Case: Motor Owners Insurance Co. Ltd Vs. Jadavji Keshavji Modi &amp; Ors

2, 000 each, in the case of Bachan Singh and Narinder Nath. In view of the limit on the insurers 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 cl. (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. 22. 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 Workmens 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 s. 95(2)(a), the liability of the insured and, therefore, the insurers indemnity, includes the liability of the aforesaid discription 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 a goods vehicle. 23. We cannot part with this case without impressing upon the 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 States 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 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 Smt. Manjusri Raha v. B.L. Gupta [1977] 2 SCR 944 ; AIR 1977 SC 1158. 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 sometimes 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 trend 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 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 of SCR). 24. These observations are still languishing in the cold storage of pious 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 States 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. 25.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We are concerned only with cl. (a) of s. 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 s. 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 cl. (a)Clause (a) as originally enacted in 1939, provided that the insurance policy must cover the liability in respect of third party risks up to 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 wordswere added after the words. 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 up to the limit of twenty thousand rupees in all. Whereas cl. (a) in its original form spoke of a vehicleused or adapted to be used for the carriage of goods, under the amendment of 1956, the clause was made applicable to cases where the vehicleis 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 Workmens Compensation Act, 1923, to the extent mentioned in the amendment. The amendment introduced by the Amendment Act, 56 of 1969, enhanced the liability under cl. (a) from twenty thousand rupees to fifty thousand rupees in all.Clause (b) of s. 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 cl. (b). 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 and one lakh rupees in all, depending upon the registered capacity of the vehicle to carry passengersRelying 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 s. 95(2)(a) of the Act. The involvement of more than one person in a single occurrence raises a different question for consideration under s. 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 wordscomes into play and we have already expressed our view on the meaning of thosen the case before the Karnataka High Court in Sanjiva Shetty [1976] ACJ 261   ; AIR 1976 Kar. 146, 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 lawSmt. Manjusri Raha v. B.L. Gupta [1977] 2 SCR 944   ; AIR 1977 SC 1158These observations are still languishing in the cold storage of pious 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 States 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, 000Having 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, especially, since the words of s. 95(2) cannot, in the context in which they occur, be regarded as plain and unambiguous. We will first demonstrate the harsh and strange consequences 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 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 lions 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, 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 that it does not exceed rupees twenty thousand. 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 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 ae agreement and truck owners are quite known for the ease with which they proclaim their insolvency. It is, therefore, no consolation that ther liability will fall on theh 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 naturally from the language used by the Legislature. It, therefore, becomes necessary to consider whether the language used by the Legislature in s. 95(2) of the Act admits of any doubt or difficulty or is capable of one interpretation onlyBut as we will presently show, the expressiondoes 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 theis 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 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 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,. 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 insurers 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 insurers 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 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 ane are, therefore, of the opinion that the ambiguity in the language used by the Legislature in the opening part of s. 95(2) and the doubt arising out of then of that language with the wordswhich occur in cl. (a), must be resolved by having regard to the underlying legislative purpose of the provisions contained in Chap. 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, unfortunately not receding, that courts have to fill gaps, clear doubts and mitigate hardships. In the words of judge Learned Handl v. Markham [1945] 148 F. 2dIt is one of the 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.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 thes 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 wordis used in the expressionfrom 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 insurerIn 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 of cl. (a) of s. 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 wordswhich occur in s. 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 [1973] ACJ 319  , only one person was involved in the collision between a jeep and a goods vehicleIt 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 Workmens 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 s. 95(2)(a), the liability of the insured and, therefore, the insurers indemnity, includes the liability of the aforesaid discription 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 a goodse cannot part with this case without impressing upon the 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 States 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 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 reminderSmt. Manjusri Raha v. B.L. Gupta [1977] 2 SCR 944   ; AIR 1977 SC