SC holds M/s Hindustan Motors liable for compensation in accident during test drive [Read Judgment]

NEW DELHI: The Supreme Court has rejected a plea by M/s Hindustan Motors Pvt Ltd that since the vehicle, involved in an accident during the test drive, was sold and delivered to the dealer on a principal to principal to basis, so the driver and the dealer alone would be liable for compensation under the Motor Vehicles Act.

A bench of Justices J B Pardiwala and Manoj Misra held M/s Hindustan Motors Pvt Ltd and not its dealer as liable to pay compensation for tortious liability for the death caused to its employee.

In the case, the Motor Accident Claims Tribunal tribunal held M/s Hindustan Motors as well as M/s Vaibhav Motors jointly and severally liable for the compensation awarded. The tribunal found 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.

The Chhattisgarh High Court enhanced the compensation on appeal by claimants. It also dismissed a plea by Vaibhav Motors to absolve the dealer from any liability.

Setting aside the High Court's order, the bench said, "the appellant was neither the owner nor in control or 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".

The court clarified 'owner’ of a vehicle is not limited to the categories specified in Section 2 (30) of the Motor Vehicles Act.

The court said 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 its judgment on September 3, the court allowed the appeal of Vaibhav Jain, proprietor of Vaibhav Motors by holding, being just a dealer of M/s Hindustan Motors, he was not liable for compensation as the owner of the vehicle.

It noted at the time of accident, the driver and the co passenger of that vehicle were employees of M/s Hindustan Motors.

The bench found 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.

The bench noted no evidence of sale of the vehicle to the dealer was produced by M/s Hindustan Motors, which also did not challenge the tribunal's order before the High Court.

"It does not lie in the mouth of M/s Hindustan Motors to canvass that it was not the owner of the vehicle," the bench said.

 [Read Judgment]