‘Owner’ Of Vehicle Not Limited To Categories U/S 2(30) MV Act; Person In Control Of Vehicle Can Be Treated As Owner For Fixing Tortious Liability: SC

The Supreme Court observed that the ‘owner’ of a vehicle is not limited to the categories specified in Section 2(30) of the Motor Vehicles Act, 1988 (MV Act) and hence, a person in control of the vehicle can be treated as its owner for fixing the tortious liability.

The Court observed thus in a civil appeal preferred against the judgment of the Chhattisgarh High Court by which the miscellaneous appeal of the dealer was dismissed and that of the claimant was allowed by enhancing the compensation.

The two-Judge Bench comprising Justice J.B. Pardiwala and Justice Manoj Misra held, “What is clear from the decisions noticed above, is that ‘owner’ of a vehicle is not limited to the categories specified in Section 2(30) of the M.V. 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. In this light, we shall now examine whether at the time of accident the vehicle in question was under the command and control of the appellant (i.e., the dealer).”

AOR Arup Banerjee appeared on behalf of the appellant while AOR Purti Gupta appeared on behalf of the respondent.

Brief Facts -

A Special Leave Petition (SLP) was filed by impleading six respondents against the impugned order and out of these, four respondents were heirs and legal representatives of the deceased on whose accidental death, the claim arose. Other two respondents were the driver of the vehicle and the manufacturer of the vehicle (M/s Hindustan Motors Pvt. Ltd.). In 2018, the Supreme Court had issued a notice only to the manufacturer and the SLP was dismissed by observing that the question raised in the matter was about the liability of the dealer (appellant).

A claim petition for death compensation was filed before the Tribunal by the claimant-respondents (legal heirs) under Section 166 of MV Act against the driver, manufacturer, and dealer. The deceased was the Territory Manager whereas the driver was the Service Engineer of the dealer. Thus, both were employees of the appellant. The accident took place when the vehicle was taken out for a test drive from the dealership of the appellant.

The following issues arose before the Supreme Court for consideration –

(i) 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?

(ii) Whether clauses 3 (b) and 4 of the Dealership Agreement absolved M/s Hindustan Motors of its liability to pay compensation as an owner?

(iii) 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?

In view of the first issue, the Court noted, “According to the Tribunal, M/s. Hindustan Motors was admittedly the manufacturer of the vehicle and there was no evidence that the vehicle was sold to the dealer. The finding is that no sale letter was produced from its side to show that the car was sold to M/s. Vaibhav Motors. At the time of accident only two persons were present in the vehicle, and they were none other than employees of M/s. Hindustan Motors, namely, Pranav Kumar Goswami (the deceased) and Shubhashish Pal (the driver).”

The Court said that as per the finding of the Tribunal, none of the employees of the dealer was present in the vehicle and rather, at the time of accident, the driver and the co¬-passenger of that vehicle were employees of M/s. Hindustan Motors.

“There is nothing on record to suggest that the dealer had the authority to deny those two persons permission to take the vehicle for a test drive. More so, when they were representatives of the owner of the vehicle. In these circumstances, we can safely conclude that 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, in our view, the appellant, being just a dealer of M/s Hindustan Motors, was not liable for compensation as an owner of the vehicle”, it added.

With regard to the second issue, the Court remarked, “A careful reading of the aforesaid clauses would indicate that they deal with company’s (M/s. Hindustan Motors’) liability in respect of any defect in the motor vehicle. They limit 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 as found above.”

The Court, therefore, rejected the submission of the counsel for M/s. Hindustan Motors that it cannot be saddled with liability for payment of compensation in view of clauses 3 (b) and 4 of the Dealership Agreement.

Coming to the third issue, the Court emphasised, “… it is clear that for exercise of the power under Rule 33 of Order 41 CPC the overriding consideration is achieving the ends of justice; and one of the limitations on exercise of the power is that 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.”

The Court further took note of the fact that the Tribunal had returned a finding on issue no.3 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 and its own employees were in control of the vehicle at the time of accident, therefore, it 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. By not challenging the same, through an appeal or cross-objection, M/s Hindustan Motors has allowed it to attain finality. Therefore, in our view, M/s Hindustan Motors cannot be allowed to question the same now”, it said.

The Court concluded that apart from the driver, M/s Hindustan Motors alone was liable for the compensation awarded and thus, the appellant should not have been burdened with liability to pay compensation.

“… if the awarded amount, or any part thereof, has been paid, or is paid, by the appellant, the appellant shall be entitled to recover the same from M/s. Hindustan Motors along with interest at the rate of 6% p.a., with effect from the date of payment till the date of recovery”, it also clarified.

Accordingly, the Apex Court allowed the appeal.

Cause Title- Vaibhav Jain v. Hindustan Motors Pvt. Ltd. (Neutral Citation: 2024 INSC 652)

Click here to read/download the Judgment