Motor Owners Insurance Co. Ltd. Vs.
Jadavji Keshavji Modi & Ors [1981] INSC 173 (29 September 1981)
CHANDRACHUD, Y.V. ((CJ) CHANDRACHUD, Y.V.
((CJ) FAZALALI, SYED MURTAZA DESAI, D.A.
CITATION: 1981 AIR 2059 1982 SCR (1) 860 1981
SCC (4) 660 1981 SCALE (3)1529
CITATOR INFO :
R 1987 SC2158 (3,8) R 1991 SC1769 (12) R 1992
SC1261 (7)
ACT:
Motor Vehicles Act 1939, S. 95(2) as amended
by Motor Vehicles (Amendment) Act 1956, S. 74-Scope of. "in
all"-"any one accident"-Meaning of,
HEADNOTE:
Section 95 of the Motor Vehicles Act, 1939
prescribes the requirements of an insurance policy and the limits OF liability
thereunder. By sub-section (1) of section 95, a policy of insurance must insure
the person or classes of persons specified in the policy to the extent
specified in sub-section (2) against any liability which may be incurred by him
or them in respect of the death of or bodily injury to any person caused by or
arising out of the use of the vehicle in a public place. Section 95(2) of the
Act as it originally stood read thus:
"95(2): Subject to the proviso to
sub-section (I) a policy of insurance shall cover any liability incurred in
respect of any one accident up to the following limits, namely:- (a) where the
vehicle is a vehicle used or adapted to be used for the carriage of goods, a
limit of twenty thousand rupees.. ".
This provision was substituted by a new
clause by section 74 of the Motor Vehicles (Amendment) Act, 1956 with effect
from February 16, 1957. The amended clause read:
"95(2) (a) :-Where the vehicle is a
goods vehicle, a limit of twenty thousand rupees in all, including the
liabilities, if any, arising under the Work men's Compensation Act, 1923, in
respect of the death of, or bodily injury to, employees (other Than The
driver), not exceeding six in number, being carried in the vehicle".
This provision underwent further amendment by
the Motor Vehicles (Amendment) Act, 1969 which came into force on March 7,
1970.
A collision took place between a motor car
and a goods truck in February 1966 as a result of which the driver of The car
died instantaneously and the person travelling in the car sustained injuries.
The Truck was insured against third party risk with the appellant-insurance
company.
861 The heirs and legal representatives of
the deceased field an application before the Motor Accidents Claims Tribunal,
under section 110-D of the Act, claiming compensation in the sum of Rs. 30,000
for the death caused in the accident. The person who was injured filed a
separate application asking for compensation of Rs. 10,000 for the injuries
suffered by him. The Tribunal dismissed both the applications on the ground
that respondent No. 3 could not be said to have been driving the truck rashly
and negligently at the time of the accident.
The claimants filed separate appeals in the
High Court, which awarded a compensation of Rs. 19,125 to the heirs of the
deceased and Rs. 10,000 to the injured person.
In the appeals to this Court it was contended
on behalf of the appellant insurance company: (i) that under clause (a) of
section 95(2) as it stood at the material time, the liability of the insurer
under the statutory policy taken by the owner of the goods vehicle is limited
to Rs. 20,000 in all and, therefore, the insurer cannot be asked to pay
compensation in excess of that amount, and that the liability to pay the
balance must be fixed on the owner of the goods vehicle who would be
vicariously responsible for the negligence of his employee who was driving the
goods vehicle, and (ii) that the Amendment Act of 1956 which came into force on
February 16, 1957 introduced the words 'in all' in clause (a) and that these
words were introduced to limit the overall liability of the insurer to twenty
thousand rupees Dismissing the appeals,
HELD: 1. The High Court took a just, correct
and realistic view of the matter by holding that, under the statutory policy
the appellant-insurance company is liable to pay the full amount of
compensation to the heirs of the deceased and to the passenger travelling in
the car, each amount being less than Rs. 20,000. [880 G-H] The purpose of law
is to alleviate, not augment, the sufferings of the people. The award of
compensation depends upon a variety of factors, including the extent of
monetary deprivation to which the heirs of the deceased are subjected. [870 G]
3. By common practice and the application of
recognised rules of statutory construction, harsh consequences following upon
an interpretation are not considered as the governing factor in the
construction of a statute, unless its language is equivocal and ambiguous. [871
E]
4. Clause (a) of section 95 (2) qualifies the
extent of the insurer's liability by the use of the unambiguous expression 'in
all' and since that expression was specially introduced by an amendment, it
must be allowed its full play. The legislature must be presumed to have
intended what it has plainly said. But, clause (a) does not stand alone and is
not the only provision to be considered for determining the outside limit of
the insurer's liability. In fact, clause (a) does not even form a complete
sentence and makes no meaning by itself. Like the other clauses (b) to (d),
clause (a) is governed by the opening words of 862 section 95 (2) to the effect
that "a policy of insurance shall cover any liability incurred in respect
of any one accident up to the following limits", that is the limits laid
down in clauses (a) to (d). [871 H-872 B] 5 (i) The expression, 'any one
accident' is susceptible of two equally reasonable meanings or interpretations.
If a collision occurs between a car and a truck resulting in injuries to five
persons, it is as much plausible to say that five persons were injured in one
accident as it is to say that each of the five per sons met with an accident. A
bystander looking at the occurrence objectively will be right in saying that
the truck and the car met with an accident or that they were concerned in one
accident. On the other hand, a person looking at the occurrence subjectively,
like the one who was injured in the collision, will say that he met with an
accident. And so will each of the five persons who were injured. From their
point of view, which is the relevant point of view, "any one
accident" means "accident to any one '. In matters involving third
party risks, it is subjective considerations which must prevail and the
occurrence has to be looked at from the point of view of those who are immediately
affected by it.
[872 E-F] 5 (ii) A consideration of
preponderating importance in a matter of this nature is not whether there was
any one transaction which resulted in injuries to many but whether more than
one person was injured, giving rise to more than one claim or cause of action,
even if the injuries were caused in the course of one single transaction. If
more than one person is injured during the course of the same transaction, each
one of the persons meets with an accident.
[873A-B]
6. The ambiguity in the language used by the
legislature in the opening part of section 95 (2) and the doubt arising out of
the co-relation of that language with the words 'in all' which occur in clause
(a) must be resolved by having regard to the underlying legislative purpose of
the provisions, contained in Chapter VIII of the Act which deals with third
party risks. That is a sensitive process which has to accommodate the claims of
the society as reflected in that purpose. [873 C]
7. In the area of legislative ambiguities
courts have to fill gaps, clear doubts and mitigate hardships. There is no
table of logarithms to guide or govern statutory construction in this area,
which leaves a sufficient and desirable discretion for the Judges to interpret
laws in the light of their purpose, where the language used by the law- makers
does not yield to one and one meaning only. lt is, therefore, appropriate to
hold that the word "accident" is used in the expression any one
accident" from the point of view of the various claimants, each of whom is
entitled to make a separate claim for the accident suffered by him and not from
the point of view of the insurer. [873 D, F-G]
8. With the emergence of the General
Insurance Corporation which has taken over general insurance business of all
kinds, including motor vehicle insurance, it should be easy to give statutory
recognition to the State's obligation to compensate victims of road accidents,
promptly, adequately and without con test . [880 F] 863 Cabell v. Markham, 148
F. 2d. 737, 739 [1945]; The South Staffordshire Tramways Company Ltd. v. The
Sickness and Accident Assurance Association Ltd., [1891]1 Q.B.D. 402;
Forney v. Dominion Insurance Co. Ltd., [1969]
1 Weekly Law Reports, 928; Manjusri Raha and Ors. v. B.L. Gupta and Ors. [1977]
2 S.C.R. 944, referred to.
Northern India Transporters Insurance Co.
Ltd. v. Smt. Amrawati, AIR 1966 Punjab 288, Jayalakshmi and Ors. v. The Ruby
General Insurance Company, Madras and Anr. AIR 1971 Madras 143; Sabita Pati and
Ors. v. Rameshwar Singh and Anr. [1973] A. C. J. 319; Sheikhupura Transport Co.
Ltd. v. Northern India Transport Co., [1971] Suppl. S.C.R. 20 distinguished.
Sanjiva Shetty v. Anantha and Ors. 1976 A.,C.
J. 261, M/s. Construction India and Ors. v. Mahindra Pal Singh Ahluwalia and
Ors 1975 A.C.J. 177, disapproved.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 801- 802 of 1978:
From the judgment and order dated the 30th
September, 1976 of the Gujarat High Court at Ahmedabad in F.A. No. 696 of 1)
1971 and 1282 of 1969.
Soli J. Sorabjee, I.N. Shroff and H.S.
Parihar for the Appellant.
S.K. Dholakia and R.C. Bhatia for Respondent
Nos. 3-6.
The Judgment of the Court was delivered by
CHANDRACHUD, C.J. These appeals raise a question of some importance from the
point of Insurance Companies which insure motor vehicles against third party
risks and more so, from the point of view of the general public which, by
reason of the increasing hazards of indisciplined and fast moving traffic, is
driven in despair to lodge claims for injuries suffered in motor vehicle
accidents. In case of air accidents, the injured and the dependents of the
deceased receive, without contest, fairly large sums by way of compensation
from the Air Corporations. We have still to awaken to the need to evolve a
reasonably comparable method for compensating those who receive injuries or die
in road or train accidents. The victims of road accidents or their dependents
are driven to wage a long and unequal battle against the Insurance Companies,
which deny their liability on every conceivable ground and indulge in an
ingenious variety of factual disputations from 'who was driving the vehicle' to
'whose negligence was the sine qua non of the accident'. The delay in the final
disposal of motor accident compensation cases, as in all 864 other classes of
litigation, takes the sting out of the laws of compensation because, an infant
child who seeks compensation as a dependent of his deceased father has often to
await the attainment of majority in order to see the colour of the money. Add
to that the monstrous inflation and the consequent fall in the value of the
rupee: Compensation demanded say, ten years ago, is less than quarter of its
value when it is received today. We do hope that the Government will apply
itself seriously and urgently to this problem and find a satisfactory method of
ameliorating the woes of victims of road accidents.
We have just talked of delay and it is just
as well that we begin by saying that the accident out of which these
proceedings arise happened on February 1, 1966. A collision took place between
a motor car, No. GJY 4973, and a goods truck, No. GTA 4123, at about 8.30 P.M.
On Naroda Road, Ahmedabad, as a result of which Ajit Sinh, who was driving the
car died instantaneously and Jadavji Keshavji Modi, who was travelling in the
car, sustained injuries. The truck was insured against third party risk with
the appellant, the Motor owners Insurance Co. Ltd.
The appellant had then an office in Ahmadabad
but it ultimately merged with the New India Assurance Co. Ltd., Bombay.
Respondents 1 (a) to I (g), who are the heirs and legal representatives of the
deceased Ajit Sinh, filed an application before the Motor Accidents Claims
Tribunal, Ahmadabad, under section 110-D of the Motor Vehicles Act, 4 of 1939,
seeking compensation in the sum of Rs. 30,000 for his death. Jadavji Modi filed
a separate application asking for compensation of Rs. 10,000 for the injuries
suffered by him. The Tribunal dismissed both the applications by a common
judgment dated June 2(, 1968 on the ground that respondent No. 3 could not be
said to have been driving the truck rashly and negligently at the time of the
accident.
Jadavji Modi and respondents I (a) to I (g)
filed separate appeals in the Gujarat High Court from the Judgment of t he
Tribunal, being First Appeals Nos. 1202 of 1969 and 696 of 1971 respectively.
These appeals were disposed of by the High Court by a common judgment dated
September 30, 1976. The hearing proceeded, both before the Tribunal and the
High Court, on the basis that the truck was used for carrying goods. The High
Court allowed the appeals, awarding a compensation of Rs. 19,125 to 865
respondents 1 (a) to 1 (g) with 6% interest from the date of application until
realisation of the amount and a compensation of Rs. 10,000 with similar
interest to Jadvaji Modi. These appeals by special leave are directed against
the judgment of the High Court.
This Court by its order dated April 18, 1978
granted special leave to the appellant to appeal from the judgment of the High
Court, limited to the question relating to the construction of section 95 (2)
of the Motor Vehicles Act, 1939, ("the Act").
Chapter VIII of the Act bears the title
"Insurance of motor vehicles against third party risks". Section 93
defines certain terms while section 94 (1) provides for the necessity to insure
a vehicle against third party risks. By that section, no person can use a Motor
vehicle in a public place, except as a passenger, unless there is in force in
relation to the use of the vehicle a policy of insurance complying with the
requirements of the chapter. Section 95 prescribes the requirements of the
insurance policy and the "limits of liability" thereunder. Broadly,
by sub-section (1) of section 95, a policy of insurance must insure the person
or classes of persons specified in the policy to the extent specified in
sub-section (2) against any liability which may be incurred by him or them in
respect of the death of or bodily injury to any person caused by or arising out
of the use of the vehicle in a public place. The proviso to sub-section (I)
consists of three clauses by which, speaking generally, a policy is not
required to cover (i) liability in respect of the death of or injuries to an
employee arising out of and in the course of his employment; (ii) liability in
respect of the death of or bodily injury to persons carried in the vehicle
except where the vehicle is used for carrying passengers for hire or reward;
and (iii) any contractual liability.
That takes us to the provisions contained in
section 95 (2) of the Act, the interpretation of which is the sole question for
our consideration in this appeal. The Motor Vehicles Act, 1939, save for
Chapter VIII relating to the insurance of motor vehicles against third party
risks, has been in force since July 1, 1939, in what were known as Part A and
Part States and since April 1, 1951 in Part States.
Chapter VIII came into force on July 1, 1946.
Section 95 (2) of the Act originally read
thus:
"95 (2) -Subject to the proviso to
sub-section (1), a 866 policy of insurance shall cover any liability incurred
in respect of any one accident upto the following limits, namely :- (a) where
the vehicle is a vehicle used or adapted to be used for the carriage of goods,
a limit of twenty thousand rupees;
(b) where the vehicle is a vehicle in which
passengers are carried for hire or reward or by reason of or in pursuance of a
contract of employment, in respect of persons other than passengers carried for
hire or reward, a limit of twenty thousand rupees; and in respect of passengers
a limit of twenty thousand rupees in all, and four thousand rupees in respect
of an individual passenger, if the vehicle is registered to carry not more than
six passengers excluding the driver or two thousand rupees in respect of an
individual passenger, if the vehicle is registered to carry more than six
passengers excluding the driver;
(c) where the vehicle is a vehicle of any
other class, the amount of the liability incurred." (emphasis supplied)
Clause (a) of sub-section (2) was substituted by a new clause by section 74 of
the Motor Vehicles (Amendment) Act, 100 of 1956, with effect from February 16,
1957. The amended clause (a), which was in force on February 1, 1966 when the
Incident leading to these proceedings occurred, reads thus:
"95(2)(a)-Where the vehicle is a goods
vehicle, a limit of twenty thousand rupees in all, including the liabilities,
if any, arising under the Workmen's Compensation Act, 1923, in respect of the
death of, or bodily injury to, employees (other than the driver), not 867
exceeding six in number, being carried in the vehicle." (emphasis
supplied) Clauses (b) and (c) of section 95 (2) remained as they were in 1939
and were not touched by the 1956 Amendment.
Section 95 (2) underwent a further amendment
by the Motor Vehicles (Amendment) Act, 56 of 1969, which came into force on
March 2, 1970. As a result of that amendment, the section reads thus:
"95 (2) -Subject to the proviso to
sub-section (l), a policy of insurance shall cover any liability incurred in
respect of any one accident upto the following limits, namely :- D (a) where
the vehicle is goods vehicle, a limit of fifty thousand rupees in all,
including the liabilities, f any, arising under the Workmen's Compensation Act,
1923, in respect of the death of, or bodily injury to employees (other than the
driver), not exceeding six in number, being carried in the vehicle;
(b) where the vehicle is a vehicle in which
passengers are carried for hire or reward or by reason of or in pursuance of a
contract of employment- (i) in respect of persons other than passengers carried
for hire or reward, a limit of fifty thousand rupees in all;
(ii) in respect of passengers:
(1) a limit of fifty thousand rupees in all
where the vehicle is registered to carry more than thirty Passengers;
868 (2) a limit of seventy-five thousand
rupees in all where the vehicle is registered to carry more than thirty but not
more than sixty passengers;
(3) a limit of one lakh rupees in all where
the vehicle is registered to carry more than sixty passengers;
and (4) subject to the limits aforesaid ten
thousand rupees for each individual passenger in any other case;
(c) save as provided in clause (d), where the
vehicle is a vehicle of any other class, the amount of liability incurred;
(d) irrespective of the class of the vehicle,
a limit of rupees two thousand in all in respect of damage to any property of a
third party." (emphasis supplied) We are concerned only with clause (a) of
section 95 (2) and that too, as it existed on February 1, 1966 when the collision
between the car and the truck took place. We have extracted the other clauses
of section 95 (2) in order to trace the legislative history of the section and
to see whether the language used by the legislature in other parts of the same
section affords a comparative clue to the interpretation of the provision
contained in clause (a).
Clause (a) as originally enacted in 1939,
provides that the insurance policy must cover the liability in respect of third
party risks upto the limit of twenty thousand rupees, where the vehicle is used
or adapted to be used for the carriage of goods. By the amendment introduced by
the Amendment Act 100 of 1956, the words "in all" were added after
the words "twenty thousand rupees". Clause (a) thus amended read to
say that where the vehicle is a goods vehicle, the policy of insurance shall
cover the liability in regard to third party risks up to the limit of twenty
thousand rupees in all. Whereas clause (a) in its original form spoke of a
vehicle "used or adapted to be used for the carriage of goods", under
the 869 amendment of 1956, the clause was made applicable to cases where the
vehicle "is a goods vehicle". The other amendment introduced by the Act
of 1956 was that the overall limit of twenty thousand rupees was expressed to
include the liability arising under the Workmen's Compensation Act, 1923 to the
extent mentioned in the amendment. The amendment introduced by the Amendment Act
56 of 1969 enhanced the liability under clause (a) from twenty thousand rupees
to fifty thousand rupees in all.
Clause (b) of section 95 applies to vehicles
in which passengers are carried for hire or reward or by reason of or in
pursuance of a contract of employment. Under that clause as it stood originally
in 1939, the liability was restricted to twenty thousand rupees in respect of
persons other than passengers carried for hire or reward; and to twenty
thousand rupees in all in respect of passengers. The Amendment Act of 1956 did
not make any change in clause (b).
But, the Amendment Act of 1969 enhanced the
liability to the limit of fifty thousand rupees in all in respect of persons other
than passengers carried for hire or reward. In respect of passengers, the
liability was enhanced from twenty thousand rupees to fifty thousand rupees in
all, seventy- five thousand rupees in all one lakh rupees in all, depending
upon the registered capacity of the vehicle to carry passengers.
It may be recalled that the High Court
awarded compensation in the sum of Rs. 19,125 to respondents 1 (a) to 1 (g) who
are the heirs and legal representatives of Ajit Sinh who was driving the car,
and Rs. 10,000 to Jadavji Modi who was travelling in the car. The total amount
of compensation awarded to the claimants thus comes to Rs.
29,125 that is to say, it is in excess of Rs.
20,000. The contention of Shri Sorabjee who appears on behalf of the appellant
insurance-company is, that under clause (a) as it stood at the material time,
the liability of the insurer under the statutory policy taken by the owner of
the goods vehicle is limited to twenty thousand rupees in all and, therefore,
the insurer cannot be asked to pay compensation in excess of that amount. The
liability to pay the balance, viz. Rs. 9,125 must according to the learned
counsel, be fastened on the owner of the goods vehicle who would be vicariously
responsible for the negligence of his employee who was driving the goods
vehicle. In support of this submission counsel relies strongly on the
circumstance that the Amendment Act of 1956
which came into force on February 16, 1957, introduced the words 870 "in
all" in clause (a). It is urged that these words were introduced advisedly
and deliberately in order to limit the overall liability of the insurer to
twenty thousand rupees under the statutory policy. These words of limitation
cannot be ignored by asking the appellant to pay compensation in excess of
twenty thousand rupees. Counsel also seeks to derive support to his submission
from the use of the words "in all" in clauses (b) and (d) of section
95 (2) as amended by Amendment Act 56 of 1969
which came into force on March ". 1970.
Having given our anxious consideration to
these contentions of Shri Sorabjee, which are not without plausibility, we have
come to the conclusion that the construction canvassed by the learned counsel
will lead to great injustice and absurdity and must, therefore, be eschewed
since, especially, the words of section 95 (2) cannot, in the context in which
they occur, be regarded as plain and unambiguous. We with first demonstrate the
harsh and strange consequences which will flow out of the construction pressed
upon us and we with then show why we consider That the material words of the
section are of doubtful import. If. for example, two or three persons die in a
collision between a car and a goods vehicle and two or three others are injured
as a result of the negligence of the driver of the goods vehicle, the heirs of
the deceased and the injured persons will together be entitled to twenty thousand
rupees in all, no matter how serious the injuries and how grave the hardship to
the heirs ensuing upon the loss of lives of those who perished in the
collision. But there is a more flagrant injustice which one shall have to
countenance if one were to accept the argument advanced on behalf of the
appellant and it is this : If two persons of unequal economic status die in the
kind of collision mentioned above, the heirs of the affluent victim will
virtually monopolise the compensation by getting a lion's share in it, thereby
adding insult to the injury caused to the heirs of the indigent victim. The
purpose of law is to alleviate, not augment, the sufferings of the people. It
is well-known that the award of compensation depends upon a variety of factors,
including the extent of monetary deprivation to which the heirs of the deceased
are subjected. Applying that criterion as one of the many variable criteria
which are applied for fixing compensation in motor accident cases, the heirs of
the affluent victim may have been awarded, say, a compensation of Rs. 90,000.
The heirs of the other victim who may have
been just managing to keep his body and soul together will probably have
received by that standard a compensation of, say, 871 ten thousand rupees. The
compensation awarded to these two groups of heirs shall have to be reduced
rateably in the proportion of 9: 1 in order to ensure it does not exceed rupees
twenty thousand "in all". The result of this will be that the
insurance company will be liable to pay a sum of Rs. 18,000 to the heirs of the
affluent person and Rs. 2,000 to the heirs of the other person. The icy band of
death may have fallen in one stroke on two victims of disparate economic status
but then, the arithmetic of the appellants argument will perpetuate the gross
inequality between the two even after their death. We must avoid a construction
which will produce such an unfair result, if we can do so without doing
violence to the language of the section. The owner of the truck will
undoubtedly be liable to pay the balance but common experience shows that the
woes of the injured and of the heirs of those who perish in automobile
accidents begin after they embark upon the adventure of execution proceedings.
There are proverbial difficulties in proving ownership of goods vehicles,
particularly if they are subject to a hire-purchase agreement and truck owners
are quite known for the ease with which they proclaim their insolvency. It is
therefore no consolation that the left- over liability will fall on the
insured.
Both by common practice and the application
of recognised rules of statutory construction, harsh consequences following
upon an interpretation are not considered as the governing factor in the
construction of a statute, unless its language is equivocal or ambiguous. If
the language is plain and capable of one interpretation only, we will not be
justified in reading into the words of the Act a meaning which does not follow
natural from the language used by legislature. It therefore becomes necessary
to consider whether the language used by the legislature in section 95 (2) of
the Act admits of any doubt or difficulty or is capable of one interpretation
only.
If the words used by the legislature in
clause (a) of section 95 (2) were the sole factor for determining the outside
limit of the insurer's liability, it may have been possible to accept the
submission that the total liability of the insurer arising out of the incident
or occurrence in question cannot exceed Rs. 20,000. Clause (a) qualifies the
extent of the insurer's liability by the use of the unambiguous expression
"in all" and since that expression was specially introduced by an
amendment, it must be allowed its full play. The legislature must be presumed
to have intended what it has plainly said. But, clause (a) does not stand alone
and is not 872 the only provision to be considered for determining the outside
limit of the insurer's liability. In fact, clause (a) does not even form a
complete sentence and makes no meaning by itself. Like the other clauses (b) to
(d), clause (a) is governed by the opening words of section 95 (2) to the
effect that "a policy of insurance shall cover any liability incurred in
respect of any one accident up to the following limits", that is to say,
the limits laid down in clauses (a) to (d). We have supplied emphasis in order
to focus attention on the true question which emerges for consideration: What
is the meaning of the expression 'any one accident"? If that expression
were plain and unambiguous, and its meaning clear and definite, effect would be
required to be given to it regardless of what we think of its wisdom or policy.
But as we will presently show, the expression "any one accident ' does not
disclose one meaning conclusively according to the laws of language.
It, clearly, is capable of more than one
meaning, introducing thereby an ambiguity which has to be resolved by resorting
to the well-settled principles of statutory construction.
The expression "any one accident"
is susceptible of two equally reasonable meanings or interpretations. If a
collision occurs between a car and a truck resulting in injuries to five persons,
it is as much plausible to say that five persons were injured in one accident
as it is to say that each of the five persons met with an accident. A
by-stander looking at the occurrence objectively will be right in saying that
the truck and the car met with an accident or that they were concerned in one
accident. On the other hand, a person looking at the occurrence subjectively,
like the one who is injured in the collision, will say that he met with an
accident. And so will each of the five persons who were injured. From their
point of view, which is the relevant point of view, "any one
accident" means "accident to any one'. In matters involving third
party risks, it is subjective considerations which must prevail and the
occurrence has to be looked at from the point of view of those who are
immediately affected by it. If the matter is looked at from an objective point
of view, the insurer's liability will be limited to Rs. 20,000 in respect of
injuries caused to all the five persons considered en bloc as a single entity,
since they were injured as a result of one single collision. On the other hand,
if the matter is looked at subjectively as it ought to be, the insurer's
liability will extend to a sum of Rs. 20,000 in respect of the injuries suffered
by each one of the five persons, since each met with an accident, though during
873 the course of the same transaction. A consideration of preponderating
importance in a matter of this nature is not whether there was any one
transaction which resulted in injuries to many but whether more than one person
was injured, giving rise to more than one claim or cause of action, even if the
injuries were caused in the course of one single transaction. If more than one
person is injured during the course of the same transaction, each one of the
persons has met with an accident.
We are, therefore, of the opinion that the
ambiguity in the language used by the legislature in the opening part of
section 95 (2) and the doubt arising out of the co-relation of that language
with the words "in all" which occur in clause (a), must be resolved
by having regard to the underlying legislative purpose of the provisions
contained in chapter VIII of the Act which deals with third party risks. That
is a sensitive process which has to accommodate the claims of the society as
reflected in that purpose.
Indeed, it is in this area of legislative
ambiguities, unfortunately not receding, that courts have to fill gaps, clear
doubts and mitigate hardships. In the words of Judge Learned Hand:
"It is one of surest indexes of a mature
and developed jurisprudence.. to remember that statutes always have some
purpose or object to accomplish whose sympathetic and imaginative discovery is
the surest guide to their meaning". (1) There is no table of logarithms to
guide or govern statutory construction in this area, which leaves a sufficient
and desirable discretion for the Judges to interpret laws in the light of their
purpose, where the language used by the law- makers does not yield to one and
one meaning only.
Considering the matter that way, we are of
the opinion that it is appropriate to hold that the word "accident"
is used in the expression "any one accident" from the point of view
of the various claimants, each of whom is entitled to make a separate claim for
the accident suffered by him and not from the point of view of the insurer.
In The South Staffordshire Tramways Company
Ltd. v. The Sickness and Accident Assurance Association Ltd., (2) the
plaintiffs, a 874 tramcar company, effected with the defendants an insurance
against claims for personal injury in respect of accidents caused by vehicles
upto the amount of 250 "in respect of any one accident''. One of the vehicles
specified in the insurance policy was overturned, causing injuries to about
forty persons, as a result of which the plaintiffs became liable to pay to
those persons compensation to the extent of 833. The question before the Court
was whether the injuries caused to each of the said forty persons constituted a
separate accident within the meaning of the policy. The Court of Appeal
answered that question in the affirmative. Lord Esher, M.R., observed in his
judgment that the claims made by the plaintiffs were in respect of personal
injuries, and each person injured claimed (' for injuries in respect of an
accident to his person by the vehicle. "If several persons were
injured", said the Master of Rolls, "upon the true construction of
the policy, there were several accidents". Bowen, L.J. took the same view
of the matter by saying that the word "accident" may be used in
either of two ways: An accident may be spoken of as occurring to a person. Or
as occurring to a train, or vehicle, or bridge. In the latter case, though
several persons were injured who were in the train, or vehicle, or on the
bridge, it would be an accident to the train, or vehicle, or bridge. In the
former, "there might, however, be said to be several accidents, to the
several persons injured". Fry, L.J., concurred in the view taken by his
Brethren, and observed that the meaning of the word "accident", as
used in the policy of insurance, is "any single injury to the person or
property accidentally caused." In Forney v. Dominion Insurance Co. Ltd. (1)
the plaintiff, a solicitor, was insured under a professional indemnity policy
whereby the defendants, the insurers, agreed to indemnify him in respect of
loss arising from any claim or claims which may be made upon him by reason of
any neglect, omission or error committed in the conduct of his business,
subject to a proviso that the liability of the insurers was not to exceed a sum
of 3000, "in respect of any one claim or number of claims arising out of
the same occurrence''. The Solicitor's assistant gave a certain advice in a
motor accident case which betrayed negligence.
The assistant had wrongly allowed a person to
become administrative of her late husband's estate and the assistant also
failed to issue writs within the six-month limitation period. A claim was made
against the Solicitor for his assistant's negligence for depriving the
claimants of their right to be paid 875 damages. The court assessed the quantum
of damages differently for different claimants, which together exceeded the sum
of 3000. It was held that the Solicitor's assistant was negligent twice and
therefore there were two occurrences in the same case in respect of which the
Solicitor became liable to pay damages for negligence.
Accordingly, the insurance company was held
liable to indemify the Solicitor in respect of the damages awarded against him up
to a limit of 3000 for each act of negligence.
In Halsbury's Laws of England, (1) the
decision in South Staffordshire Tramways company is cited in support of the
proposition that the word 'accident "may fall to be construed from the
point of view of each individual victim, so as to produce, in effect, as many
accidents (even in a single occurrence) as there - are victims" .
The provisions contained in section 95 (2) of
the Act arose for consideration before a Full Bench of the High Court of Punjab
in Northern India Transporters Insurance Co. Ltd. v. Smt. Amrawati, (2) a Full
Bench of the High Court of Madras in Jayalakshami & Ors. v. The Ruby
General Insurance Company, Madras & anr., (3) the High Court of Karnataka
in Sanjiva Shetty v. Anantha & Ors., (4) and the High Court of Orissa in
Sabita Pati & Ors. v. Rameshwar Singh and anr. (5) and M/s Construction
India & Ors. v. Mahindra Pal Singh Ahluwalia & ors. (6) The Punjab case
arose under section 95 (2) (b), while the other cases arose under section 95
(2) (a) of the Act.
In the case before the Madras Full Bench, a
person called Krishnaswami who was driving a car died as a result of a
collision between his car and a goods vehicle. The Claims Tribunal dismissed
the claim of the heirs of the deceased, but a Division Bench of the High Court
took the view that compensation in the sum of Rs. 40,000 would be payable to
them. The Division Bench referred for consideration of the Full Bench the
question whether on a true construction 876 of clause (a) of section 95 (2),
the liability of the Insurance company was limited to rupees twenty thousand.
The Full Bench, overruling a previous decision of a Division Bench, answered
this question in the affirmative. It is important to bear in mind that the case
before the Madras High Court was in a material respect different from the case
before us. The High Court had to consider the claim of one person only since,
only one person had met with an accident.
In the case before us, more than one person
has been injured, which raises the question as regards the construction of the
words "any one accident'' which occur in section 95 (2). That question did
not arise in the Madras case and the decision, therefore, does not touch the
question before us. Similarly, in the case before the Orissa High Court in
Sabita Pati, only one person was involved in the collision between a jeep and a
goods vehicle. Relying on the judgment of the Full Bench of the Madras High
Court, the Orissa High Court held that the liability of the Insurance company
was limited to rupees twenty thousand under section 95(2)(a) of the Act. The n
involvement of more than one person in a single occurrence raises a different
question for consideration under section 95 (2) (a) than the involvement of a
single person in a single occurrence. In the latter case, it may be true to say
that the liability of the insurer is limited to rupees twenty thousand under a
statutory policy. In the former, the interpretation of the words "any one
accident'' came into play and we have already expressed our view on the meaning
of those words.
In the case before the Karnataka High Court
in Sanjiva Shetty, a taxi and a car met with a collision, as a result of which
two persons travelling in the taxi, the driver of the car and a boy called
Bharatisha sitting on the roadside were injured. Before the High Court was the
claim of the driver of the car and the boy. A Division Bench of the High Court
held that the total liability of the Insurance Company was limited to rupees twenty
thousand in respect of the injuries suffered by them. The High Court
apportioned the liability by directing the insurance company to pay Rs. 18,730
to the boy and Rs. 1 ,270 to the driver of the car.
In view of our judgment in the instant case,
the decision of the Karnataka High Court cannot be considered to be good law.
We may add that paragraph 22 of the judgment of the High Court says that it was
"common ground" between the parties that the limit of the liability
of the insurers was only rupees twenty thousand in all. The High Court added
"...... indeed, no argument was addressed to the contrary by any of the
877 parties". In the case before the Orissa High Court in M/s Construction
India, two children travelling in a school bus belonging to the Orissa
Government died in a collision between the bus and a goods vehicle. Section 95
(2) (a) was held attracted and since more than one person was injured as a
result of a single occurrence, the same question arose as before us. The orissa
High Court held that since the total compensation exceeded rupees twenty
thousand, the liability of the insurers was limited to rupees twenty thousand
in all and that the amount payable to the heirs of the deceased children was
liable to be apportioned. This decision also cannot be considered as laying
down the correct law and there too, as in Sanjiva Shetty, no argument was
advanced before the High Court on the construction of clause (a), particularly
in reference to the words "any one accident" which occur in section
95 (2).
The case before the Punjab Full Bench in
Northern India Transporters, arose under the old section 95 (2) (b) and need
not really detain us. Under that section, as it stood prior to its amendment in
1969, a policy of insurance was required to cover any liability incurred in
respect of any one accident upto the limit of twenty thousand rupees in respect
of persons other than passengers carried for hire or reward, where the vehicle
was one in which passengers were carried for hire or for reward or by reason of
or in pursuance of a contract of employment. In respect of passengers, there
was a twofold limit on the insurer's liability: "a limit of twenty
thousand rupees in all" and four thousand rupees in respect of an
individual passenger if the vehicle was registered to carry not more than six
passengers excluding the driver, or two thousand rupees in respect of an
individual passenger if the vehicle was registered to carry more than six
passengers excluding the driver. A passenger bus was involved in an occurrence
in which two passengers were killed. The High Court held that the
straightforward course was to take the language of the Act as it stood, which
left no doubt that in the case of a bus registered for carrying more than six
passengers, the limit of the liability was twenty thousand rupees in all and
there was a further limit in respect of each individual passenger in the sum of
two thousand rupees. The words "any one accident' in the opening part of
section 95 (2) made no difference to this interpretation because, if more than
one passenger was injured in a single occurrence, no one passenger was entitled
to receive more than rupees two thousand or four thousand, depending on the registered
capacity of the vehicle to carry passengers.
878 The judgment of the Punjab High Court was
brought in appeal to this Court in Sheikhupura Transport Co. Ltd. v.
Northern India Transport Co.(1) For reasons
aforesaid, the judgment in that case is not an authority on the interpretation
of clause (a) of section 95 (2). After setting out the relevant provisions of
section 95 (2) at pages 24 and 25 of the Report, Hegde J. speaking for himself
and Jaganmohan Reddy, J. concluded:
"In the present case we are dealing with
a vehicle in which more than six passengers were allowed to be carried. Hence
the maximum liability imposed under s.
95 (2) on the insurer is Rs. 2,000 per
passenger though the total liability may go upto Rs. 20,000.'' Towards the end
of the judgment, it was observed that reading the provision contained in
sections 95 and 96 together, ".. it is clear that the statutory liability
of the insurer to indemnify the insured is as prescribed in Sec. 95,(2). Hence
the High Court was right in its conclusion that the liability of the insurer in
the present case only extends upto Rs. 2,000 each, in the case of Bachan Singh
and Narinder Nath". In vies of the limit on the insurer's liability in
respect of each passenger, the argument on the construction of the words
"any one accident" had no relevance and was therefore neither made
nor considered by the Court. Different considerations may arise under clause
(b), as amended by Act 56 of 1969, but we do not propose to make any
observations on that aspect of the matter, since it does not directly arise
before us.
It was suggested that the interpretation
which we are putting on s. 95 (2) (a) will create difficulties in cases where
the insured also incurs liability under the Workmen's Compensation Act, 1923 in
respect of the death of, or bodily injury to, employees (other than the
driver), not exceeding six in number, being carried in the vehicle. It is true
that under section 95 (2) (a), the liability of the insured and therefore the
insurer's indemnity includes the liability of the aforesaid description under
the Act of 1923. But that is a matter of apportionment which may require a
rateable deduction to be made from the compensation payable to each victim,
depending upon the quantum of compensation payable under the Act of 1923 to
employees carried in the goods vehicle.
879 We cannot part with this case without
impressing upto the A Government, once again, the urgent need to provide by law
for the payment of reasonable amounts of compensation, without contest, to
victims of road accidents. We find that road accidents involving passengers
travelling by rail or public buses are usually followed by an official announcement
of payment of ex gratia sums to victims, varying between five hundred and two
thousand rupees or so.
That is a niggardly recognition of the
State's obligation to its people particularly so when the frequency of
accidents involving the public transport system has increased beyond believable
limits. The newspaper reports of August and September 1981 regarding deaths and
injuries caused in such accidents have a sorry story to tell. But we need not
reproduce figures depending upon newspaper assessment because, the newspapers
of September 18, 1981 carry the report of a statement made by the Union
Minister of State for Shipping and Transport before the North Zone goods
transport operators ...that 20,000 persons were killed and
1.5 lakh were injured in highway accidents
during 1980. We wonder whether adequate compensation was paid to this large
mass of suffering humanity. In any event, the need to provide by law for the
payment of adequate compensation without contest to such victims can no longer
be denied or disputed. It was four years ago that this Court sounded a warning
and a reminder (1):
"With the emergence of an ultra-modern
age which has led to strides of progress in all spheres of life, we have
switched from fast to faster vehicular traffic which has come as a boon to
many, though some times in the case of some it has also proved to be a
misfortune The time is ripe for serious consideration of creating no-fault
liability. Having regard to the directive principles of State policy, the
poverty of the ordinary run of victims of automobile accidents, the compulsory
nature of insurance of motor vehicles, the nationalisation of general insurance
companies and the expanding trends towards nationalisation of bus transport,
the law of torts based on no-fault needs reform.
".... it is only just and fair that the
Legislature should make a suitable provision so as to pay adequate compensation
by properly evaluating the precious life of a 880 citizen in its true
perspective rather than devaluing human lives on the basis of an artificial
mathematical formula. It is common knowledge that where a passenger travelling
by a plane dies in an accident, he gets a compensation of Rs. 1,00,000 or like
large sums, and yet when death comes to him not through a plane but through a
motor vehicle he is entitled only to Rs. 2,000. Does it indicate that the life
of a passenger travelling by plane becomes more precious merely because he has
chosen a particular conveyance and the value of his life is considerably
reduced if he happens to choose a conveyance of a lesser value like a motor
vehicle. Such an invidious distinction is absolutely shocking to any judicial
or social conscience and yet s. 95 (2) (d) of the Motor Vehicles Act seems to
suggest such a distinction. We hope and trust that our law makers will give
serious attention to this aspect of the matter and remove this serious lacuna
in s. 95 (2) (d) of the Motor Vehicles Act. We would also like to suggest that
instead of limiting the liability of the Insurance Companies to a specified sum
of money as representing the value of human life, the amount should be left to
be determined by a Court in the special circumstances of each case. We further
hope our suggestions will be duly implemented and the observations of the
highest Court of the country do not become a mere pious wish. ' (per Fazal Ali
J, pp. 945, 946, 950, 951).
These observations are still languishing in
the cold storage of pious wishes. With the emergence of the General Insurance
Corporation which has taken over general insurance business of all kinds,
including motor vehicles insurance, it should be easy to give statutory recognition
to the State's obligation to compensate victims of road accidents promptly,
adequately and without contest.
We are happy to note that the Gujarat High
Court, by its judgment under appeal, took a just, correct and realistic view of
the matter by holding that, under the statutory policy, the appellant insurance
company is liable to pay the full amount of compensation to the heirs of the
driver of the car and to the passenger who was travelling in the car, each
amount being less than Rs. 20,000.
881 In the result the appeals are dismissed
with costs in separate sets in favour of respondents 1 (a) to 1 (g) who are the
heirs of the deceased Ajit Sinha and in favour of respondents 3 to 6 who are
the heirs of Jadavji Keshavji Modi since deceased.
N.V.K. Appeals dismissed.
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