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Civil · Reportable judgment

Vaibhav Jain vs Hindustan Motors Pvt. Ltd.

Court
Supreme Court of India
Date
3 September 2024
Case No.
CIVIL APPEAL No. 10192/2024
Result
Allowed
Bench
J.B. Pardiwala, Manoj Misra
Citation
[2024] 9 S.C.R. 16 : 2024 INSC 652
Acts & Sections
Motor Vehicles Act, 1988 CPC
Supreme Court Reports [2024] 9 S.C.R. 16 : 2024 INSC 652
Issue for consideration
Whether as a mere dealer of M/s Hindustan Motors, the appellant could be considered owner of the vehicle and as such liable, jointly and severally with M/s Hindustan Motors, to pay the compensation as directed by the Tribunal/High Court; whether clauses 3 (b) and 4 of the Dealership Agreement absolved M/s Hindustan Motors of its liability to pay compensation as an owner; whether M/s Hindustan Motors, even without preferring an appeal against the award of the Tribunal, could question its liability under the award by relying on the provisions of Order 41, Rule 33 of the CPC.
Headnote

Motor Vehicles Act, 1988 – Compensation – Liability of the dealer, if any – “ownership/owner” of the vehicle – Dealership Agreement between M/s Vaibhav Motors-appellant, the dealer and M/s Hindustan Motors, manufacturer of the vehicle – Accidental death when the vehicle was taken out for a test-drive by the employees of M/s Hindustan Motors from the dealership of the appellant – Prior to the accident, if M/s Hindustan Motors had sold the offending vehicle to the appellant – If not, whether the dealer would be liable for the compensation, jointly and severally with M/s Hindustan Motors:

Held: ‘owner’ of a vehicle is not limited to the categories specified in s. 2(30) of the 1988 Act – If the context so requires, even a person at whose command or control the vehicle is, could be treated as its owner for the purposes of fixing tortious liability for payment of compensation – There is no evidence that the vehicle was sold to the appellant-dealer – At the time of accident only two persons were present in the vehicle (the driver and the deceased) both of whom were employees of M/s Hindustan Motors and had taken the vehicle from the appellant-dealer for the test drive – Dealer had no authority to deny them the permission to take the vehicle for the test drive more so, when they were representatives of the owner of the vehicle, i.e. M/s Hindustan Motors – At the time of accident the vehicle was not only under the ownership of M/s Hindustan Motors but also under its control and command through its employees – Therefore, the appellant, being just a dealer of M/s Hindustan Motors was not liable for compensation as an owner of the vehicle – At the time of accident, the vehicle was being driven by an employee of M/s Hindustan Motors, thus, apart from the driver, M/s Hindustan Motors alone was liable for the compensation awarded. [Paras 19, 20, 23]

Read the full headnote (3 more paragraphs)

Motor Vehicles Act, 1988 – Compensation – Dealership Agreement between M/s Vaibhav Motors-appellant, the dealer and M/s Hindustan Motors, manufacturer of the vehicle – M/s Hindustan Motors was held jointly and severally liable to pay compensation – It contended that Clauses 3 (b) and 4 the Agreement shifted the tortious liability to the appellant-dealer and it was not liable for payment of compensation: Held: Rejected – Clauses 3(b) and 4 in the Agreement limited the company’s liability in respect of any defect in the motor vehicle to the company’s obligations under the warranty clause – The use of the words “and the company will have no other liability and all liabilities other than one under warranty as aforesaid shall be to the account of the Dealer”, in absence of specific exclusion of tortious liability arising from use of such vehicle, cannot absolve the owner of the motor vehicle of its liability under the Motor Vehicles Act and shift it on to the dealer when the vehicle at the time of accident was under the control and command of the owner i.e. M/s Hindustan Motors through its own employees. [Para 27]

Code of Civil Procedure, 1908 – Order 41, Rule 33 – Tribunal held M/s Hindustan Motors jointly and severally liable to pay the compensation – However, no appeal was filed by M/s Hindustan Motors against the award of the Tribunal – It relied upon Order 41, Rule 33 to challenge that portion of the award which made it jointly and severally liable:

Held: For exercise of the power under Rule 33 of Order 41 the overriding consideration is achieving the ends of justice – One of the limitations on exercise of the power is that part of the decree which essentially ought to have been appealed against, or objected to, by a party and which that party has permitted to achieve a finality cannot be reversed to the advantage of such party – In the instant case, the Tribunal returned a finding on that M/s Hindustan Motors had provided no evidence to show that the vehicle manufactured and owned by it was sold by it to the dealer – Admittedly, its own employees/officers were in control of the vehicle at the time of accident and, therefore, M/s Hindustan Motors was held jointly and severally liable for the compensation awarded – This part of the award operated against it and was backed by a finding of ownership – M/s Hindustan Motors allowed it to attain finality by not challenging the same through an appeal or cross-objection – Therefore, it cannot be allowed to question the same now. [Para 32]

Keywords: Accidental death · Offending vehicle · Compensation · Liability to pay compensation · Liability of the dealer · Jointly and severally liable to pay compensation · “owner” of the vehicle · At the time of accident · Dealership Agreement · Dealer · Dealership · Manufacturer of the vehicle · Test-drive · Death during test-drive · In control or command of the vehicle · In constructive possession of the vehicle · Employees of owner of the vehicle · Tortious liability · Finding achieved finality · Appeal · Cross-objection

As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

Judgment Manoj Misra, J. 1. Leave granted. 2. This appeal impugns the judgment and order of the High Court of Chhattisgarh at Bilaspur1 dated 15.11.2017, whereby Miscellaneous Appeal (Civil) No. 1306 of 2007 filed by the appellant was dismissed and Miscellaneous Appeal (Civil) No. 1147/2017 filed by the claimant(s) was allowed thereby enhancing the compensation already awarded to them. 3. At the outset, we would like to put on record that the Special Leave Petition (SLP) against the impugned order was filed by impleading six respondents. Respondents 1 to 4 (R-1 to R-4) were heirs and legal
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