Ex-Gratia Compensation Under Repealed Rules Survives for Accidents Occurring Prior to Repeal Absent Retrospective Intent

The respondent’s son died in a "hit and run" road accident on 21.03.2022

The respondent sought compensation under the Bihar Motor Vehicle (Amendment-1) Rules, 2021, which provided for ₹5,00,000 ex-gratia payment for death

The State authorities refused the full amount, claiming the 2021 Rules were stayed by the High Court in a separate litigation (C.W.J.C. No. 2183/2022) and subsequently repealed by a 2023 Notification

The State only paid ₹25,000 under the older Solatium Scheme, 1989

The learned Single Judge directed the State to pay the remaining ₹4,75,000, leading to this Appeal by the State

1. Whether the repeal of the 2021 Rules by the 2023 Notification operates retrospectively to extinguish claims arising from accidents that occurred while the 2021 Rules were in force.

2. Whether the interim stay of a statutory notification by the Court during the pendency of litigation permanently debars a claimant from seeking benefits under that notification once the litigation is concluded.

The Court applied the principle of "prospectivity of statutes," holding that every statute or statutory rule is prospective unless expressly or by necessary implication made retrospective [P. Mahendran v. State of Karnataka; Zile Singh v. State of Haryana]

It further relied on the doctrine that a notification rescinding an earlier exemption or benefit can only operate prospectively and cannot take away vested rights conferred by the previous law [M.P. v. G.S. Dall and Flour Mills]

The court also interpreted Section 161 of the Motor Vehicles Act regarding "hit and run" compensation updates

The Court reasoned that the accident occurred on 21.03.2022, a date when the 2021 Rules (effective from 15.09.2021) were legally valid and enforceable

Although the Division Bench had stayed those Rules in C.W.J.C. No. 2183 of 2022, the final disposal of that case on 28.11.2023 explicitly directed that any compensation interdicted by the stay should be paid expeditiously

The Court found that the subsequent 2023 Notification, which repealed the 2021 Rules effective from 26.10.2023, carried no retrospective intent

Therefore, the right to ₹5,00,000 had crystallized at the time of the accident and could not be negated by a subsequent repeal or a temporary judicial stay

It held that the respondent is entitled to the full ₹5,00,000 ex-gratia amount as the 2021 Rules were in force at the time of death

The District Magistrate, West Champaran, was directed to disburse the balance of ₹4,75,000 within four weeks, clarifying this as interim compensation without prejudice to the respondent’s right to seek higher compensation under other legal remedies