Holding

A dealer is not an owner for compensation liability when the vehicle is under the control and command of the manufacturer’s employees, and contractual clauses do not shield the manufacturer from tortious liability; consequently, the dealer is not jointly liable.

Summary

The appellant, Vaibhav Motors, was a dealer of Hindustan Motors and was sued for compensation after a Hindustan Motors employee died in a test‑drive accident involving a vehicle that had not been sold to the dealer. The key question was whether the dealer could be deemed the "owner" of the vehicle and thus jointly liable with Hindustan Motors under the Motor Vehicles Act, 1988. The Court held that ownership for liability purposes is not limited to the name on the registration; it includes the person who has actual control and command of the vehicle. Since the vehicle was under the control of Hindustan Motors' employees at the time of the accident, the dealer was not an owner and could not be held jointly liable. The contractual clauses limiting Hindustan Motors' liability were found not to exclude tortious liability under the Act. Finally, Hindustan Motors could not invoke Order 41 Rule 33 to challenge the award after having allowed the finding to become final. The appeal was allowed, relieving the dealer of liability and directing recovery from Hindustan Motors if any payment had been made.

Issues considered

Whether a dealer can be considered the owner of a vehicle and be held jointly and severally liable for compensation under the Motor Vehicles Act, 1988.
Whether clauses 3(b) and 4 of the Dealership Agreement absolve the manufacturer from tortious liability for compensation.
Whether the manufacturer, without filing an appeal, can use Order 41 Rule 33 of the CPC to contest the portion of the award that made it jointly liable.

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 33
Motor Vehicles Act, 1988s. 166, s. 168, s. 2(30)

Subjects

Accidental deathOffending vehicleCompensationLiability to pay compensationLiability of the dealerJointly and severally liable to pay compensationowner of the vehicleAt the time of accidentDealership AgreementDealerDealershipManufacturer of the vehicleTest-driveDeath during test-driveIn control or command of the vehicleIn constructive possession of the vehicleEmployees of owner of the vehicleTortious liabilityFinding achieved finalityAppealCross-objection

Judgment

[2024] 9 S.C.R. 16 : 2024 INSC 652

Vaibhav Jain
v.
Hindustan Motors Pvt. Ltd.
Civil Appeal No. 10192/2024
03 September 2024
[J.B. Pardiwala and Manoj Misra,* JJ.]

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.

Headnotes†
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 –

* Author
[2024] 9 S.C.R. 17

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

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]
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
18 [2024] 9 S.C.R.

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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]

Case Law Cited
M/s Tata Motors Limited v. Antonio Paulo Vaz and Anr. [2021] 1
SCR 625 : (2021) 18 SCC 545; Bihar Supply Syndicate v. Asiatic
Navigation & Ors. [1993] 2 SCR 425 : (1993) 2 SCC 639; Sri
Chandre Prabhuji Jain Temple & Ors. v. Harikrishna & Anr. [1974]
1 SCR 442 : (1973) 2 SCC 665 – referred to.
Rajasthan State Road Transport Corporation v. Kailash Nath Kothari
& Ors. [1997] Suppl. 3 SCR 724 : (1997) 7 SCC 481; Godavari
Finance Company v. Degala Satyanarayanamma & Ors. [2008]
6 SCR 231 : (2008) 5 SCC 107; National Insurance Co. Ltd. v.
Deepa Devi & Ors. [2007] 13 SCR 134 : (2008) 1 SCC 414; Guru
Govekar v. Filomena F. Lobo [1988] Suppl. 1 SCR 170 : (1988)
3 SCC 1; Ramesh Mehta v. Sanwal Chand Singhvi & Ors. [2004]
Suppl. 1 SCR 418 : (2004) 5 SCC 409; Banarasi & Ors. v. Ram
Phal [2003] 2 SCR 22 : (2003) 9 SCC 606 – relied on.

List of Acts
Motor Vehicles Act, 1988; Code of Civil Procedure, 1908.

List of 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.
[2024] 9 S.C.R. 19

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10192 of 2024
From the Judgment and Order dated 15.11.2017 of the High Court
of Chhattisgarh at Bilaspur in MA No. 1306 of 2007
Appearances for Parties
Arup Banerjee, Amit Poddar, Priyanshu Raj, R. K. Dey, Rajiv Agnihotri,
Sanjeev Sharma, Advs. for the Appellant.
Ms. Purti Gupta, Ms. Henna George, Advs. for the Respondent.
Judgment / Order of the Supreme Court

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 representatives of the deceased Pranay Kumar Goswami on
whose accidental death the claim arose. Respondent no. 5 (R-5),
namely, Shubhashish Pal, was the person who drove the vehicle
at the time of accident; and Respondent no.6 (R-6), namely,
M/s Hindustan Motors, was the manufacturer of the vehicle. However,
on 23.10.2018, this Court issued notice only to the manufacturer (R-
6) (i.e., M/s Hindustan Motors) and the SLP was dismissed qua R-1
to R-5 by observing that the question raised in the matter is about
the liability of the dealer (i.e., the appellant). Therefore, in our view,
the impugned award has attained finality insofar as the rights of the

1 High Court
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claimant-respondents are concerned. In consequence, it appears, the
Registry has shown M/s Hindustan Motors as the sole respondent
though, initially, there were six respondents. Be that as it may to have
a clear understanding of the matter, we shall describe the parties
as they were described in the SLP at the time of its presentation.
FACTUAL MATRIX
4. A claim petition for death compensation was filed before the
Tribunal by claimant-respondents (R-1 to R-4) (i.e., legal heirs of
the deceased who died in the accident), under Section 166 of the
Motor Vehicles Act, 1988,2 against driver of the offending vehicle
(R- 5); M/s. Hindustan Motors Private Limited (R-6) (i.e., manufacturer
of the vehicle); and Vaibhav Jain (i.e., Proprietor of M/s Vaibhav
Motors - the dealer of R-6) (the appellant herein). The deceased
was R-6’s Territory Manager whereas the driver of the vehicle was
R-6’s Service Engineer. Thus, the driver and the deceased were
employees of R-6 (i.e., M/s Hindustan Motors). The accident took
place when the vehicle was taken out for a test drive from the
dealership of the appellant.
5. On the pleadings of the parties, five issues were framed by the
Tribunal. Out of those five, the issue relevant for the purposes of
this appeal is:
Whether prior to the accident M/s. Hindustan Motors had sold
the offending vehicle to M/s. Vaibhav Motors (i.e., the dealer)? If
not, whether the dealer can be held liable for the compensation,
jointly and severally, with M/s. Hindustan Motors?
6. As regards issue of ownership of the vehicle, the Tribunal held that
on the day of accident, M/s. Hindustan Motors was the owner of the
vehicle though Vaibhav Motors was in possession of the vehicle as
its dealer. Based on that, the Tribunal held M/s. Hindustan Motors
as well as M/s. Vaibhav Motors (the appellant) jointly and severally
liable for the compensation awarded.
7. Aggrieved by quantum of the compensation awarded, the claimants
(R-1 to R-4) preferred Miscellaneous Appeal (Civil) No. 1147/2017
before the High Court; whereas vide Miscellaneous Appeal (Civil)

2 M.V. Act
[2024] 9 S.C.R. 21

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

No. 1306/2007, the dealer (i.e., the appellant herein) questioned
the award to the extent it made him jointly and severally liable for
payment of the compensation.
8. Both the aforesaid appeals were heard simultaneously and disposed
of by the impugned order. The claimants’ appeal was allowed, and
the compensation was enhanced. However, the appellant’s appeal
was dismissed.
9. We have heard Shri Arup Banerjee for the appellant and Ms. Purti
Gupta for M/s Hindustan Motors; and have also perused the materials
on record.
Submissions on behalf of the appellant
10. The learned counsel for the appellant submitted:
(i) On the date of accident, the owner of the offending vehicle
was its manufacturer M/s. Hindustan Motors (R-6) in whose
name the vehicle was temporarily registered and there was
no evidence that the vehicle was transferred to the appellant.
(ii) The driver of the vehicle and the deceased were both employees
of M/s Hindustan Motors and they took the vehicle from the
dealership for a test drive, therefore, the vehicle, at the time of
accident, was in the control and possession of M/s Hindustan
Motors through its employees.
(iii) The liability for compensation is of the owner of the vehicle
including the driver. Section 2(30) of the M.V. Act defines the
“owner” as a person in whose name a motor vehicle stands
registered, and where such person is a minor, the guardian
of such minor, and in relation to a motor vehicle which is the
subject of a hire-purchase agreement, or an agreement of lease
or an agreement of hypothecation, the person in possession of
the vehicle under that agreement.
(iv) The Dealership Agreement between the appellant and
M/s. Hindustan Motors is neither an agreement of hire-purchase
nor of lease or hypothecation, therefore, even if the dealer is
taken to be in constructive possession of the vehicle, the dealer
would not be its owner within the meaning of Section 2(30) of
the M.V. Act.
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(v) Clauses 3 (b) and 4 of the Dealership Agreement, relied to fasten
liability on the appellant, are in respect of defects in the vehicle
and not in respect of any claim for compensation arising from
an accident involving the vehicle. The concept of possessory
owner as obtaining under section 2(19)3 of the Motor Vehicles
Act, 1939 is no longer available under the M.V. Act, 1988 since
the definition of owner has undergone a sea change.
(vi) The judgment of this Court in “Rajasthan State Road Transport
Corporation vs. Kailash Nath Kothari & Ors.” 4 was based
on the definition of owner as obtaining under the old Act hence
it would not be of any help to decide ownership of a vehicle
under the new M.V. Act, 1988.
(vii) Once it is established that appellant is neither owner nor driver
of the vehicle, it cannot be made liable for the compensation.
Submissions on behalf of M/s Hindustan Motors (R-6)
11. Per contra, learned counsel for M/s Hindustan Motors submitted:
(i) M/s. Hindustan Motors had sold the vehicle to the appellant
vide challan cum invoice No. 20302564 for an amount of
Rs. 7,73,475/. Pursuant thereto, the car bearing temporary
registration No. CG04RPRTC-0478 was delivered to the
appellant on principal-to-principal basis. As the sale stood
complete in all respects, the appellant was owner of the vehicle
on the date of accident. (To buttress the above submission,
reliance was placed on a decision of this Court in “M/s. Tata
Motors Limited vs. Antonio Paulo Vaz and Anr.” 5)
(ii) Assuming that the deceased as well the driver was an employee
of M/s Hindustan Motors, once the vehicle was sold and
delivered to the dealer, the driver and the dealer alone would
be liable for compensation. More so, because clause 3(b) of
the Dealership Agreement absolved M/s Hindustan Motors of
its liability by providing as follows:

3 “owner” means, where the person, in possession of a motor vehicle is a minor, the guardian of such
minor, and in relation to a motor vehicle which is the subject of a hire purchase agreement, the person in
possession of the vehicle under that agreement.
4 [1997] Suppl. 3 SCR 724 : (1997) 7 SCC 481
5 [2021] 1 SCR 625 : (2021) 18 SCC 545
[2024] 9 S.C.R. 23

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

“3(b) After the motor vehicles are dispatched /delivered the
Company’s liability in respect of any defect in the motor
vehicle will be limited to the Company’s obligations under
the warranty clause and the Company will have no other
liability and all liability other than the one under warranty
as aforesaid shall be to the account of the Dealer.”
(Emphasis supplied)
(iii) The dealer being the possessory owner was rightly held liable
in the light of the decision of this Court in Rajasthan State
Road Transport Corporation (supra).
(iv) Even if M/s. Hindustan Motors did not file an appeal against
the impugned award, this Court can absolve M/s. Hindustan
Motors of its liability by modifying the award in exercise of its
power under Order 41 Rule 33 of the Civil Procedure Code,
1908 (for short CPC) as expounded by this Court in “Bihar
Supply Syndicate vs. Asiatic Navigation & Ors.”6 and “Sri
Chandre Prabhuji Jain Temple & Ors. vs. Harikrishna &
Anr.7
ISSUES
12. Having noticed the rival submissions, in our view, following issues
fall for our 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?

6 [1993] 2 SCR 425 : (1993) 2 SCC 639
7 [1974] 1 SCR 442 : (1973) 2 SCC 665
24 [2024] 9 S.C.R.

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Issue No.(i)
13. Before we delve into the afore-stated issues, we must have a look at
the concept of ‘ownership’ of a vehicle as obtaining under the M.V.
Act for fixing liability in respect of compensation. Section 166 8 of
the M.V. Act enumerates the persons who may file an application for
compensation before the Claims Tribunal whereas Section 168(1)9
of the M.V. Act speaks about the award of the Tribunal. Interestingly,
Section 166, though specifies the persons who may file an application
for compensation, omits to specify person(s) against whom the
application is to be filed. However, sub-section (1) of Section 168
by providing that the Claims Tribunal shall specify the amount which
shall be paid by the insurer or owner or driver of the vehicle involved
in the accident, gives sufficient indication on whom the liability for
compensation would fall.

8 Section 166. Application for compensation. – (1) An application for compensation arising out of an
accident of the nature specified in sub-section (1) of section 165 may be made –
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of the legal representatives of the
deceased; or
(d) by any agent duly authorized by the person injured or all or any of the legal representatives
of the deceased, as the case may be,
Provided that where all the legal representatives of the deceased have not joined in any such
application for compensation, the application shall be made on behalf of or for the benefit of all the
legal representatives of the deceased and the legal representatives who have not so joined, shall
be impleaded as respondents to the application.
Provided further that where a person accepts compensation under section 164 in accordance with
the procedure provided under section 149, his claims petition before the claims tribunal shall lapse.
(2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the
claims tribunal having jurisdiction over the area in which the accident occurred, or to the claims tribunal
within the local limits of whose jurisdiction the claimant resides or carries on business or within the local
limits of whose jurisdiction the defendant resides, and shall be in such form and contains such particulars
as may be prescribed.
(3) No application for compensation shall be entertained unless it is made within six months of the
occurrence of the accident.
(4) The claims tribunal shall treat any report of accident forwarded to it under section 159 as an
application for compensation under this Act.
(5) Notwithstanding anything in this Act or any other law for the time being in force, the right of a person
to claim compensation for injury in an accident shall, upon the death of the person injured, survive to his
legal representatives, irrespective of whether the cause of death is relatable to or had any nexus with
the injury or not.
9 Section 168.- Award of the Claims Tribunal. – (1) On receipt of an application for compensation made
under section 166, the claims tribunal shall, after giving notice of the application to the insurer and after
giving the parties including the insurer an opportunity of being heard, hold and inquiry into the claim
or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an
award determining the amount of compensation which appears to it be just and specifying the person or
persons to whom compensation shall be paid and in making the award the claims tribunal shall specify
the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or
by all or any of them, as the case may be:..
[2024] 9 S.C.R. 25

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

14. In Godavari Finance Company v. Degala Satyanarayanamma &
Ors.10 a question arose whether a financier would be an owner of
a motor vehicle within the meaning of Section 2(30)11 of the M. V.
Act, 1988. In that case, the accident took place on 29.5.1995 and,
admittedly, the vehicle was not in control of the financier though
its name was entered in the registration book of the vehicle. The
extract of the registration book, however, revealed that the vehicle
was registered in the name of fourth respondent therein (i.e., not the
financier) and that the hire-purchase agreement with the financier
had also been cancelled on 10.11.1995. In that context, while holding
that financier was not liable, interpreting the definition of ‘owner’, as
provided in Section 2(30), this Court observed:
“12. Section 2 of the Act provides for interpretation of
various terms enumerated therein. It starts with the phrase
unless the context otherwise requires. The definition of
owner is a comprehensive one. The interpretation clause
itself states that the vehicle which is the subject matter of
a hire purchase agreement, the person in possession of
vehicle under that agreement shall be the owner. Thus,
the name of financier in the registration certificate would
not be decisive for determination as to who was the
owner of the vehicle. We are not unmindful of the fact
that ordinarily the person in whose name the registration
certificate stands should be presumed to be the owner, but
such a presumption can be drawn only in the absence of
any other material brought on record or unless the context
otherwise requires.
13. In case of a motor vehicle which is subjected to a hire
purchase agreement, the financier cannot ordinarily be
treated to be the owner. The person who is in possession
of the vehicle, and not the financier being the owner would
be liable to pay damages for the motor accident.

10 [2008] 6 SCR 231 : (2008) 5 SCC 107
11 Section 2. – In this Act, unless the context otherwise requires, --
(30) “owner” means the person in whose name a motor vehicle stands registered, and while such person
is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a
hire purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in
possession of the vehicle under that agreement.
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15. An application for payment of compensation is filed
before the Tribunal constituted under Section 165 of the
Act for adjudicating upon the claim for compensation in
respect of accident involving the death of, or bodily injury
to, persons arising out of the use of motor vehicles, or
damages to any property of a third party so arising, or both.
Use of the motor vehicle is a sine qua non for entertaining
a claim for compensation. Ordinarily if driver of the vehicle
would use the same, he remains in possession or control
thereof. Owner of the vehicle, although may not have
anything to do with the use of vehicle at the time of the
accident, actually he may be held to be constructively
liable as the employer of the driver. What is, therefore,
essential for passing an award is to find out the liabilities
of the persons who are involved in the use of the vehicle
or the persons who are vicariously liable. The insurance
company becomes a necessary party to such claims as
in the event the owner of the vehicle is found to be liable,
it would have to reimburse the owner in as much as a
vehicle is compulsorily insurable so far as the third party
is concerned, as contemplated under section 147 thereof.
Therefore, there cannot be any doubt whatsoever that
the possession or control of a vehicle plays a vital role.”
(Emphasis supplied)
15. In Rajasthan State Road Transport Corporation (in short RSRTC)
(supra), the vehicle along with services of the driver were hired
by RSRTC from its registered owner. The issue which arose for
consideration by this Court was whether RSRTC, which had hired the
vehicle along with services of the driver from the registered owner of
the vehicle, could be held vicariously liable for the accident caused
by use of that vehicle. Answering the question in the affirmative,
this Court, on the principle of vicarious liability of RSRTC for the
tort committed by a person under its control and command, held:
“17. ….. The general proposition of law and the presumption
arising therefrom that an employer, that is the person who
has the right to hire and fire the employee, is generally
responsible vicariously for the tort committed by the
employee concerned during the course of his employment
[2024] 9 S.C.R. 27

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

and within the scope of his authority, is a rebuttable
presumption. If the original employer is able to establish
that when the servant was lent, the effective control over
him was also transferred to the hirer, the original owner
can avoid his liability and the temporary employer or the
hirer, as the case may be, must be held vicariously liable
for the tort committed by the employee concerned in the
course of his employment while under the command
and control of the hirer notwithstanding the fact that the
driver would continue to be on the payroll of the original
owner………..”
16. In that backdrop, this Court while construing the definition of “owner”,
as provided in Section 2(19) of the old Motor Vehicles Act, 1939,12
held that (a) the definition of “owner” under section 2 (19) of the Act
is not exhaustive; (b) it has to be construed in a wider sense based
on the facts and circumstances of a given case; and (c) it must
include, in a given case, the person who has the actual possession
and control of the vehicle and under whose direction and command
the driver is obliged to operate the same. It was also observed that
to confine the meaning of owner to the registered owner only would
not be proper where the vehicle is in the actual possession and
control of the hirer at the time of the accident.
17. In National Insurance Co. Ltd. v. Deepa Devi & Ors.13 the question
was as to who would be liable to pay compensation if the offending
vehicle at the time of accident is under requisition for election. From
the claimant’s side, by relying on the decision of this Court in Guru
Govekar v. Filomena F. Lobo,14 it was argued that regardless of
the vehicle being in possession of some other person, the owner
would be liable. Negativing this argument, this Court held that when
a vehicle is requisitioned for State duty, the owner of the vehicle has
no other alternative but to hand over the possession to the statutory
authority and, therefore, the case would be distinguishable from the
one where the owner gives the vehicle to someone else on his own
free will. Holding so, it was observed:

12 See Footnote 3
13 [2007] 13 SCR 134 : (2008) 1 SCC 414
14 [1988] Suppl. 1 SCR 170 : (1988) 3 SCC 1
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“10. …. While the vehicle remains under requisition, the
owner does not exercise any control there over. The driver
may still be the employee of the owner of the vehicle but
he has to drive it as per the direction of the officer of the
State, who is put in charge thereof. Save and except for
legal ownership, for all intent and purport, the registered
owner of the vehicle loses entire control thereover. He
has no say as to whether the vehicle should be driven
at a given point of time or not. He cannot ask the driver
not to drive a vehicle on a bad road. He or the driver
could not possibly say that the vehicle would not be
driven in the night. The purpose of requisition is to use
the vehicle. For the period the vehicle remains under the
control of the State and /or its officers, the owner is only
entitled to payment of compensation therefor in terms of
the Act, but he cannot exercise any control thereupon. In
a situation of this nature, this court must proceed on the
presumption that Parliament while enacting the 1988 Act
did not envisage such a situation. If in a given situation,
the statutory definitions contained in the 1988 Act cannot
be given effect to in letter and spirit, the same should be
understood from the common sense point of view.”
(Emphasis supplied)
18. While observing as above, this Court noticed that the clause defining
“owner” is prefaced with the expression “unless the context otherwise
requires” and, therefore, in the light of an earlier decision of this
Court in Ramesh Mehta v. Sanwal Chand Singhvi & Ors.,15 it
was held that where the context makes the definition given in the
interpretation clause inapplicable, the same meaning cannot be
assigned.
19. 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.

15 [2004] Suppl. 1 SCR 418 : (2004) 5 SCC 409, paragraph 27
[2024] 9 S.C.R. 29

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

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).
20. 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). Based on that, the Tribunal observed:
“………therefore, it is inferred that Hindustan Motors had
given the Lancer car to Vaibhav Motors for the purpose
of selling it. And the entire supervision was that of Pranav
Kumar and Shubhashish Pal of Hindustan Motors. It is not
proved that Hindustan Motors had sold the said Lancer
car to Vaibhav Motors. Accordingly, the issue no.3 is held
to be not proved.”
21. However, the Tribunal held all non-applicants, namely, Shubhashish
Pal (i.e., driver of the vehicle); M/s. Hindustan Motors (owner of the
vehicle); and M/s. Vaibhav Motors (the dealer), jointly and severally
liable for the compensation.
22. Against the award, the appellant (i.e., the dealer) filed an appeal but
no appeal was preferred by M/s. Hindustan Motors even though a
categorical finding was returned by the Tribunal that no evidence
of sale of the vehicle to the dealer was produced by M/s Hindustan
Motors. In view thereof, it does not lie in the mouth of M/s. Hindustan
Motors to canvass that it was not the owner of the vehicle. We have,
therefore, to consider whether M/s. Vaibhav Motors (the appellant),
being in constructive possession of the vehicle as a dealer, could be
held liable, particularly when M/s. Hindustan Motors was its owner
and, at the time of accident, the vehicle was being driven by an
employee of M/s Hindustan Motors.
23. As per the finding of the Tribunal, which remained undisturbed, the
aforesaid two employees of M/s. Hindustan Motors took the vehicle
from M/s Vaibhav Motors (the appellant) for a test drive. None of
the employees of the dealer was present in the vehicle. Rather, at
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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.
24. The issue no.(i) is decided in the aforesaid terms.
Issue No. (ii)
25. Now, we shall consider whether by virtue of clauses 3 (b) and 4 of
the Dealership Agreement, M/s Hindustan Motors was absolved of
its tortious liability, that is, whether the tortious liability shifted to the
dealer (i.e., the appellant).
26. Clauses 3 (b) and 4 of the Dealership Agreement have been extracted
in paragraph 14 of the judgment of the High Court. They read as
under:
“3 (b) After the motor vehicles are dispatched/ delivered
the Company’s liability in respect of any defect in the motor
vehicle will be limited to the Company’s obligations under
the warranty clause and the Company will have no other
liability and all liabilities other than the one under warranty
as aforesaid shall be to the account of the Dealer.
4. After the motor vehicles are delivered, the Company’s
liability in respect of any defect in the motor vehicle will
be limited to the Company’s obligation under the warranty
clause and the Company will have no other liability. All
liabilities other than the one under warranty as aforesaid
shall be to the account of the Dealer.”
27. 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
[2024] 9 S.C.R. 31

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

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. We, therefore, reject the submission
of the learned 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.
28. Issue no.(ii) is decided in the aforesaid terms.
Issue No.(iii)
29. The issue as to whether M/s Hindustan Motors, without filing a
separate appeal, or cross-objection, could take recourse to the
provisions of Order 41 Rule 33 of the Code of Civil Procedure, 190816
to challenge that portion of the award which made it liable, jointly
and severally, for the compensation awarded is rendered academic
in view of our findings on issues (i) and (ii). However, we propose
to address the said issue.
30. In Banarasi & Ors. V. Ram Phal17 this Court dealt with the scope
of Order 41 Rule 2218 CPC (post 1976 amendment) and the power

16 Order 41 Rule 33. CPC. – Power of Court of Appeal -- The appellate court shall have power to pass
any decree and make any order which ought to have been passed or made and to pass or make such
further or other decree or order as the case may require, and this power may be exercised by the Court
notwithstanding that the appeal is as to part only of the decree and may be exercised in favor of all or
any of the respondents or parties, although such respondents or parties may not have filed any appeal
or objection and may, where there have been decrees in cross-suits or where two or more decrease are
passed in one suit, be exercised in respect of all or any of the decrees, although any appeal may not
have been filed against such decrees:
Provided that the Appellate Court shall not make any order under section 35A, in pursuance of any
objection on which the Court from whose decree the appeal is preferred has omitted or refused to make
such order.
Illustration
A claims a sum of money as due to him from X or Y, and in a suit against both obtains a decree against
X. X, appeals and A & Y are respondents. The appellate court decides in favor of X. It has power to pass
a decree against Y.
17 [2003] 2 SCR 22 : (2003) 9 SCC 606
18 Order 41 Rule 22 CPC. – Upon hearing respondent may object to decree as if he had preferred a
separate appeal..—
(1) Any respondent, though he may not have appealed from any part of the decree, may not only
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of an appellate court under Order 41 Rule 33 CPC. While dealing
with the scope of Rule 22 of Order 41, the Court observed:
“10. …. There may be three situations:
(i) The impugned decree is partly in favour of the
appellant and partly in favour of the respondent.
(ii) The decree is entirely in favour of the respondent though
an issue has been decided against the respondent.
(iii) The decree is entirely in favour of the respondent and
all the issues have also been answered in favour of
the respondent but there is a finding in the judgment
which goes against the respondent.
11. In the type of case (i) it was necessary for the
respondent to file an appeal or take cross-objection against
that part of the decree which is against him if he seeks to
get rid of the same though that part of the decree which
is in his favor he is entitled to support without taking any
cross-objection. The law remains so post amendment
too. In the type of cases (ii) and (iii) pre-amendment
CPC did not entitle nor permit the respondent to take any
cross-objection as he was not the person aggrieved by
the decree. Under the amended CPC, read in the light
of the explanation, though it is still not necessary for the
respondent to take any cross- objection laying challenge

support the decree but may also state that the finding against him in the court below in respect of
any issue ought to have been in his favour; and may also take any cross-objection to the decree
which he could have taken by way of appeal provided he has filed such objection in the appellate
court within one month from the date of service on him or his pleader of notice of the day fix for
hearing the appeal, or within such further time as the appellate court may deem fit to allow.
Explanation.-- A respondent aggrieved by a finding of the court in the judgment on which the
decree appealed against is based may, under this rule, file cross objection in respect of the decree
insofar as it is based on that finding, notwithstanding that by reason of the decision of the court on
any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in
favor of that respondent.
(2) Form of objection and provisions applicable thereto. --- Such cross objection shall be in the
form of a memorandum, and the provisions of rule 1, so far as they relate to the form and contents
of the memorandum of appeal, shall apply thereto.
(3) Omitted (by Act 46 of 1999, w.e.f. 1.7.2002)
(4) Where, in any case in which any respondent has under this rule filed a memorandum of objection,
the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless
be heard and determined after such notice to the other parties as the Court thinks fit.
(5) The provisions relating to appeals by indigent persons shall, so far as they can be made applicable,
apply to an objection under this rule.
[2024] 9 S.C.R. 33

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

to any finding adverse to him as the decree is entirely in
his favor and he may support the decree without his cross
objection; the amendment made in the text of sub-rule (1),
read with the explanation newly inserted, gives him a right
to take cross-objection to a finding recorded against him
either while answering an issue or while dealing with an
issue. The advantage of preferring such cross-objection
is spelled out by sub-rule (4). In spite of the original
appeal having been withdrawn or dismissed for default
the cross objection taken to any finding by the respondent
shall still be available to be adjudicated upon on merits
which remedy was not available to the respondent under
the unamended CPC. In the pre- amendment era, the
withdrawal or dismissal for default of the original appeal
disabled the respondent to question the correctness or
otherwise of any finding recorded against the respondent.
12. The fact remains that to the extent to which the decree
is against the respondent and he wishes to get rid of it he
should have either filed an appeal of his own or taken cross
objection failing which the decree to that extent cannot
be insisted on by the respondent for being interfered, set
aside or modified to his advantage……”
In respect of the power of an appellate court under Order
41 Rule 33 CPC, the Court, after observing that the true
scope of the power could be best understood when read
along with Rule 419. of Order 41, held:
“15. Rule 4 seeks to achieve one of the several objects
sought to be achieved by Rule 33, that is, avoiding a
situation of conflicting decrees coming into existence in
the same suit. The above said provisions confer power of
the widest amplitude on the appellate court so as to do
complete justice between the parties and such power is

19 Order 41 Rule 4 CPC. – One of several plaintiffs or defendants may obtain reversal of whole
decree where it proceeds on ground common to all. -- Where there are more plaintiffs or more
defendants than one in a suit, and the decree appealed from proceeds on any ground common to all the
plaintiffs or to all the defendants, any one of the plaintiffs or of the defendants may appeal from the whole
degree, and thereupon the appellate court may reverse or vary the decree in favor of all the plaintiffs or
defendants, as the case may be.
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unfettered by consideration of facts like what is the subject
matter of the appeal, who has filed the appeal and whether
the appeal is being dismissed, allowed or disposed of by
modifying the judgment appealed against. While dismissing
an appeal and though confirming the impugned decree, the
appellate court may still direct passing of such decree or
making of such order which ought to have been passed or
made by the court below in accordance with the findings of
fact and law arrived at by the court below and which it would
have done had it been conscious of the error committed
by it and noticed by the appellate court. While allowing the
appeal or otherwise interfering with the decree or order
appealed against, the appellate court may pass or make
such further or other, decree or order, as the case would
require being done, consistent with the findings arrived at
by the appellate court. The object sought to be achieved
by conferment of such power on the appellate court is to
avoid inconsistency, inequity, inequality in reliefs granted
to similarly placed parties and unworkable decree or order
coming into existence. The overriding consideration is
achieving the ends of justice. Wider the power, higher
the need for caution and care while exercising the power.
Usually, the power under Rule 33 is exercised when the
portion of the decree appealed against or the portion of
the decree held liable to be set aside or interfered by the
appellate court is so inseparably connected with the portion
not appealed against or left untouched that for the reason
of the latter portion being left untouched either injustice
would result or inconsistent decrees would follow. The
power is subject to at least three limitations: first, the power
cannot be exercised to the prejudice or disadvantage of
a person not a party before the court; secondly, a claim
given up or lost cannot be revived; and thirdly, such 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. A case where there are two
relief prayed for and one is refused while the other one
is granted and the former is not inseparably connected
[2024] 9 S.C.R. 35

Vaibhav Jain v. Hindustan Motors Pvt. Ltd.

with or necessarily depending on the other, in an appeal
against the latter, the former relief cannot be granted in
favor of the respondent by the appellate court exercising
power under Rule 33 of Order 41.”
(Emphasis supplied)
31. From the decision above, which has been consistently followed, 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.
32. In the instant case, 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. 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. 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. Issue no. (iii) is decided in
the aforesaid terms.
CONCLUSION
33. In view of our conclusion that the appellant was neither the owner nor
in control/ command of the vehicle at the time of accident, and the
vehicle was being driven by an employee of M/s. Hindustan Motors,
we are of the view that apart from the driver, M/s. Hindustan Motors
alone was liable for the compensation awarded. Thus, the appellant
should not have been burdened with liability to pay compensation.
RELIEF
34. However, as vide order dated 23.10.2018 the SLP was dismissed qua
the claimant-respondents, we are unable to set aside the award to
the extent it enables the claimant-respondents to recover the awarded
compensation, jointly or severally, from the owner, dealer and driver
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of the vehicle. But we make it clear that 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.
35. The appeal is allowed to the extent above.
36. Pending application(s), if any, shall stand disposed of.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Divya Pandey