UNITED INDIA INSURANCE COMPANY LTD Vs. SHABNAM

JUDGEMENT

(1.) HEARD the learned counsel for the appellant.

(2.) THIS appeal is directed against the interim award dated 14. 11. 1995 passed by the Motor Accident Claims Tribunal, Udaipur u/s. 140 of the Motor Vehicles Act, 1988 awarding an amount of Rs. 25, 000/- to the respondents on no fault liability. The learned counsel for the appellant has submitted that the accident took place on 02. 07. 1994 and on that day the amount payable u/s. 140 of the Motor Vehicles Act, 1988 for an injury was a sum of Rs. 12, 000/ -. Regarding the amendment which came into force on 14. 04. 1994, whereby amount of compensation payable u/s. 140 of the Motor Vehicles Act for an injury was enhanced to Rs. 25, 000/-, it is submitted by the learned counsel for the appellant that this amendment cannot the applied retrospectively and, therefore, the Motor Accident Claims Tribunal, Udaipur was not justified in awarding the sum of Rs. 25, 000/- to the respondents u/s. 140 of the Motor Vehicles Act. In support of his submission the learned counsel for the appellant has placed reliance on the decision of the learned Single Judge of this Court given in National Insurance Company Ltd. vs. Heera and others (1 ).

(3.) IN view of the decision of the Hon'ble Supreme Court, it can be said without any hesitation that at the time of issuing the insurance policy incorporating the statutory liability under the Motor Vehicles Act it is open for the insurance company either to mention in the policy itself the limits and the legal liability or merely to refer to the relevant provisions under which the liability has been imposed. If the law has been mentioned in the policy itself, then the liability would be to the extent prescribed by such law and it is later amended in the law during the contingency of the policy from alternating the statutory liability of the insurance company to pay the compensation. On the other hand, if the insurance policy does not contain the legal provisions and merely refers to the law imposing statutory liability, the liability of the insurance company to pay compensation will have to be determined with reference to the law as in force on the date of the accident because the cause of action for claiming compensation under the policy issued by the insurance company arises on the date of accident. The date on which the cause of action accrues to the claimants is the date on which the liability to pay the compensation to the claimants arises. There cannot be two separate days, one for accrual of the cause of action and the other for accrual of liability to pay compensation. To sum up the decision of the Hon'ble Supreme Court in Padma Srinivasan vs. Premier INsurance Co. Ltd. (supra), lays down the law that in the absence of limit of liability incorporated in the insurance policy itself, the extent of liability of the insurance policy will have to be determined in accordance with the law enforced on the date of the accident. IN view of the aforesaid decision of the Hon'ble Supreme Court, the view taken by the Division Bench of this Court in R. S. R. T. C. vs. Ogam and Other (supra) does not appear to be a good law. IN the judgment of the Hon'ble Supreme Court there is nothing to indicate that the liability of the insurance company to pay the amount under the insurance policy can be regarded as a liability under the procedural law. On the other hand the judgment shows that the liability of the insurance company was considered on the footings that such liability was under a substantive law for the application of which the terms and conditions of the policy as well as the accrual of the cause of action were relevant. The view taken by the Division Bench that the payment of no fault compensation is regarding the procedure which an Accident Claims Tribunal has to follow and enhance of a normal compensation from Rs. 15, 000/- to Rs. 25, 000/- is only a procedural matter, does not appear to be correct in view of the view taken by the Hon'ble Supreme Court. So far as the retrospectivity of the amended provisions of the Motor Vehicles Act is concerned, the Division Bench has held that the provisions of this section confer the prospective measure of benefit and no question of retrospective operation of the provisions of New Act arises. The Division Bench has held that even if the provisions in question or by prospective amendment, the benefit of the new Act would be available to the claimants if the Tribunal is called up to ground the benefit under new provisions after coming into force of the New Act. The aforesaid view is based on the assumption that Sec. 140 of the Motor Vehicles Act, 1988 gives a completely independent right. IN view of the decision of the Hon'ble Supreme Court in Padma Srinivasan vs. Premier INsurance Company Ltd. (supra), the extent of liability of the insurance company, is to be determined with reference to the law applicable on the date of accident, if the extent of the statutory liability has not been mentioned in the insurance policy itself and the insurance policy merely refers to the statutory liability, by necessary implication, the liability to pay compensation u/s. 140 of the Motor Vehicles Act, 1988 cannot be said to be independent of the insurance policy issued by the insurance company. Hence, the view taken by the Division Bench appears to be no more good law in view of the Hon'ble Supreme Court. So far as the overriding effect manifested by the Sec. 144 of the Motor Vehicles Act, it may be pointed out that a similar provision is present in sec. 92 (E) of the Motor Vehicles Act, 1939. Assuming that Sec. 144 of the Motor Vehicles Act applies to all other laws including Motor Vehicles Act, 1939. The provisions of this Section cannot be used for the purpose of laying down any law other than the law laid down by the Hon'ble Supreme Court in Padma Srinivasan vs. Premier INsurance Co. Ltd. (supra) for determining the liability of the insurance company. Sec. 144 of the Motor Vehicles Act nowhere provides that the cause of action for the purpose of award for compensation u/s. 140 shall be deemed to be any date other than the date of accident nor there is anything in Sec. 144 to indicate that the date of presentation of application for interim award u/s. 140 of the Motor Vehicles Act is to be regarded as the date of accrual of cause of action for the purpose of compensation awarded u/s. 140 of the Motor Vehicles Act.