Prospective operation of statutory liability bars enhanced no-fault compensation for pre-Act motor accident claims.

Section 140 of the Motor Vehicles Act, 1988 was held to be prospective only, because a statutory provision that creates or enlarges substantive liability is presumed not to operate retrospectively unless the legislature clearly provides otherwise. The Court held that the enhanced no-fault compensation under the 1988 Act could not apply to an accident that occurred before the Act commenced, and that Section 217 of the Act and Section 6 of the General Clauses Act, 1897 did not evince a contrary intention. Earlier High Court views were overruled, and the claim for enhanced compensation failed.

---

---

Issues: Whether Section 140 of the Motor Vehicles Act, 1988 applies retrospectively so as to enhance no-fault compensation for accidents that occurred before the Act came into force.

Analysis: Section 92-A of the Motor Vehicles Act, 1939 created a statutory no-fault liability of Rs. 15,000, while Section 140 of the Motor Vehicles Act, 1988 initially raised the amount to Rs. 25,000 and later to Rs. 50,000 by amendment. The governing principle is that a statute is presumed to operate prospectively unless retrospective operation is clearly expressed or necessarily implied, particularly where the provision creates or enlarges substantive rights and liabilities. Section 140 was held not to be procedural in nature, and therefore it could not enlarge the claimants' rights in respect of a pre-Act accident. Section 217 of the Motor Vehicles Act, 1988 and Section 6 of the General Clauses Act, 1897 did not indicate any contrary intention sufficient to make Section 140 retrospective.

Conclusion: Section 140 of the Motor Vehicles Act, 1988 does not have retrospective effect and cannot govern accidents that occurred before its commencement.

Final Conclusion: The earlier contrary High Court views were overruled, and the claim for enhanced no-fault compensation under the 1988 Act failed for a pre-commencement accident.

Ratio Decidendi: A substantive statutory provision creating or enlarging liability is presumed to be prospective and will not apply retrospectively unless the legislature clearly so provides, expressly or by necessary implication.

---