Supreme Court of India
Vaibhav Jain vs Hindustan Motors Pvt. Ltd on 3 September, 2024
Author: Rajesh Bindal
Bench: Rajesh Bindal
2024 INSC 652
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 10192 /2024
(Arising out of SLP (C) No. 28968/2018)
VAIBHAV JAIN …Appellant (s)
VERSUS
HINDUSTAN MOTORS PVT. LTD. …Respondent(s)
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.
Signature Not Verified
Digitally signed by
rashmi dhyani pant
Date: 2024.09.03
1 High Court
17:48:04 IST
Reason:
SLP (C) No.28968/2018 Page 1 of 25
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 (R1 to R4) were heirs and legal representatives of the
deceased Pranay Kumar Goswami on whose accidental
death the claim arose. Respondent no.5 (R5), namely,
Shubhashish Pal, was the person who drove the vehicle at
the time of accident; and Respondent no.6 (R6), namely,
M/s Hindustan Motors, was the manufacturer of the
vehicle. However, on 23.10.2018, this Court issued notice
only to the manufacturer (R6) (i.e., M/s Hindustan
Motors) and the SLP was dismissed qua R1 to R5 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 claimantrespondents 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 claimantrespondents (R1 to R4)
SLP (C) No.28968/2018 Page 2 of 25
(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 (R5); M/s.
Hindustan Motors Private Limited (R6) (i.e., manufacturer
of the vehicle); and Vaibhav Jain (i.e., Proprietor of M/s
Vaibhav Motors the dealer of R6) (the appellant herein).
The deceased was R6’s Territory Manager whereas the
driver of the vehicle was R6’s Service Engineer. Thus, the
driver and the deceased were employees of R6 (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.
2 M.V. Act
SLP (C) No.28968/2018 Page 3 of 25
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 (R1 to R4) preferred Miscellaneous Appeal
(Civil) No.1147/2017 before the High Court; whereas vide
Miscellaneous Appeal (Civil) 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 (R6) in whose name the
vehicle was temporarily registered and there
SLP (C) No.28968/2018 Page 4 of 25
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 hirepurchase
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 hirepurchase nor
of lease or hypothecation, therefore, even if
the dealer is taken to be in constructive
SLP (C) No.28968/2018 Page 5 of 25
possession of the vehicle, the dealer would
not be its owner within the meaning of
Section 2 (30) of the M.V. Act.
(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
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) 7 SCC 481
SLP (C) No.28968/2018 Page 6 of 25
cannot be made liable for the
compensation.
Submissions on behalf of M/s Hindustan Motors (R6)
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.
CG04RPRTC0478 was delivered to the
appellant on principaltoprincipal 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
5 (2021) 18 SCC 545SLP (C) No.28968/2018 Page 7 of 25
compensation. More so, because clause 3
(b) of the Dealership Agreement absolved
M/s Hindustan Motors of its liability by
providing as follows:
“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 Chandre6 (1993) 2 SCC 639
SLP (C) No.28968/2018 Page 8 of 25
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?
Issue No.(i)
7 (1973) 2 SCC 665
SLP (C) No.28968/2018 Page 9 of 25
13. Before we delve into the aforestated 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 1668 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
88 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.
99 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: ..
SLP (C) No.28968/2018 Page 10 of 25
filed. However, subsection (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.
14. In Godavari Finance Company v. Degala
Satyanarayanamma & Ors.9 a question arose whether a
financier would be an owner of a motor vehicle within the
meaning of Section 2(30)10 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 hirepurchase 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 vehicle9 9 (2008) 5 SCC 107
1010 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.
SLP (C) No.28968/2018 Page 11 of 25
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.
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)
SLP (C) No.28968/2018 Page 12 of 25
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 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, 193911, 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
1111 See Footnote 3
SLP (C) No.28968/2018 Page 13 of 25
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.12 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. Lobo13, 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:
“10. …. While the vehicle remains under requisition, the
owner does not exercise any control there over. The driver1212 (2008) 1 SCC 414
1313 ((1988) 3 SCC 1SLP (C) No.28968/2018 Page 14 of 25
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.14, 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,
1414 (2004) 5 SCC 409, paragraph 27
SLP (C) No.28968/2018 Page 15 of 25
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).
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 nonapplicants,
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.
SLP (C) No.28968/2018 Page 16 of 25
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 the time of accident, the driver and the copassenger 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
SLP (C) No.28968/2018 Page 17 of 25
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.”SLP (C) No.28968/2018 Page 18 of 25
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 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 crossobjection, could
take recourse to the provisions of Order 41 Rule 33 of the
Code of Civil Procedure, 190815 to challenge that portion of
1515 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
SLP (C) No.28968/2018 Page 19 of 25
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 Phal16 this Court dealt
with the scope of Order 41 Rule 22 17 CPC (post 1976
amendment) and the power 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:
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.
1616 (2003) 9 SCC 606
1717 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 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.
SLP (C) No.28968/2018 Page 20 of 25
(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 crossobjection 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 crossobjection. The law
remains so post amendment too. In the type of cases (ii) and
(iii) preamendment CPC did not entitle nor permit the
respondent to take any crossobjection 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
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 subrule (1), read
with the explanation newly inserted, gives him a right to take
crossobjection to a finding recorded against him either while
answering an issue or while dealing with an issue. The
advantage of preferring such crossobjection is spelled out by
subrule (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……”
SLP (C) No.28968/2018 Page 21 of 25
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 418. 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 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
18.18. 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.
SLP (C) No.28968/2018 Page 22 of 25
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 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
SLP (C) No.28968/2018 Page 23 of 25
operated against it and was backed by a finding of
ownership. By not challenging the same, through an
appeal or crossobjection, 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 claimantrespondents, 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 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
SLP (C) No.28968/2018 Page 24 of 25
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.
……………………………………….J.
(J.B. Pardiwala)
……………………………………….J.
(Manoj Misra)
New Delhi;
September 03, 2024
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