STATE OF PUNJAB & ORS.versusBHAJAN KAUR & ORS.

                              [2008] 7 S.C.R. 1111
    ,~




                        STATE OF PUNJAB & ORS.                             A
                                      v.
                           BHAJAN KAUR & ORS.
                       (Civil Appeal No. 3406 of 2008)
                                  MAY 8, 2008
                                                                           B
           [S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.]

              Motor Vehicles Act, 1988:
              s. 140 - Held:'Does not have retrospective effect- Motor
         Vehicles Act, 1939 - s. 92-A.                                     c
              Interpretation of statutes:
               Prospective or Retrospective effect of a statute - Held:
         Statute is presumed to be prospective unless held to be
         retrospective either expressly or by necessary implication - D
         s. 6 of General Clauses Act not applicable - ff new Act confers
         a right, it does so with prospective effect unless expressly stated
         otherwise - General Clauses Act - s. 6.
                Under the Motor Vehicles Act, 1939, s.92-A provided
                                                                       E
         for payment of a sum of Rs.15,000/- by way of no fault
         liability. It was raised to Rs.25,000/- by reason of s.140 of
         the 1988 Act and with effect from 14.11.1994, tbe quantum
         of amount payable was raised to Rs.50,000/-. The question
         for consideration in the present appeal is whether s.140
         would have retrospective effect.                              F

              Dismissing the appeal, the Court
             HELD: 1. S.140 of Motor Vehicles Act, 1988 does not
         have retrospective effect. [Paras 8, 27] [1114-G, 1124-A]
                                                                           G
              2. A statute is presumed to be prospective unless
·• "'·   held to be retrospective, either expressly or by necessary
         implication. A substantive law is presumed to be
         prospective. It is one of the facets of rule of law. S. 92-A of
                                       1111                                H
    1112     SUPREME COURT REPORTS               · [2008] 7 S.C.R.
                                                                       ..
A the Motor Vehicles Act, 1939 created a right and a liability
  on the owner of the vehicle. It is a statutory liability. Per se
  it is not a tortuous liability. Where a right is created by an
  enactment, in absence of a clear provision in the statute,
  it is not to be applied retrospectively. [Para 9] [1115-8,C]
B       United India Insurance Co. Ltd. v. Padmavathy and            ..L
    others (1990) ACJ 751; M.K. Kunhimohammed v. P.A.
    Ahmedkutty AIR 1987 SC 2158 - overruled.

          3. The rights and liabilities of the parties are
c   determined when cause of action for filing the claim
    petition arises. The liability under the Act is a statutory
    liability. The liability could, thus, be made retrospective
    only by reason of a statute or statutory rules. It was
    required to be so stated expressly by the Parliam~nt. [Para
    13] [1116-H, 1117-A]
D
       4. Reference to s.6 of the General Cle-uses Act is
  misplaced. S.217 of the 1988 Act contains the repeal and
  saving clause. 5.140 of the 1988 Act does not find place
  in various clauses contained in Sub-section (2) of s.217
E of the 1988 Act. 5.6 of the General Clauses Act, saves a
  right accrued and/ or a liability incurred. It does not create
  a right. When s.6 applies, only an existing right is saved
  thereby. The existing right of a party has to be determined
  on the basis of the statute which was applicable and not
F under the new one. If a new Act confers a right, it does so
  with prospective effect when it comes into force, unless
  expressly stated otherwise. S.140 of the 1988 Act does
  not contain any procedural provision so as to construe it
  to have retrospective effect. It cannot enlarge any right.
  Rights of the parties are to be determined on the basis of
G
  the law as it then stood, viz., before the new Act come
  into force. [Paras 14, 16] [1117-C, 1118-A,8]
                                                                       >-   •
       5. It is now well-settled that a change in the
  substantive law, as opposed to adjective law, would not
H affect the pending litigation unless the legislature has
          STATE OF PUNJAB & ORS. v. BHAJAN KAUR & ORS.                 1113
f                        [S.S. SINHA, J]

          enacted otherwise, either expressly or by necessary                  A
          implication.[Para 17] [1118-C]

               Garikapati v. Subbaiah Chowdhary AIR 1957 SC 540;
          Gajraj Singh and Others v. State Transport Appellate Tribunal
          and Others (1997) 1 SCC 650; Ramesh Singh and Another v.
                                                                               B
          Cinta Devi and Others (1996) 3 SCC 142; Zile Singh v. State
          of Haryana (2004) 8 SCC 1; Lohia Machines Ltd. and Anr v.
          Union of India (UOI) and Ors. (1985) 2 SCR 686; Mis. Indian
          Metals and Ferro Alloys Ltd. & Anr v. State of Orissa & Ors.
          (1987) 3 SCC 189; Madishetti Bala Ramu/ (0) by LRs. v. The
          Land Acquisition Officer (2007) 8 SCALE 184; Ashok Lanka             c
          and Anr v. Rishi Oixit and Ors. (2005) 5 SCC 598; Southern
          Petrochemical Industries Co. Ltd. v. Electricity Inspector & ETIO
          and Others (2007) 5 SCC 447- referred to.
              CIVIL APPELLATE JURISDCTION : Civil Appeal No.
    -~                                                                         D
          3406 of 2008.

               From the Judgment & Order dated 29.8.2007 of the High
          Court of Punjab and Haryana at Chandigarh in FAO No. 1004/
          1984.
                                                                               E
              K.K. Khurana, A.AG., A.K. Mehta and Kuldip Singh for the
          Appellents.

               Meenakshi Arora for the Respondents.

    ''(
               The Judgment of the Court was delivered by
                                                                               F
               S.8. SINHA, J. 1. Delay condoned.

               2. Leave granted.

                3. Whether Section 140 of the Motor Vehicles Act, 1988
          (for short "the 1988 Act") will have a retrospective effect is the   G
          question involved herein.
               4. An accident took place on 8.01.1983. The deceased
          was a driver of a truck bearing No. PUC 9005. It collided with a
          bus belonging to the appellant bearing registration No. PBL-
          2310. It was being driven by one Sampuran Singh. A claim             H
     1114       SUPREME COURT REPORTS                    (2008] 7 S.C.R.
                                                                            ,.._

A   petition was filed in relation to the said accident purported to
    be in terms of Section 110-A of the Motor Vehicles Act, 1939
    (for short "the 1939 Act").

         5. Appellants herein denied and disputed their liabilities.
    Several issues were framed by the learned Tribunal. The said
B
    claim petition was dismissed by an award dated 12.10.1984.

          A First Appeal was preferred by the respondent No. 1
    against the said award dated 12.10.1984. A learned Single
    Judge of the High Court disposed of the same awarding a sum
c   of Rs. 15,000/- by way of compensation by way of no fault liability.
    An intra-court appeal was preferred thereagainst. Relying on or
    on the basis of a decision of the said Court in Mosmi and
    Another v. Ram Kumar and others [1992 ACJ 192], it was held:
            "In view of the authoritative pronouncement, this appeal is
D           disposed of by holding that the claimant would be entitled
            to a sum of Rs. 50,000/- (Rs. Fifty thousand only) under
            "no fault liability". In addition thereto, they would also be
            entitled to interest @ 9% per annum from the date of
            application till payment. However, in case, any amount
E           was paid to the claimant in view of the order dated
            31.8.1993 passed by this Court, the same shall be
            deducted out of this amount."

         6. Before adverting to the questions raised in this appeal,
    we may notice that a statement was made at the bar that the
                                                                            y'
F   State is not interested in the matter but only intended to get the
    law settled. We, therefore, did not issue any notice to the
    respondents and requested Ms. Meenakshi Arora, learned
    counsel to assist us in the matter.

G         7. Section 92-A of the 1939 Act provided for payment ofa
     sum of Rs. 15,000/- by way of no fault liability. It was raised to
     Rs. 25,000/- by reason of Section 140 of the 1988 Act. However,
     with effect from 14.11.1994, by Amending Act 54 of 1994, the
    ·quantum of the amount payable has been raised to Rs. 50,000 -.

H           8. Indisputably, under the 1939 Act only a sum of
         STATE OF PUNJAB & ORS, v. BHAJAN KAUR & ANR.                   1115
                        [S.B. SINHA, J.]
/   J,

         Rs. 15,000/- was payable by way of no fault liability.                A
               The question which arises for consideration in this appeal
         is as to whether it has a retrospective effect. In our opinion, it
         does not have.
              9. A statute is presumed to be prospective unless h~ld to        B
         be retrospective, either expressly or by necessary implication.
         A substantive law is presumed to be prospective. It is one of the
         facets of rule of law.

               Section 92-A of the 1939 Act created a right and a liability
         on the owner of the vehicle. It is a statutory liability. Per se it is C
         not a tortuous liability. Where a right is created by an enactment,
         in absence of a clear provision in the statute, it is not to be
         applied retrospectively.
              10. Ms. Arora, however, has drawn our attention to a
                                                                            0
         decision of the Kerala High Court in United India Insurance
         Co. Ltd. v. Padmavathy and others [1990 ACJ 751]. The Kera la
         High Court referred to a decision of this Court in M.K.
         Kunhimohammed v. PA. Ahmedkutty [AIR 1987 SC 2158]
         wherein the following observations were made: ·
                                                                            E
              "Having regard to the inflationary pressures and the
              consequent loss of purchasing power of the rupee we feel
              that the amount of Rs. 15,000 and the amount of Rs. 7,500
              in the above provision appear to have become unrealistic.
              We, therefore, suggest that the limits of compensation in F
              respect of death and in respect of permanent disablement,
              payable in the event of there being no proof of fault, should
              be raised adequately to meet the current situation."
               In Padmavathy (supra), the Kerala High Court held:
                                                                               G
              "11. The said suggestion of the Supreme Court was given
              due respect by the law-making machinery when the Bill
              was finally introduced in Statement of Objects and Reasons
              prefaced in the new Act. Therefore, in effect, Parliament
              has only retained the same right which was conferred on          H
    1116       SUPREME COURT REPORTS                    [2008] 7 S.C.R.
                                                                                ...   '

A          the victims, through Chapter VI IA of the repealed Act. The
           difference in the quantum of compensation is only intended
           to make the right realistic and on a par with the amount
           fixed earlier. Hence, Section 6 of the General Clauses Act
           would not impede the enforcement of Section 140 of the
B          new Act in relation to an accident which occurred prior to
           the coming into force of the new Act.

           12. For yet another reason, we can support the said
           conclusion. Section 6 of the General Clauses Act permits
           switching over to the repealed Act only if a different
c          intention does not appear in the new statute. Such a
           different intention can be discerned from the new Act. It is
           in Chapter X of the new Act that provisions regarding "no
           fault liability" have been included. The Chapter" starts with
           Section 140 and ends with Section 144. The last Section
D          reads as follows : 'The provisions of this Chapter shall
           have effect notwithstanding anything contained in any other
           provision of this Act or of any other law for the time being
           in force". The different intention manifested in the new Act
           is that the provisions in Chapter X should get
E          predominance over all other laws. The provisions
           contained in that Chapter must be given effect to
           notwithstanding any contrary provision in any other law
           including Section 6 of the General Clauses Act. All other
           provisions, therefore, must yield to the provisions
F          contained in Chapter X of the new Act. This is the legislative   y
           intention manifested through Section 144 of the new Act."
          11. In the decision of the Punjab and Haryana High Court
    in Mosmi (supra), reliance has been placed upon the judgment
    of the Kerala High Court.
G
         12. With the greatest of respect to the learned Judges of
    the Kerala and Punjab & Haryana High Court, we could not                ~

    persuade ourselves to agree with the said view.
         13. No reason has been assigned as to why the 1988 Act
H   should be held to be retrospective in character. The rights and
       STATE OF PUNJAB & ORS. v. BHAJAN KAUR & ANR.                       1117
                      [S.S. SINHA, J]

      liabilities of the parties are determined when cause of action               A
      for filing the claim petition arises. As indicated hereinbefore,
      the liability under the Act is a statutory liability. The liability could,
      thus, be made retrospective only by reason of a statute or
      statutory rules. It was required to be so stated expressly by the
      Parliament.                                                                  8
,4


            Applying the principles of interpretation of statute, the 1988
      Act cannot be given retrospective effect, more particularly, when
      it came into force on or about 1.07.1989.

             14. Reference to Section 6 of the General Clauses Act, in             c
      our opinion, is misplaced. Section 217 of the 1988 Act contains
      the repeal and saving clause. Section 140 of the 1988 Act does
      not find place in various clauses contained in Sub-section (2) of
      Section 217 of the 1988 Act. Sub-section (4) of Section 217 of
      the 1988 Act reads, thus:
...                                                                                D
            "(4) The mention of particular matters in this se-:tion shall
            not be held to prejudice or affect the general application
            of section 6 of the General effect of repeals."
            15. What is, therefore, otherwise saved in Section 6 of the
      · General Clauses Act inter alia is the right. It reads as under:            E

            "6 Effect of repeal.-Where this Act, or any Central Act or
            Regulation made after the commencement of this Act,
            repeals any enactment hitherto made or hereafter to be
--r         made, then, unless a different intention appears, the repeal           F
            shall not-
            (a) ***
            (b) ***
            (c) affect any right, privilege, obligation or liability acquired, G
            accrued or incurred under any enactment so repealed; ... "
~

            16. Section 6 of the General Clauses Act, therefore, inter
      alia saves a right accrued and/ or a liability incurred. It does not
      create a right. When Section 6 applies only an existing right is
                                                                                   H
    1118       SUPREME COURT REPORTS                   [2008) 7 S.C.R.
                                                                           \


A   saved thereby. The existing right of a party has to be determined
    on the basis of the statute which was applicable and not under
    the new one. If a new Act confers a right. it does so with
    prospective effect when it comes into force, unless expressly
    stated otherwise.
B         Section 140 of the 1988 Act does not .contain any                ~



    procedural provision so as to construe it to have retrospective
    effect. It cannot enlarge any right. Rights of the parties are to be
    determined on the basis of the law as it then stood, viz., before
    the new Act come into force.
c
           17. It is now well-settled that a change in the substantive
    law, as opposed to adjective law, would not affect the pe:1ding
    litigation unless the legislature has enacted otherwise, either
    expressly or by necessary implication.
D         18. In Garikapati v. Subbaiah Chowdhary [AIR 1957 SC             -\
    540], the law i'> stated, thus:
           "... The golden rule of construction is that, in the absence
           of anything in the enactment to show that it is to have
           retrospective operation, it cannot be so construed as to
E          have the effect of altering the law applicable to a claim in
           litigation at the time when the Act was passed ... "
          19. The question was considered by this Court in Gajraj
    Singh and Others v. State Transport Appellate Tribunal and
F   Others [(1997) 1 SCC 650] and the law was stated in the
    following terms:
           "22. Whenever an Act is repealed it must be considered,
           except as to transactions past and closed, as if it had
           never existed. The effect thereof is to obliterate the Act
G          completely from the record of Parliament as if it had never
           been passed; it never existed except for the purpose of
           those actions which were commenced, prosecuted and
           concluded while it was an existing law. Legal fiction is one
           which is not an actual reality and which the law recognises
H          and the court accepts as a reality. Therefore, in case of
STATE OF PUNJAB & ORS. v. BHAJAN KAUR & ANR.              1119
               [S.B. SINHA, J.)

    legal fiction the court believes something to exist which in A
    reality does not exist. It is nothing but a presumption of the
    existence of the state of affairs which in actuality is
    non-existent. The effect of such a legal fiction is that a
    position which otherwise would not obtain is deemed to
    obtain under the circumstances. Therefore, when B
    Section 217(1) of the Act repealed Act 4 of 1939 w.e.f.
    1-7-1989, the law in Act 4 of 1939 in effect came to be
    non-existent except as regards the transactions, past and
    closed or saved.
    23. In Crawford's Interpretation of Law (1989) at p. 626, C
    it is stated that:
    "[A]n express repeal will operate to abrogate an existing
    law, unless there is some indication to the contrary, such
    as a saving clause. Even existing rights and pending
                                                                  D
    litigation, both civil and criminal, may be affected although
    it is not an uncommon practice to use the 8aving clause
    in order to preserve existing rights and to exempt pending
    litigation."
   At p. 627, it is stated that:                                  E
   "[M]oreover, where a repealing clause expressly refers to
   a portion of a prior Act, the remainder of such Act will not
   usually be repealed, as a presumption is raised that no
   further repeal is necessary, unless there is irreconcilable
   inconsistency between them. In like manner, ifthe repealing    F
   clause is by its terms confined to a particular Act, quoted
   by title, it will not be extended to an act upon a different
   subject."
   Section 6 of the GC Act enumerates, inter alia, that where G
   the Act repeals any enactment, unless a different intention
   appears, the repeal shall not (a) revive anything not in
   force or existing at the time at which the repeal takes
   effect; or (b) affect the previous operation of any enactment
   so repealed or anything duly done or suffered thereunder; H
    1120       SUPREME COURT REPORTS                    [2008] 7 S.C.R.


A          or (c) affect any right, privilege, obligation or liability
           acquired, accrued or incurred under any enactment so
           repealed, and any such investigation, legal proceeding or
           remedy may be instituted, continued or enforced. In India
           Tobacco Co. Ltd. v CTO (SCC at p. 517) in paras 6 and
8          11, a Bench of three Judges had held that repeal connotes
           abrogation and obliteration of one statute by another from
           the statute-book as completely as if it had never been
           passed. When an Act is repealed, it must be considered,
           except as to transactions past and closed, as if it had
c          never existed. Repeal is not a matter of mere form but is
           of substance, depending on the intention of the legislature.
           If the intention indicated either expressly or by necessary
           implication in the subsequent statute was to abrogate or
           wipe off the former enactment wholly or in part, then it
           would be a case of total or pro tanto repeal.
D
           24. Wfien there is a repeal and simultaneous re-eractment,
           Section 6 of the GC Act would apply to such a case unless
           contrary intention can be gathered from the repealing Act.
           Section 6 would be applicable in such cases unless the
E          new legislation manifests intention inconsistent with or
           contrary to the application of the section. Such
           incompatibility would have to be ascertained from all
           relevant provisions of the new Act. Therefore, when the
           repeal is followed by a fresh legislation on the same subject,
F          the Court would undoubtedly have to look to the provisions
           of the new Act only for the purpose of determining whether
           the new Act indicates different intention. The object of
           repeal and re-enactment is to obliterate the Repealed Act
           and to get rid of certain obsolete matters."
G        20. In Ramesh Singh and Another v. Cinta Devi and
    Others [(1996) 3 SCC 142] it has clearly been held that Section
    217 of the 1988 Act does not expressly or by necessary
    implication make the relevant provision retrospective in
    operation.
H
STATE OF PUNJAB & ORS. v. BHAJAN KAUR & ANR.                1121
               [S.B. SINHA, J.]

     21. In Zile Singh v. State of Haryana [(2004) 8 SCC 1], a A
Three-Judge Bench of this Court, stated the law, thus:
     "17. Maxwell states in his work on Interpretation of
     Statutes (12th Edn.) that the rule against retrospective
     operation is a presumption only, and as such it "may be B
     overcome, not only by express words in the Act but also
     by circumstances sufficiently strong to displace it" (p.
     225). If the dominant intention of the legislature can be
     clearly and doubtlessly spelt out, the inhibition contained
     in the rule against perpetuity becomes of doubtful
     applicability as the "inhibition of the rule" is a matter of C
     degree which would "vary secundum materiam" (p.226).
     Sometimes, where the sense of the statute demands it or
     where there has been an obvious mistake in drafting, a
     court will be prepared to substitute another word or phrase
     for that which actually appears in the text of the Act (p. D
     231)."
     22. In Lohia Machines Ltd. and Anr v. Union of India (UO/)
and Ors. [(1985) 2 SCR 686], this Court held :
     "On the other hand it is quite clear that if the relief granted E
     is to be withdrawn with retrospective operation from
     1972 the assessees who have enjoyed the relief for a!I
     those years will have to face a very grave situation. The
     effect of the withdrawal of the relief with retrospective
     operation will be to impose on the assessee a huge F
     accumulated financial burden for no fault of the assessee
     and this is bound to create a serious financial problem for
     the assessee. Apart from the heavy financial burden which
     is likely to upset the economy of the undertaking, the
     assessee will have to face other serious problems. On G
     the basis that the relief was legitimately and legally
     available to the assessee, the assessee had proceeded
     to act and to arrange its affairs. If the relief granted is
     now permitted to be withdrawn with retrospective
     operation, the c..>sessee may be found guilty of violation H
    1122        SUPREME COURT REPORTS                    [2008] 7 S.C.R.


A          of provisions of other statutes and may be visited with
           penal consequences ... "
         23. In Mis. Indian Metals and Ferro Alloys Ltd. & Anr. v.
    State of Orissa & Ors. [(1987) 3 SCC 189], it was opined :
B          "25 ... we hold that the High Court was not right in observing
           that the orders under Section 22-B of the Act imposing
           restrictions on consumption of power could not legally and
           validly be passed by the Government "with retrospective
           effect" in the middle of a water year. But the position
c          regarding disallowance of clubbing stands on an entirely
           different footing. If a consumer had been allowed the benefit
           of clubbing previJusly, that benefit cannot be taken away
           with retrospective effect thereby saddling him with heavy
           financial burden in respect of the past period where he
D          had drawn and consumed power on the faith of the orders
           extending to him the benefit of clubbing ... "
        24. In Madishetti Bala Ramu/ (D) by LRs. v. The Land
    Acquisition Officer [2007 (8) SCALE 184], this Court observed:
           "19. In Land Acquisition Officer-cum-DSWO, A.P. v. B. V
E
           Reddy and Sons, this Court opined that Section 25 being
           not a procedural provision will have no retrospective effect,
           holding:
           6. Coming to the second question, it is a well- settled
F          principle of construction that a substantive provision cannot
           be retrospective in nature unless the provision itself
           indicates the same. The amended provision of Section
           25 nowhere indicates that the same would have any
           retrospective effect. Consequently, therefore, it would apply
G          to all acquisitions made subsequent to 24-9-1984, the
           date on which Act 68 of 1984 came into force. The Land
           Acquisition (Amendment) Bill of 1982 was introduced in
           Parliament on 30- 4-1982 and came into operation with
           effect from 24-9-1984 .... "
H          25. In Ashok Lanka and Anr. v. Rishi Dixit and Ors. [(2005)
       STATE OF PUNJAB & ORS. v. BHAJAN KAUR & ANR.                     1123
                      [S.B. SINHA, J.]

       5 SCC 598], this Court held:                                              A
            "A statute must be read reasonably. A statute should not
            read in such a manner which results in absurdity, A statute,
            on its plain language, although postulates a prospective
            operation, it cannot be held to be retrospective only
            because it would apply for the excise year for which
                                                                                 8
            applications were invited despite the fact that the selection
            process made thereunder is over."

             26. The Kerala and Punjab & Haryana High Court
       proceeded on the basis that Section 6 of the General Clauses              c
       Act will apply. If the same applies, it would not affect any right,
       privilege, obligation or liability acquired, accrued or incurred
       under any enactment so repealed. If that be so, the old Act shall
       apply and not the new one. Construction of a repeal and saving
       clause vis-'-vis the statute providing for continuation of orders,
                                                                                 0
       etc. must be given the meaning which can be culled out from
       the statute in question.
             27. In Southern Petrochemical Industries Co. Ltd. v.
       Electricity Inspector & ETIO and Others [(2007) 5 SCC 447],
       this Court held:                                                          E

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

..1.        " ••• The objective of the provision is to ensure protection of

            any right or privilege acquired under the repealed Act.
            The only exception to it is legislative intention to the contrary.
            That is, the repeaiing Act may expressly provide or it may           H
    1124      SUPREME COURT REPORTS                  [2008) 7 S.C.R.


A          impliedly provide against continuance of such right,
           obligation or liability... "
         We, therefore, are clearly of the opinion that the 1988 Act
    does not have any retrospective operation.
                                   I


B         28. For the reasons aforementioned, the decisions of
    Kerala and Punjab & Haryana High Court do not lay down a
    good law. They are overruled accordingly. However, as the State
    has not asked for any relief against the respondents, this appeal
    is dismissed. No costs.
C D.G.                                           Appeal dismissed