SINGH, J. - (1.) HEARD the learned counsel for the appellant.
(2.) THIS appeal is directed against the interim award dated 14. 11. 1995 passed by the Motor Accident Claims Tribunal, Udaipur u/s. 140 of the Motor Vehicles Act, 1988 awarding an amount of Rs. 25, 000/- to the respondents on no fault liability. The learned counsel for the appellant has submitted that the accident took place on 02. 07. 1994 and on that day the amount payable u/s. 140 of the Motor Vehicles Act, 1988 for an injury was a sum of Rs. 12, 000/ -. Regarding the amendment which came into force on 14. 04. 1994, whereby amount of compensation payable u/s. 140 of the Motor Vehicles Act for an injury was enhanced to Rs. 25, 000/-, it is submitted by the learned counsel for the appellant that this amendment cannot the applied retrospectively and, therefore, the Motor Accident Claims Tribunal, Udaipur was not justified in awarding the sum of Rs. 25, 000/- to the respondents u/s. 140 of the Motor Vehicles Act. In support of his submission the learned counsel for the appellant has placed reliance on the decision of the learned Single Judge of this Court given in National Insurance Company Ltd. vs. Heera and others (1 ). On a perusal of the judgment given by the learned Single Judge of this Court in National Insurance Company Ltd. vs. Heera and Others (supra), it appears to be necessary to refer to the decision given by the Division Bench in the case of R. S. R. T. C. vs. Smt. Ogam and others (2) because in the decision, a contrary view appears to have been taken by the Division Bench. A perusal of the judgment reported in R. S. R. T. C. vs. Smt. Ogam and others (supra)shows that the Division Bench was of the view that the amended provisions of Sec. 140 of the Motor Vehicles Act had no retrospective application but it was held that if the claim petition, is filed after the date of amendment, then the amendment provisions of Sec. 144 of the Motor Vehicles Act would be applicable and in these circumstances the amount of compensation would be awarded to the claimants. It was further held by the Division Bench that the provisions of Sec. 140 of the Motor Vehicles Act are procedural in nature and Sec. 144 of the Motor Vehicles Act, gives overriding effect to the provisions contained in Sec. 140. A short question that arises is whether the decision given by the learned Single Judge of this Court in National Insurance Company vs. Heera and others (supra), does not lay down a good law in view of the decision given by the Division Bench in R. S. R. T. C. vs. Ogum (supra ). The Division Bench, has expressed its views on three points, (1) Whether the provisions of Sec. 140 of the Motor Vehicles Act are procedural in nature?; (2) Whether the amended provisions of Sec. 140 of the Motor Vehicles Act have retrospective application? and (3) Whether Sec. 144 of the Motor Vehicles Act gives overriding effect to the amended provisions of Sec. 140 of the Motor Vehicles Act? Regarding the first question the Division Bench has held that provisions of Sec. 140 are procedural in nature. Regarding the second question the Division Bench has held that the amended provisions of Sec. 140 of the Motor Vehicles Act cannot be said to have retrospective application. And regarding the third question the Division Bench expressed the view that Sec. 144 of the Motor Vehicles Act gives overriding effect to the provisions of Sec. 140 and, therefore, the amended provisions of Sec. 140 overrides the corresponding provisions of Sec. 92-A of the Motor Vehicles Act, 1939. In Padma Srinivasan vs. Premier Insurance Company Ltd. (3), their lordships of Supreme Court considered the nature and extent of liability of the Insurance Company. In that case the insurance policy came into force on June 30, 1969 and covered a period to June 29, 1970. The statutory liability of the insurer, before the amendment was Rs. 20, 000/ -. By an amendment which came into force on March 2, 1970, the statutory liability of the insurer was increased from Rs. 20, 000/- to Rs. 50, 000/ -. The accident which gave rise to the claim proceedings occurred on April 5, 1970. The question which arose before their Lordships of the Supreme Court was whether the statutory liability for third party risk under the statutory policy must be held to be limited to Rs. 20. 000/- according to the relevant legal provision as it existed on the date on which the police came into force or, whether, that liability can be extended to Rs. 50, 000/- in accordance with the legal provision as it stood on the date of the accident. Their Lordships held that certificate of insurance exhibit P.-9 was issued by the agent of the Insurance Company on May 31, 1969 for the period June 30, 1969 to Insurance Company had undertaken liability as the insurance company had undertaken liability as the one under Chapter determinable under Chapter VIII at the relevant time, that is to say, at the time when the liability arises. Since the liability of policy arises on the occurrence of the accident and not until then, one must necessarily have regard to the state of law obtaining at the time of the accident for determining the extent of the insurer's liability under a statutory policy. Their lordships further held that the governing factor for determining the application of the appropriate law is not the date on which the policy of insurance came into force but the date on which the cause of action accrued for enforcing liability arising under the terms of the policy. Their lordships observed:- " The certificate of insurance exhibit P-9 issued by the respondent's agent on May 31, 1969 for the period June 30, 1969 to June 29, 1970 shows that the respondent insurer had undertaken "liability as the one under Chapter VIII of the Motor Vehicles Act, 1939". That must mean liability as determinable under Chapter VIII at the relevant time, that is to say, at the time when the liability arises. Since the liability of the insurer to pay a claim under a motor accident policy arises on the occurrence of the accident and not until then, one must necessarily have regard to the state of the law obtaining at the time of the accident for determining the extent of the insurer's liability under a statutory policy. In this behalf, the governing factor for determining the application of the appropriate law is not the date on which the policy of insurance came into force but the date on which the cause of action accrued for enforcing liability arising under the terms of the policy. That we consider to be a reasonable manner in which to understand and interpret the contract of insurance entered into by the insured and the insurer in this case. The contracting parties did not incorporate the provisions of Chapter VIII of the Act in their contract. That is to say, they did not identify the liability of the promisor on the basis of the provisions of Chapter VIII as they stood on the date when the contract was made. They merely referred to the provisions of Chapter VIII, which means "the provisions of Chapter VIII in force at any given time", the given time being the date on which the right to sue accrues or, correspondingly, the liability arises. If the parties to a contract agree that one shall pay to the other damages for breach of contract in accordance with the law contained in any particular statute, without identifying the law as the provision which is in force on the date of the contract, the law which will apply for determining the quantum of damages is the one which is in force on the date on which the breach of contract is committed, that being the date on which the cause of action arises, and not the law which was in force on the date on which the contract was made. "
(3.) IN view of the decision of the Hon'ble Supreme Court, it can be said without any hesitation that at the time of issuing the insurance policy incorporating the statutory liability under the Motor Vehicles Act it is open for the insurance company either to mention in the policy itself the limits and the legal liability or merely to refer to the relevant provisions under which the liability has been imposed. If the law has been mentioned in the policy itself, then the liability would be to the extent prescribed by such law and it is later amended in the law during the contingency of the policy from alternating the statutory liability of the insurance company to pay the compensation. On the other hand, if the insurance policy does not contain the legal provisions and merely refers to the law imposing statutory liability, the liability of the insurance company to pay compensation will have to be determined with reference to the law as in force on the date of the accident because the cause of action for claiming compensation under the policy issued by the insurance company arises on the date of accident. The date on which the cause of action accrues to the claimants is the date on which the liability to pay the compensation to the claimants arises. There cannot be two separate days, one for accrual of the cause of action and the other for accrual of liability to pay compensation. To sum up the decision of the Hon'ble Supreme Court in Padma Srinivasan vs. Premier INsurance Co. Ltd. (supra), lays down the law that in the absence of limit of liability incorporated in the insurance policy itself, the extent of liability of the insurance policy will have to be determined in accordance with the law enforced on the date of the accident. IN view of the aforesaid decision of the Hon'ble Supreme Court, the view taken by the Division Bench of this Court in R. S. R. T. C. vs. Ogam and Other (supra) does not appear to be a good law. IN the judgment of the Hon'ble Supreme Court there is nothing to indicate that the liability of the insurance company to pay the amount under the insurance policy can be regarded as a liability under the procedural law. On the other hand the judgment shows that the liability of the insurance company was considered on the footings that such liability was under a substantive law for the application of which the terms and conditions of the policy as well as the accrual of the cause of action were relevant. The view taken by the Division Bench that the payment of no fault compensation is regarding the procedure which an Accident Claims Tribunal has to follow and enhance of a normal compensation from Rs. 15, 000/- to Rs. 25, 000/- is only a procedural matter, does not appear to be correct in view of the view taken by the Hon'ble Supreme Court. So far as the retrospectivity of the amended provisions of the Motor Vehicles Act is concerned, the Division Bench has held that the provisions of this section confer the prospective measure of benefit and no question of retrospective operation of the provisions of New Act arises. The Division Bench has held that even if the provisions in question or by prospective amendment, the benefit of the new Act would be available to the claimants if the Tribunal is called up to ground the benefit under new provisions after coming into force of the New Act. The aforesaid view is based on the assumption that Sec. 140 of the Motor Vehicles Act, 1988 gives a completely independent right. IN view of the decision of the Hon'ble Supreme Court in Padma Srinivasan vs. Premier INsurance Company Ltd. (supra), the extent of liability of the insurance company, is to be determined with reference to the law applicable on the date of accident, if the extent of the statutory liability has not been mentioned in the insurance policy itself and the insurance policy merely refers to the statutory liability, by necessary implication, the liability to pay compensation u/s. 140 of the Motor Vehicles Act, 1988 cannot be said to be independent of the insurance policy issued by the insurance company. Hence, the view taken by the Division Bench appears to be no more good law in view of the Hon'ble Supreme Court. So far as the overriding effect manifested by the Sec. 144 of the Motor Vehicles Act, it may be pointed out that a similar provision is present in sec. 92 (E) of the Motor Vehicles Act, 1939. Assuming that Sec. 144 of the Motor Vehicles Act applies to all other laws including Motor Vehicles Act, 1939. The provisions of this Section cannot be used for the purpose of laying down any law other than the law laid down by the Hon'ble Supreme Court in Padma Srinivasan vs. Premier INsurance Co. Ltd. (supra) for determining the liability of the insurance company. Sec. 144 of the Motor Vehicles Act nowhere provides that the cause of action for the purpose of award for compensation u/s. 140 shall be deemed to be any date other than the date of accident nor there is anything in Sec. 144 to indicate that the date of presentation of application for interim award u/s. 140 of the Motor Vehicles Act is to be regarded as the date of accrual of cause of action for the purpose of compensation awarded u/s. 140 of the Motor Vehicles Act. I, therefore, most respectfully hold that in view of the decision of the Hon'ble Supreme Court in Padma Srinivasan vs. Premier Insurance Co. Ltd. (supra), the view taken by the Division Bench is not good. For reasons mentioned above, I hold that the liability of the Insurance Company u/s. 140 of the Motor Vehicles Act deserves to be determined with reference to the law enforced on the date of the accident. This appeal, therefore, deserves to be allowed and is hereby allowed. The interim award is hereby modified by substituting, the sum of Rs. 12, 000/- in place of the amount of Rs. 25,000/- awarded by the Motor Accident Claims Tribunal. . ;