Full Judgment Text
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PETITIONER:
MOTOR OWNERS INSURANCE CO. LTD.
Vs.
RESPONDENT:
JADAVJI KESHAVJI MODI & ORS.
DATE OF JUDGMENT29/09/1981
BENCH:
CHANDRACHUD, Y.V. ((CJ)
BENCH:
CHANDRACHUD, Y.V. ((CJ)
FAZALALI, SYED MURTAZA
DESAI, D.A.
CITATION:
1981 AIR 2059 1982 SCR (1) 860
1981 SCC (4) 660 1981 SCALE (3)1529
CITATOR INFO :
R 1987 SC2158 (3,8)
R 1991 SC1769 (12)
R 1992 SC1261 (7)
ACT:
Motor Vehicles Act 1939, S. 95(2) as amended by Motor
Vehicles (Amendment) Act 1956, S. 74-Scope of. "in all"-"any
one accident"-Meaning of,
HEADNOTE:
Section 95 of the Motor Vehicles Act, 1939 prescribes
the requirements of an insurance policy and the limits OF
liability thereunder. By sub-section (1) of section 95, a
policy of insurance must insure the person or classes of
persons specified in the policy to the extent specified in
sub-section (2) against any liability which may be incurred
by him or them in respect of the death of or bodily injury
to any person caused by or arising out of the use of the
vehicle in a public place. Section 95(2) of the Act as it
originally stood read thus:
"95(2): Subject to the proviso to sub-section (I) a
policy of insurance shall cover any liability incurred in
respect of any one accident upto the following limits,
namely:-
(a) where the vehicle is a vehicle used or adapted to
be used for the carriage of goods, a limit of twenty
thousand rupees.. ".
This provision was substituted by a new clause by
section 74 of the Motor Vehicles (Amendment) Act, 1956 with
effect from February 16, 1957. The amended clause read:
"95(2) (a) :-Where the vehicle is a goods vehicle, a
limit of twenty thousand rupees in all, including the
liabilities, if any, arising under the Work men’s
Compensation Act, 1923, in respect of the death of, or
bodily injury to, employees (other Than The driver), not
exceeding six in number, being carried in the vehicle".
This provision underwent further amendment by the Motor
Vehicles (Amendment) Act, 1969 which came into force on
March 7, 1970.
A collision took place between a motor car and a goods
truck in February 1966 as a result of which the driver of
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The car died instantaneously and the person travelling in
the car sustained injuries. The Truck was insured against
third party risk with the appellant-insurance company.
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The heirs and legal representatives of the deceased
field an application before the Motor Accidents Claims
Tribunal, under section 110-D of the Act, claiming
compensation in the sum of Rs. 30,000 for the death caused
in the accident. The person who was injured filed a separate
application asking for compensation of Rs. 10,000 for the
injuries suffered by him. The Tribunal dismissed both the
applications on the ground that respondent No. 3 could not
be said to have been driving the truck rashly and
negligently at the time of the accident.
The claimants filed separate appeals in the High Court,
which awarded a compensation of Rs. 19,125 to the heirs of
the deceased and Rs. 10,000 to the injured person.
In the appeals to this Court it was contended on behalf
of the appellant insurance company: (i) that under clause
(a) of section 95(2) as it stood at the material time, the
liability of the insurer under the statutory policy taken by
the owner of the goods vehicle is limited to Rs. 20,000 in
all and, therefore, the insurer cannot be asked to pay
compensation in excess of that amount, and that the
liability to pay the balance must be fixed on the owner of
the goods vehicle who would be vicariously responsible for
the negligence of his employee who was driving the goods
vehicle, and (ii) that the Amendment Act of 1956 which came
into force on February 16, 1957 introduced the words ’in
all’ in clause (a) and that these words were introduced to
limit the overall liability of the insurer to twenty
thousand rupees
Dismissing the appeals,
^
HELD: 1. The High Court took a just, correct and
realistic view of the matter by holding that, under the
statutory policy the appellant-insurance company is liable
to pay the full amount of compensation to the heirs of the
deceased and to the passenger travelling in the car, each
amount being less than Rs. 20,000. [880 G-H]
The purpose of law is to alleviate, not augment, the
sufferings of the people. The award of compensation depends
upon a variety of factors, including the extent of monetary
deprivation to which the heirs of the deceased are
subjected. [870 G]
3. By common practice and the application of recognised
rules of statutory construction, harsh consequences
following upon an interpretation are not considered as the
governing factor in the construction of a statute, unless
its language is equivocal and ambiguous. [871 E]
4. Clause (a) of section 95 (2) qualifies the extent of
the insurer’s liability by the use of the unambiguous
expression ’in all’ and since that expression was specially
introduced by an amendment, it must be allowed its full
play. The legislature must be presumed to have intended what
it has plainly said. But, clause (a) does not stand alone
and is not the only provision to be considered for
determining the outside limit of the insurer’s liability. In
fact, clause (a) does not even form a complete sentence and
makes no meaning by itself. Like the other clauses (b) to
(d), clause (a) is governed by the opening words of
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section 95 (2) to the effect that "a policy of insurance
shall cover any liability incurred in respect of any one
accident up to the following limits", that is the limits
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laid down in clauses (a) to (d). [871 H-872 B]
5 (i) The expression, ’any one accident’ is susceptible
of two equally reasonable meanings or interpretations. If a
collision occurs between a car and a truck resulting in
injuries to five persons, it is as much plausible to say
that five persons were injured in one accident as it is to
say that each of the five per sons met with an accident. A
bystander looking at the occurrence objectively will be
right in saying that the truck and the car met with an
accident or that they were concerned in one accident. On the
other hand, a person looking at the occurrence subjectively,
like the one who was injured in the collision, will say that
he met with an accident. And so will each of the five
persons who were injured. From their point of view, which is
the relevant point of view, "any one accident" means
"accident to any one ’. In matters involving third party
risks, it is subjective considerations which must prevail
and the occurrence has to be looked at from the point of
view of those who are immediately affected by it.
[872 E-F]
5 (ii) A consideration of preponderating importance in
a matter of this nature is not whether there was any one
transaction which resulted in injuries to many but whether
more than one person was injured, giving rise to more than
one claim or cause of action, even if the injuries were
caused in the course of one single transaction. If more than
one person is injured during the course of the same
transaction, each one of the persons meets with an accident.
[873A-B]
6. The ambiguity in the language used by the
legislature in the opening part of section 95 (2) and the
doubt arising out of the co-relation of that language with
the words ’in all’ which occur in clause (a) must be
resolved by having regard to the underlying legislative
purpose of the provisions, contained in Chapter VIII of the
Act which deals with third party risks. That is a sensitive
process which has to accommodate the claims of the society
as reflected in that purpose. [873 C]
7. In the area of legislative ambiguities courts have
to fill gaps, clear doubts and mitigate hardships. There is
no table of logarithms to guide or govern statutory
construction in this area, which leaves a sufficient and
desirable discretion for the Judges to interpret laws in the
light of their purpose, where the language used by the law-
makers does not yield to one and one meaning only. lt is,
therefore, appropriate to hold that the word "accident" is
used in the expression any one accident" from the point of
view of the various claimants, each of whom is entitled to
make a separate claim for the accident suffered by him and
not from the point of view of the insurer. [873 D, F-G]
8. With the emergence of the General Insurance
Corporation which has taken over general insurance business
of all kinds, including motor vehicle insurance, it should
be easy to give statutory recognition to the State’s
obligation to compensate victims of road accidents,
promptly, adequately and without con test . [880 F]
863
Cabell v. Markham, 148 F. 2d. 737, 739 [1945]; The
South Staffordshire Tramways Company Ltd. v. The Sickness
and Accident Assurance Association Ltd., [1891]1 Q.B.D. 402;
Forney v. Dominion Insurance Co. Ltd., [1969] 1 Weekly Law
Reports, 928; Manjusri Raha and Ors. v. B.L. Gupta and Ors.
[1977] 2 S.C.R. 944, referred to.
Northern India Transporters Insurance Co. Ltd. v. Smt.
Amrawati, AIR 1966 Punjab 288, Jayalakshmi and Ors. v. The
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Ruby General Insurance Company, Madras and Anr. AIR 1971
Madras 143; Sabita Pati and Ors. v. Rameshwar Singh and Anr.
[1973] A. C. J. 319; Sheikhupura Transport Co. Ltd. v.
Northern India Transport Co., [1971] Suppl. S.C.R. 20
distinguished.
Sanjiva Shetty v. Anantha and Ors. 1976 A.,C. J. 261,
M/s. Construction India and Ors. v. Mahindra Pal Singh
Ahluwalia and Ors 1975 A.C.J. 177, disapproved.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 801-
802 of 1978:
From the judgment and order dated the 30th September,
1976 of the Gujarat High Court at Ahmedabad in F.A. No. 696
of 1) 1971 and 1282 of 1969.
Soli J. Sorabjee, I.N. Shroff and H.S. Parihar for the
Appellant.
S.K. Dholakia and R.C. Bhatia for Respondent Nos. 3-6.
The Judgment of the Court was delivered by
CHANDRACHUD, C.J. These appeals raise a question of
some importance from the point of Insurance Companies which
insure motor vehicles against third party risks and more so,
from the point of view of the general public which, by
reason of the increasing hazards of indisciplined and fast
moving traffic, is driven in despair to lodge claims for
injuries suffered in motor vehicle accidents. In case of air
accidents, the injured and the dependents of the deceased
receive, without contest, fairly large sums by way of
compensation from the Air Corporations. We have still to
awaken to the need to evolve a reasonably comparable method
for compensating those who receive injuries or die in road
or train accidents. The victims of road accidents or their
dependents are driven to wage a long and unequal battle
against the Insurance Companies, which deny their liability
on every conceivable ground and indulge in an ingenious
variety of factual disputations from ’who was driving the
vehicle’ to ’whose negligence was the sine qua non of the
accident’. The delay in the final disposal of motor accident
compensation cases, as in all
864
other classes of litigation, takes the sting out of the laws
of compensation because, an infant child who seeks
compensation as a dependent of his deceased father has often
to await the attainment of majority in order to see the
colour of the money. Add to that the monstrous inflation and
the consequent fall in the value of the rupee: Compensation
demanded say, ten years ago, is less than quarter of its
value when it is received today. We do hope that the
Government will apply itself seriously and urgently to this
problem and find a satisfactory method of ameliorating the
woes of victims of road accidents.
We have just talked of delay and it is just as well
that we begin by saying that the accident out of which these
proceedings arise happened on February 1, 1966. A collision
took place between a motor car, No. GJY 4973, and a goods
truck, No. GTA 4123, at about 8.30 P.M. On Naroda Road,
Ahmedabad, as a result of which Ajit Sinh, who was driving
the car died instantaneously and Jadavji Keshavji Modi, who
was travelling in the car, sustained injuries. The truck was
insured against third party risk with the appellant, the
Motor owners Insurance Co. Ltd.
The appellant had then an office in Ahemdabad but it
ultimately merged with the New India Assurance Co. Ltd.,
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Bombay. Respondents 1 (a) to I (g), who are the heirs and
legal representatives of the deceased Ajit Sinh, filed an
application before the Motor Accidents Claims Tribunal,
Ahmedabad, under section 110-D of the Motor Vehicles Act, 4
of 1939, seeking compensation in the sum of Rs. 30,000 for
his death. Jadavji Modi filed a separate application asking
for compensation of Rs. 10,000 for the injuries suffered by
him. The Tribunal dismissed both the applications by a
common judgment dated June 2(, 1968 on the ground that
respondent No. 3 could not be said to have been driving the
truck rashly and negligently at the time of the accident.
Jadavji Modi and respondents I (a) to I (g) filed
separate appeals in the Gujarat High Court from the Judgment
of t he Tribunal, being First Appeals Nos. 1202 of 1969 and
696 of 1971 respectively. These appeals were disposed of by
the High Court by a common judgment dated September 30,
1976. The hearing proceeded, both before the Tribunal and
the High Court, on the basis that the truck was used for
carrying goods. The High Court allowed the appeals, awarding
a compensation of Rs. 19,125 to
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respondents 1 (a) to 1 (g) with 6% interest from the date of
application until realisation of the amount and a
compensation of Rs. 10,000 with similar interest to Jadvaji
Modi. These appeals by special leave are directed against
the judgment of the High Court.
This Court by its order dated April 18, 1978 granted
special leave to the appellant to appeal from the judgment
of the High Court, limited to the question relating to the
construction of section 95 (2) of the Motor Vehicles Act,
1939, ("the Act").
Chapter VIII of the Act bears the title "Insurance of
motor vehicles against third party risks". Section 93
defines certain terms while section 94 (1) provides for the
necessity to insure a vehicle against third party risks. By
that section, no person can use a Motor vehicle in a public
place, except as a passenger, unless there is in force in
relation to the use of the vehicle a policy of insurance
complying with the requirements of the chapter. Section 95
prescribes the requirements of the insurance policy and the
"limits of liability" thereunder. Broadly, by sub-section
(1) of section 95, a policy of insurance must insure the
person or classes of persons specified in the policy to the
extent specified in sub-section (2) against any liability
which may be incurred by him or them in respect of the death
of or bodily injury to any person caused by or arising out
of the use of the vehicle in a public place. The proviso to
sub-section (I) consists of three clauses by which, speaking
generally, a policy is not required to cover (i) liability
in respect of the death of or injuries to an employee
arising out of and in the course of his employment; (ii)
liability in respect of the death of or bodily injury to
persons carried in the vehicle except where the vehicle is
used for carrying passengers for hire or reward; and (iii)
any contractual liability.
That takes us to the provisions contained in section 95
(2) of the Act, the interpretation of which is the sole
question for our consideration in this appeal. The Motor
Vehicles Act, 1939, save for Chapter VIII relating to the
insurance of motor vehicles against third party risks, has
been in force since July 1, 1939, in what were known as Part
A and Part States and since April 1, 1951 in Part States.
Chapter VIII came into force on July 1, 1946.
Section 95 (2) of the Act originally read thus:
"95 (2) -Subject to the proviso to sub-section (1), a
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866
policy of insurance shall cover any liability
incurred in respect of any one accident upto the
following limits, namely :-
(a) where the vehicle is a vehicle used or
adapted to be used for the carriage of goods,
a limit of twenty thousand rupees;
(b) where the vehicle is a vehicle in which
passengers are carried for hire or reward or
by reason of or in pursuance of a a contract
of employment, in respect of persons other
than passengers carried for hire or reward, a
limit of twenty thousand rupees; and in
respect of passengers a limit of twenty
thousand rupees in all, and four thousand
rupees in respect of an individual passenger,
if the vehicle is registered to carry not
more than six passengers excluding the driver
or two thousand rupees in respect of an
individual passenger, if the vehicle is
registered to carry more than six passengers
excluding the driver;
(c) where the vehicle is a vehicle of any other
class, the amount of the liability incurred."
(emphasis supplied)
Clause (a) of sub-section (2) was substituted by a new
clause by section 74 of the Motor Vehicles (Amendment) Act,
100 of 1956, with effect from February 16, 1957. The amended
clause (a), which was in force on February 1, 1966 when the
Incident leading to these proceedings occurred, reads thus:
"95(2)(a)-Where the vehicle is a goods vehicle, a limit
of twenty thousand rupees in all, including
the liabilities, if any, arising under the
Workmen’s Compensation Act, 1923, in respect
of the death of, or bodily injury to,
employees (other than the driver), not
867
exceeding six in number, being carried in the
vehicle."
(emphasis supplied)
Clauses (b) and (c) of section 95 (2) remained as they were
in 1939 and were not touched by the 1956 Amendment.
Section 95 (2) underwent a further amendment by the
Motor Vehicles (Amendment) Act, 56 of 1969, which came into
force on March 2, 1970. As a result of that amendment, the
section reads thus:
"95 (2) -Subject to the proviso to sub-section (l), a
policy of insurance shall cover any liability
incurred in respect of any one accident upto
the following limits, namely :- D
(a) where the vehicle is goods vehicle, a
limit of fifty thousand rupees in all,
including the liabilities, f any,
arising under the Workmen’s Compensation
Act, 1923, in respect of the death of,
or bodily injury to employees (other
than the driver), not exceeding six in
number, being carried in the vehicle;
(b) where the vehicle is a vehicle in which
passengers are carried for hire or
reward or by reason of or in pursuance
of a contract of employment-
(i) in respect of persons other than
passengers carried for hire or reward, a
limit of fifty thousand rupees in all;
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(ii) in respect of passengers:
(1) a limit of fifty thousand rupees in
all where the vehicle is registered
to carry more than thirty
Passengers;
868
(2) a limit of seventy-five thousand
rupees in all where the vehicle is
registered to carry more than
thirty but not more than sixty
passengers;
(3) a limit of one lakh rupees in all
where the vehicle is registered to
carry more than sixty passengers;
and
(4) subject to the limits aforesaid ten
thousand rupees for each individual
passenger in any other case;
(c) save as provided in clause (d), where the
vehicle is a vehicle of any other class, the
amount of liability incurred;
(d) irrespective of the class of the vehicle, a
limit of rupees two thousand in all in
respect of damage to any property of a third
party."
(emphasis supplied)
We are concerned only with clause (a) of section 95 (2)
and that too, as it existed on February 1, 1966 when the
collision between the car and the truck took place. We have
extracted the other clauses of section 95 (2) in order to
trace the legislative history of the section and to see
whether the language used by the legislature in other parts
of the same section affords a comparative clue to the
interpretation of the provision contained in clause (a).
Clause (a) as originally enacted in 1939, provides that
the insurance policy must cover the liability in respect of
third party risks upto the limit of twenty thousand rupees,
where the vehicle is used or adapted to be used for the
carriage of goods. By the amendment introduced by the
Amendment Act 100 of 1956, the words "in all" were added
after the words "twenty thousand rupees". Clause (a) thus
amended read to say that where the vehicle is a goods
vehicle, the policy of insurance shall cover the liability
in regard to third party risks upto the limit of twenty
thousand rupees in all. Whereas clause (a) in its original
form spoke of a vehicle "used or adapted to be used for the
carriage of goods", under the
869
amendment of 1956, the clause was made applicable to cases
where the vehicle "is a goods vehicle". The other amendment
introduced by the Act of 1956 was that the overall limit of
twenty thousand rupees was expressed to include the
liability arising under the Workmen’s Compensation Act, 1923
to the extent mentioned in the amendment. The amendment
introduced by the Amendment Act 56 of 1969 enhanced the
liability under clause (a) from twenty thousand rupees to
fifty thousand rupees in all.
Clause (b) of section 95 applies to vehicles in which
passengers are carried for hire or reward or by reason of or
in pursuance of a contract of employment. Under that clause
as it stood originally in 1939, the liability was restricted
to twenty thousand rupees in respect of persons other than
passengers carried for hire or reward; and to twenty
thousand rupees in all in respect of passengers. The
Amendment Act of 1956 did not make any change in clause (b).
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But, the Amendment Act of 1969 enhanced the liability to the
limit of fifty thousand rupees in all in respect of persons
other than passengers carried for hire or reward. In respect
of passengers, the liability was enhanced from twenty
thousand rupees to fifty thousand rupees in all, seventy-
five thousand rupees in all one lakh rupees in all,
depending upon the registered capacity of the vehicle to
carry passengers.
It may be recalled that the High Court awarded
compensation in the sum of Rs. 19,125 to respondents 1 (a)
to 1 (g) who are the heirs and legal representatives of Ajit
Sinh who was driving the car, and Rs. 10,000 to Jadavji Modi
who was travelling in the car. The total amount of
compensation awarded to the claimants thus comes to Rs.
29,125 that is to say, it is in excess of Rs. 20,000. The
contention of Shri Sorabjee who appears on behalf of the
appellant insurance-company is, that under clause (a) as it
stood at the material time, the liability of the insurer
under the statutory policy taken by the owner of the goods
vehicle is limited to twenty thousand rupees in all and,
therefore, the insurer cannot be asked to pay compensation
in excess of that amount. The liability to pay the balance,
viz. Rs. 9,125 must according to the learned counsel, be
fastened on the owner of the goods vehicle who would be
vicariously responsible for the negligence of his employee
who was driving the goods vehicle. In support of this
submission counsel relies strongly on the circumstance that
the Amendment Act of 1956 which came into force on February
16, 1957, introduced the words
870
"in all" in clause (a). It is urged that these words were
introduced advisedly and deliberately in order to limit the
overall liability of the insurer to twenty thousand rupees
under the statutory policy. These words of limitation cannot
be ignored by asking the appellant to pay compensation in
excess of twenty thousand rupees. Counsel also seeks to
derive support to his submission from the use of the words
"in all" in clauses (b) and (d) of section 95 (2) as amended
by Amendment Act 56 of 1969 which came into force on March
". 1970.
Having given our anxious consideration to these
contentions of Shri Sorabjee, which are not without
plausibility, we have come to the conclusion that the
construction canvassed by the learned counsel will lead to
great injustice and absurdity and must, therefore, be
eschewed since, especially, the words of section 95 (2)
cannot, in the context in which they occur, be regarded as
plain and unambiguous. We with first demonstrate the harsh
and strange consequences which will flow out of the
construction pressed upon us and we with then show why we
consider That the material words of the section are of
doubtful import. If. for example, two or three persons die
in a collision between a car and a goods vehicle and two or
three others are injured as a result of the negligence of
the driver of the goods vehicle, the heirs of the deceased
and the injured persons will together be entitled to twenty
thousand rupees in all, no matter how serious the injuries
and how grave the hardship to the heirs ensuing upon the
loss of lives of those who perished in the collision. But
there is a more flagrant injustice which one shall have to
countenance if one were to accept the argument advanced on
behalf of the appellant and it is this : If two persons of
unequal economic status die in the kind of collision
mentioned above, the heirs of the affluent victim will
virtually monopolise the compensation by getting a lion’s
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share in it, thereby adding insult to the injury caused to
the heirs of the indigent victim. The purpose of law is to
alleviate, not augment, the sufferings of the people. It is
well-known that the award of compensation depends upon a
variety of factors, including the extent of monetary
deprivation to which the heirs of the deceased are
subjected. Applying that criterion as one of the many
variable criteria which are applied for fixing compensation
in motor accident cases, the heirs of the affluent victim
may have been awarded, say, a compensation of Rs. 90,000.
The heirs of the other victim who may have been just
managing to keep his body and soul together will probably
have received by that standard a compensation of, say,
871
ten thousand rupees. The compensation awarded to these two
groups of heirs shall have to be reduced rateably in the
proportion of 9: 1 in order to ensure it does not exceed
rupees twenty thousand "in all". The result of this will be
that the insurance company will be liable to pay a sum of
Rs. 18,000 to the heirs of the affluent person and Rs. 2,000
to the heirs of the other person. The icy band of death may
have fallen in one stroke on two victims of disparate
economic status but then, the arithmetic of the appellants
argument will perpetuate the gross inequality between the
two even after their death. We must avoid a construction
which will produce such an unfair result, if we can do so
without doing violence to the language of the section. The
owner of the truck will undoubtedly be liable to pay the
balance but common experience shows that the woes of the
injured and of the heirs of those who perish in automobile
accidents begin after they embark upon the adventure of
execution proceedings. There are proverbial difficulties in
proving ownership of goods vehicles, particularly if they
are subject to a hire-purchase agreement and truck owners
are quite known for the ease with which they proclaim their
insolvency. It is therefore no consolation that the left-
over liability will fall on the insured.
Both by common practice and the application of
recognised rules of statutory construction, harsh
consequences following upon an interpretation are not
considered as the governing factor in the construction of a
statute, unless its language is equivocal or ambiguous. If
the language is plain and capable of one interpretation
only, we will not be justified in reading into the words of
the Act a meaning which does not follow natural from the
language used by legislature. It therefore becomes necessary
to consider whether the language used by the legislature in
section 95 (2) of the Act admits of any doubt or difficulty
or is capable of one interpretation only.
If the words used by the legislature in clause (a) of
section 95 (2) were the sole factor for determining the
outside limit of the insurer’s liability, it may have been
possible to accept the submission that the total liability
of the insurer arising out of the incident or occurrence in
question cannot exceed Rs. 20,000. Clause (a) qualifies the
extent of the insurer’s liability by the use of the
unambiguous expression "in all" and since that expression
was specially introduced by an amendment, it must be allowed
its full play. The legislature must be presumed to have
intended what it has plainly said. But, clause (a) does not
stand alone and is not
872
the only provision to be considered for determining the
outside limit of the insurer’s liability. In fact, clause
(a) does not even form a complete sentence and makes no
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meaning by itself. Like the other clauses (b) to (d), clause
(a) is governed by the opening words of section 95 (2) to
the effect that "a policy of insurance shall cover any
liability incurred in respect of any one accident upto the
following limits", that is to say, the limits laid down in
clauses (a) to (d). We have supplied emphasis in order to
focus attention on the true question which emerges for
consideration: What is the meaning of the expression ’any
one accident"? If that expression were plain and
unambiguous, and its meaning clear and definite, effect
would be required to be given to it regardless of what we
think of its wisdom or policy. But as we will presently
show, the expression "any one accident ’ does not disclose
one meaning conclusively according to the laws of language.
It, clearly, is capable of more than one meaning,
introducing thereby an ambiguity which has to be resolved by
resorting to the well-settled principles of statutory
construction.
The expression "any one accident" is susceptible of two
equally reasonable meanings or interpretations. If a
collision occurs between a car and a truck resulting in
injuries to five persons, it is as much plausible to say
that five persons were injured in one accident as it is to
say that each of the five persons met with an accident. A
by-stander looking at the occurrence objectively will be
right in saying that the truck and the car met with an
accident or that they were concerned in one accident. On the
other hand, a person looking at the occurrence subjectively,
like the one who is injured in the collision, will say that
he met with an accident. And so will each of the five
persons who were injured. From their point of view, which is
the relevant point of view, "any one accident" means
"accident to any one’. In matters involving third party
risks, it is subjective considerations which must prevail
and the occurrence has to be looked at from the point of
view of those who are immediately affected by it. If the
matter is looked at from an objective point of view, the
insurer’s liability will be limited to Rs. 20,000 in respect
of injuries caused to all the five persons considered en
bloc as a single entity, since they were injured as a result
of one single collision. On the other hand, if the matter is
looked at subjectively as it ought to be, the insurer’s
liability will extend to a sum of Rs. 20,000 in respect of
the injuries suffered by each one of the five persons, since
each met with an accident, though during
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the course of the same transaction. A consideration of
preponderating importance in a matter of this nature is not
whether there was any one transaction which resulted in
injuries to many but whether more than one person was
injured, giving rise to more than one claim or cause of
action, even if the injuries were caused in the course of
one single transaction. If more than one person is injured
during the course of the same transaction, each one of the
persons has met with an accident.
We are, therefore, of the opinion that the ambiguity in
the language used by the legislature in the opening part of
section 95 (2) and the doubt arising out of the co-relation
of that language with the words "in all" which occur in
clause (a), must be resolved by having regard to the
underlying legislative purpose of the provisions contained
in chapter VIII of the Act which deals with third party
risks. That is a sensitive process which has to accommodate
the claims of the society as reflected in that purpose.
Indeed, it is in this area of legislative ambiguities,
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unfortunately not receding, that courts have to fill gaps,
clear doubts and mitigate hardships. In the words of Judge
Learned Hand:
"It is one of surest indexes of a mature and
developed jurisprudence.. to remember that statutes
always have some purpose or object to accomplish whose
sympathetic and imaginative discovery is the surest
guide to their meaning". (1)
There is no table of logarithms to guide or govern statutory
construction in this area, which leaves a sufficient and
desirable discretion for the Judges to interpret laws in the
light of their purpose, where the language used by the law-
makers does not yield to one and one meaning only.
Considering the matter that way, we are of the opinion that
it is appropriate to hold that the word "accident" is used
in the expression "any one accident" from the point of view
of the various claimants, each of whom is entitled to make a
separate claim for the accident suffered by him and not from
the point of view of the insurer.
In The South Staffordshire Tramways Company Ltd. v. The
Sickness and Accident Assurance Association Ltd., (2) the
plaintiffs, a
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tramcar company, effected with the defendants an insurance
against claims for personal injury in respect of accidents
caused by vehicles upto the amount of 250 "in respect of
any one accident’’. One of the vehicles specified in the
insurance policy was overturned, causing injuries to about
forty persons, as a result of which the plaintiffs became
liable to pay to those persons compensation to the extent of
833. The question before the Court was whether the
injuries caused to each of the said forty persons
constituted a separate accident within the meaning of the
policy. The Court of Appeal answered that question in the
affirmative. Lord Esher, M.R., observed in his judgment that
the claims made by the plaintiffs were in respect of
personal injuries, and each person injured claimed (’ for
injuries in respect of an accident to his person by the
vehicle. "If several persons were injured", said the Master
of Rolls, "upon the true construction of the policy, there
were several accidents". Bowen, L.J. took the same view of
the matter by saying that the word "accident" may be used in
either of two ways: An accident may be spoken of as
occurring to a person. Or as occurring to a train, or
vehicle, or bridge. In the latter case, though several
persons were injured who were in the train, or vehicle, or
on the bridge, it would be an accident to the train, or
vehicle, or bridge. In the former, "there might, however, be
said to be several accidents, to the several persons
injured". Fry, L.J., concurred in the view taken by his
Brethren, and observed that the meaning of the word
"accident", as used in the policy of insurance, is "any
single injury to the person or property accidentally
caused."
In Forney v. Dominion Insurance Co. Ltd. (1) the
plaintiff, a solicitor, was insured under a professional
indemnity policy whereby the defendants, the insurers,
agreed to indemnify him in respect of loss arising from any
claim or claims which may be made upon him by reason of any
neglect, omission or error committed in the conduct of his
business, subject to a proviso that the liability of the
insurers was not to exceed a sum of 3000, "in respect of
any one claim or number of claims arising out of the same
occurrence’’. The Solicitor’s assistant gave a certain
advice in a motor accident case which betrayed negligence.
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The assistant had wrongly allowed a person to become
administratrix of her late husband’s estate and the
assistant also failed to issue writs within the six-month
limitation period. A claim was made against the Solicitor
for his assistant’s negligence for depriving the claimants
of their right to be paid
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damages. The court assessed the quantum of damages
differently for different claimants, which together exceeded
the sum of 3000. It was held that the Solicitor’s
assistant was negligent twice and therefore there were two
occurrences in the same case in respect of which the
Solicitor became liable to pay damages for negligence.
Accordingly, the insurance company was held liable to
indemify the Solicitor in respect of the damages awarded
against him upto a limit of 3000 for each act of
negligence.
In Halsbury’s Laws of England, (1) the decision in
South Staffordshire Tramways company is cited in support of
the proposition that the word ’accident
"may fall to be construed from the point of view
of each individual victim, so as to produce, in effect,
as many accidents (even in a single occurrence) as
there - are victims" .
The provisions contained in section 95 (2) of the Act
arose for consideration before a Full Bench of the High
Court of Punjab in Northern India Transporters Insurance Co.
Ltd. v. Smt. Amrawati, (2) a Full Bench of the High Court of
Madras in Jayalakshami & Ors. v. The Ruby General Insurance
Company, Madras & anr., (3) the High Court of Karnataka in
Sanjiva Shetty v. Anantha & Ors., (4) and the High Court of
Orissa in Sabita Pati & Ors. v. Rameshwar Singh and anr. (5)
and M/s Construction India & Ors. v. Mahindra Pal Singh
Ahluwalia & ors. (6) The Punjab case arose under section 95
(2) (b), while the other cases arose under section 95 (2)
(a) of the Act.
In the case before the Madras Full Bench, a person
called Krishnaswami who was driving a car died as a result
of a collision between his car and a goods vehicle. The
Claims Tribunal dismissed the claim of the heirs of the
deceased, but a Division Bench of the High Court took the
view that compensation in the sum of Rs. 40,000 would be
payable to them. The Division Bench referred for
consideration of the Full Bench the question whether on a
true construction
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of clause (a) of section 95 (2), the liability of the
Insurance company was limited to rupees twenty thousand. The
Full Bench, overruling a previous decision of a Division
Bench, answered this question in the affirmative. It is
important to bear in mind that the case before the Madras
High Court was in a material respect different from the case
before us. The High Court had to consider the claim of one
person only since, only one person had met with an accident.
In the case before us, more than one person has been
injured, which raises the question as regards the
construction of the words "any one accident’’ which occur in
section 95 (2). That question did not arise in the Madras
case and the decision, therefore, does not touch the
question before us. Similarly, in the case before the Orissa
High Court in Sabita Pati, only one person was involved in
the collision between a jeep and a goods vehicle. Relying on
the judgment of the Full Bench of the Madras High Court, the
Orissa High Court held that the liability of the Insurance
company was limited to rupees twenty thousand under section
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95(2)(a) of the Act. The n involvement of more than one
person in a single occurrence raises a different question
for consideration under section 95 (2) (a) than the
involvement of a single person in a single occurrence. In
the latter case, it may be true to say that the liability of
the insurer is limited to rupees twenty thousand under a
statutory policy. In the former, the interpretation of the
words "any one accident’’ came into play and we have already
expressed our view on the meaning of those words.
In the case before the Karnataka High Court in Sanjiva
Shetty, a taxi and a car met with a collision, as a result
of which two persons travelling in the taxi, the driver of
the car and a boy called Bharatisha sitting on the roadside
were injured. Before the High Court was the claim of the
driver of the car and the boy. A Division Bench of the High
Court held that the total liability of the Insurance Company
was limited to rupees twenty thousand in respect of the
injuries suffered by them. The High Court apportioned the
liability by directing the insurance company to pay Rs.
18,730 to the boy and Rs. 1 ,270 to the driver of the car.
In view of our judgment in the instant case, the decision of
the Karnataka High Court cannot be considered to be good
law. We may add that paragraph 22 of the judgment of the
High Court says that it was "common ground" between the
parties that the limit of the liability of the insurers was
only rupees twenty thousand in all. The High Court added
"...... indeed, no argument was addressed to the contrary by
any of the
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parties". In the case before the Orissa High Court in M/s
Construction India, two children travelling in a school bus
belonging to the Orissa Government died in a collision
between the bus and a goods vehicle. Section 95 (2) (a) was
held attracted and since more than one person was injured as
a result of a single occurrence, the same question arose as
before us. The orissa High Court held that since the total
compensation exceeded rupees twenty thousand, the liability
of the insurers was limited to rupees twenty thousand in all
and that the amount payable to the heirs of the deceased
children was liable to be apportioned. This decision also
cannot be considered as laying down the correct law and
there too, as in Sanjiva Shetty, no argument was advanced
before the High Court on the construction of clause (a),
particularly in reference to the words "any one accident"
which occur in section 95 (2).
The case before the Punjab Full Bench in Northern India
Transporters, arose under the old section 95 (2) (b) and
need not really detain us. Under that section, as it stood
prior to its amendment in 1969, a policy of insurance was
required to cover any liability incurred in respect of any
one accident upto the limit of twenty thousand rupees in
respect of persons other than passengers carried for hire or
reward, where the vehicle was one in which passengers were
carried for hire or for reward or by reason of or in
pursuance of a contract of employment. In respect of
passengers, there was a twofold limit on the insurer’s
liability: "a limit of twenty thousand rupees in all" and
four thousand rupees in respect of an individual passenger
if the vehicle was registered to carry not more than six
passengers excluding the driver, or two thousand rupees in
respect of an individual passenger if the vehicle was
registered to carry more than six passengers excluding the
driver. A passenger bus was involved in an occurrence in
which two passengers were killed. The High Court held that
the straightforward course was to take the language of the
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Act as it stood, which left no doubt that in the case of a
bus registered for carrying more than six passengers, the
limit of the liability was twenty thousand rupees in all and
there was a further limit in respect of each individual
passenger in the sum of two thousand rupees. The words "any
one accident’ in the opening part of section 95 (2) made no
difference to this interpretation because, if more than one
passenger was injured in a single occurrence, no one
passenger was entitled to receive more than rupees two
thousand or four thousand, depending on the registered
capacity of the vehicle to carry passengers.
878
The judgment of the Punjab High Court was brought in
appeal to this Court in Sheikhupura Transport Co. Ltd. v.
Northern India Transport Co.(1) For reasons aforesaid, the
judgment in that case is not an authority on the
interpretation of clause (a) of section 95 (2). After
setting out the relevant provisions of section 95 (2) at
pages 24 and 25 of the Report, Hegde J. speaking for himself
and Jaganmohan Reddy, J. concluded:
"In the present case we are dealing with a vehicle
in which more than six passengers were allowed to be
carried. Hence the maximum liability imposed under s.
95 (2) on the insurer is Rs. 2,000 per passenger though
the total liability may go upto Rs. 20,000.’’
Towards the end of the judgment, it was observed that
reading the provision contained in sections 95 and 96
together, ".. it is clear that the statutory liability of
the insurer to indemnify the insured is as prescribed in
Sec. 95,(2). Hence the High Court was right in its
conclusion that the liability of the insurer in the present
case only extends upto Rs. 2,000 each, in the case of Bachan
Singh and Narinder Nath". In vies of the limit on the
insurer’s liability in respect of each passenger, the
argument on the construction of the words "any one accident"
had no relevance and was therefore neither made nor
considered by the Court. Different considerations may arise
under clause (b), as amended by Act 56 of 1969, but we do
not propose to make any observations on that aspect of the
matter, since it does not directly arise before us.
It was suggested that the interpretation which we are
putting on s. 95 (2) (a) will create difficulties in cases
where the insured also incurs liability under the Workmen’s
Compensation Act, 1923 in respect of the death of, or bodily
injury to, employees (other than the driver), not exceeding
six in number, being carried in the vehicle. It is true that
under section 95 (2) (a), the liability of the insured and
therefore the insurer’s indemnity includes the liability of
the aforesaid description under the Act of 1923. But that is
a matter of apportionment which may require a rateable
deduction to be made from the compensation payable to each
victim, depending upon the quantum of compensation payable
under the Act of 1923 to employees carried in the goods
vehicle.
879
We cannot part with this case without impressing upto
the A Government, once again, the urgent need to provide by
law for the payment of reasonable amounts of compensation,
without contest, to victims of road accidents. We find that
road accidents involving passengers travelling by rail or
public buses are usually followed by an official
announcement of payment of ex gratia sums to victims,
varying between five hundred and two thousand rupees or so.
That is a niggardly recognition of the State’s obligation to
its people particularly so when the frequency of accidents
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involving the public transport system has increased beyond
believable limits. The newspaper reports of August and
September 1981 regarding deaths and injuries caused in such
accidents have a sorry story to tell. But we need not
reproduce figures depending upon newspaper assessment
because, the newspapers of September 18, 1981 carry the
report of a statement made by the Union Minister of State
for Shipping and Transport before the North Zone goods
transport operators ...that 20,000 persons were killed and
1.5 lakh were injured in highway accidents during 1980. We
wonder whether adequate compensation was paid to this large
mass of suffering humanity. In any event, the need to
provide by law for the payment of adequate compensation
without contest to such victims can no longer be denied or
disputed. It was four years ago that this Court sounded a
warning and a reminder (1):
"With the emergence of an ultra-modern age which
has led to strides of progress in all spheres of life,
we have switched from fast to faster vehicular traffic
which has come as a boon to many, though some times in
the case of some it has also proved to be a misfortune
The time is ripe for serious consideration of creating
no-fault liability. Having regard to the directive
principles of State policy, the poverty of the ordinary
run of victims of automobile accidents, the compulsory
nature of insurance of motor vehicles, the
nationalisation of general insurance companies and the
expanding trends towards nationalisation of bus
transport, the law of torts based on no-fault needs
reform.
".... it is only just and fair that the
Legislature should make a suitable provision so as to
pay adequate compensation by properly evaluating the
precious life of a
880
citizen in its true perspective rather than devaluing
human lives on the basis of an artificial mathematical
formula. It is common knowledge that where a passenger
travelling by a plane dies in an accident, he gets a
compensation of Rs. 1,00,000 or like large sums, and
yet when death comes to him not through a plane but
through a motor vehicle he is entitled only to Rs.
2,000. Does it indicate that the life of a passenger
travelling by plane becomes more precious merely
because he has chosen a particular conveyance and the
value of his life is considerably reduced if he happens
to choose a conveyance of a lesser value like a motor
vehicle. Such an invidious distinction is absolutely
shocking to any judicial or social conscience and yet
s. 95 (2) (d) of the Motor Vehicles Act seems to
suggest such a distinction. We hope and trust that our
law makers will give serious attention to this aspect
of the matter and remove this serious lacuna in s. 95
(2) (d) of the Motor Vehicles Act. We would also like
to suggest that instead of limiting the liability of
the Insurance Companies to a specified sum of money as
representing the value of human life, the amount should
be left to be determined by a Court in the special
circumstances of each case. We further hope our
suggestions will be duly implemented and the
observations of the highest Court of the country do not
become a mere pious wish. ’ (per Fazal Ali J, pp. 945,
946, 950, 951).
These observations are still languishing in the cold storage
of pious wishes. With the emergence of the General Insurance
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Corporation which has taken over general insurance business
of all kinds, including motor vehicles insurance, it should
be easy to give statutory recognition to the State’s
obligation to compensate victims of road accidents promptly,
adequately and without contest.
We are happy to note that the Gujarat High Court, by
its judgment under appeal, took a just, correct and
realistic view of the matter by holding that, under the
statutory policy, the appellant insurance company is liable
to pay the full amount of compensation to the heirs of the
driver of the car and to the passenger who was travelling in
the car, each amount being less than Rs. 20,000.
881
In the result the appeals are dismissed with costs in
separate sets in favour of respondents 1 (a) to 1 (g) who
are the heirs of the deceased Ajit Sinha and in favour of
respondents 3 to 6 who are the heirs of Jadavji Keshavji
Modi since deceased.
N.V.K. Appeals dismissed.
882