State of Punjab & Ors. Vs. Bhajan Kaur & Ors.  INSC 859 (8
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3406 OF 2008 [Arising out of SLP
(Civil) No. 12575 of 2008 (@ CC 1875 of 2008)] State of Punjab & Ors. ...Appellants
Versus Bhajan Kaur & Ors. ...Respondents
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
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 dated 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 others [1992 ACJ 192], it was held:
"In view of the authoritative
pronouncement, this appeal is disposed of by holding that the claimant 3 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
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.
4 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
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 [1990 ACJ 751]. The Kerala High Court referred to
a decision of this Court in M.K. Kunhimohammed v. P.A. Ahmedkutty [AIR 1987 SC
2158] 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 5 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 Parliament. This fact can be discerned from the
Statement of Objects and Reasons prefaced in the new Act. Therefore, in effect,
Parliament has only retained the same right which was conferred on the victims,
through Chapter VIIA of the repealed Act. The difference in the quantum of
compensation is only intended to make the right realistic and on a par with the
amount fixed earlier.
Hence, Section 6 of the General
Clauses Act would not impede the enforcement of Section 140 of the new Act in
relation to an accident which occurred prior to the coming into force of the
12. For yet another reason, we can
support the said conclusion. Section 6 of the General Clauses Act permits
switching over to the repealed Act only if a different intention does not
appear in the new statute. Such a different intention can be discerned from the
new Act. It is in Chapter X of the new Act that provisions regarding "no
6 have been included. The
Chapter" starts with Section 140 and ends with Section 144. The last
Section reads as follows : "The provisions of this Chapter shall have
effect notwithstanding anything contained in any other provision of this Act or
of any other law for the time being in force". The different intention
manifested in the new Act is that the provisions in Chapter X should get
predominance over all other laws. The provisions contained in that Chapter must
be given effect to notwithstanding any contrary provision in any other law
including Section 6 of the General Clauses Act. All other provisions,
therefore, must yield to the provisions contained in Chapter X of the new Act.
This is the legislative intention manifested through Section 144 of the new
11. In the decision of the Punjab
and Haryana High Court in Mosmi (supra), reliance has been placed upon the
judgment of the Kerala High Court.
12. With the greatest of respect
to the learned Judges of the Kerala and Punjab & Haryana High Court, we
could not persuade ourselves to agree with the said view.
13. No reason has been assigned as
to why the 1988 Act should be held to be retrospective in character. The rights
and liabilities of the parties are determined when cause of action for filing
the claim petition arises. As 7 indicated hereinbefore, the liability under the
Act is a statutory liability.
The liability could, thus, be made
retrospective only by reason of a statute or statutory rules. It was required
to be so stated expressly by the Parliament.
Applying the principles of
interpretation of statute, the 1988 Act cannot be given retrospective effect,
more particularly, when it came into force on or about 1.07.1989.
14. Reference to Section 6 of the
General Clauses Act, in our opinion, is misplaced. Section 217 of the 1988 Act
contains the repeal and saving clause. Section 140 of the 1988 Act does not
find place in various clauses contained in Sub-section (2) of Section 217 of
the 1988 Act. Sub-section (4) of Section 217 of the 1988 Act reads, thus:
"(4) The mention of
particular matters in this section shall not be held to prejudice or affect the
general application of section 6 of the General Clauses Act, 1897 (10 of 1897)
with regard to the effect of repeals."
15. What is, therefore, otherwise
saved in Section 6 of the General Clauses Act inter alia is the right. It reads
"6 Effect of repeal.--Where
this Act, or any Central Act or Regulation made after the commencement of this
Act, repeals any enactment hitherto made or hereafter to be made, then, unless
a different intention appears, the repeal shall not-- (a) *** (b) *** (c)
affect any right, privilege, obligation or liability acquired, accrued or
incurred under any enactment so repealed;..."
16. Section 6 of the General
Clauses Act, therefore, inter alia saves a right accrued and/ or a liability
incurred. It does not create a right. When Section 6 applies only an existing
right is saved thereby. The existing right of a party has to be determined on
the basis of the statute which was applicable and not under the new one. If a
new Act confers a right, it does so with prospective effect when it comes into
force, unless expressly stated otherwise.
9 Section 140 of the 1988 Act does
not contain any procedural provision so as to construe it to have retrospective
effect. It cannot enlarge any right. Rights of the parties are to be determined
on the basis of the law as it then stood, viz., before the new Act come into
17. It is now well-settled that a
change in the substantive law, as opposed to adjective law, would not affect
the pending litigation unless the legislature has enacted otherwise, either
expressly or by necessary implication.
18. In Garikapati v. Subbaiah
Chowdhary [AIR 1957 SC 540], the law is stated, thus:
"...The golden rule of
construction is that, in the absence of anything in the enactment to show that
it is to have retrospective operation, it cannot be so construed as to have the
effect of altering the law applicable to a claim in litigation at the time when
the Act was passed..."
19. The question was considered by
this Court in Gajraj Singh and Others v. State Transport Appellate Tribunal and
Others [(1997) 1 SCC 650] and the law was stated in the following terms:
10 "22. Whenever an Act is
repealed it must be considered, except as to transactions past and closed, as
if it had never existed. The effect thereof is to obliterate the Act completely
from the record of Parliament as if it had never been passed; it never existed
except for the purpose of those actions which were commenced, prosecuted and
concluded while it was an existing law. Legal fiction is one which is not an
actual reality and which the law recognises and the court accepts as a reality.
Therefore, in case of legal fiction the court believes something to exist which
in reality does not exist. It is nothing but a presumption of the existence of
the state of affairs which in actuality is non-existent. The effect of such a
legal fiction is that a position which otherwise would not obtain is deemed to
obtain under the circumstances. Therefore, when Section 217(1) of the Act
repealed Act 4 of 1939 w.e.f. 1-7-1989, the law in Act 4 of 1939 in effect came
to be non- existent except as regards the transactions, past and closed or saved.
23. In Crawford's Interpretation
of Law (1989) at p. 626, it is stated that:
"[A]n express repeal will
operate to abrogate an existing law, unless there is some indication to the
contrary, such as a saving clause. Even existing rights and pending litigation,
both civil and criminal, may be affected although it is not an uncommon
practice to use the saving clause in order to preserve existing rights and to
exempt pending litigation."
At p. 627, it is stated that:
"[M]oreover, where a
repealing clause expressly refers to a portion of a prior Act, the remainder of
such Act will not usually be repealed, as a presumption is raised that no 11
further repeal is necessary, unless there is irreconcilable inconsistency
between them. In like manner, if the repealing clause is by its terms confined
to a particular Act, quoted by title, it will not be extended to an act upon a
Section 6 of the GC Act
enumerates, inter alia, that where the Act repeals any enactment, unless a
different intention appears, the repeal shall not (a) revive anything not in
force or existing at the time at which the repeal takes effect; or (b) affect
the previous operation of any enactment so repealed or anything duly done or
suffered thereunder; or (c) affect any right, privilege, obligation or
liability acquired, accrued or incurred under any enactment so repealed, and
any such investigation, legal proceeding or remedy may be instituted, continued
or enforced. In India Tobacco Co. Ltd.
v. CTO (SCC at p. 517) in paras 6 and
11, a Bench of three Judges had held that repeal connotes abrogation and
obliteration of one statute by another from the statute-book as completely as
if it had never been passed. When an Act is repealed, it must be considered,
except as to transactions past and closed, as if it had never existed. Repeal
is not a matter of mere form but is of substance, depending on the intention of
the legislature. If the intention indicated either expressly or by necessary
implication in the subsequent statute was to abrogate or wipe off the former
enactment wholly or in part, then it would be a case of total or pro tanto
24. When there is a repeal and
simultaneous re- enactment, Section 6 of the GC Act would apply to such a case
unless contrary intention can be gathered from the repealing Act. Section 6
would be applicable in such cases unless the new legislation manifests
intention inconsistent with or contrary to the application of the section. Such
incompatibility would have to be ascertained from 12 all relevant provisions of
the new Act. Therefore, when the repeal is followed by a fresh legislation on
the same subject, the Court would undoubtedly have to look to the provisions of
the new Act only for the purpose of determining whether the new Act indicates
different intention. The object of repeal and re-enactment is to obliterate the
Repealed Act and to get rid of certain obsolete matters."
20. In Ramesh Singh and Another v.
Cinta Devi and Others [(1996) 3 SCC 142] it has clearly been held that Section
217 of the 1988 Act does not expressly or by necessary implication make the
relevant provision retrospective in operation.
21. In Zile Singh v. State of
Haryana [(2004) 8 SCC 1], a Three-Judge Bench of this Court, stated the law,
"17. Maxwell states in his
work on Interpretation of Statutes (12th Edn.) that the rule against
retrospective operation is a presumption only, and as such it "may be
overcome, not only by express words in the Act but also by circumstances
sufficiently strong to displace it" (p.
225). If the dominant intention of
the legislature can be clearly and doubtlessly spelt out, the inhibition
contained in the rule against perpetuity becomes of doubtful applicability as
the "inhibition of the rule" is a matter of degree which 13 would "vary
secundum materiam" (p. 226).
Sometimes, where the sense of the
statute demands it or where there has been an obvious mistake in drafting, a
court will be prepared to substitute another word or phrase for that which
actually appears in the text of the Act (p. 231)."
22. In Lohia Machines Ltd. and
Anr. v. Union of India (UOI) and Ors.
[(1985) 2 SCR 686], this Court
"On the other hand it is
quite clear that if the relief granted is to be withdrawn with retrospective
operation from 1972 the assessees who have enjoyed the relief for all those
years will have to face a very grave situation. The effect of the withdrawal of
the relief with retrospective operation will be to impose on the assessee a
huge accumulated financial burden for no fault of the assessee and this is
bound to create a serious financial problem for the assessee. Apart from the
heavy financial burden which is likely to upset the economy of the undertaking,
the assessee will have to face other serious problems. On the basis that the
relief was legitimately and legally available to the assessee, the assessee had
proceeded to act and to arrange its affairs. If the relief granted is now
permitted to be withdrawn with retrospective operation, the assessee may be
found guilty of violation of provisions of other statutes and may be visited
with penal consequences..."
23. In M/s. Indian Metals and
Ferro Alloys Ltd. & Anr. v. State of Orissa & Ors. [(1987) 3 SCC 189],
it was opined :
"25...we hold that the High
Court was not right in observing that the orders under Section 22-B of the Act
imposing restrictions on consumption of power could not legally and validly be
passed by the Government "with retrospective effect" in the middle of
a water year. But the position regarding disallowance of clubbing stands on an
entirely different footing. If a consumer had been allowed the benefit of
clubbing previously, that benefit cannot be taken away with retrospective
effect thereby saddling him with heavy financial burden in respect of the past period
where he had drawn and consumed power on the faith of the orders extending to
him the benefit of clubbing..."
24. In Madishetti Bala Ramul (D)
by LRs. v. The Land Acquisition Officer [2007 (8) SCALE 184], this Court
"19. In Land Acquisition
Officer-cum-DSWO, A.P. v. B.V. Reddy and Sons, this Court opined that Section
25 being not a procedural provision will have no retrospective effect, holding:
6. Coming to the second question,
it is a well- settled principle of construction that a substantive provision
cannot be retrospective in nature unless the provision itself indicates the
same. The amended provision of Section 25 nowhere indicates that the same would
have any retrospective effect. Consequently, therefore, it 15 would apply to
all acquisitions made subsequent to 24-9-1984, the date on which Act 68 of 1984
came into force. The Land Acquisition (Amendment) Bill of 1982 was introduced
in Parliament on 30- 4-1982 and came into operation with effect from
25. In Ashok Lanka and Anr. v.
Rishi Dixit and Ors. [(2005) 5 SCC 598], this Court held:
"A statute must be read
reasonably. A statute should not read in such a manner which results in
absurdity, A statute, on its plain language, although postulates a prospective
operation, it cannot be held to be retrospective only because it would apply
for the excise year for which applications were invited despite the fact that
the selection process made thereunder is over."
26. The Kerala and Punjab &
Haryana High Court proceeded on the basis that Section 6 of the General Clauses
Act will apply. If the same applies, it would not affect any right, privilege,
obligation or liability acquired, accrued or incurred under any enactment so
repealed. If that be so, the old Act shall apply and not the new one.
Construction of a repeal and saving 16 clause vis-`-vis the statute providing
for continuation of orders, etc. must be given the meaning which can be culled
out from the statute in question.
27. In Southern Petrochemical
Industries Co. Ltd. v. Electricity Inspector & ETIO and Others [(2007) 5
SCC 447], this Court held:
"106. Furthermore, exemption
from payment of tax in favour of the appellants herein would also constitute a
right or privilege. The expression "privilege" has a wider meaning
than right. A right may be a vested right or an accured right or an acquired
right. Nature of such a right would depend upon and also vary from statute to
It has been so held by this Court,
while construing Section 6 of the General Clauses Act, in M/s.
Gurcharan Singh Baldev Singh v.
Yashwant Singh and Others [(1992) 1 SCC 428] in the following terms:
"...The objective of the
provision is to ensure protection of any right or privilege acquired under the
repealed Act. The only exception to it is legislative intention to the
contrary. That is, the repealing Act may expressly provide or it may impliedly
provide against continuance of such right, obligation or liability..."
We, therefore, are clearly of the
opinion that the 1988 Act does not have any retrospective operation.
17 28. For the reasons
aforementioned, the decisions of Kerala and Punjab &
Haryana High Court do not lay down
a good law. They are overruled accordingly. However, as the State has not asked
for any relief against the respondents, this appeal is dismissed. No costs.
[Lokeshwar Singh Panta] New Delhi;