judgement:
Civil Appeals Nos.
801 802 of 1978: From the judgment and order dated the 30th September, 1976 of the Gujarat High Court at Ahmedabad in F.A. No. 696 of 1) 1971 and 1282 of 1969.
Soli J. Sorabjee, I.N. Shroff and H.S. Parihar for the Appellant.
S.K. Dholakia and R.C. Bhatia for Respondent Nos.
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 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 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 '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 other classes of litigation, takes the sting out of the laws of compensation 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 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 1, 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.
The truck was insured against third party risk with the appellant, the Motor owners Insurance 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 I (g), who are the heirs and legal representatives of the deceased Ajit Sinh, filed an application before the Motor Accidents Claims Tribunal, Ahmedabad, under section 110 D of the , 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 suffered by him.
The Tribunal dismissed both the applications by a common judgment dated June 2(, 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 I (a) to I (g) filed separate appeals in the Gujarat High Court from the Judgment of t 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 basis that the truck was used for carrying goods.
The High Court allowed the appeals, awarding a compensation of Rs. 19,125 to 865 respondents 1 (a) to 1 (g) with 6% interest from the date of application until realisation of the amount and a compensation of Rs. 10,000 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 Court, limited to the question relating to the construction of section 95 (2) of the , ("the ").
Chapter VIII of the bears the title "Insurance of motor vehicles against third party risks".
Section 93 defines certain terms while section 94 (1) provides for the necessity to insure a vehicle against 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 prescribes the requirements of the insurance policy and the "limits of liability" thereunder.
Broadly, by sub section (1) of section 95, 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 to sub section (I) 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) any contractual liability.
That takes us to the provisions contained in section 95 (2) of the , the interpretation of which is the sole question for our consideration in this appeal.
The , save for Chapter VIII relating to the insurance of motor vehicles against third party risks, has been in force since July 1, 1939, in what were known as Part A and Part States and since April 1, 1951 in Part States.
Chapter VIII came into force on July 1, 1946.
Section 95 (2) of the originally read thus: "95 (2) Subject to the proviso to sub section (1), a 866 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 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 a contract of employment, in respect of persons other than passengers carried for hire or reward, a limit of twenty thousand rupees; and in respect of passengers a limit of twenty thousand rupees in all, and four thousand rupees in respect of an individual 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; (c) where the vehicle is a vehicle of any other class, the amount of the liability incurred." (emphasis supplied) Clause (a) of sub section (2) was substituted by a new clause by section 74 of the Motor Vehicles (Amendment) , 100 of 1956, with effect from February 16, 1957.
The amended clause (a), which was in force on February 1, 1966 when the Incident leading to these proceedings occurred, reads thus: "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 , in respect of the death of, or bodily injury to, employees (other than the driver), not 867 exceeding six in number, being carried in the vehicle." (emphasis supplied) Clauses (b) and (c) of section 95 (2) remained as they were in 1939 and were not touched by the 1956 Amendment.
Section 95 (2) underwent a further amendment by the Motor Vehicles (Amendment) , 56 of 1969, which came into force on March 2, 1970.
As a result of that amendment, the section reads thus: "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 goods vehicle, a limit of fifty thousand rupees in all, including the liabilities, f any, arising under the , 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; (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 contract of employment (i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all; (ii) in respect of passengers: (1) a limit of fifty thousand rupees in all where the vehicle is registered to carry more than thirty Passengers; 868 (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 where the vehicle is registered to carry more than sixty passengers; and (4) subject to the limits aforesaid ten thousand rupees for each individual 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 of rupees two thousand in all in respect of damage to any property of a third party.
" (emphasis supplied) We are concerned only with clause (a) of section 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 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 interpretation of the provision contained in clause (a).
Clause (a) as originally enacted in 1939, provides 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 100 of 1956, the 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 "used or adapted to be used for the carriage of goods", under the 869 amendment of 1956, the clause was made applicable to cases where the vehicle "is a goods vehicle".
The other amendment introduced by the of 1956 was that the overall limit of twenty thousand rupees was expressed to include the liability arising under the to the extent mentioned in the amendment.
The amendment introduced by the Amendment 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; and to twenty thousand rupees in all in respect of passengers.
The Amendment of 1956 did not make any change in clause (b).
But, the Amendment 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 one lakh rupees in all, depending upon the registered capacity of the vehicle to carry passengers.
It may be recalled that the High Court awarded compensation in the sum of Rs. 19,125 to respondents 1 (a) to 1 (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 thus comes to Rs. 29,125 that is to say, it is in excess of Rs. 20,000.
The contention of Shri Sorabjee who appears on behalf of the appellant insurance 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 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 of 1956 which came into force on February 16, 1957, introduced the words 870 "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 words "in all" in clauses (b) and (d) of section 95 (2) as amended by Amendment 56 of 1969 which came into force on March ".
Having 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 since, especially, the words of section 95 (2) cannot, in the context in which they occur, be regarded as plain and unambiguous.
We with first demonstrate the harsh and strange consequences which will flow out of the construction pressed upon us and we with then show why we consider That the material words of the section are of doubtful import.
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 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 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, 871 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 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 band 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 a hire purchase agreement and truck owners are quite known for the 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 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 a meaning which does not follow natural 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 admits of any doubt or difficulty or is capable of one interpretation only.
If the words used by the legislature in clause (a) of section 95 (2) were the sole factor for determining the outside limit of the insurer 's liability, it may have been possible to accept the 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 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 872 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 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 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 accident ' does 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 the well settled principles of statutory construction.
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 an 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 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 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 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 insurer 's 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 873 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 an accident.
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 having regard to the underlying legislative purpose of the provisions contained in chapter VIII of the 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 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 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.
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 point of view of the insurer.
In The South Staffordshire Tramways Company Ltd. vs The Sickness and Accident Assurance Association Ltd., (2) the plaintiffs, a 874 tramcar company, effected with the defendants an insurance against claims for personal injury 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 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 ( ' 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 saying 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 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 "accident", as used in the policy of insurance, is "any single injury to the person or property accidentally caused.
" In Forney vs Dominion Insurance Co. Ltd. (1) the plaintiff, a solicitor, was insured under a professional indemnity policy whereby 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 same occurrence ' '.
The 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 within the six month limitation period.
A claim was made against the Solicitor for his assistant 's negligence for depriving the claimants of their right to be paid 875 damages.
The court assessed the quantum of damages differently 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 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 proposition that the word 'accident "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 arose for consideration before a Full Bench of the High Court of Punjab in Northern India Transporters Insurance Co. Ltd. vs Smt.
Amrawati, (2) a Full Bench of the High Court of Madras in Jayalakshami & Ors.
vs The Ruby General Insurance Company, Madras & anr., (3) the High Court of Karnataka in Sanjiva Shetty vs Anantha & Ors., (4) and the High Court of Orissa in Sabita Pati & Ors.
vs Rameshwar Singh and anr.
(5) and M/s Construction India & Ors.
vs 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 .
In 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 876 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 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 words "any one accident ' ' which occur in section 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, 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 limited to rupees twenty thousand under section 95(2)(a) of the .
The n involvement of more than one person in a single occurrence raises 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 into play and we have already expressed our view on the meaning of those words.
In the case before the Karnataka High Court in Sanjiva Shetty, 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 law.
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 ". indeed, no argument was addressed to the contrary by any of the 877 parties".
In the case before the Orissa High Court in M/s Construction 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 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 argument was advanced before the High Court on the construction of clause (a), particularly in reference to the words "any one accident" 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 not really detain us.
Under that section, as it stood prior to its 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, 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 passengers excluding the driver.
A passenger bus was involved in an occurrence in which two passengers were killed.
The High Court held that the straightforward course was to take the language of the 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 in all and there was a further limit in respect of each individual passenger in the sum of two thousand rupees.
The words "any one accident ' in the opening part of section 95 (2) made no difference to this interpretation because, if more than one passenger was injured in a single occurrence, no one passenger was entitled to receive more than rupees two thousand or four thousand, depending on the registered capacity of the vehicle to carry passengers.
878 The judgment of the Punjab High Court was brought in appeal to this Court in Sheikhupura Transport Co. Ltd. vs Northern India Transport Co.(1) 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 Reddy, J. concluded: "In the present case we are dealing with a vehicle in which more than six passengers were allowed to be carried.
Hence the maximum liability imposed under section 95 (2) on the insurer is Rs. 2,000 per passenger though the total 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 Sec.
95,(2).
Hence the High Court was right in its 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 Narinder Nath".
In vies of the limit on the insurer 's 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 clause (b), as amended by 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.
It was suggested that the interpretation which we are putting on section 95 (2) (a) will create difficulties in cases where the insured also incurs liability under the 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 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 of 1923 to employees carried in the goods vehicle.
879 We cannot part with this case without impressing upto the A 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 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 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 (1): "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 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 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 880 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 section 95 (2) (d) of the 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 section 95 (2) (d) of the .
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).
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 State 's 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. 881 In the result the appeals are dismissed with costs in separate sets in favour of respondents 1 (a) to 1 (g) who are the heirs of the deceased Ajit Sinha and in favour of respondents 3 to 6 who are the heirs of Jadavji Keshavji Modi since deceased.
N.V.K. Appeals dismissed.

summary:
Section 95 of the 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 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.
Section 95(2) of the Act as it originally stood read thus: "95(2): Subject to the proviso to sub section (I) 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 to be used for the 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 amended clause read: "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 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 the vehicle".
This provision underwent further amendment by the Motor Vehicles (Amendment) Act, 1969 which came into force on March 7, 1970.
A collision took place between a motor car and a goods truck in February 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 appellant insurance company.
861 The heirs and legal representatives of the deceased field an application before the Motor Accidents Claims Tribunal, under section 110 D of the Act, claiming compensation in the sum of Rs. 30,000 for the death caused in the accident.
The person who was injured filed a separate application asking for compensation 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 time of the accident.
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 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 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 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 company is liable to pay the full amount of compensation to the heirs of the deceased 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.
[870 G] 3.
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 and ambiguous.
[871 E] 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) 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 section 95 (2) to the effect that "a policy of insurance shall cover any liability incurred in respect of any one accident up to 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 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 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.
[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 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 language with the words 'in all ' 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 C] 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 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 the law makers does not yield to one and one meaning only.
lt 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 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 insurer.
[873 D, F G] 8.
With the emergence of the General Insurance Corporation which has taken over general insurance business of all kinds, including motor vehicle insurance, it should be easy to give statutory recognition to the State 's obligation to compensate victims of road accidents, promptly, adequately and without con test .
Cabell vs Markham, 737, 739 [1945]; The South Staffordshire Tramways Company Ltd. vs The Sickness and Accident Assurance Association Ltd., [1891]1 Q.B.D. 402; Forney vs Dominion Insurance Co. Ltd., [1969] 1 Weekly Law Reports, 928; Manjusri Raha and Ors.
vs B.L. Gupta and Ors. ; , referred to.
Northern India Transporters Insurance Co. Ltd. vs Smt.
Amrawati, AIR 1966 Punjab 288, Jayalakshmi and Ors.
vs The Ruby General Insurance Company, Madras and Anr. ; Sabita Pati and Ors.
vs Rameshwar Singh and Anr. ; Sheikhupura Transport Co. Ltd. vs Northern India Transport Co., distinguished.
Sanjiva Shetty vs Anantha and Ors. , M/s. Construction India and Ors.
vs Mahindra Pal Singh Ahluwalia and Ors , disapproved.


judgement:
Civil Appeal No. 2060 of 1970.
From the judgment and order dated the 26th August, 1969 of the Madhya Pradesh High Court in First Appeal No. 100 of 1965 Harbans Singh for the Appellant.
Gopal Subramaniam, D.P. Mohanty and R.A. Shroff for the Respondent.
The Judgment of the Court was delivered by BALARRISHNA ERADI, J.
This appeal by certificate granted by the High Court of Madhya Pradesh under Article 133 (1) (a) arises out of a suit Regular Civil Suit No. 7 A of 1963 on the file of the First Additional District Judge, Bhopal instituted by the appellant herein against the State of Madhya Pradesh, for recovery of a sum of Rs. 29,500 from the defendant by way of refund of the first instalment of the sale price deposited by the plaintiff with the Forest Department of the defendant State pursuant to an auction of two forest coupes held on August 17, 1960, together with damages alleged to have been sustained by the plaintiff on account of alleged breach of contract by the defendant.
The plaint contained a further prayer that the defendant should be restrained by a permanent injunction from taking any steps to recover from the plaintiff the second and third instalments of the sale price for which the two coupes had been knocked down in favour of the plaintiff at the auction sale.
The trial court held that the plaintiff is entitled to recover from the defendant Rs. 17, 500 by way of refund of the first instalment of the sale price of the two coupes, but rejected the plaintiff 's claim for recovery of damages.
Accordingly, a decree was passed in the plaintiff 's favour for recovery of Rs. 17,500 with proportionate costs.
The plaintiff 's prayer for the relief of permanent injunction was also granted by the trial court.
897 The State (defendant) carried the matter in appeal before the High Court of Madhya Pradesh.
The High Court took the view that the plaintiff 's claim for refund of the first instalment of the sale price was unsustainable inasmuch as he had not proved that the number of trees which were actually available for extraction in the two coupes, according to the proper markings, was less than the number of trees which was covered by the assurance given to the contractor at the time of the auction.
As regards the relief of permanent injunction, the High Court held that from the notice (Exh.
P 7) issued by the concerned Divisional Forest officer to the plaintiff on April 17, 1961, it was seen that the Government had indicated to the plaintiff its intention to terminate the contract before the second instalment had become due and hence the only right which the Government thereafter had was to realise from the plaintiff the deficiency, if any, occasioned by a resale of the two coupes.
In this view, the High Court held that the Government had no longer the right to claim from the plaintiff the balance of the sale consideration represented by the second and third instalments and that the decree for permanent injunction granted by the trial court did not, therefore, call for any interference.
Accordingly, the appeal filed by the defendant was allowed in part by the High Court and the decree granted to the plaintiff by the trial court for recovery of Rs. 17,500 was set aside.
Hence, this appeal by the plaintiff.
The facts of the case on which there is no dispute are as follows.
On July 22, 1960, the Forest Department of the State Government of Madhya Pradesh published in the State Gazette a notice notifying for general information that forest contracts of East Bhopal, Forest Division will be settled by public auction to be held by the Divisional Forest officer at Sader Manjil, Bhopal on August 17, 1960.
The plaintiff attended the said auction after having deposited the requisite earnest money.
At the time o the auction, the respective Range officers announced the details of the quantities of the forest produce available in each coupe.
In the said announcement, the total number of trees of each species available in each coupe as also their girth etc., were announced by the concerned Range officers and the bids were invited on the basis of the said information given out to the intended bidders.
The plaintiff was the highest bidder in respect of two coupes, namely, Searmau Coupe C/2 "A" and "B".
The plaintiff 's bid of Rs. 69,000 for those two coupes was accepted by the Auctioning officer and pursuant thereto, the plaintiff deposited on August 22, 1960 Rs. 16, 250 being the balance of the first instalment of Rs. 17,250 after adjustment of the 898 earnest money already deposited.
The plaintiff also produced a solvency certificate and executed the requisite Security Bonds.
On October 27, 1960, the plaintiff was informed by the concerned Divisional Forest officer that the security bonds furnished by the plaintiff were accepted and that the contract in respect of the two coupes was sanctioned in his favour by the Chief Conservative officer of Forests.
By the said communication, the plaintiff was directed to proceed to the site and sign the 'coupe boundary certificate ' before the Range officer for getting possession of the two coupes.
The plaintiff 's case is that when, in pursuance of the aforesaid intimation, he visited the two coupes and conducted a detailed inspection of the trees available for extraction, he found that the coupes did Dot contain the forest produce as announced at time of auction, that a very large number of big trees which had been marked for felling and given serial numbers did not bear hammer marks either at the breast height or at the bottom, with the result that the contractor was debarred under the rules from felling those trees, that similarly a large number of trees which were hammer marked had not, however, been given serial numbers and that a large number of trees situated along the bank of a Nala in Coupe No. 2 "B" which had been marked for felling and had been serially numbered were found to have been subsequently "reserved" with the result that it was no longer open to the contractor to cut any of those trees.
The plaintiff states that the aforesaid vital discrepancies and irregularities were pointed out by him to the Range officer and inasmuch as the number of trees available for cutting in the two coupes was found to be very much short of the quantity and quality of the forest produce given out at the time of auction as being available in the two coupes, he refused to sign the boundary certificate.
Thereafter, correspondence concerning the matter passed between the plaintiff and the Department, but notwithstanding joint inspections of the site and deliberations the parties could not reach any agreement.
The plaintiff took the stand that unless the Department was ready and (; willing to put him in possession of the forest produce conforming to the quantity and quality of timber announced at the time of the auction, he was entitled to repudiate the contract and claim a refund of the amount remitted by him by way of first instalment of the sale price.
The Forest Department issued a notice to the plaintiff on April 17, 1961, calling upon him to show cause why the contract should not be terminated and the two coupes reauctioned at the 899 plaintiff 's risk.
In the meantime, on January, 19, 1961, the plaintiff had been served with a notice requiring him to deposit the second instalment of Rs. 17,250 and threatening that in the event of failure to comply with the said demand, the amount will be recovered as arrears of land revenue.
Subsequently, the Forest authorities of the State initiated action for recovering from the plaintiff the sum of Rs. 34,500 purporting to be the second and third instalments of the sale price, and a notice of demand under Section 146 of the Madhya Pradesh, Land Revenue Code was issued to the plaintiff by the Tehsildar, Bhopal.
Thereupon, the plaintiff instituted the present suit praying for the relief aforementioned, after Serving on the defendant a due notice under Section 80, Code of Civil Procedure.
Admittedly, the auction sale was of the right to cut the trees which had been marked and numbered in the entire area covered by the two coupes in question.
Details regarding the quantity and quality of timber available for cutting in the respective coupes were announced by the concerned Range officers at the time of auction and it was on the basis of the said information that the participants in the auction were invited to bid.
The trial Court as well as the High Court have concurrently found that an assurance had been given by the Department at the time of the auction that the two coupes contained the specified quantity of timber of different varieties and girth and that the details then given were as set out in the tabular statement appended to paragraph 3 of the written statement of the defendant.
The plaintiff (examined as P.W. 2) and P.Ws. 3 to 6 all of whom had inspected the coupes subsequent to the auction sale have sworn that the quantity of the timber that was actually available for cutting in the two coupes was considerably less than the quantity announced at the time of the auction.
The oral testimony given by them is corroborated by the statements contained in Exhibits p 1, P 3, P 5, P 6 and P 8, which are copies of the various representations made by the plaintiff to the offices of the Forest Department after he found out on inspection of the coupes that there was vast divergence between what was announced at the time of the auction as the quantity of the timber available for cutting from the two coupes in question and the quantity that was actually found to be available.
Even though the then Sub Divisional Forest officer, who was examined as D.W. 2, has stated in the evidence that after receipt of the plaintiff 's complaint, he inspected the coupes and submitted a detailed inspection report to the Divisional Forest officer, the defendant did not produce the said report in Court, it has also 900 come out in the evidence of D.W. 3, who was the Forest Guard in the area concerned at the relevant time, that he had submitted to the Range officer a report containing details of the timber available for cutting in the two coupes.
The aforementioned two reports would have been of valuable assistance in determining the extent of shortfall, if any, in the quantity of timber actually available for cutting in the coupes when compared with the particulars given out at the auction.
The non production of the two reports by the dependant, who alone was in possession of the documentary evidence capable of throwing light on the subject matter of this crucial issue, assumes significance in view of the admission made by D.W. 3 that during his inspection of the coupes pursuant to the complaint received from the plaintiff he had found that there were some trees which had been numbered for cutting but had not been hammer marked, that there were some other trees which contained hammer marks only at one place instead of at the base as well as at breast height, as required under the rules, and that there were still some other trees which had been marked by hammer but had not been assigned any number.
The inspection report prepared by this witness which has been suppressed is a very material document since the witness has sworn that he had actually counted and noted the precise number of trees in respect of which such irregularities were found to have been committed.
Another important admission made by this witness is that there was some truth in the complaint of the plaintiff with respect to the 'reservation ' of the Nala.
The evidence clearly shows that there was a large number of trees of different varieties situated on the bank of a Nalla in Coupe No. 2 "B" and they had been hammer marked and serially numbered for cutting and removal.
At the time of the auction sale, the Department had treated these trees as being available for extraction by the contractor and it was on that basis that the particulars regarding the total quantity of timber belonging to different species available for cutting in the two coupes were announced to the bidders.
However, subsequently, the area comprising the bank of the said Nalla was declared as "reserved", with the result that there was a prohibition against cutting of the trees from the said 'reserved ' area.
The plaintiff in his evidence, as P.W.2, has stated that there were about 300 teak trees in the area forming the bank of the Nalla and that the value of those trees would amount to between Rs. 10,000 and Rs. 12,000.
Though three officers of the Forest Department were examined on the side of the defendant, the aforesaid testimony given by the plaintiff has not been controverted by them, 901 Notwithstanding the aforesaid facts brought out in the A evidence, the High Court summarily rejected the plaintiff 's contention based on the factum of reservation of the trees standing on the bank of Nalla by stating as follows: "But there is nothing in the plaintiff 's complaints to the Department at any stage alleging that this reservation had been made after the auction had taken place.
The idea appears to be an after thought.
The mere oral statement of the plaintiff and his witnesses that this marking for reservation had taken place after the auction, on the basis that they did not see these markings about reservation of the trees near the Nalla when they had gone to that forest on earlier occasions, are wholly insufficient to come to the conclusion that the Nalla area had been reserved after the auction. ' ' The aforesaid reasoning is based entirely on the assumption that in one of the complaints preferred by the plaintiff before the Department officers, it had been alleged by him, that the reservation of the trees on the bank of Nalla had been made after the auction had taken place.
A mere reference to Exh.
P l is sufficient to show that the aforesaid assumption made by the High Court is wholly erroneous.
P l is a copy of the representation dated December 28, 1960 submitted by the plaintiff to the Divisional Forest officer (East), Bhopal.
In paragraph 4 thereof, the plaintiff had stated as follows: "That the applicant inspected the coupe in or about the first week of November 1960 to give the coupe boundary certificate as is required under Clause 2 of the draft agreement deed.
During this inspection the applicant was surprised to know that there were numerous irregularities committed in the marking of trees and huge area containing the Forest Produce marked for sale in the said coupe was subsequently reserved." (underlining supplied) Thus, the correct factual position is that the plaintiff had categorically complained to the Department that a substantial area containing the forest produce, which had all been originally marked for sale, had been subsequently 'reserved ', with the result that the quan 902 tity of timber available for extraction had become substantially reduced, The criticism made by the High Court that the argument advanced by the plaintiff was the result of an after thought, was therefore not justified.
We may at this stage refer to Condition No. 3 in the sale notice (Exn. D/l) on which strong reliance was placed on behalf of the respondent.
That condition reads: "The details of quantities of forest produce announced at the time of auction are correct to the best of the knowledge of the Divisional Forest officer but are not guaranteed to any extent The intending bidders are, therefore, advised to inspect on the spot the contract area and the produce they intend to bid for with a view to satisfy themselves about its correctness.
No claim shall lie against the State Government for compensation or any other relief, if the details of the quantities are subsequently found to be incorrect".
In our opinion, the trial court was perfectly right in its view that, while the said condition will operate to prevent the Contractor from claiming any damages or compensation from the State Government on the ground that the details of the quantity of the forest produce were subsequently found to be incorrect, it will not preclude him from repudiating the contract on its being found that there was substantial variance between the particulars furnished at the time of the auction regarding the quantity and quality of timber that will be available for extraction in the concerned coupes and the quantity etc.
Of tree growth actually found to be available on the site.
It has been clearly established by the evidence in this case that a very substantial quantity of timber standing on the bank of Nalla had been marked for extraction and numbered and the auction sale had been held on the basis that the highest bidder would be entitled to fell and remove all those trees.
But by the time the coupes were allowed to be inspected by the auction purchaser, that area was declared to be "reserved", with the result that there was a complete prohibition against the felling of any timber therefrom.
This has substantially altered the very foundation of the contract and hence it was perfectly open to the plaintiff to repudiate the contract and claim a refund of the amount deposited by him as a part payment of the purchase price.
903 We are unable to agree with the view expressed by the High A Court that "the plaintiff cannot succeed unless he proved that, even after excluding the trees standing on the reserved area, the rest of the forest did not have sufficient number of trees which would satisfy the assurance given at the time of the auction".
The subject matter of the auction sale was the totality of the trees which were marked for cutting in the two coupes.
Since a substantial number of the marked trees was contained in the area which was subsequently declared as "reserved", it is inevitable that there was a corresponding diminution in the total quantity of timber which was announced as available for cutting at the time of the auction sale.
We do not, therefore, find it possible to agree with the reasons stated by the High Court for refusing the plaintiff 's prayer for refund of the amount paid by him by way of the first instalment of the sale price.
The conclusion recorded by the trial court on this issue was perfectly correct and the High Court was in error in interfering with the said finding.
We notice, however, that a slight mistake has crept into the judgment and decree of the trial court, inasmuch as the amount of the first instalment refund has been wrongly mentioned therein as Rs. 17,500, whereas the amount actually paid by the plaintiff by way of the first instalment was only Rs. l7,250.
A modification to this extent is, therefore, called for in the decree passed by the trial court.
This appeal is accordingly allowed, the judgment and decree passed by the High Court are set aside and those of the trial court are restored subject to the modification that the amount recoverable by the plaintiff from the defendant shall be only Rs. 17,250 and not Rs. 17,500 as stated in the trial court decree.
In all other respects, the decree passed by the trial court will remain in tact.
The respondent (defendant) will pay the costs of the piaintiff in this Court as well as in the High Court.

dataset_name: IN-Abs

summary:
Pursuant to the notice dated July 22, 1960, notifying that forest contracts will be settled by public auction, the appellant plaintiff attended the said auction on August 17, 1960 after having deposited the requisite earnest money of Rs. 1,000 and furnished the solvency certificate for the sum of Rs. 1.5 lakh.
At the time of auction, the details of the forest produce available in each coupe was announced.
In the said announcement the total number of trees of each species available in each coupe as also their girth etc were furnished and the bids were invited on the basis of the said information given to the intended bidders.
The appellant as the highest bidder in respect of two coupes, namely, Searmau Coupe C/2 "A" and "B" with a bid of Rs 69,000 for these two coupes.
Pursuant thereto, the appellant deposited on August 22,1960, Rs. 16,250 being the balance of the first instalment of Rs. 17,250, after adjustment of the earnest money in deposit.
On executing the requisite security bonds, the appellant was directed, on October 27, 1960, to proceed to the site and sign the "coupe boundary certificate", before the Range officer for getting possession of the two coupes.
When the appellant visited the two coupes and conducted a detailed inspection of the trees available for extraction, he found that the coupes did not contain the forest produce as announced at the time of the auction.
Inasmuch as the number of trees available for cutting in the two coupes were found to be very much short of the quantity and quality of the forest produce given out at the time of auction as being available in the two coupes, the appellant refused to sign the boundary certificate.
The forest authorities, on January 19,1961 served a notice calling upon the appellant to deposit the second and third instalments of the bid amount and threatening that in the event of default, the amount would be recovered as arrears of land revenue.
Subsequently a distraint notice was also issues under section 146 of the Madhya Pradesh Land Revenue Code by the Tehsildar.
On April 17,1961, the forest authorities issued a notice calling upon the appellant to show cause why the contract be not terminated and the two 895 coupes re auctioned at his risk.
Thereupon the appellant, after serving on the, respondent a due notice under section 80 Civil Procedure Code, filed a suit tor recovery of the amount deposited by way of first instalment plus damages arising out of the breach of contract.
The appellant also prayed for a permanent injunction restraining the State for taking coercive step to recover further instalments.
The Trial Court decreed the suit as prayed for.
In appeal by the respondent.
State the High Court set aside the decree on the ground that the appellant did not prove that the number of trees which were actually available for extraction in the two coupes, according to proper marking was less than the number of trees which was covered by the assurance given to the contractor at the time of the auction.
Allowing the appeal by certificate under Article 133 (1) (a) of the Constitution, the Court, ^ HELD: 1.
While condition number 3 in the Sale Notice (exhibit D/D) will operate to prevent the Contractor from claiming any damages or compensation from the State Government on the ground that the details of the quantity of the forest produce were subsequently found to be incorrect, it will not preclude him from repudiating the contract on its being found that there was substantial variance between the particulars furnished at the time of the auction regarding the quantity and quality of timber that will be available for extraction in the concerned coupes and the quantity etc.
Of tree growth actually found to be available on the site.
[902 D F] 2: 1.
It has been clearly established by the evidence in this case that a very substantial quantity of timber standing on the bank of Nalla had been marked for extraction and numbered and the auction sale had been held on the basis that the highest bidder would be entitled to fell and remove all those trees.
But by the time the coupes were allowed to be inspected by the auction purchaser, that area was declared to be "reserved", with the result that there was a complete prohibition against the felling of any timber therefrom.
This has substantially altered the very foundation of the contract and hence it was perfectly open to the plaintiff to repudiate the contract and claim a refund of the amount deposited by him as a part payment of the purchase price.
[902 F H] 2: 2.
The subject matter of the auction sale was the totality of the trees which were marked for cutting in the two coupes.
Since a substantial number of the marked trees was contained in the area which was subsequently declared as "reserved", it is inevitable that there was a corresponding diminution in the total quantity of timber which was announced as available for cutting at the time of the auction sale.
[903 A C] 2: 3.
The appellant has fully proved his claim for the refund of the amount paid by him by way of the first instalment of the sale price by examining himself as P.W. 2 and also through P.Ws. 3 to 6, all of whom had inspected the coupes subsequent to the auction sale.
The oral testimony given by them is further corroborated by the statements contained in exhibit P l, P 3, P 5, P 6 and P 8.
Further the sworn evidence of respondent 's own witnesses (D.W. 2 and D.W. 3) and the suppression of their two inspection reports from the court confirmed the right to repudiate the contract and ask for a refund.
[899 H, 900 A E] 896 2: 4.
That the criticism made by the High Court that the argument by the appellant plaintiff was the result of an after thought is wholly unjustified and erroneous is clear from a mere reference to exhibit P 1.
The correct factual position is that the plaintiff had categorically complained to the department that a substantial area containing the forest produce.
which had all been originally marked for sale, had been subsequently "reserved" with the result that the quantity of timber available for extraction had become substantially reduced.
[901D E, H, 902A]