Holding

Each claimant’s injury is treated as a separate accident, so the insurer’s liability under Section 95(2)(a) is limited to Rs.20,000 per claim, not in total, and the insurer must pay the full compensation awarded to each claimant.

Summary

In 1966 a collision between a car and a goods truck caused the death of the car driver and injuries to a passenger. The heirs of the deceased and the injured passenger claimed compensation under the Motor Vehicles Act, 1939. The Motor Accidents Claims Tribunal dismissed the claims, but the Gujarat High Court awarded Rs.19,125 to the heirs and Rs.10,000 to the passenger. The insurer, Motor Owners Insurance Co. Ltd., appealed, arguing that Section 95(2)(a) of the Act, as amended in 1956, limited its liability to Rs.20,000 "in all" for a goods vehicle, so the total payment could not exceed that amount. The Supreme Court examined the meaning of the phrase "any one accident" and the words "in all", holding that each claimant’s injury constitutes a separate accident and the Rs.20,000 limit applies per claim, not cumulatively. Consequently, the insurer must pay the full amounts awarded, each being below Rs.20,000. The Court dismissed the insurer’s appeals.

Issues considered

The proper construction of Section 95(2)(a) of the Motor Vehicles Act, 1939, especially the phrase "any one accident" and the words "in all".
Whether the statutory limit of Rs.20,000 under the clause applies to the aggregate liability of the insurer for all claimants in a single collision or to each individual claim.
The effect of the 1956 amendment introducing "in all" on the insurer's liability.

Legislation cited

Motor Vehicles Act, 1939s. 95(1), s. 95(2)
Motor Vehicles (Amendment) Act, 1956s. 74
Motor Vehicles (Amendment) Act, 1969
Workmen's Compensation Act, 1923

Subjects

Motor vehicle insuranceStatutory limitSection 95Any one accidentIn allThird party riskCompensationStatutory construction

Judgment

A 860

MOTOR OWNERS INSURANCE CO. LTD.

v.

B JADAVJI KESHAVJI MODI & ORS.

September 29, 1981

[Y.V. CHANDRACHUD, C.J., S. MUll.TAZA FAZAL ALI
AND D.A. DESAI, JJ.]
c
Motor Vehicles Act 1939, S. 95(2) as amended by Motor Vehicles (Amend-
ment) Act 1956,.S. 14-Scope of. "in all"-crany one accident"-Meaning of,

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
D specified in the policy to the extent specified in sub-section (2) against any liabi-
Jity 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 (1) a policy of insurance
shall cover any liability incurred in respect of any one accid~nt upto the following
E limits, namely :-

(a) \vhcre the vehicle is a vehicle used or adapated to be used for th~
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
F amended clause read :

"9j(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
G the vehicle".

This provision underwent further amendment by the Motor Vehicles
(Amendment) Act, 1969 which came into force on March 2, 1970.

A colJision took place between a motor car and a goods truck in February
ff 1966 as a result of which the driver of the car died instantaneously and the person
travelling in the car sustained injuries. The truck was insured against third
party risk with the appeliant·insurance company.
MOTOR OWNERS INSURANCE Y J.K. MODI 861

The heirs and legal representatives of the deceased filed an application A
before the Motor Accidents Claims Tribunal, under section llO·D of the Act~
claiming compensation in the sum of Rs. 30,000 for the death caused in the acci-
dent. The person who was injured filed a separate application asking for com-
pensation 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 tirue of the accident.
B
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
c
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
t 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 D
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 com- E
pany is liable to pay the full amount of compensation to the heirs of the decea-
sed 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. F
(870 G]

3. By common practice and the application of recognised rules of statu~
tory 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]
G
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) H
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
862 SUPREME COURT REPORTS (1982] I S.C.R.

A 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 the
limits 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
B 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
c accident" means ''accident to any one''. la 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
D 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 langu-
E age wilh the words 'in air 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 CJ

F 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 staiutory 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. It 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 clai-
-
G mants, 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]

s. With the emergenci;: of the General Insurance C.:>rporation which has
taken over general insurance business of all kinds, including motor vehicle insu-
rance, it should be easy to give statutory recognition to the State's obligation to
H compensate victims of road accidents, promptly, adequately and without con 4

test. [880 F]
MOTOR OWNERS INSURANCE v. J.K. MODI (Chandrachud, C.J.) 863

Cabell v. Markham, 148 F. 2d. 737, 739 [1945]; The South Staffordshire A
Tramways Co1npany Ltd. v. The Sickness and Accident Assurance Association Ltd.,
> [1891] 1 Q.B.D. 402; Forney v. Dominion Insurance Co. Ltd., [1969] I 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, Jaya!akshmi and Ors. v. The Ruby General Insurance Company, B
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 Shelly v. Anantha and Ors, 1976 A.,C. J. 261; M/s. Construction
India and Ors. v. Mahindra Pal Singh _'Ahluwalia and Ors., 1975 A.CJ. 177,
disapproved. c
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 801-802 of
1978:
I
From the judgment and order dated the 30th September,
1976 of the Gujarat High Court at Ahmedabad in F.A. No. 696 of D
1971 and 1282 of 1969.

So/i J. Sorabjee, 1.N. Shroff and /l,S. Parihar for the Appellant.

S.K. Dholakia and R.C. Bhatia for Respondent Nos. 3-6.
E
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 F
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 G
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 H
'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 SUPREME COURT REPORTS [1982] 1 S.C.R.

other classes of litigation, takes the sting out of the laws of com-
pensation 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
B 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 I, 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.
D The truck was insured against third party risk with t)1e appellant,
the Motor Owners Iasurance Co. Ltd.

The appellant had then an office in Ahemdabad but it
ultimately merged with the New India Assurance Co. Ltd., Bombay.
Respondents 1 (a) to 1 (g), who are the heirs and legal representa-
E tives 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
F suffered by him. The Tribunal dismissed both the applications by
a tcommon judgment dated June 2C, 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 1 (a) to 1 (g) filed separate
G appeals in the Gujarat High Court from the Judgment oft 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
H basis that the truck was used for carrying goods. The High Court
allowed the appeals, awarding a compensation of Rs. 19, 125 to
MOTOR OWNERS INSURANCE V, J.K. MODI (Chandrachud, C.J.) 865

respondents 1 (a) to 1 (g) with 6% interest from the date of applica- A
tion until realisation of the amount and a compensation of Rs. I 0,000
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 8
Court, limited to the question relating to the construction of section
95 (2) of the Motor Vehicles Act, 1939, ("the Ac(').

Chapter VIII of the Act bears the title "Insurance of motor vehi-

.. cles against third party risks". Section 93 defines certain terms while
section 94 (I) provides for the necessity to insure a vehicle against c
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
I
prescribes the requirements of the insurance policy and the "limits
of liability" thereunder. Broadly, by sub-section (I) of section 95,
D
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
E
to sub-section (1) 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) F
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 G
third party risks, has been in force since July I, 1939, in what were
known as Part A and Part C States and since April I, 1951 in Part
B States. Chapter VIII came into force on July I, 1946.

Section 95 (2) of the Act originally read thus : H
"95 (2) -Subject to the proviso to sub-section (1), a
866 SUPREME COURT REPORTS (1982] l cs.C.R

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
B 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
c contract of employment, in respect of persons
other than passengers carried for hire or
reward, a limit of twenty thonsand rupees;
and in respect of passengers a limit of
twenty thousand rupees in all, and four
thousand rupees in respect of an individual
D 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;
E
(c) where the vehicle is a vehicle of any other
class, the amount of the liability incurred."
(emphasis supplied)

F Clause (a) of sub-section (2) was substituted by a new clause by •
section 74 of the Motor Vehicles (Amendment) Act, JOO of 1956,
with effect from February 16, 1957. The amended clause (a), which
was in force on February J, 1966 when the mcident leading to these
proceedings occurred, reads thus :

G
"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,
H employees (other than the driver), not
MOTOR OWNERS INSUR~NCE v. J.K. MODI (Cha11drachud, C.J.) 867

exceeding six in number, being carried in the A
vehicle.''

(emphasis supplied)

Clauses (b) and (c) of section 95 (2) remained as they were in 1939 8
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 : c

''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 a goods vehicle, a limit
of fifty 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 E
(other than the driver), not exceeding six in
number, being carried in the vehicle;

(b) where foe vehicle is a vehicle in which
passengers are carried for hire or reward or
by reason of or in pursuance of a contract
F
of employment-

(i) in respect of persons other than passen-
gers carried for hire or reward, a limit of
fifty thousand rupees in all; G
(ii) in respect of passengers :

(ll a limit of fifty thousand
rupees in all where the vehicle is
registered to carry more than thirty H
passengers;
868 SUPREME COURT REPORTS [1982) 1 s.c.R.

A (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 _
B where the vehicle is registered to
carry more than sixty passengers;
and

(4) subject to the limits aforesaid ten
thonsand rupees for each individual
c 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
D of rupees two thousand in all in respect of
damage to any property of a third party."
(emphasis supplied)

E We are concerned only with clause (a) of section 95 (2) and
that too, as it existed on February l, 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
F interpretation of the provision contained in clause (a).

Clause (a) as originally enacted in 1939, provide:! 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
G 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
H "used or adapted to be used for the carriage of goods", under the
MOTOR OWNERS INSURANCE v. J.K. MODI (Chandrachud, C.J.) 869

A
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 B
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;
c
and to twenty thousand rupees in all in respect of passengers. The
Amendment Act of 1956 did not make any change in clause (b). But,
the Amendment Act of 1969 enhanced the liability to the limit of
I fifty thousand rupees in all in respect of persons other than
D
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.
E
It may be recalled that the High Court awarded compensation
in the sum of Rs. 19,125 to respondents I (a) to I (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 thns comes
to Rs. 29,125 that is to say, it is in excess of Rs. 20,000. The
F
contention of Shri Sorabjee who appears on behalf of the appellant
insnrance·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 G
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 H
which came into force on February 16, 1957, introduced the words
870 SUPREMH COURT REPORTS [1982] 1 S.C.R.

A "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
B words "in all" in clauses (b) and (d) of section 95 (2) as amended
by Amendment Act 56 of I 969 which came into force on March
2, 1970.
.f
Having given our anxious consideration to these contentions

c 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 unambi-
guous. We will first demonstrate the harsh and strange consequences
D which will flow out of the construction pressed upon us and we will
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
E serious the injuries and bow grave the hardship to the heirs ensuing
up0n 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
F affluent victim will virtually monopolise the compensation by getting
a lion's 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
G are subjected. Appl)ing 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
H
probably have received by that standard a compensation of, say,
MOTOR OWNERS INSURANCE v, J.K. MODI (Chandrachud, C.J.) 871

ten thousand rupees. The compensation awarded to these two A
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
hand of death may have fallen in one stroke on two victims of B
disparate economic status but then, the arithmetic of the appellant's
I argument V>ill 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 automo-
bile accidents begin after they embark upon the adventure. of
c

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
D
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 apr lication 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
E
't. ambiguous. If the language is plain and capable of one interpreta-
tion only, we will not be justified in reading into the words of the
Act a meaning which does not follow naturally 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
F
Act admits of any doubt or difficulty or is capable of one interpreta-
tion only.

• If the words used by the legislature in clause (a) of
srction 95 (2) were the sole factor for determining the outside limit
of the insurer's liability, it may have been possible to accept the
G
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 hy an amendment, it must be allowed its full H
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 SUPREME COURT REPORTS - (1982] J S.C.R.

A 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 section 95 (2) to the effect that "a policy of insurance
shall cover any liability incurred in respect of any one accident
B 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

c 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 accidenr· does not disclose one
1

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.
D
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 au
E 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
F
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
G 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 con-
sidered 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
H 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
MOTOR OWNERS INSURANCE v. J.K. MODI (Chandruchud, C.J.) 873

the course of the same transaction. A consideration of prepondera- A
ting 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 B
persons has met with an accident.
I
> 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 c
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 pnrpose.
Indeed, it is in this area of legislative ambiguities, unfortunately not
receding, that courts have to fill gaps, clear doubts and mitigate
D
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 construc-
tion in this area, which leaves a sufficient and desirable discretion
for the Judges to interpret laws in the light of their purpose, where F
, 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 G
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
H
(I) Cabell v. Markham, 148 F. 2d 737, 739 (1945).
(2) [1891] 1 QBD 402.
874 SUPREME COURT REPORTS [ 1982) 1 S.C.R.

A tramcar company, effected with the defendants an insurance against
claims for personal irjury 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
B 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
c 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 <aying 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
D 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
E
"accident", as used in the policy of insurance, is "any single injury
to the person or property accidentally caused."

In Forney v. Dominion Inswcnce Co. Ltd. (') the plaintiff, a
solicitor, was insured under a professional indemnity policy whereby
F 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 sa1ne occurrence". The
G Solicitor's assistant gave a certain advice in a motor accident case
which betrayed negligence. The assistant had wrongly allowed a
person to become administratrix of her late husband's estate and the
assistant also failed to issue writs withnin the six-month limitation
period. A claim was made against the Solicitor for his assistant's
H negligence for depriving the claimants of their right to be paid

(I) [ 1969] J \\tekl) Law Reports, 928.
MOTOR OWNERS INSURANCE v. J.K. MODI (Chandrachud, C.J.) 875

damages. The court assessed the quantum of damages differently A
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
B
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 proposi-
tion that the word 'accident'
c
"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
D
consideration before a Full Bench of the High Court of Punjab in
Northern India Transporters Insurance Co. Ltd. v. Smt. Amrawati, (')
a Full Bench of the High Court of Madras in Jayalakshmi & ors. v.
The Ruby General Insurance Company, Madras & anr., (') the High
Court ofKarnataka in Sanjiva Shelly v. Anantha & ors.,(') and the
E
High Court of Orissa in Sabi ta Pa ti & ors. v. Rameshwar Singh and
anr. (5) and M/s Construction Indi~ & 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 F
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 considera-
tion of the Full Bench the question whether on a true construction
G
(I) 4th Edn. Volum' 25 Pages 354-355, paragraph 696.
(2) AIR 1966 Punjab 288.
(3) AIR 1971 Madras 143.
(4) [1976] ACJ 261.
(5) [1973] ACJ. 319. H
).
(6) [1975] ACJ 177.
876 SUPREME COURT REPORTS [1982] I s.c.R.

A 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
8 the claim of one person only since, only one person had met with an
aecident. In the case before us, more than one person has been
injured, which raises the question as regards the construction of the I
words ·'any one accident" which occur in section 95 (2). That l
question did not arise in the Madras case and the decision, therefore,
does not touch the question before us. Similarly, in the case before
c the Orissa High Court in Sabfta 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 limi·
ted to rupees twenty thousand under section 95(2)(a) of the Act. The
involvement of more than one person in a single occurrence raises
D 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

..
Ii'
into play and we have already expressed our view on the meaning
of those words .

In tl1e case before the Karnataka High Court in Sanjiva
Shelly, 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
F 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
G in the instant case, the decision of the Karnataka High Court cannot
be considered to be good Jaw. 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 " ..... .
H indeed, no argument was addressed to the contrary by any -of the
MOTOR OWNERS INSURANCE V, J.K. MODI (Chandrachud, C.J.) 877

parties''. In the case before the Orissa High Court in M/s Cons/ruc- A
tion 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
8
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 argu-
ment was advanced before the High Court on the construction of-
clause (a), particularly in reference to the words "any one accident"
c
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 r.ot
really detain us. Under that section, as it stood prior to its D
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, E
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 pas;engers excluding the driver. A F
passenger bus was involved in an occurrence in which two passengers
were killed. The High Col!rt held that the straightforward course
was to take the language of the 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 iu
all and there was a further limit in respect of each individual G
pas~eng~r ~n the sum ?f two thousand rupees. The words "any one
accident m the opemng part of section 95 (2) made no difference
to this interpretation because, if more than one passenoer was
injured in a single occurrence, no one passenger was entltled to
receive more H
:i - . than rupees two thousand or four thousand , dependin g
on the registered capacity of the vehicle to carry passengers.
878 SUPREME COURT REPORTS [1982] 1 ~S.C.k

A The judgment of the Punjab High Court was brought in appeal
to this Court in Sheikhupura Transport Co. Ltd. v. Northern India
Transport Co.(') 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
B Reddy, J. concluded :

"In the present case we are dealing with a vehicle in 1
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
c 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 s. 95:(2). Hence the High Court was right in its
D 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
Narir.der Nath". Jn view of the limit on the insurer's liability in
resrect 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
E 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
rr atter, 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
F 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
G of apportionment which may require a rateable deduction to be
made from the compensation payable to each victim, depending
upon the quantum of compenstion payable under the Act of 1923 to
employees carried in the goods vehicle.

H (I) [1971] Suppl. S.C.R. 20.
MOTOR OWNERS INSURANCE v. J.K. MODI (Chandrachud, C.J.) 879

We cannot part with this case without impressing upto the A
Government, once again, the urgent need to provide by law for the
pa}ment 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 grati? sums to victims,
varying between five hundred and two thousand rupees or so. That B
is a niggardly recognition of the State's obligation to its people
particularly so when the frequency of accidents 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 c
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, D

• the need to provide by law for the payment of adequate compensa-
tion 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 (') :
E
"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- F
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 G
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 H
(I) Manjusri Roha and Ors. v. B.L. Gupta and Ors. : [1977] 2 SCR 944.
880 SUPREME COURT REPORTS [1982] 1 S.C.R

A
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. I ,00,000 or like large sums, and yet when death comes
B 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 1
to choose a conveyance of a lesser value like a motor
c 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
D 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
E 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
F wishes. With the emergence of the General Insurance 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.

G
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
H 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. .x
MOTOR OWNERS INSURANCE v. J.K. MODI (Chandrachud, C.J.) 881

In the result the appeals are dismissed with costs in separate A
sets in favour of respondents I (a) to I (g) who are the heirs of the
deceased Ajit Sinh and in favour of respondents 3 to 6 who are the
heirs of Jadavji Keshavji Modi since deceased.

N.V.K . Appeals dismissed.

•