ORIENTAL INSURANCE CO. LTD. v. SMT. RAJ KUMARI AND ORS

Citation: [2007] 11 S.C.R. 1141

Court: Supreme Court of India

Bench: ARIJIT PASAYAT, LOKESHWAR SINGH PANTA

Case summary

ORIENTAL INSURANCE CO. LTD. v. SMT. RAJ KUMARI AND ORS.pdf

Judgment text

ORIENTAL INSURANCE CO. LTD. v. SMT. RAJ KUMAR! AND ORS. NOVEMBER 14, 2007 [DR. ARIJIT PASAYAT AND LOKESHWAR SINGH PANTA, JJ. ] Motor Vehicles Act, 1988: s. 147-Award ofcompensation-High Court while passing award of Rs. 1. 25 lacs, held that liability of insurer is limited to Rs. 50, 000, however, insurer wouldpay entire amount to claimants and recover amount in excess ofRs. 50,000from the insured-On appeal, held, liability of insurer is limited to Rs. 50,000-Balance of compensation be recoveredfrom the insured. Rate ofinterest-Award ofcompensation with interest@ 12% p. a. -On appeal, held: /nterestfixed@9% p. a. considering the date ofaccident. Precedent Reliance on the ·decision without looking into the factual backgroundofthe case before.

the court-Held: Notproper-Decfsion is precedent on its own facts-Observations ofcourts are neither to be read as Euclid's theorems nor as provisions ofthe statute-These observations to be read in the context in which they are stated-Judge$ interpret words ofstatutes-Their words not to be interpreted as statutes-Judgment-interpretation of The conductor ofthe bus lost his life in an accident His widow~ minor children and parents claimed compensatior. ofRs. 1. 40 lacs~ The Tribunal awarded compensation ofRs. 57,600/-with interest@ 12% p. a. It however held that the liability ofinsurerwas limited tc;> Rs. 50,000/-. The claimants filed appeal before the High Court. The 'r \ { High Cou~ enhanced compensation to Rs. 1. 25 lacs and upheld the view oftribunal as to liability ofTribunal. However, itwas held that the entire amountwas to be paid by the insurer to the claimants and .. insurer could recover the amount in excess ofRs. 50,000/- from the owner and the driver ofthe vehicle.

In appeal to this Court, appellant contended that having held that the liability of the insurance company was limited to Rs. 50,000/-, the High Court was not justified in directing payment of the entire amount by it and to recov~r the differential amount and that the rate ofinterest is big~. Partly allowing the appeal, the Court HELD: 1. It is true that in certain cases this Court has, after looking into the fact situation, directed the insurance company to . 1 make payment with liberty to recover the amount in excess ofthe liability from the insured. Those decisions were given on the facts _.. ( situation ofthe cases concerned. [Para 10] . [1146-F] New India Assurance Co. Ltd v. C. M Jaya and Ors. , [2002] 2 SCC 278; and Oriental Insurance Co. Ltd v. Shakuntala Garg and f Ors. , (Civil Appeal No. 104 of 2000, disposed of on 10. 1. 2003), referred to. 2. 1. Reliance on the decision without looking into the factual background ofthe case before it is clearly impermissible.

A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving a judgment that I " constitutes a precedent. [Para 11] [1146-G] " • )o Oriental Insurance Co. Ltd. v. Shakuntala Garg andOrs. , (Civil ~ Appeal No. 104 of2000, disposed ofon 10. 1. 2003; and State ofOrissa v. Sudhansu Sekhar Misra and Ors. , AIR (1968) SC 647, relied on. 2. 2. A case is a precedent and bindiiig for what it explicitly j... decides and no more. The words used by Judges in their judgments .. _ are not to be read as ifthey are words in Act ofParliament. [Para 11) [1147-C,D] r ORIENTAL INSURANCE CO. LTD. v. RAJKUMARI 1143 Quinn v. Leathern, (1901) AC 495 (H. L. ), referred to. 2. 3. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation ofthe decision on which reliance is placed.

Observations ofCourts are neither to be read as Euclid's theorems nor as provisions ofthe B, statute and that too taken out oftheir context. These observations must be read in the context in which they appear to have been stated. Judgments ofCourts are not to be construed as statutes. To interpret words, phrases and provisions ofa statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words ofstatutes; their words are not to be interpreted as statutes. [Para 12) [1147-E, F, G) 2. 4. Circumstantial flexibility, one additional or different fact D may make a world ofdifference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not prop~r. [Para 14) [1148-D] London Graving Dock Co. Ltd. v. Horton, (1951) AC 7~7; Home Office v. Dorset Yacht Co.

, (1970) 2 All ER 294; Megarry, Jin (1971) 1WLR1062 and Herrington v. British Railways Board, (1972) 2 'WLR 537, referred to. 3. In the instant case the insured was a private limited company doing transport business. There was no material placed before the p High Court to show that the claimants would have any difficulty in recovering the awarded amount from it. That being so, the High Court's order is modified to the extent that the insurer shall pay an amount of Rs. 50,000/- with interest awarded to claimants. The balance has to be paid by the insured. [Para 16] [1149-A, B] 4. The liability of the insurance company is limited to Rs. 50,000/-with interest@9% p. a. from the date of the application. The rate is being fixed considering the date ofaccident. [Para 17] (1149-C] CI\TlL APPELLATE JURISDICTION : Civil Appeal No. 5209 of ~ 2007. From the final Judgment and Order datt'. d 13. 7. 2005 ofthe High Court ofPunjab and Haryana at Chandigarh in First Appeal froni. Qrder No.

1029 of 1986. _ M. K. Dua and Kishore Rawat for the Appellant . - . Dinesh Chander Yadav and Dr. Kailash Chand for the Respondents. . ~ -' . The Judgment ofthe Court_was delivered by . DR. ARIJIT PASAYAT, J. 1. Leave granted.. 2. ch3. ltenge in this appeaI. i~ to the order pa5se reta~ion. apprgpri~~e th~reto. This is n~t to ~et;rac~ from. \he gr~~ weigl). t ~o ~~ giyen ~9 the language actually used by that most distingltjshedjudge. " , •.. _ r• , • ~ . , ' . • - ' I '\. I.. i.. •\ 'J. ll •. 01..... -1 • i "'"~~ L 13. In Home Office v. Dorset Yacht Co. , (1970) 2 AH ER 294 Lord Reid said, "Lord Atkin's speech..... is not to be treated as ifit was stattite d~ficition. It will require qualificatio~ in ~ew ci~cwpstances. ;' Megarry, J in(i971) 1WLR1062 observed: "One must not, ofcourse, construe even a reserved judgment ofR~~ell L~i as ifit·~~re M. Act~f Parlia:i:ne~t. " ~d, i~ He~rington v. Brtti~h. Rail~ays 13oa~d, (1972) '2 WLR 537 Lord Morris said: ' .. '. . ' · .

"There is always peril in treating the w9rds per. 15. The following words ofLord De~g in the matter ofapplyipg precedents have bec~me locus classic~s: . ... . . .. n • ' • • • . • . ~ \,. _ \ ' ' . ' ... ':E~~! i, ca~~ dyp~~4s. on its. 9wn facts ~d a close similarity ~et\y~eq. 9pe case and another is llQt enol! gh ~caμse e~en;a. single sjgriifj. £m. 1t, ~etailmax alter the entji:e as~t, ip. deciding sμ9h cases, 9p. e shRuld avoid· the temptation to. decide cases (as said- by <:;qrdozo) by matching the colour of<:me. case againsJ th~ col9ur ofanother. To decide therefore, on. which side. oftne. line a case ~···" •' .. . .. ,. ~,~. ~-'·' . ,,,_' ~ falls, the,broad resemblance to another. caseis not-at all decisive. " '. ltl • • ~· ... , • I~ ~. -·. ~· :ao. ·~.. _ ... ,... ~;. "''-•' "K't *** *** *** "Precedent s! iould be fol~qwed:only so,far. ~. it·tp. i:! f~ t4~:pa~ ofjustice, b~t you must cut the. dead·w9od <l! l~:trim offtr~ sJcie, branches else. you \\jll find. yours~lt:l9st:in th!

~~! tt. s;,~n~;~~ch~s. My plea is to keep the path to justice clear ofobstructions which could impede it. " 16. In the instant case the insured was a private limited company doing transport business. There was no material placed before the High Court to show that the claimants would have any difficulty in recovering the awarded amount from it. That being so, the High Court's order is modified to the extent that the insurer shall pay an amount of Rs. 50,000/-with interest awarded to claimants. The balance has to be paid by the insured. 17. Another point urged before this Court in support ofthe appeal was that the rate ofinterest is high. The liability ofthe insurance company is limited to Rs. 50,000/- with interest@ 9% p. a. from the date ofthe application. The rate is being fixed considering the date ofaccident. The insured shall forthwith make payment ofthe balance amount with interest to the claimants and in any event not later than 3 months from the date of this order. 18.

The appeal is allowed to the aforesaid extent with no order as to costs. D. G. Appeal partly allowed.