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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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