2008 (5) TMI 604 - SC - Indian Laws

Whether Section 140 of the Motor Vehicles Act, 1988 will have a retrospective effect? Held that - Appeal dismissed. 1988 Act does not have any retrospective operation.

Summary

Issues Involved:
1. Retrospective effect of Section 140 of the Motor Vehicles Act, 1988.
2. Application of Section 6 of the General Clauses Act, 1897.
3. Interpretation of statutory provisions and legislative intent.

Detailed Analysis:

1. Retrospective Effect of Section 140 of the Motor Vehicles Act, 1988:
The primary issue in this case was whether Section 140 of the Motor Vehicles Act, 1988, which increased the compensation amount under "no fault liability" from Rs. 15,000 to Rs. 50,000, should be applied retrospectively. The accident in question occurred on 8.01.1983, under the Motor Vehicles Act, 1939, which stipulated a compensation of Rs. 15,000. The Supreme Court held that the 1988 Act does not have retrospective effect. The Court emphasized that a statute is presumed to be prospective unless explicitly stated otherwise. The Court stated, "A substantive law is presumed to be prospective. It is one of the facets of rule of law." The liability under the Act is a statutory liability, and such liability can only be made retrospective by explicit legislative provision.

2. Application of Section 6 of the General Clauses Act, 1897:
The respondents argued that Section 6 of the General Clauses Act should apply, which preserves rights and liabilities under repealed laws unless a different intention appears in the new statute. The Supreme Court disagreed, stating that Section 140 of the 1988 Act does not appear in the clauses of Section 217(2) of the 1988 Act, which contains the repeal and saving clause. The Court noted, "Section 6 of the General Clauses Act inter alia saves a right accrued and/or a liability incurred. It does not create a right." Therefore, the existing rights must be determined based on the statute applicable at the time of the accident, not under the new Act.

3. Interpretation of Statutory Provisions and Legislative Intent:
The Court examined various precedents and principles of statutory interpretation. It reiterated that changes in substantive law do not affect pending litigation unless explicitly stated by the legislature. The Court cited Garikapati v. Subbaiah Chowdhary, stating, "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 have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed." The Court also referred to Gajraj Singh and Others v. State Transport Appellate Tribunal and Others, emphasizing that the effect of repeal is to obliterate the Act completely from the record of Parliament as if it had never existed, except for past transactions.

The Court concluded that the 1988 Act does not have retrospective operation and overruled the decisions of the Kerala and Punjab & Haryana High Courts, which had held otherwise. The appeal was dismissed, with no costs awarded, as the State did not seek any relief against the respondents.

Conclusion:
The Supreme Court held that Section 140 of the Motor Vehicles Act, 1988, does not have retrospective effect. The rights and liabilities of the parties must be determined based on the law as it stood before the new Act came into force. The application of Section 6 of the General Clauses Act was found to be misplaced in this context, and the decisions of the Kerala and Punjab & Haryana High Courts were overruled.