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                                                            REPORTABLE

                  IN THE SUPREME COURT OF INDIA

                   CIVIL APPELLATE JURISDICTION

                CIVIL APPEAL NO. 3406              OF 2008      [Arising out of SLP (Civil) No. 12575 of 2008 (@ CC 1875 of 2008)]

State of Punjab & Ors.                                    ...Appellants

                                      Versus

Bhajan Kaur & Ors.                                        ...Respondents

                            JUDGMENT

S.B. SINHA, J :

1.      Delay condoned.

2.      Leave granted.

3.      Whether Section 140 of the Motor Vehicles Act, 1988 (for short "the

1988 Act") will have a retrospective effect is the question involved herein.

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4.    An accident took place on 8.01.1983. The deceased was a driver of a

truck bearing No. PUC 9005.       It collided with a bus belonging to the

appellant bearing registration No. PBL-2310. It was being driven by one

Sampuran Singh. A claim petition was filed in relation to the said accident

purported to be in terms of Section 110-A of the Motor Vehicles Act, 1939

(for short "the 1939 Act").

5.    Appellants herein denied and disputed their liabilities. Several issues

were framed by the learned Tribunal. The said claim petition was dismissed

by an award dated 12.10.1984.

     A First Appeal was preferred by the respondent No. 1 against the said

award dated 12.10.1984.       A learned Single Judge of the High Court

disposed of the same awarding a sum of Rs. 15,000/- by way of

compensation by way of no fault liability.      An intra-court appeal was

preferred thereagainst. Relying on or on the basis of a decision of the said

Court in Mosmi and Another v. Ram Kumar and others [1992 ACJ 192], it

was held:

            "In view of the authoritative pronouncement, this              appeal is disposed of by holding that the claimant

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            would be entitled to a sum of Rs. 50,000/- (Rs.              Fifty thousand only) under "no fault liability". In              addition thereto, they would also be entitled to              interest @ 9% per annum from the date of              application till payment. However, in case, any              amount was paid to the claimant in view of the              order dated 31.8.1993 passed by this Court, the              same shall be deducted out of this amount."

6.    Before adverting to the questions raised in this appeal, we may notice

that a statement was made at the bar that the State is not interested in the

matter but only intended to get the law settled. We, therefore, did not issue

any notice to the respondents and requested Ms. Meenakshi Arora, learned

counsel to assist us in the matter.

7.    Section 92-A of the 1939 Act provided for payment of a sum of Rs.

15,000/- by way of no fault liability. It was raised to Rs. 25,000/- by reason

of Section 140 of the 1988 Act. However, with effect from 14.11.1994, by

Amending Act 54 of 1994, the quantum of the amount payable has been

raised to Rs. 50,000/-.

8.    Indisputably, under the 1939 Act only a sum of Rs. 15,000/- was

payable by way of no fault liability.

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     The question which arises for consideration in this appeal is as to

whether it has a retrospective effect. In our opinion, it does not have.

9.    A statute is presumed to be prospective unless held to be

retrospective, either expressly or by necessary implication. A substantive

law is presumed to be prospective. It is one of the facets of rule of law.

     Section 92-A of the 1939 Act created a right and a liability on the

owner of the vehicle. It is a statutory liability. Per se it is not a tortuous

liability. Where a right is created by an enactment, in absence of a clear

provision in the statute, it is not to be applied retrospectively.

10.   Ms. Arora, however, has drawn our attention to a decision of the

Kerala High Court in United India Insurance Co. Ltd. v. Padmavathy and

others [1990 ACJ 751]. The Kerala High Court referred to a decision of this

Court in M.K. Kunhimohammed v. P.A. Ahmedkutty [AIR 1987 SC 2158]

wherein the following observations were made:

            "Having regard to the inflationary pressures and              the consequent loss of purchasing power of the              rupee we feel that the amount of Rs. 15,000 and              the amount of Rs. 7,500 in the above provision

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     appear to have become unrealistic. We, therefore,       suggest that the limits of compensation in respect       of death and in respect of permanent disablement,       payable in the event of there being no proof of       fault, should be raised adequately to meet the       current situation."

In Padmavathy (supra), the Kerala High Court held:

     "11. The said suggestion of the Supreme Court       was given due respect by the law-making       machinery when the Bill was finally introduced in       Parliament. This fact can be discerned from the       Statement of Objects and Reasons prefaced in the       new Act. Therefore, in effect, Parliament has only       retained the same right which was conferred on the       victims, through Chapter VIIA of the repealed       Act. The difference in the quantum of       compensation is only intended to make the right       realistic and on a par with the amount fixed earlier.       Hence, Section 6 of the General Clauses Act       would not impede the enforcement of Section 140       of the new Act in relation to an accident which       occurred prior to the coming into force of the new       Act.

     12. For yet another reason, we can support the said       conclusion. Section 6 of the General Clauses Act       permits switching over to the repealed Act only if       a different intention does not appear in the new       statute. Such a different intention can be discerned       from the new Act. It is in Chapter X of the new       Act that provisions regarding "no fault liability"

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              have been included. The Chapter" starts with                Section 140 and ends with Section 144. The last                Section reads as follows : "The provisions of this                Chapter shall have effect notwithstanding                anything contained in any other provision of this                Act or of any other law for the time being in                force". The different intention manifested in the                new Act is that the provisions in Chapter X should                get predominance over all other laws. The                provisions contained in that Chapter must be given                effect to notwithstanding any contrary provision in                any other law including Section 6 of the General                Clauses Act. All other provisions, therefore, must                yield to the provisions contained in Chapter X of                the new Act. This is the legislative intention                manifested through Section 144 of the new Act."

11.      In the decision of the Punjab and Haryana High Court in Mosmi

(supra), reliance has been placed upon the judgment of the Kerala High

Court.

12.      With the greatest of respect to the learned Judges of the Kerala and

Punjab & Haryana High Court, we could not persuade ourselves to agree

with the said view.

13.      No reason has been assigned as to why the 1988 Act should be held

to be retrospective in character. The rights and liabilities of the parties are

determined when cause of action for filing the claim petition arises. As

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indicated hereinbefore, the liability under the Act is a statutory liability.

The liability could, thus, be made retrospective only by reason of a statute

or statutory rules.    It was required to be so stated expressly by the

Parliament.

     Applying the principles of interpretation of statute, the 1988 Act

cannot be given retrospective effect, more particularly, when it came into

force on or about 1.07.1989.

14.   Reference to Section 6 of the General Clauses Act, in our opinion, is

misplaced. Section 217 of the 1988 Act contains the repeal and saving

clause. Section 140 of the 1988 Act does not find place in various clauses

contained in Sub-section (2) of Section 217 of the 1988 Act. Sub-section

(4) of Section 217 of the 1988 Act reads, thus:

             "(4) The mention of particular matters in this               section shall not be held to prejudice or affect the               general application of section 6 of the General               Clauses Act, 1897 (10 of 1897) with regard to the               effect of repeals."

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15.   What is, therefore, otherwise saved in Section 6 of the General

Clauses Act inter alia is the right. It reads as under:

            "6 Effect of repeal.--Where this Act, or any              Central Act or Regulation made after the              commencement of this Act,              repeals any enactment hitherto made or hereafter              to be made, then, unless a different intention              appears, the repeal shall not--

             (a) ***

            (b) ***

            (c) affect any right, privilege, obligation or              liability acquired, accrued or incurred under any              enactment so repealed;..."

16.   Section 6 of the General Clauses Act, therefore, inter alia saves a

right accrued and/ or a liability incurred. It does not create a right. When

Section 6 applies only an existing right is saved thereby. The existing right

of a party has to be determined on the basis of the statute which was

applicable and not under the new one. If a new Act confers a right, it does

so with prospective effect when it comes into force, unless expressly stated

otherwise.

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     Section 140 of the 1988 Act does not contain any procedural

provision so as to construe it to have retrospective effect. It cannot enlarge

any right. Rights of the parties are to be determined on the basis of the law

as it then stood, viz., before the new Act come into force.

17.   It is now well-settled that a change in the substantive law, as opposed

to adjective law, would not affect the pending litigation unless the

legislature has enacted otherwise, either expressly or by necessary

implication.

18.   In Garikapati v. Subbaiah Chowdhary [AIR 1957 SC 540], the law is

stated, thus:

                  "...The golden rule of construction is that, in                 the absence of anything in the enactment to show                 that it is to have retrospective operation, it cannot                 be so construed as to have the effect of altering the                 law applicable to a claim in litigation at the time                 when the Act was passed..."

19.   The question was considered by this Court in Gajraj Singh and Others

v. State Transport Appellate Tribunal and Others [(1997) 1 SCC 650] and

the law was stated in the following terms:

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    "22. Whenever an Act is repealed it must be considered, except as to transactions past and closed, as if it had never existed. The effect thereof is to obliterate the Act completely from the record of Parliament as if it had never been passed; it never existed except for the purpose of those actions which were commenced, prosecuted and concluded while it was an existing law. Legal fiction is one which is not an actual reality and which the law recognises and the court accepts as a reality. Therefore, in case of legal fiction the court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non-existent. The effect of such a legal fiction is that a position which otherwise would not obtain is deemed to obtain under the circumstances. Therefore, when Section 217(1) of the Act repealed Act 4 of 1939 w.e.f. 1-7-1989, the law in Act 4 of 1939 in effect came to be non- existent except as regards the transactions, past and closed or saved.     23. In Crawford’s Interpretation of Law (1989) at p. 626, it is stated that:        "[A]n express repeal will operate to    abrogate an existing law, unless there is some    indication to the contrary, such as a saving    clause. Even existing rights and pending    litigation, both civil and criminal, may be    affected although it is not an uncommon    practice to use the saving clause in order to    preserve existing rights and to exempt pending    litigation." At p. 627, it is stated that:       "[M]oreover, where a repealing clause    expressly refers to a portion of a prior Act, the    remainder of such Act will not usually be    repealed, as a presumption is raised that no

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  further repeal is necessary, unless there is    irreconcilable inconsistency between them. In    like manner, if the repealing clause is by its    terms confined to a particular Act, quoted by    title, it will not be extended to an act upon a    different subject." Section 6 of the GC Act enumerates, inter alia, that where the Act repeals any enactment, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced. In India Tobacco Co. Ltd. v. CTO (SCC at p.           517) in paras 6 and 11, a Bench of three Judges had held that repeal connotes abrogation and obliteration of one statute by another from the statute-book as completely as if it had never been passed. When an Act is repealed, it must be considered, except as to transactions past and closed, as if it had never existed. Repeal is not a matter of mere form but is of substance, depending on the intention of the legislature. If the intention indicated either expressly or by necessary implication in the subsequent statute was to abrogate or wipe off the former enactment wholly or in part, then it would be a case of total or pro tanto repeal.    24. When there is a repeal and simultaneous re- enactment, Section 6 of the GC Act would apply to such a case unless contrary intention can be gathered from the repealing Act. Section 6 would be applicable in such cases unless the new legislation manifests intention inconsistent with or contrary to the application of the section. Such incompatibility would have to be ascertained from

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            all relevant provisions of the new Act. Therefore,              when the repeal is followed by a fresh legislation              on the same subject, the Court would undoubtedly              have to look to the provisions of the new Act only              for the purpose of determining whether the new              Act indicates different intention. The object of              repeal and re-enactment is to obliterate the              Repealed Act and to get rid of certain obsolete              matters."

20.   In Ramesh Singh and Another v. Cinta Devi and Others [(1996) 3

SCC 142] it has clearly been held that Section 217 of the 1988 Act does not

expressly or by necessary implication make the relevant provision

retrospective in operation.

21.   In Zile Singh v. State of Haryana [(2004) 8 SCC 1], a Three-Judge

Bench of this Court, stated the law, thus:

                "17. Maxwell states in his work on              Interpretation of Statutes (12th Edn.) that the rule              against retrospective operation is a presumption              only, and as such it "may be overcome, not only              by express words in the Act but also by              circumstances sufficiently strong to displace it" (p.                     225). If the dominant intention of the              legislature can be clearly and doubtlessly spelt out,              the inhibition contained in the rule against              perpetuity becomes of doubtful applicability as the              "inhibition of the rule" is a matter of degree which

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           would "vary secundum materiam" (p.          226).             Sometimes, where the sense of the statute             demands it or where there has been an obvious             mistake in drafting, a court will be prepared to             substitute another word or phrase for that which             actually appears in the text of the Act (p. 231)."

22.   In Lohia Machines Ltd. and Anr. v. Union of India (UOI) and Ors.

[(1985) 2 SCR 686], this Court held :

           "On the other hand it is quite clear that if the relief             granted is to be withdrawn with retrospective             operation from 1972 the assessees who have             enjoyed the relief for all those years will have to             face a very grave situation. The effect of the             withdrawal of the relief with retrospective             operation will be to impose on the assessee a huge             accumulated financial burden for no fault of the             assessee and this is bound to create a serious             financial problem for the assessee. Apart from the             heavy financial burden which is likely to upset the             economy of the undertaking, the assessee will             have to face other serious problems. On the basis             that the relief was legitimately and legally             available to the assessee, the assessee had             proceeded to act and to arrange its affairs. If the             relief granted is now permitted to be withdrawn             with retrospective operation, the assessee may be             found guilty of violation of provisions of other             statutes and may be visited with penal             consequences..."

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23.   In M/s. Indian Metals and Ferro Alloys Ltd. & Anr. v. State of Orissa

& Ors. [(1987) 3 SCC 189], it was opined :

           "25...we hold that the High Court was not right in             observing that the orders under Section 22-B of             the Act imposing restrictions on consumption of             power could not legally and validly be passed by             the Government "with retrospective effect" in the             middle of a water year. But the position regarding             disallowance of clubbing stands on an entirely             different footing. If a consumer had been allowed             the benefit of clubbing previously, that benefit             cannot be taken away with retrospective effect             thereby saddling him with heavy financial burden             in respect of the past period where he had drawn             and consumed power on the faith of the orders             extending to him the benefit of clubbing..."

24.   In Madishetti Bala Ramul (D) by LRs. v. The Land Acquisition

Officer [2007 (8) SCALE 184], this Court observed:

           "19. In Land Acquisition Officer-cum-DSWO,             A.P. v. B.V. Reddy and Sons, this Court opined             that Section 25 being not a procedural provision             will have no retrospective effect, holding:

           6. Coming to the second question, it is a well-             settled principle of construction that a substantive             provision cannot be retrospective in nature unless             the provision itself indicates the same. The             amended provision of Section 25 nowhere             indicates that the same would have any             retrospective effect. Consequently, therefore, it

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            would apply to all acquisitions made subsequent to              24-9-1984, the date on which Act 68 of 1984 came              into force. The Land Acquisition (Amendment)              Bill of 1982 was introduced in Parliament on 30-              4-1982 and came into operation with effect from              24-9-1984...."

25.   In Ashok Lanka and Anr. v. Rishi Dixit and Ors. [(2005) 5 SCC

598], this Court held:

            "A statute must be read reasonably. A statute              should not read in such a manner which results in              absurdity, A statute, on its plain language,              although postulates a prospective operation, it              cannot be held to be retrospective only because it              would apply for the excise year for which              applications were invited despite the fact that the              selection process made thereunder is over."

26.   The Kerala and Punjab & Haryana High Court proceeded on the basis

that Section 6 of the General Clauses Act will apply. If the same applies, it

would not affect any right, privilege, obligation or liability acquired,

accrued or incurred under any enactment so repealed. If that be so, the old

Act shall apply and not the new one. Construction of a repeal and saving

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clause vis-‘-vis the statute providing for continuation of orders, etc. must be

given the meaning which can be culled out from the statute in question.

27.   In Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector

& ETIO and Others [(2007) 5 SCC 447], this Court held:

            "106. Furthermore, exemption from payment of              tax in favour of the appellants herein would also              constitute a right or privilege. The expression              "privilege" has a wider meaning than right. A              right may be a vested right or an accured right or              an acquired right. Nature of such a right would              depend upon and also vary from statute to statute.              It has been so held by this Court, while construing              Section 6 of the General Clauses Act, in M/s.              Gurcharan Singh Baldev Singh v. Yashwant Singh              and Others [(1992) 1 SCC 428] in the following              terms:

            "...The objective of the provision is to ensure              protection of any right or privilege acquired under              the repealed Act. The only exception to it is              legislative intention to the contrary. That is, the              repealing Act may expressly provide or it may              impliedly provide against continuance of such              right, obligation or liability..."

     We, therefore, are clearly of the opinion that the 1988 Act does not

have any retrospective operation.

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28.   For the reasons aforementioned, the decisions of Kerala and Punjab &

Haryana High Court do not lay down a good law. They are overruled

accordingly. However, as the State has not asked for any relief against the

respondents, this appeal is dismissed. No costs.

                                           ...............................J.                                             [S.B. Sinha]

                                           ................................J.                                             [Lokeshwar Singh Panta] New Delhi; May 08, 2008