Art of Distinguishing Case Law

(Varghese T. Abraham, B. A., LL. M., (District Judge) Presiding Officer, Labour Court, Ernakulam.)

Not a Story - Believe Me or Not

Scene was a moffusil Court in Middle - Travancore. There was a pleader. He is no more. He was subscriber to Travancore Law Journal (T.L.J.) Though a veteran cross examiner he was a poor student of quick grasping. One day he went through a Judgment - not in its entirety - which appeared in the Journal. The Editorial Note of that Judgment ran as follows:-

"Theft – 380 I.P.C. - A member of a Hindu Joint Family cannot commit theft".

Facts of that case would show that a member of a Joint Hindu Family committed theft of family property. In that context, the then apex court of the State held that a member of a Hindu Joint Family has moiety of share over the family property, he is entitled to have share over every inch of the property and the remedy of the aggrieved party is to sue for partition, claim the share of the stolen property and not to launch a criminal prosecution.

The aforesaid Pleader had a theft case with him. In that case, one Parameswaran Pillai committed theft of the property of his neighbour Mathew, a Christian. When Mathew stood in the box, the Head Constable, as he could .then, brought out the necessary facts in the examination in chief. The Pleader stood up and put only one question in cross-examination. "Mr. Mathew do you agree that my client is a member of a Joint Hindu Family?"

Mathew replied, "Yes".

The Pleader sat on chair. He did not put any question to other witnesses also. The Magistrate was surprised and the Pleader solaced the Magistrate saying he has a decision with him to support his client's case. When the case reached the stage of argument, the Pleader relying on the above said decision submitted. "My client is admittedly a member of a Hindu Joint Family and as per this decision he cannot commit theft". Pleader's innocence and ignorance ended in conviction of his client.

A Prolegomenon

The above incident happens in the bar and verdicts daily. The law declared and laid down by the Supreme Court binds all the Courts below it including the High Courts. The law laid down by the High Court binds all the subordinate Courts of that State. In the absence of any decision of the High Court to which the subordinate courts of that State function, the decisions of other High Courts can be looked into and accepted atleast as a persuasive piece of legal principle. Eventhough the decision of the High Court or Supreme Court is incorrect, unpalatable, the subordinate courts have to follow it, unless the decision is per incurium [1]. This is the constitutional mandate. It is also necessary for maintaining judicial discipline. Yet another reason is that better wisdom of the Courts below must yield to the higher wisdom of the Courts above.

Doctrine of Stare Decisis [2]

It is a basic principle of administration of justice that like cases should be decided like. Law declared by the highest courts have binding force because of the principle of stare decisis. It is a maxim of practical universal application.

Legal principles are often laid down by judges in the interpretative process. Legislature while enacting laws cannot anticipate everything that may arise in future. Though it is said that Court cannot fill up lacuna or loop holes in statutes it often does so in the course of dispute settlement. Judges cannot fold their hands by saying that casus ommisus is to be filled by the Legislature and it is not the court's duty to do so. But in usual practice Judges fill up the lacuna so as to alter the law to meet social situations or urgent necessity. This is called by Lord Denning [3] as "ironing out of creases". But he cautions "a Judge shall not alter the material of which the Act is woven....." His Lordship Justice V.R. Krishna Iyer [4] puts it in another sarcastic form:" Statutory construction is not petrified process and the old bottle to the extent language and realism permits, be filled with new wine. Of course, the bottle should not break or lose shape". According to Cardozo.J. "Judges make law by evolution rather than by revolution" [5]. "Judges do and must legislate...." said Holmes. J.

Judicial Activism

Law is an instrument of social ends. A dynamic society requires a dynamic legal system. A Judge legislates only between gaps. He fills the open space in the law. As Justice Holmes asserted, "Judges really make the law, because they are motivated by the considerations as is the legislator". A Judge must be active. He shall not be a passive on looker. If the legislature fails or omits to intervene Judges must wear the rob of legislator. Judiciary is the back bone of Indian Democracy. Might, muscle and money shall not exploit the unorganised class or the down trodden [6]. Recently a Division Bench of Calcutta High Court in Basant Kumar v. Gopal Chokhany [7] exhibited judicial activism. In that case a guardian was appointed for the benefits of children of land lord who lost mental balance. The High Court increased rate of rent in the interest of social justice and rejected the tenant's plea that his case is governed by, Rent legislation. The concept of social justice weighed the mind of court. The Supreme Court in Sadhuram v. PidiaBehari [8] had already adopted a similar approach. In that case when the property was sold by auction by the Official Receiver a few persons unauthorisedly trespassed into property and put up hutmunts for their residence. The Supreme Court accepted their offer to pay substantial amount even though they were trespassers.

Take care of the calf and threw away the placenta

A cow delvers a calf and also a placenta. Look after the calf and throw away the placenta. It is the principle of law laid down by a Judge in a given set of facts that binds the Courts below. "It is not everything said by a Judge that constitutes a precedent. The dispute is solely concerned with facts except on questions of law [9]". Rupert Cross says [10]:

"If the Judge in a later case is bound by the precedent according to English doctrine of stare decisis, he must apply the earlier ratio decidendi, however much he disapproves of it, unless to use the words of Lord Reid, he considers that the two cases are reasonably distinguishable".

Casual observation

Suppose the question before the court is "whether B. Ed. degree is a post graduate degree". In the verdict the Judge says "Like an LL. B. degree B. Ed. degree is not a post graduate degree". Here, "Like an LL. B. degree" is an unnecessary or casuaI observation. It is obiter dicta; just like a placenta. "B. Ed. degree is not a post graduate degree" is the principle of law or ratio decidendi, it is the calf. Take care of, and nurse it.

Ratio decidendi and Obiter Dicta-Distinction

The distinction between ratio decidendi and obiter dicta is an old one. As long as 1673 Vaughun C.J. said :

"An opinion given in court, if not necessary to the judgment given of record, but that it might have been as well given if no such or a contrary had been broached is no judicial opinion, but a mere gratis dictum [11]. Austin said [12]: "Such general proposition, occurring in the course of a decision, as have not this implication with the specific peculiarities of the case, are commonly styled as extrajudicial, and commonly have no authority".

Don't forget

A Judge decides a case on the set of facts presented before him. The Supreme Court in Prakash Amich v. State of Gujarat [13] said:

"Hence, while applying the decision to a later case, the court which is dealing with it should carefully try to ascertain the true principle laid down by the previous decision. A decision often takes its colour from the questions involved in the case in which it is rendered. The scope and authority of a precedent should never be expanded unnecessarily beyond the needs of a given situation....."                                                                       (emphasis supplied)

The Supreme Court, again, in C.I.T. v. Sun Engineering Works [14] observed: "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this court divorced from the context of the question under consideration and treat it to be the complete law declared by this Court. Judgment must be read as whole and the observations from the judgment have to be considered in the light of questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered..... [15]”

Foot Notes:

1. A decision against the statutes or in ignorance of law or binding principle is called decision per incurium

2. This doctrine means "keep to what has been decided previously."

3. Seafood Court Estates Ltd. v. Asher 1949 All. E.R.155.

4. Bangalore Water Supply case, 1978 Lab. I.C.467.

5.Nature of Judicial Process. P.169.

6. Recently a Division Bench of our Kerala High Court declared unconstitutional the provisions relating to fair rent in the Kerala Buildings (Lease and Rent Control) Act 1965 enacted three decades ago. This is judicial activism since the court felt that "all Land Lords are not rich and all the tenants are not poor."

7. A.I.R. 1994 Cal. III.

8. AIR. 1984 SC.1471.

9.Rupert Cross. "Precedent in English Law" second Edn, P.36.

10.Ibid pp 36-37.

11. Quoted in "Precedent in English Law" " Ibid p.37.

12. Jurisprudence. 5th Edn. P.622. Salmond.

13. A.I.R. 1986 S.C.468.

14.A.I.R. 1993 S.C.43.

15. See also Madhav Rao v. Union of India A.I.R. 1971 S.C.530.

Right of Redemption of Mortgage u/S.60 T.P Act and Order XXXIV of the Code of Civil Procedure - A Case Study

(By M.R. Parameswaran, Advocate, Ernakulam)

The right to redeem a mortgage until the same is extinguished either by act of the parties or by decree of the Court is a right of a mortgagor statutorily recognised, by S. 60 of the Transfer of Property Act (IV of 1882). The right is also referred to as the "equity" of redemption in English law but strictly not applicable in India-vide AIR 1959 Patna 153 (FB). In Pattabhiramier v. Venkatarow Naicken (71) 13 Moo. Ind. App 560 their Lordships of the Privy Council held that the English Doctrine of "The Equity of Redemption" was unknown to ancient law in India. In England an English Mortgagee became "at law" the "absolute owner" of the property after the lapse of the time fixed for payment of the mortgage amount. But the equity courts held that the transaction is to be treated merely as a loan borrowal and as such, time is not of the essence of the contract and allowed the mortgagor to redeem, even after the period stipulated. Since the mortgagor was allowed to redeem in equity it is called the "equity of redemption". Lord Haldane L.C. in Kreglinger v. New Patagonia Meat & Cold Storage Co. Ltd. (1914) 83 LJ Ch. 79, stated the history of the Equity of Redemption. The jurisdiction of the court of equity to set aside the legal title of a mortgagee and compel him to - reconvey the land on payment of the principal, interest and costs is a very old one owing its origin to the influence of the church in the courts of the early Chacellors. The famous assembly of Exclesistics condemned usurers and laid down that when a creditor has been paid his debt, he should restore his pledge and the courts of Chancery should at an early date exercise jurisdiction 'in personam' over mortgages. The power was only a special application of a general power of relieve against penalities and to mould them into mere securities. In a common law mortage, land was conveyed to the creditor on condition that if the money advanced was repaid on the date and place named the property will revert back to the mortgagor, but on breach of the condition he will lose it forever. This hardship was that the debt still remained unpaid and could be recovered. Thus to relieve against this virtual penalty, equity compelled the creditor to use his legal title as a mere security. The equity of redemption was thus treated as an 'estate in land' capable of being transferred and attached.

In 1958 KLJ 78, it was held that S. 60 T.P. Act confers a substantive right on the mortgagor to redeem the mortgage. In (11) 9 Ind. Cases 513 (FB) the Madras High Court took the view that it is a 'right' to be enforced and not a 'liability' which he may be compelled to be discharged. The right conferred by the section consists of three parts. On payment of the mortgage money after it has become clue, to require the mortgagee (a) To deliver to the mortgagor the mortgage deed and all documents relating to the property in his possession; (b) if the mortgagee is in possession to deliver to him, and (c) to retransfer in property at the cost of the mortgagor to him or such other person as directed by him and where the mortgage is registered, to get a registered acknowledgement that any right in derogation of his interest transferred to the mortgagee has been extinguished. On receipt of the mortgage money if the mortgagee does not perform any of the above said acts the mortgage will not continue but the mortgagor gets a new right to have his demands enforced through court (AIR 1963 SC 1041)

In places where T.P. Act is in force, the courts will apply the principle adumbrated under the S. 60 in accordance with justice, equity and good conscience. In other words, rules of English law are to be followed whenever found applicable to Indian conditions (AIR 1953 SC 1) & (ILR 1966 2 Kerala 388). In Travancore before the Act was extended the principle of this section was applied on that basis (AIR 1955T.C. 130).

Right to Redeem What is?

It means the right to buy back or set free by payment. (1963 AIR SC 1041). A suit to enforce this right is called a suit for redemption. The right arises when the Principal money becomes 'due'. Before the T.P. Amendment Act, 1929 the word used was 'Payable'. There was divergence of judicial opinion among the courts in India as to whether the right to redeem accrues before or only after the expiry of the period stipulated. Now by the decision of the Supreme Court in AIR 1958 SC 770 this controversy is set at rest and the position in law is that ordinarily, the right arises only after the period but parties can make provision for discharge of the debt and recovery of property before. The right to 'foreclose' and 'redeem' are held co-extensive and said to arise simultaneously ie., if the mortgagee has no right for the mortgage money neither was the mortgagor entitled to sue for redemption. (1964 KLT 153).

How Right of redemption is exercised?

On 'Payment' or 'tender' of mortgage money at the proper time and place the right is exercised. It is the right to pay and not actual payment that is the criterion.

The right of redemption when extinguished?

It is by act of parties or by a decree of court. By act of parties it means a 'release' of the right by the mortgagor. The act of parties must be an act independent-of the mortgage and not part and parcel of it. Otherwise, it will be a clog on redemption and as such void. A purchase by the mortgagee at a court sale of the property also will extinguish the right, (a) A mortgagee can obtain a decree on the mortgage and at the sale in execution thereof purchase the property with the leave of the court, (b) obtain a decree on a money claim unconnected with the mortgage at the sale in execution of such a decree purchase the property with the leave of the court, and (c) Purchase without such leave where the property is brought to sale in execution of a money decree by a third party against the mortgagor. In ILR 16 Cal 682 (Mahabir Prasad v. Macnaghten) their Lordships of the Privy Council held that the position" of a mortgagee purchaser at court sale is the same as that of a stranger and he gets an irredeemable title and that the equity of redemption is extinguished. The same view is taken by the Supreme Court in AIR 1961 SC 1353 also.

Extinguishment of the right to redeem by a decree of court is by a final decree in a foreclosure suit under O. XXXIV, R. 3 of theCivil Procedure Code, 1908 or by a final decree in a redemption suit under O. XXXIV R. 8 of the Code. O. XXXIV, R. 5 of the Code of Civil Procedure 1908 deals with the final decree in a suit for sale. The mortgagor has a right under this provision to pay the mortgage money interest and costs, plus five percent of the purchase money to be paid into court before confirmation of sale and redeem the mortgage. The said provision is admittedly available under the Central Act as amended by Act 104 of 1976.

The said provisions dealing with the substantive right of redemption of the mortgagor under S. 60 of the T.P. Act though in a procedural form as has been the subject of various decisions of our High Court and the Supreme Court. In AIR 1988 Supreme Court 1200 (Mahadagonda Ramgonda Patil and Ors. v. Shripai Balwant Ranade and Ors.) while considering (lie right of the mortgagor to tile a second suit for redemption the Hon'ble Court considered the scope and amplitude of O. XXXIV R. 5 CPC in detail. In (1995) 1 SCC 161 (New Kenilworth Hotels (P) Ltd. v. Ashoka Industries Ltd. & Ors.) the court considered and held that under S. 60 T.P. Act until confirmation of sale the mortgagor has a right to deposit the entire sale money and that the Court has a statutory duty to direct redemption of mortgage. (1989) 4 SCC 344 Maganlal v. Jalswal Industries Neemach was relied upon.

After the amendment of Code of Civil Procedure, 1908 by the C.P.C. Amendment Act 104/1976 O.XXXIV of the Code governing suits relating to Mortgages of Immovable Property contained the provision O. XXXIV R. 5 as follows:-

"5. Final Decree in suit for sale:- (1) Where on or before the day fixed or at any time before die confirmation of a sale made in pursuance of a final decree passed under sub-r. (3) of this rule the defendant makes payment into court of all amounts due from him under sub-r.(1) of R.4, the Court.shall,onapplicationmadebythedefendantinthisbehalf,passafinaldecreeor,if such decree has been passed, an order-

(a) ordering die plaintiff to deliver up die documents referred to in and, if necessary,-

(b) ordering him to transfer the mortgaged property as directed in the said decree, and also if necessary,-

(c) ordering him to put the defendant in possession of die property.

(2) Where the mortgaged property or part thereof has been sold in pursuance of a decree passed under sub-r.(3) of this rule. the Court shall not pass on order under sub-rule (1) of this rule, unless the defendant in addition to the amount mentioned in sub-r. (1), deposit in court for payment to the purchaser a sum equal to five per cent of the amount of the purchase money paid into court by the purchaser.

Where such deposits have been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase money paid into court by him, together with a sum equal to five per cent thereof.

(3) Where payment in accordance with sub-r. (1) has not been made, the court shall, on application made by the plaintiff in this behalf, pass a final decree directing that the mortgaged property or a sufficient part thereof be sold and that the proceeds of the sale be dealt with in the manner provided in sub-r. (l) of R. 4".

But subsequently, by the Kerala Amendment published in K.G. No. 46 dated 20.11.1990 the whole of O. XXXIV has been substituted. Unlike in the Central Amendment which contains provisions, for Preliminary Decree and Final Decree under Rr. 4 & 5 now there is only R. 3 which provides for a composite decree. R. 5 of the Central Amendment has been completely omitted in the Kerala Amendment. Is it a cassus omissus which could be supplied in an appropriate case by invoking S. 60 of the T.P. Act itself was one of the questions mooted before the Division Bench in C.R.P. No. 2340/1995 (Philomina Jose v. The Federal Bank Ltd. & Anr.). The Division Bench consisting of Hon'ble Justice P.K. Balasubramanian & K.A. Abdul Gafoor, J. considered the question and held that in the absence of a provision in the Amended O.XXXIV of the Code the right of redemption cannot be permitted to the defendant/ Judgment Debtor (Mortgagor). In that case, the facts are as follows :

Federal Bank Ltd. filed a suit for realisation of money by sale of the mortgaged under the equitable mortgage created in favour of the Bank to secure the liability. The 1st defendant was the principal debtor and defendants 2 & 3 are the guarantors/ sureties. The property mortgaged belonged to the 3rd defendant. It is the residential property of defendants 2 & 3 having an extent of 12 3/4 cents in a very important area in Mattancherry. Kochi. The suit was decreed on admission for realisation of a sum of Rs.20,000/- with 14% interest and cost charged upon the property by sale of the same. In execution of the decree E.P. was filed for realisation of a sum of Rs.29, 755-22Ps for sale of property. Pending execution Rs.17,400 was paid by the Judgment debtors. For the balance property was proclaimed and sold on 26.10.1994 and the same was purchased by third party for Rs.30,200/- The 3rd Judgment debtor who is the owner of the property mortgaged (the mortgagor) filed E. A. on 9/1/1995 by depositing the entire sale amount and 5% commission payable to the auction purchaser and prayed for setting aside the sale invoking her right to redeem the mortgage before confirmation of sale and also the inherent powers of the Court. Thus, O.XXXIV and S. 151 CPC were invoked. The decree holder contended that after the Kerala Amendment, O.XXXIV R. 5 as in the Central Act is not available and only provisions for setting aside the sale are either O. XXI R. 89 or 90 C.P.C. Auction purchaser also contested. The Court dismissed the petition accepting the same. Against that the Revision was filed. The learned Single Judge Justice K. Sreedharan, as his Lordship then was, before whom the matter came up for admission referred it to a Division Bench which ultimately confirmed the order of the Court below.

The property is worth Rs.15 lakhs now. The serious and irreparable prejudice and injury caused to the mortgagor who has the right to redeem the mortgage under S. 60 of the T.P. Act and O. XXIV R. 5 CPC as per the Central Act is now denied because the Kerala Amendment has not provided for the same. This requires consideration. Assuming in the Kerala Amendment there is an omission, as there was no amendment by Act 104/1996 to O. XXXIV CPC and thereafter the Kerala Amendment was made which is inconsistent with the Central Act, the Central Act provision should prevail as per S. 97(3) of the CPC Amendment Act 1976. Assuming that there is no express provision, since S. 151 CPC was also invoked the court could have very well permitted the mortgagor to invoke S.60 T.P. Act and permitted redemption. The question whether a separate suit for redemption will lie is academic since once the sale is confirmed the mortgage will be deemed extinguished. Hence, to avoid unnecessary hardship to mortgagors necessary amendments have to be made at the earliest in O.XXXIV C.P.C. in Kerala in this regard. If not the court will have to invoke S. 151 CPC read with S.60 T.P. Act to render substantial justice to parties, ex debito justitiae. This is only in consonance with the dictum laid down by the Supreme Court in New Kenilworth Hotels (P) Ltd, v. Ashoka Industries Ltd. & Ors. (1995) 1 SCC 161 that until confirmation of sale mortgagor has right to deposit entire sale money and court has a statutory duty to direct redemption of mortgage.

Blood Test in Paternity Dispute

(S.A. Karim, M.Com. L.L.B., Advocate, Thiruvananthapuram)

Blood test means human blood test. It becomes necessary to decide disputed paternity. The paternity issue arises in family and property disputes. In such case, direct evidence is not probable and the litigant relys on circumstantial evidence. A clear, convincing and reliable evidence is very remote. Therefore, the litigant turns to the time tested scientific evidence like blood group test. Jaisingh P. Modi is an authority in medical jurisprudence. His book 'Medical Jurisprudence and Toxicology', 20th edition, page 93, states "no blood group antigen can appear in a child, unless it is present in either or both of the parents. An antigen from a homozygous blood group must appear with blood of the child". This is not the conclusive test, but there is more chance. It excludes a suspected father or mother. The latest scientific achievement in this field is D.N. A. test. It revolutionises medical diagnosis, forensic work and solves old mysteries.

The Supreme Court in a Division Bench decision in Goutham Kundu v. State of West Bengal, held that a child born during lawful wedlock is legitimate and that access occurred between the parents. This presumption can only be displaced by a strong preponderance of evidence and not by mere balance of probabilities. It is reported in 1993 Criminal Law Journal 3233, 1993 SCC (Cri.) 928 and AIR 1993 SC 2295. The Apex Court refuses, to declare a child bastard and a mother unchaste based on scientific evidence. This decision is relied in Gomathi v. Vijayaraghavan of the Madras High Court, reported in 1995 Crl. Law Journal 91. Therefore, the Court takes shelter on Ss.4 and 112 of the Evidence Act.

S.112, Evidence Act, deals with legitimacy of child. It reads "the fact that any person was born during the continuance of valid marriage between his mother and any man or within two hundred and eighty days after its desolution, the mother remaining unmarried, shall be conclusive proof that he is the legitimate son of the man, unless it can be shown that the parties to the marriage had no access to each other at any time, when he could have been begotten. S.4 of the Evidence Act, states the principle of conclusive proof when one fact is declared by this Act to be conclusive proof of another, the court shall on proof of one fact regard the other as proved and shall not allow evidence to be given for the purpose of disproving it".

Modi's blood group test theory and the latest D.N.A. test are challenge to S.112 Evidence Act. It is due to the enormous growth of science and technology. With all humility, I submit, the decision of Supreme Court in Goutham Kundu v. State of West Bengal, gives new lease of life to S.112 of the Evidence Act, and shuts out the litigant from scientific evidence.

Law of Intestate Succession — A Comment on

1995 (1) KLT 403 (SC)

(By T.J. Michael, Advocate, Thodupuzha)

The finding of the Hon'ble Division Bench of the Apex Court, in Radhika v. Agnu Ram 1995 (1) KLT 403, it has to be submitted with respect to the Hon'ble Judges that one would be afraid whether it is not against the proposition of law laid down in the same decision.

The law of intestate succession in the case of property inherited by a Hindu female from her father or mother, is contained in Ss.15 and 16 of the Hindu Succession Act, 1956. The non obstante clause contained in sub-section (2) of S.15 lays down that where there are no sons or daughters and no children of a pre-deceased son or daughter of the deceased; the property will devolve upon the heirs of the father. But in the instant case the deceased intestate woman has a daughter. As is understood, the widower husband has filed the suit for partition of the properties of the deceased wife on the premise that he and the defendant daughter are the heirs of the deceased. From the facts it seems that the method of succession contained in S.15(2)(a) is not applicable to the case since the deceased has a daughter. Therefore with great respect one has to doubt whether the interference, with the concurrent findings of the District Court and High Court that the appellant and respondent are the heirs of deceased and they inherit in equal moiety, is justified.

Any Difference in the Defence available to the Insurers under 1939 and 1988 Act and Whether the Decision Reported in 1996 (1) 393 Requires Reconsideration

(By C.R. Kesavan, Advocate, Tirur)

1. An Insurer who is given notice of application for compensation under 1939 Act is entitled to defend the action on 3 grounds enumerated in S. 96(2) clauses (a), (b) and (c). Clause (a) pertains to a defence that the Insurance Company is not liable if the Policy is cancelled by mutual consent or by virtue of any provisions contained therein before the accident giving rise to the liability. The defence under CI. (b) is that the insurer can avoid the liability if there is any breach of certain specified condition of the Policy as enumerated therein under Sub clause (i), (ii) and (iii). The 3rd defence under clause (c) is that the insurer can avoid liability if the Policy is obtained by non-disclosure of material fact or representation of fact which was false.

2. While enacting 1988 Act, the Legislature deleted the 1st defence in cl. (a) of 1939 Act and other 2 defences available under clauses (b) and (c) of 1939 Act are retained AT IT IS in the 1988 Act. Due to the deletion of the 1st defence in cl. (a) of 1939 Act, the changes in serial numbers of the clauses is necessitated and with the result what was the 2nd defence in cl. (b) of 1939 Act is numbered as cl. (a) and similarly cl. (c) in the old Act is numbered as cl. (b) under the new Act. But it must always be borne in mind that the cl. (b) in 1939 Act pertains to the defence of breach of specified conditions of Policy and this is now cl. (a) in the new Act and the defence of suppression of material fact while obtaining the policy in cl. (c) in the old Act is cl. (b) in 1988 Act and this clause is nothing to do with any condition of the Policy and any breach thereof.

3. The driving licence as defined in S. 2(10) of the M.V. Act 1988 should not only authorise the holder to drive a motor vehicle but it should also specifically authorise him to drive a particular class, description or type of a motor vehicle. No person shall drive a motor vehicle in any public place unless he holds an effective driving licence and to drive a transport vehicle he should be specifically entitled as per the licence. As regards the definition and necessity for driving licence etc., the provisions contained in both the 1939 and 1988 Acts are similar. Driving a motor vehicle by a person not duly licenced is a breach of specified condition of a Policy and this is a defence available to the insurance company under both the 1939 and 1988 Act (vide S. 96(2) (b)(ii) and S. 149 (2) (a) (ii) of the respective Acts.

4. The consistent view of the High Courts of Punjab and Haryana, Gujarat, Karnataka and Andra Pradesh is that it is a good defence to the Insurance Company to avoid liability if the driver of a motor vehicle is not duly licenced. The latest pronouncement of the Hon'ble Supreme Court reported in 1996 AC J 253 establishes the fact that a person who is not duly licensed (even a learner's licence is not sufficient) is a good defence available to the Insurance Company and the Policy of Insurance contemplates that the Insurance Company would be liable only if the vehicle is being driven by a person holding a valid driving licence though it is the decision rendered under S. 96(2)(b)(ii) of the M.V. Act, 1939. When the insured allows the vehicle to be driven by a person not duly licensed there is a wilful breach of specified condition of the Policy and the Insurance Company is not liable at all is the law of the land as reported in 1989 AC J1078 SC while dealing the provision contained in S. 96(2)(b)(ii) of 1939 M.V. Act. The corresponding provision under 1988 Act is identical and hence to hold the Insurer liable, or to direct the company first to pay the quantum of liability which in law it is not liable and then to direct the Company to realise the amount from the actual person who is liable in law is not to give the correct legal effect of the provisions of law contained in both the Acts in case the provisions are identical in both the Acts.

5. While giving legal effect to Sub-ss. 2 and 4 of S. 149 of M.V. Act 1988, our Hon'ble High Court in a case wherein the driver is found not duly licensed has made the Insurance Company liable and directed first to discharge the liability and then to recover the amount from the insured as per the ruling reported in 1996 (1) KLT393 (The Oriental Insurance Co. Ltd., v. Usha). It appears that the decision rendered by our Hon'ble High Court is without taking into account the real legal effect of S. 149 of the Act especially sub-s. 4 therein with reference to the earlier provisions contained in 1939 Act. It can be seen from the following comparison of the provision contained both in S. 96(2) and (3) of 1939 Act and S. 149 (2)(4) of 1988 Act that the Legislature, as a matter of fact, has never intended to effect any change as regards the defence opened to the insurer in 1988 Act expecting the deletion of the 1st ground of defence that the policy is cancelled by mutual consent etc. etc. as contained in clause (a) in S. 96(2) of the old Act.

Comparative Study

6. It can be seen from the above comparative study of the provisions under both the Acts that the defences opened to the Insurance Company to avoid liability are identical and the only difference is that the first ground contained in S. 96(2) Cl. (a) (the Policy was cancelled by mutual consent or by virtue of any provisions contained in the Policy before the accident giving rise to the liability) is taken away and deleted in the new Act. This first ground of defence is not available now unlike in the old Act (Cl.(a) of the 1939 Act.)

7. The second ground of defence in 1939 Act which is the first ground in 1988 Act opened to the Insurance Company under both the Acts is the breach of certain specified conditions of the Policy and this ground is also identical under both the Acts. It may be borne in mind that this ground of defence IS THE BREACH OF SPECIFIED CONDITIONS OF THE POLICY and not a ground under the existence of certain given fact and circumstances as in the third ground of defence. (Vide Cl.(b) of 1939 Act which is corresponding to Cl.(a) of 1988 Act).

8. The third ground of defence in 1939 Act which is the 2nd ground in 1988 Act (it is not breaches of specified conditions of the policy) opened to the insurance company under both the Acts is that the company can avoid the liability if the policy is void on the ground that it is obtained by non-disclosure of material fact or by representation of facts which was false in some material particular, (vide cl. (c) of 1939 Act which is corresponding to cl. (b) of 1988 Act).

9. Thus, previously under the old Act there were 3 grounds of defences whereas under the new Act there are 2 grounds of defence. When the 1st ground of defence is deleted under the new Act, what was contained as 2nd ground of defence under the old Act (S. 96(2) Cl. (b) - breach of certain specified conditions of Policy) happened to be the 1st ground of defence under the 1988 Act (S. 149 (2) cl. (a)). In short cl. (b) of old Act is now cl. (a) under the new Act and similarly what was contained as 3rd ground of defence in S. 96 (2), cl. (c) of the old Act happened to be the 2nd ground in S. 149 (2) cl. (b). This is the only distinction between the 1939 and 1988 Acts.

10. When a ground of defence of breach of certain specified conditions of the Policy is opened to the insurance company under cl. (b) of S. 96(2) of the old Act (cl. (a) of S. 149(2) under the new Act), the Legislature wanted to make it dear that any-other condition other than those certain specified conditions in the Policy cannot be pressed into service by the Insurance Company and referred to avoid statutory liability and such conditions will be of no legal effect. Hence, sub-s. (3) of S. 96 of (lie old Act is enacted to carry out the above intention and which is corresponding to Sub-s. 4 of S. 149 of the new Act. On a reading of S. 96(3) of the old Act it is clear that the breach of specified conditions of the Policy enumerated in cl. (b) of S. 96(2) are saved and protected and the defence of breach of such certain specified conditions contained in Cl. (b) is always opened to the Insurance company to avoid liability. When a person can legally avoid a liability under certain given circumstances, the question of asking that person to discharge first the liability and then to recover the amount paid from the person actually liable does not arise at all (vide 1990 ACJ 757 Karnataka).

11. On a comparison of the provisions contained in Sub-s. (3) of S. 96 of the old Act and Sub-s. 4 of S. 149 of the new Act one can find that the legislature as it is simply copied down the provisions contained in Sub-s. 3 of S. 96 while enacting the Sub-s. 4 of S. 149. The words 'cl. (b) of Sub-s. (2)" appearing therein are also copied and referred in Sub-s. 4 of S. 149 of 1988 Act as in the old Act instead of cl. (a) by forgetting the fact that cl. (b) conditions of Policy of the Old Act is now cl. (a) under the new Act due to the deletion of cl. (a) of the old Act and re-numbering the clauses in Sub-s. (2) while enacting the new Act and also forgetting the vital fact that the cl. (b) in Sub-s. (2) of S. 149 of the new Act does not pertain at all to any conditions of Policy but totally a different ground of defence on the happening of a certain event viz., that the policy is void as it is obtained by suppression of material fact etc. etc. The reference of cl. (b) therein in Sub-s. 4 instead of cl. (a) is a clear mistake committed by the legislature. If a literal interpretation is given to the provisions contained in Sub-s. 4 of S. 149 of 1988 Act without diving deep into the matter as appears to have been done by our Hon'ble High Court while deciding the case reported in 1996 (1) KLT 393, the result would be that certain right of defence given under S. 149(2) cl. (a) is taken away under Sub-s. 4 of S. 149 and the Insurance Company cannot avoid liability under any circumstances expecting on the ground that the Policy is void due to happening of certain events. This definitely is not the real intention of the Legislature and reference to cl. (b) instead of cl. (a) in Sub-s. 4 of S. 149 is an inadvertent mistake committed by the Legislature in its hasty legislation.

12. Any contract entered into between two parties is void if it is obtained by suppression of material fact and mis-representation of fact. This is more so in the case of a contract of insurance as it is a contract wherein utmost good faith is expected from the contracting parties. This substantive defence is always opened to the Insurance Company under the old Act as well as under the new Act. Under cl. (c) in Sub-s. 2 of the old Act (cl. (b) under the 1988 Act) the Insurance Company can avoid the liability if the Policy is void if it is obtained by non-disclosure of material fact and representation of fact which was false as in cl. (b) of Act 1988. But cl. (c) is not referred in Sub-s. 3 of S. 96 of the 1939 Act but cl. (b) alone finds a place therein. If a literal interpretation of this provision is done as seen done by Their Lordships of our High Court while deciding the case reported in 1996(1) KLT393, the result would be that one can easily say that as there is no reference of cl. (c) in S. 96(3) of the old Act the defence that the policy is void due to non-disclosure of material fact is not available to the Insurance Company under the old Act. The defence under cl. (c) of the old Act is always opened to the Insurance Company under the old Act despite the fact that it does not find a place in Sub-s. 3 of S. 96 of the old Act, since it does not pertain at all to any conditions of Policy. What is saved under both sub-s. (3) of S. 96 old Act and Sub-s. 4 of S. 149 new Act are certain conditions of Policy and they are only referred therein and it is nothing to do with the other ground of defence mentioned in cl. (c) of the Old Act which is corresponding to cl. (b) of the new Act. It appears that this vital distinction was not brought to the attention of the Learned Judges and hence, the decision in 1996 (1) KLT 393 is rendered on a mere literal interpretation of Sub-s. 4 of S. 149 of the M.V. Act, 1988. The reference to cl. (b) in Sub-s. 4 of S. 149 of 1988 Act is evidently a mistake crept in due to the deletion of the 1st ground of defence contained in cl. (a) of the old Act, and in order to give the correct legal effect of the sub-s. 4 of S. 149 of 1988 Act, it is to be interpreted in a meaningful manner to avoid the anomaly. If a meaningful interpretation is given by comparison of the provision contained in both the Acts it can be seen that the Legislature never intended to take away the defence given to the Insurance company as per S. 149 (2)(a). When there is an ambiguity in a statute a clear distinction has to be drawn between the literal approach and purposive approach and the purposive approach is adopted in order to give the correct legal effect. The very purpose of enacting S, 149 of 1988 Act is to save certain conditions of Policy in order to enable the insurer to take shelter under those conditions to avoid liability. If literal interpretation is given to S. 149(4) of 1988 Act it would be meaningless and the very object of legislation would be defeated exposing the insurer to all kinds of risks. Normally war and riot risks are excluded in a contract of insurance. War risks are specifically included when war is declared between two countries. In recognition of this established principles which reigns the field, the injury caused due to war, riot and civil commotion are specially excluded as per S. 149 (2) cl. (a) (iii) of M. V. Act, 1988, and the company can always avoid the liability on these grounds with reference to conditions contained in the Policy of Insurance. By giving a literal interpretation of S. 149(4) of 1988 Act, if cl. (a) policy conditions are not brought within the ambit of the saving clauses therein, the insurance company has to pay even in a case when all occupants in several stage carriage buses parked in a bus stand are reduced into ashes due to the bombardment of an enemy plane during the time of a war. Similarly, due to the riot or civil commotion if all passengers in a stage carriage are burned alive by rioters, the insurance company has to pay compensation. This is not the scheme of the M. V. Act despite the fact that it is a social legislation to protect the innocent victims of the road accidents.

"Where the language of a statute in its ordinary meaning and gramatical construction leads to a manifest contradiction of the apparent purpose of the enactment or to some inconvenience or absurdity which can hardly have been intended, a construction may be put upon it which modifies the meaning of die words and even die structure of die sentence". (MAXWELL ON INTERPRETATION OF THE STATUTES).

According to Benjamin Cardozo the eminent jurist,

"There are gaps to be filled, mere are doubts and ambiguities to be cleared up". "There are hardships and wrongs to be mitigated, if not avoided" while interpretating a statute in order to give correct legal effect."

While interpreting the scope of a particular provision of law the Court must ascertain the intention of Legislature by looking at not merely to the clauses to be construed but to the entire statute as opined by our Hon'ble Supreme Court in (1979) 4 SCC 85. "A statute is not to be interepreted merely from the Lexicographer's angle. The Court must give effect to the will and in-built policy of the Legislature as discernible from the object and scheme of the enactment, and the language employed therein." The meaning and intent of the Legislature is to be gathered not merely from the words used by the Legislature but a variety of other relevant circumstances. "To he literal or to be blinkered by some rigid cannon or restriction may be to miss the life of law itself as opined by our Hon'ble Supreme Court in (1977) 1 SCC 155. "In order to know what is the provision contained in a particular provision of law one has to know what it has been, and what it tends to become". "We are interested with law as it is. If this leads to unjust results it is a matter for Parliament and not for us" is not the stand expected from a Judge while giving a correct legal effect to a particular portion of the provisions of the statute.

Hence, cl. (b) of Sub-s. 2 referred to in S. 149(4) is to be read as cl.(a) of Sub-S. 2 in order to give the correct legal effect, and to obviate the unintentionally  anomaly committed by the Legislature the decision reported in 1996 (1) KLT 393 requires immediate reconsideration and the Legislature is also to see that this anomaly is not allowed to be there in the statute any longer.