NATIONAL INSURANCE CO LTD Vs. MADHAB CHANDRA DAS

JUDGEMENT

(1.) NATIONAL Insurance Co. Ltd. (hereinafter referred to as 'the insurer') calls in question the legality of the judgment passed by the Third Motor Accidents Claims Tribunal, Puri (in short, 'the Tribunal') holding it liable to pay the compensation awarded in favour of respondent Nos. 1 and 2 (hereinafter referred to as 'the claimants') in this appeal. The appeal has been filed under Section 110 -D of the Motor Vehicles Act, 1939 (referred to as 'the old Act' hereinafter).

(2.) A brief reference to the factual position is necessary for disposal of this appeal. One Basudev Das (hereinafter referred to as 'the deceased') was an ice -cream seller, who lost his life in an accident wherein an auto -rickshaw bearing registration No. ORP 9530 was involved. Though the accident took place on 16.10.1978 the deceased breathed his last on 27.10.1978. The parents of the deceased (respondent Nos. 1 and 2) lodged a claim for compensation against Balaram Das (hereinafter referred to as 'the insured') and the insurer. Though there is some amount of dispute as to whether the appellant had insured the vehicle and whether Balaram Das was legally insured, for the sake of convenience I have used the terms 'insurer' and 'insured'. The insurer resisted the claim of the claimants on the ground that the vehicle was not validly insured and, therefore, it had no liability. The issue of a certificate of insurance was not disputed. Payment of premium, however, was disputed. According to the insurer, no amount was paid and in good faith the certificate of insurance was issued which was subsequently cancelled when it was detected that the premium had not been paid. The Tribunal looked into the various documents which were filed before it and observed that the certificate of insurance admittedly issued was valid from 13.9.1978 to 12.9.1979 and not from 23.5.1978 to 22.5.1979 as claimed by the insurer. A letter addressed by the Branch Manager, Bhubaneswar, of the insurer to the Regional Transport Officer, Puri, dated 23.5.1978, indicated that the insurance certificate in respect of the offending vehicle was being cancelled due to non -payment of insurance premium. The said letter was acknowledged on 7.11.1978 by the Regional Transport Officer, Puri, as evident from the endorsement in the letter itself which was marked as Exh. B by the Tribunal. It was also indicated that the original insurance certificate No. 395/77/78. I.Z. 400 and No. 419/77/78. I.Z. 400 related to the period from 13.9.1978 to 12.9.1979 and, therefore, the certificate of insurance was to be cancelled from the date of issue. It was also indicated that the proposal form had not been received. Placing reliance on Exh. A, it was stated that the concerned certificate issued in favour of one Rajkishore Ray was issued on 6.11.1978 in lieu of certificate No. 472/003/419/77/78. The Tribunal found it interesting that the letter which was purportedly written on 23.5.1978 was to the effect that the insurance certificate was valid from 13.9.1978 to 12.9.1979. No satisfactoiy explanation was given for this apparently confusing mention regarding the dates. It further observed that after the accident, no proceeding for cancellation of the certificate after compliance with the provisions of Section 105 of the old Act as required under Section 96(2) was commenced. A definite conclusion was arrived at that cancellation of the insurance certificate was not validly done and has no effect on the validity of the insurance certificate which was in force on the date of occurrence. It was also observed that there was no material to show that the original and the duplicate certificates were issued to the insured under mistake and there was no evidence regarding compliance with Section 104 of the old Act. Accordingly, the sum of Rs. 31,020/ - with interest at the rate of 12 per cent per annum was awarded.

(3.) IT is true that in the new Act there is no provision corresponding to Section 105 of the old Act. Absence of such a provision would not render the provision of Section 105 of the old Act to be directory. Whether a provision is directory or mandatory would depend on several factors. There is no universal rule to aid in determining whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of the court to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed. (See H.N. Rishbud v. State of Delhi AIR 1955 SC 196). There are no ready tests or invariable formulae to determine whether a particular provision in a statute is mandatory or directory. The broad purpose of the statute is important. The object of the particular provision must be considered. The link between the two is most important. The weighing of the consequence of holding a provision to be mandatory or directory is vital and, more often than not, determinative of the very question whether the provision is mandatory or directory. Proof of prejudice is necessary to invalidate the act complained of. (See Dalchand v. Municipal Corporation, Bhopal AIR 1983 SC 303). The difference between a mandatory rule and a directory rule is that while the former must be strictly observed, in the case of the latter, substantial compliance may be sufficient to achieve the object regarding which the rule is enacted. (See Shiarif -ud -Din v. Abdul Gani Lone AIR 1980 SC 303). The determinative factor is the intent of the law -maker. (See Ramchandra Keshav Adke v. Govind Joti Chavare AIR 1975 SC 915; State of Mysore v. V.K. Kangan AIR 1975 SC 2190 and Govind Lal Chaggan Lal Patel v. Agriculture Produce Market Committee AIR 1976 SC 263). The use of the term 'shall' does not conclude the matter. The word 'shall' does not always mean that provision is obligatory and not permissive. The term 'shall' is construed as 'may' under certain circumstances. The use of the term 'shall' in a statute, though generally taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding or the outcome of the proceeding would be invalid.