Summary
A vehicle in a dealer's custody was being test driven by the manufacturer's own employees when it crashed. The Supreme Court held that the dealer was not liable as owner because the manufacturer owned the vehicle and controlled it through those employees. Clauses of the dealership agreement allocating liability for defects did not shift tortious liability to the dealer, and the manufacturer, which had not appealed the award, could not use Order 41 Rule 33 CPC to escape it. Since the award had become final for the claimants, the dealer was allowed to recover from the manufacturer whatever it pays.
Issues
- Whether a dealer holding a vehicle for sale could be treated as its owner, and so be held jointly and severally liable for motor accident compensation, when the manufacturer's employees took it out for a test drive.
- Whether clauses 3(b) and 4 of the dealership agreement absolved the manufacturer of liability to pay compensation as owner.
- Whether the manufacturer, without filing an appeal or cross-objection against the award, could challenge its liability by invoking Order 41 Rule 33 CPC.
Provisions considered
- Section 2(30), Motor Vehicles Act, 1988The definition of owner opens with 'unless the context otherwise requires' and is not confined to the registered owner or the listed categories. Where the context requires, the person who commands or controls the vehicle may be treated as owner for fixing tortious liability. Applied here, the manufacturer, and not the dealer, was the owner in control. (¶¶ 14, 18, 19, 23)
- Sections 166 and 168(1), Motor Vehicles Act, 1988Section 166 says who may claim but not against whom. Section 168(1), by requiring the Tribunal to specify the amount payable by the insurer, owner or driver, indicates on whom liability falls. (¶ 13)
- Order 41 Rule 33, Code of Civil Procedure, 1908The appellate power under Rule 33 is wide and aims at the ends of justice. It cannot be used to reverse, for the benefit of a party, a part of the decree which that party ought to have challenged by appeal or cross-objection and allowed to become final. (¶¶ 29, 30, 31, 32)
- Order 41 Rule 22, Code of Civil Procedure, 1908A respondent who wants a part of the decree that goes against him set aside or modified must file an appeal or a cross-objection. (¶ 30)
Held
- The owner of a vehicle is not limited to the categories in Section 2(30) of the Motor Vehicles Act, 1988. Where the context requires, a person who commands or controls the vehicle can be treated as owner for fixing tortious liability to pay compensation. (¶ 19)
- The Tribunal found that the manufacturer had not proved any sale to the dealer, and the manufacturer did not challenge that finding. It therefore could not argue that it was not the owner. (¶¶ 20, 22)
- At the time of the accident only the manufacturer's employees were in the vehicle, having taken it from the dealership for a test drive, and nothing showed that the dealer could have refused them. The vehicle was therefore owned by the manufacturer and under its command and control through its employees, and the dealer was not liable as owner. (¶¶ 23, 33)
- Clauses 3(b) and 4 of the dealership agreement deal with the manufacturer's liability for defects in the vehicle, which they confine to the warranty. Because they do not specifically exclude tortious liability arising from use of the vehicle, they do not shift the owner's liability under the Motor Vehicles Act to the dealer. (¶ 27)
- Although the question had become academic, the Court held that the manufacturer could not invoke Order 41 Rule 33 CPC. It had let the finding of ownership and the joint and several liability become final by not filing an appeal or cross-objection, and the Rule 33 power cannot reverse such a part of the decree for the benefit of the party that let it become final. (¶¶ 29, 31, 32)
Result
Appeal allowed in part. The SLP had already been dismissed against the claimants, so the award remains enforceable by them against the owner, dealer and driver. If the dealer has paid or pays any part of the award, it may recover that amount from the manufacturer with 6% interest a year from the date of payment until recovery.