the old Act.

4. The Division Bench in Padmavathy's case made a survey through the development of the claims of compensation in respect of fatal accidents under common law and how it was followed in India and it gained statutory recognition with the enactment of Fatal Accidents Act, 1855; and the effect of the Rule in Rylands v. Fletcher (1861-73 A11.E.R.1) on the law and also how the position continued till the introduction of Chapter VTI-A in the old Act. The Division Bench then held that "the right created in Chapter VII-A of the repealed Act is to have compensation irrespective of whether the opposite party is guilty of any fault. The amount of compensation was fixed in the' statute itself in respect of such right".

5. The Division Bench then proceeded to consider whether enhancement of the compensation amount from Rs. 15,000/- (mentioned in S.98-A of the old act) would create a different right. For answering the question, the Division Bench glimpsed at the reasons for enhancing the amount, such as the erosion of money value of the currency and how the English courts, after second world war period, moulded reliefs in consonance with (he rate of inflation and how that principle was followed in India. In that cont