VAIBHAV JAIN versus HINDUSTAN MOTORS PVT. LTD.

Citation: [2024] 9 S.C.R. 16 · Decided: 03-09-2024 · Supreme Court of India · Bench: J.B. PARDIWALA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[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
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