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CASE NO.:

Appeal (civil) 16 of 2004

PETITIONER:

M/s. National Insurance Co. Ltd.

RESPONDENT:

Baljit Kaur and Ors.

DATE OF JUDGMENT: 06/01/2004

BENCH:

CJI., V. N. Khare,S.B. Sinha & Dr. AR. Lakshmanan.

JUDGMENT:

JUDGMENT

(Arising out of S.L.P. [C] No. 17763 of 2001)

WITH

CIVIL APPEAL NO. 17/04 (@ SLP (C) No. 17837/01)

CIVIL APPEAL NO. 18/04 (@ SLP (C) No. 18027/01)

CIVIL APPEAL NO. 20/04 (@ SLP (C) No. 5220/02)

CIVIL APPEAL NO. 27/04 (@ SLP (C) No. 5225/02)

CIVIL APPEAL NO. 28/04 (@ SLP (C) No. 6045/02)

CIVIL APPEAL NO. 26/04 (@ SLP (C) No. 6046/02)

CIVIL APPEAL NO. 25/04 (@ SLP (C) No. 6047/02)

CIVIL APPEAL NO. 24/04 (@ SLP (C) No. 6048/02)

CIVIL APPEAL NO. 23/04 (@ SLP (C) No. 6049/02)

CIVIL APPEAL NO. 22/04 (@ SLP (C) No. 6050/02)

CIVIL APPEAL NO. 21/04 (@ SLP (C) No. 6051/02)

V.N. KHARE, CJI.

Leave granted.

The question that arises for consideration in these appeals is whether

an insurance policy in respect of a goods vehicle would also cover gratuitous

passengers, in view of the legislative amendment in 1994 to Section 147 of

the Motor Vehicles Act, 1988.

The first respondent herein preferred a claim petition for

compensation before the Motor Accident Claims Tribunal, Ludhiana

(hereinafter referred to as 'the Claims Tribunal'), in view of the death of her

sixteen year old son, Sukhwinder Singh, due to the allegedly reckless driving

by the second respondent and driver of the goods vehicle, bearing Number

PB-10U-8937, on February 19, 1999. It was found by the Claims Tribunal

that the victim, who was returning in the truck from a marriage ceremony,

died as a result of the rash and negligent driving by the driver of the goods

vehicle, the second respondent herein. It was an admitted fact that the said

vehicle was insured with the appellant insurance company.

The Claims Tribunal relying upon the decision of this Court in New

India Assurance Co. v. Satpal Singh (2000) 1 SCC 237, accepted the claim

petition, and rejected the contention of the appellant insurance company that

the concerned vehicle being a goods vehicle, it would not have to incur any

liability with respect to passengers transported in the vehicle. It further

directed the appellant to pay an amount of Rs.1,32,000/- as compensation,

with interest at the rate of 9% from the date of application. The High Court

upheld the verdict of the Claims Tribunal on appeal, with the further

direction that in the event the owner, the third respondent herein, had

committed any breach, the appellant insurer would be entitled to recover the

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amount of compensation from him.

It may be noticed at the outset that the Judgment rendered in Satpal

Singh case (supra) has been subsequently reversed by a three-judge Bench

of this Court in New India Assurance Co. Ltd. Vs. Asha Rani (2003) 2 SCC

223, which was followed in the case of Oriental Insurance Co. Ltd. Vs.

Devireddy Konda Reddy (2003) 2 SCC 339.

Reference in this connection may also be made to National Insurance

Co. Ltd. v. Ajit Kumar and Others [JT 2003 (7) SC 520].

In the case of New India Assurance Co. Ltd. Vs. Asha Rani (Supra),

it was held that the previous decision in Satpal Singh Case, was incorrectly

rendered, and that the words "any person" as used in Section 147 of the

Motor Vehicles Act, 1988, would not include passengers in the goods

vehicle, but would rather be confined to the legislative intent to provide for

third party risk. The question in the subsequent judgment in Oriental

Insurance Co. Ltd. Vs. Devireddy Konda Reddy (supra), involved, as in the

present case, the liability of the insurance company in the event of death

caused to a gratuitous passenger traveling in a goods vehicle. The Court

held that the Tribunal and the High Court were not justified in placing

reliance upon Satpal Singh case (supra), in view of its reversal by Asha

Rani (supra), and that, accordingly, the insurer would not be liable to pay

compensation to the family of the victim who was traveling in a goods

vehicle.

It was contended by the learned counsel appearing on behalf of the

second and third respondents, the driver and owner of the vehicle

respectively, that the decision in Asha Rani case (supra) and Konda Reddy

case (supra) were delivered with respect to the position prevailing prior to

the amendment of Section 147 by the Motor Vehicles (Amendment) Act,

1994. As such, the effect of the legislative amendment was not in question

in the above cases, and therefore, the law laid down by these decisions

would not be considered as binding law in view of coming into force of the

said amendment. Since the accident in the present instance occurred in

1999, this Court would now have to consider afresh the impact of the 1994

amendment, and could not consider itself circumscribed by the

aforementioned decisions in the Asha Rani case (supra) and Konda Reddy

case (supra) which both involved motor accidents predating the said

amendment.

It is the submission of the respondent vehicle owner and driver that

the insertion, by way of legislative amendment, of the words "including

owner of the goods or his authorized representative carried in the vehicle" in

Section 147 would result in the inference that gratuitous passengers would as

well be covered by the scope of the provision. Any other construction, it

was urged by the learned counsel for the second and third respondents,

would render the effect of the words "any person" as completely redundant.

The material portion of the provision contained in Section 147 of the

Motor Vehicles Act, 1988, as amended by the Motor Vehicles (Amendment)

Act, 1994 reads as follows:

"147. Requirements of policies and limits of

liability- (1) In order to comply with the requirements of

this Chapter, a policy of insurance must be a policy

which-

(a)

(b) insures the person or classes of persons

specified in the policy to the extent specified in sub-

section (2) \026

(i) against any liability which may be

incurred by him in respect of the

death of or bodily injury to any

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person, including owner of the goods

or his authorized representative

carried in the vehicle or damage to

any property of a third party caused

by or arising out of the use of the

vehicle in a public place;

(ii) * * *"

(emphasis added)

Admittedly, it is incumbent upon a Court of law to eschew that

interpretation of a statute that would serve to negate its true import, or to

render the words of any provision as superfluous. Nonetheless, we find no

merit in the above submissions proffered by the learned counsel for the

respondent. The effect of the 1994 amendment on Section 147 is

unambiguous. Where earlier, the words "any person" could be held not to

include the owner of the goods or his authorized representative travelling in

the goods vehicle, Parliament has now made it clear that such a construction

is no longer possible. The scope of this rationale does not, however, extend

to cover the class of cases where gratuitous passengers for whom no

insurance policy was envisaged, and for whom no insurance premium was

paid, employ the goods vehicle as a medium of conveyance.

We find ourselves unable, furthermore, to countenance the contention

of the respondents that the words "any person" as used in Section 147 of the

Motor Vehicles Act, would be rendered otiose by an interpretation that

removed gratuitous passengers from the ambit of the same. It was observed

by this Court in the case concerning New India Assurance Co. Ltd. Vs.

Asha Rani (supra) that the true purport of the words "any person" is to be

found in the liability of the insurer for third party risk, which was sought to

be provided for by the enactment.

It is pertinent to note that a statutory liability enjoined upon an owner

of the vehicle to compulsorily insure it so as to cover the liability in respect

of a person who was travelling in a vehicle pursuant to a contract of

employment in terms of proviso (ii) appended to Section 95 of the 1939 Act

does not occur in Section 147 of the 1988 Act. The changes effected in the

1988 Act vis-`-vis the 1939 Act as regard definitions of 'goods vehicle',

'public service vehicle' and 'stage carriage' have also a bearing on the subject

inasmuch as the concept of any goods carriage carrying any passenger or

any other person was not contemplated.

In a situation of this nature, the doctrine of suppression of mischief

rule as adumbrated in Heydon's case [3 Co Rep 7a, 76 ER 637] shall apply.

Such an amendment was made by the Parliament consciously. Having

regard to the definition of 'goods carriage' vis-`-vis 'public service vehicle', it

is clear that whereas the goods carriage carrying any passenger is not

contemplated under the 1988 Act as the same must be used solely for

carrying the goods.

In Halsbury's Laws of England, Volume 44(1), fourth reissue, para

1474, pp 906-07, it is stated :

"Parliament intends that an enactment shall

remedy a particular mischief and it is therefore

presumed that Parliament intends that the court,

when considering, in relation to the facts of the

instant case, which of the opposing constructions

of the enactment corresponds to its legal meaning,

should find a construction which applies the

remedy provided by it in such a way as to suppress

that mischief. The doctrine originates in Heydon's

case where the Barons of the Exchequer resolved

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that for the sure and true interpretation of all

statutes in general (be they penal or beneficial,

restrictive or enlarging of the common law), four

things are to be discerned and considered :

(1) what was the common law before the

making of the Act;

(2) what was the mischief and defect for which

the common law did not provide;

(3) what remedy Parliament has resolved and

appointed to cure the disease of the

commonwealth; and

(4) the true reason of the remedy,

and then the office of all the judges is always to

make such construction as shall :

(a) suppress the mischief and advance the

remedy; and

(b) suppress subtle inventions and

evasions for the continuance of the

mischief pro privato commodo (for

private benefit); and

(c) add force and life to the cure and

remedy according to the true intent of

the makers of the Act pro publico (for

the public good)."

Heydon's Rule has been applied by this Court in a large number of

cases in order to suppress the mischief which was intended to be remedied as

against the literal rule which could have otherwise covered the field. [See for

example, Smt. PEK Kalliani Amma and Others vs. K. Devi and Others,

[AIR 1996 SC 1963; Bengal Immunity Co. Ltd. vs. State of Bihar and

Others, AIR 1955 SC 661; and Goodyear India Ltd. vs. State of Haryana and

Another, AIR 1990 SC 781].

By reason of the 1994 Amendment what was added is "including the

owner of the goods or his authorised representative carried in the vehicle".

The liability of the owner of the vehicle to insure it compulsorily, thus, by

reason of the aforementioned amendment included only the owner of the

goods or his authorised representative carried in the vehicle besides the third

parties. The intention of the Parliament, therefore, could not have been that

the words 'any person' occurring in Section 147 would cover all persons who

were travelling in a goods carriage in any capacity whatsoever. If such was

the intention there was no necessity of the Parliament to carry out an

amendment inasmuch as expression 'any person' contained in sub-clause (i)

of clause (b) of sub-section (1) of Section 147 would have included the

owner of the goods or his authorised representative besides the passengers

who are gratuitous or otherwise.

The observations made in this connection by the Court in Asha Rani

case (supra) to which one of us, Sinha, J, was a party, however, bear

repetition:

"26. In view of the changes in the relevant

provisions in the 1988 Act vis-`-vis the 1939 Act,

we are of the opinion that the meaning of the

words "any person" must also be attributed having

regard to the context in which they have been used

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i.e. "a third party". Keeping in view the provisions

of the 1988 Act, we are of the opinion that as the

provisions thereof do not enjoin any statutory

liability on the owner of a vehicle to get his vehicle

insured for any passenger traveling in a goods

vehicle, the insurers would not be liable therefor."

In Asha Rani (supra), it has been noticed that sub-clause (i) of clause

(b) of sub-section (1) of Section 147 of the 1988 Act speaks of liability

which may be incurred by the owner of a vehicle in respect of death of or

bodily injury to any person or damage to any property of a third party caused

by or arising out of the use of the vehicle in a public place. Furthermore, an

owner of a passenger-carrying vehicle must pay premium for covering the

risks of the passengers travelling in the vehicle. The premium in view of the

1994 Amendment would only cover a third party as also the owner of the

goods or his authorised representative and not any passenger carried in a

goods vehicle whether for hire or reward or otherwise.

It is therefore, manifest that in spite of the amendment of 1994, the

effect of the provision contained in Section 147 with respect to persons

other than the owner of the goods or his authorized representative remains

the same. Although the owner of the goods or his authorized representative

would now be covered by the policy of insurance in respect of a goods

vehicle, it was not the intention of the legislature to provide for the liability

of the insurer with respect to passengers, especially gratuitous passengers,

who were neither contemplated at the time the contract of insurance was

entered into, nor any premium was paid to the extent of the benefit of

insurance to such category of people.

The upshot of the aforementioned discussions is that instead and in

place of the insurer the owner of the vehicle shall be liable to satisfy the

decree. The question, however, would be as to whether keeping in view the

fact that the law was not clear so long such a direction would be fair and

equitable. We do not think so. We, therefore, clarify the legal position

which shall have prospective effect. The Tribunal as also the High Court had

proceeded in terms of the decisions of this Court in Satpal Singh (supra).

The said decision has been overruled only in Asha Rani (supra).

We, therefore, are of the opinion that the interest of justice will be sub-

served if the appellant herein is directed to satisfy the awarded amount in

favour of the claimant if not already satisfied and recover the same from the

owner of the vehicle. For the purpose of such recovery, it would not be

necessary for the insurer to file a separate suit but it may initiate a

proceeding before the executing court as if the dispute between the insurer

and the owner was the subject matter of determination before the tribunal

and the issue is decided against the owner and in favour of the insurer. We

have issued the aforementioned directions having regard to the scope and

purport of Section 168 of the Motor Vehicles Act, 1988 in terms whereof it

is not only entitled to determine the amount of claim as put forth by the

claimant for recovery thereof from the insurer, owner or driver of the vehicle

jointly or severally but also the dispute between the insurer on the one hand

and the owner or driver of the vehicle involved in the accident inasmuch as

can be resolved by the tribunal in such a proceeding.

For the aforementioned reasons, the appeals are partly allowed to the

aforementioned extent and subject to the directions aforementioned. But

there shall be no order as to costs.

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