PETITIONER:
PUSHPABAI PURSHOTTAM UDESHI & ORS.
Vs.
RESPONDENT:
RANJIT GINNING & PRESSING CO. (P) LTD. & ANR.
DATE OF JUDGMENT25/03/1977
BENCH:
KAILASAM, P.S.
BEG, M. HAMEEDULLAH (CJ)
CITATION:
1977 AIR 1735 1977 SCR (3) 372
1977 SCC (2) 745
ACT
Motor Vechicles Act 1939--S. 95, 110--Liability of insur-
ance company--Death of passenger not for reward--Quantum of
compensation--Annual income if on the basis of basic wages.
Torts--Negligence--Res ipsa loquitur--Rash and negligent
driving--Meaning of--Rationalae--course of employment--Scope
of employment--If driver gives a lift without charging
anything--If master liable--Vicarious liability--Master and
servant.
HEADNOTE
Purshottam Udeshi was travelling in a car which was
driven by Manager of the first respondent company. The car
was insured with the second respondent. The car dashed
against a tree while proceeding from Nagpur to Pandurna.
Purshottam, who was aged 58 years at that time, died in
the. accident. His annual income was about Rs. 9000/-.
The widow and children of Purshottam filed a claim for
compensation for a sum of Rs. 1 lac under section 110 of the
Motor Vehicles Act, 1939, before the Claims Tribunal. The
respondents denied that the vehicle was driven in a rash or
negligent manner and contended tbat the vehicle at the time
of accident was perfectly in sound condition. It was also
contended that Purshottam was travelling in the said vehicle
on his own responsibility and for his own purpose absolutely
gratis and not on behalf of or at the instance of respondent
No. 1 or the driver of the vehicle and, therefore, the
claimants were not entitled to any compensation. The
respondent pleaded inevitable accident.
The Tribunal found that the accident was as a result of
negligent driving of the vehicle by the Manager. It also
found that the first respondent the owner of the company was
liable, to pay compensation to the claimants on account of
negligence of their employee. The. Tribunal awarded Rs.
31,209/- as general damages on the basis of 5 years’ earning
less the, amount which the deceased might have spent on
himself and Rs. 2,000/. as special damages for funeral and
post-funeral expenses. The Tribunal took into account the
pay, D.A., conveyance allowance etc. for the purpose of
determining income of the deceased. Both the respond-
ents. filed appeals in the. High Court. The High Court did
not decide the question as to whether the accident was due
to rash and negligent driving or the quantum of compensation
allowed by the Tribunal was proper or not on the ground that
the respondent No. 1 cannot be held vicariously liable for
the act of their Manager in taking Purshottam as a passen-
ger as the said act was neither in the course of his employ-
ment nor under any authority whatsoever; that no evidence
was led to show that the respondent No. 1 was aware that
Purshottam was being taken in the car as a passenger by
their Manager. The High Court held that Purshottam was no
better than a trespasser as far as respondent No. 1 is
concerned and that, therefore., respondent No. 1 cannot be
made vicariously liable.
In an appeal by certificate, the appellants claimants con-
tended:
(1) That the accident was due to the, rash
and negligent driving of the Manager of re-
spondent No. 1.
(2) The accident took place during the course
of the employment of the driver.
Allowing the appeal,
HELD: (1) The car was being driven rashly and negligent-
ly. Although no eye witness was examined P.W.I. the brother
of the deceased who went to the spot soon after the accident
was examined. He deposed that the car dashed
373
against a tree. The tree was on the right hand side of the
road, 4 ft. away from the right-hand side of the main met-
alled road. The road was 15 ft. wide and was a metalled
road. On other side of the road there were fields at lower
level. The tree against which the car dashed was uprooted
about 9 to 10" from the ground. The car dashed so vio-
lently that it was broken in the front side. The vehicle
struck so violently that the machine of the car went back
about a foot from its original position. The steering wheel
of the engine of the car receded back on the driver’s side
and the said impact on the driver’s side and by the said
impact the occupants died and front seat also moved back.
The witness was not cross-examined on these facts. The
maxim of "Res ipsa 1oquitur" clearly applies in the present
case. In view of the proved facts the burden was on the
respondents to prove the inevitable accident. [376 B-H]
Eller v. Selfridge (1930) 46 T.L.R. 236, referred to.
The normal rule is that it is for the plaintiff to prove
negligence but in some cases considerable hardship is caused
to’ the plaintiff as the true, cause! of the accident is not
known to him but is solely within the knowledge of the,
defendant who caused it. The plaintiff can prove the acci-
dent but cannot prove how it happened to establish negli-
gence on the part of the defendant. This hardship is sought
to be avoided by applying the principle of res ipsa 1oqui-
tur. It means the accident "speaks for itself" or "tells
its own story". The car could not have gone to the right
extremity and dashed with such violence with the tree if the
driver had exercised reasonable care and caution. The Court
did not think it necessary to remand the matter to the High
Court to consider the question of rash and negligent driving
since the evidence was convincing. [377 D-E, 378, A. E]
(2) It is an admitted fact that the driver of the car,
the Manager of respondent No. 1, was proceeding from Nagpur
to Pandhurna for purpose of delivering an amount of Rs.
20,000/-. He was driving the car in the course of the
employment of respondent No. 1. It is now firmly estab-
lished that the master’s liability is based on the ground
that the. act is done in the scope or sourse of his employ-
ment or authority. [379 A-G]
Young v. Edward Box and Co. Ltd. (1951) 1 T.L.R. 789 at 793,
approved.
Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt
(1966)3 SCR 527; Conway v. George Wimpey & Co. Ltd. 1951 All
E.R. 363 and 62 T.L.R. 458, distinguished.
Ormrod and Another v. Crosville Motor Services Ltd.
(1953)2 All E.R. 753 and Canadian Pacific Railway Co. v.
Lockhart 1942 A.C. 591, referred to.
(3) The Manager permitted Purshottam to have a ride in
the car. Taking into account the high position of the
driver who was the Manager of the company it is reasonable,
to presume in the absence of any evidence to the contrary
the Manager had authority to carry Purshottam or acting in
the course of his employment. There is nothing to support
the conclusion of the High Court that the driver was not
acting in the course of his employment. [382 D-F]
Cox v. Midland Counties Ry. Co. (3 Ex. 268) and Honghton
v. Pilkington, (1912) 3 K.B. 308 distinguished.
Twine v. Bean’s Express, Ltd. 62 T.L.R.p. 155, year 1945-46
distinguished.
4. Recent trend in law is to make the master liable for
acts which do not strictly fall within the term "in the
course of employment" as ordinarily understood. [383 F]
5. The High Court did not go into the question of
quantum of compensation. The Tribunal, however, ought not
to have taken D.A., Conveyance Allowance etc., into account
for the purposes of determining the income of the deceased.
Thus, the income of 5 years would stand reduced from Rs.
31,000/to Rs. 25,500/- over and above special damage of Rs.
2,000/- [385 A, C-D]
374
6. As far as respondent No. 2 Insurance Co. is con-
cerned it contended that since the Company had specifically
limited its liability in respect of injury to passengers to
Rs. 15,000/- it cannot be made liable for anything in excess
of Rs. 15,000/-. The respondent No. 1 contended that the
insurance cover under the Act extended to the injury
to the passengers also and relied on Section 95(1)
(b)(i) which provides against any libility to the owner
which may be incurred by him in respect of death or bodily
injury to any person or damage to any person of a third
party caused by or arising out of the use of the vehicle in
a public place. Section 95 of the Motor Vehicles Act as
amended by Act 56 of 1969, is based on the Road Traffic Act
of 1960 or the earlier Act of 1930 in England. Section
95(a) and 95(b)(i) of the Act adopts the provisions of the
English Road Traffic Act, 1960, and excludes the liability
of the Insurance Co. regarding the. risk to the passengers.
Section 95 provides that a policy of insurance must be a
policy which insures the persons against any liability which
may be incurred by him in respect of death or bodily injury
to any person or damage. to any property of a third party
caused by or arising out of use of the vehicle in a public
place. Proviso 2 to Section 95(b) makes it clear that it is
not required that a policy of insurance should cover risk of
the passengers who are not carried for hire or reward.
Under section 95, the risk to a passenger in a vehicle who
is not carried for hire or reward is not required to be
insured. The Insurer can however always take policies for a
risk which is not covered by section 95. In the present
case, the insurer had insured with the Insurance Co. the
risk to the passenger to the extent of Rs. 15,000/-.
Clause 1 of the section 2 to the Insurance Policy which
requires the Insurance Co. to indemnify the insured in
respect of claimants’ claim which becomes legally payable:
in respect of death of or bodily injury to any person is not
happily worded. However, since the said clause .talks of
"except so far as necessary to meet the requirements of
section 95 of the Motor Vehicles Act, 1939" would indicate
that the liability is restricted ,to the liability aris-
ing out of the statutory requirements under section 95. The
policy read with the other clauses makes it clear that the
respondent no. 2 would be liable to the extent of Rs.
15,000/-. [385 G-H, 386 A, F, 387 B, H, 388 A-D]
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2071 of
1968.
(From the Judgment and Order dated 20-4-1967 of the
Madhya Pradesh High Court in Misc. First Appeal No. 104/66).
Rameshwar Nath, for the appellants
U.R. Lalit and A.G. Ratnaparkhi, for respondent No. 1.
Naunit Lal and Miss Lalita Kohli, for respondent No. 2.
The Judgment of the Court was delivered by
KAILASAM, J.--This is an appeal by certificate under
Article 133 (1)(a) of the Constitution granted by the High
Court of Madhya Pradesh. The appellants filed a claim for
compensation of a sum of rupees one lakh under section 110
of the Motor Vehicles Act before the Claims Tribunal,
Jabalpur. The first claimant is the wife and the claimants
2 to 8 are the children of one Purshottam Tulsidas Udeshi
who met with his death in a motor car accident on 18th
December, 1960 when he was travelling in the car which was
driven by Madhavjibhai Mathuradas Ved, the Manager of the
first opponent company, M/s. Ranjit Ginning and Pressing Co.
Private Ltd., in a rash and negligent manner near a village
called Chincholivad which was 16 miles from Saoner. The car
which was .a Hindustan Ambassador Saloon was insured with
second opponent, Union
375
Fire Accident and General Insurance Co. Ltd. The deceased
was aged 58 years at the time of’ his death and according to
the petitioners was earning annually about Rs. 9,000. They
claimed a compensation of rupees one lakh. The opposite
parties, the owner and the insurance company, opposed. the
claim. While admitting that the vehicle was proceeding
from Nagpur on its way to Pandhurna for the purpose men-
tioned by the applicants they denied that the vehicle was
driven in a rash and negligent manner and pleaded that the
vehicle was at the time of accident in perfectly sound
condition. It Was submitted that the husband of the appli-
cant No. 1 was travelling in the said vehicle on his own
responsibility and for his own purpose and absolutely
gratis and not on behalf of or at the instance of the
opposite party No. 1, or the driver of the vehicle and
therefore the claimants are not entitled to any compensa-
tion. The opposite parties pleaded that the incident was as
a result of inevitable accident and not due to any act of
rashness or negligence on the part Of the driver. They
opposed the claim of the compensation as highly exaggerated.
The Motor Accidents Claims Tribunal, Jabalpur, found
that the accident of the motor vehicle was as a result of
negligent driving of the vehicle by the Manager, Madhavjib-
hai Mathuradas Ved, the driver of the vehicle. It also
found that the first respondent, the owner of the company,
is liable to pay compensation to the claimants on account of
the negligence of their employee Madhavjibhai which caused
the death of Purshottam Tulsidas Udeshi. Regarding the
compensation payable the Tribunal fixed Rs. 31,209.15 as
general damages in addition to Rs. 2,000 as special damages
for funeral and post-funeral expenses. The owner, first
opponent, preferred an appeal to the High Court impleading
the claimants and the insurance company as respondents
against the award passed by the. Claims Tribunal. The High
Court did not decide the question as to whether the accident
was due to the rash and negligent driving or the quantum of
compensation to which the claimants were entitled to as it
allowed the appeal by the owner on the ground that the owner
cannot be held vicariously liable for the act of Madhavjib-
hai in taking Purshottam as a passenger as the said act was
neither in the course of his employment nor under any au-
thority whatsoever and that there was no evidence that the
owners of the vehicle were aware that Purshottam was being
taken in the car as a passenger by their Manager, Madhavjib-
hai. Holding that so far as the owners are concerned Pur-
shottam was no better than a trespasser the High Court held
that the owners were not vicariously liable. On an applica-
tion by the claimants the High Court granted a certificate
and thus this appeal has come before this Court.
The questions that arise for consideration are whether on
the facts of the case the claimants have established (1)
that the accident was due to the rash and negligent driving
of Madhaviibhai Mathuradas Ved, the Manager of the company,
and (2) whether the incident took place during the course of
the employment of the driver. In the event the claimants
succeed on these two points the amount of compensation to
which they are entitled would have to be determined.
376
The High Court relying on three decisions in Sitgram
Motilal Kalal v. Santanuprasad Jaishankar Bhatt(1), Canadian
Pacific Railway Company v. Leonard Lockhall(2), and Conway
v. George Wimpey & Co. Ltd.(3), came to the conclusion that
the rash and negligent driving by the Manager was not in the
course of his employment. The learned counsel for the
respondent relied on some other decisions which will be
referred to in due course.
The High Court has not gone into the question as to
whether the car was. being driven rashly and negligently by
the owner’s employee as it held that the act was not in the
course of his employment. We feel that the question as to
whether the car was being driven rashly and negligently
would have to be decided on the facts of the case first
for, if the claimants fail to establish rash’ and negligent
act no other question would arise. We would therefore
proceed to deal with this question first. The claimants
did not lead any direct evidence as to how the accident
occurred. No eye-witness was examined. But P.W. 1, the
younger brother of the deceased Purshottam Udeshi, who went
to the spot soon after the accident was examined. He stated
that he went with one of his relatives and an employee of
his brother’s employer and saw that the car had dashed
against a tree while proceeding from Nagpur to Pandurna.
The tree was on the right hand side of the road, four feet
away from the right hand side of the main metalled road.
The vehicle will have to proceed on the left hand side of
the road. The road was 15 feet wide and was a straight
metalled road. On either side of the road there were
fields. The fields were of lower level. The tree against
which the car dashed was uprooted about 9 to 10 inches from
the ground. The car dashed so heavily that it was broken in
the front side. A photograph taken at that time was also
filed. According to the witness the vehicle struck so
heavily that the machine of the car from its original posi-
tion went back about a foot. The steering wheel and the
engine of the car receded back on driver’s side and by the
said impact the occupants died and front seat also moved
back. The witness was not cross-examined on what he saw
about the state of the car and the tree. It was not sug-
gested to him that the car was not driven in a rash and
negligent manner. In fact there is no cross-examination on
the aspect of rash and negligent driving. The Claims Tribu-
nal on this evidence found that "it was admittedly a mishap
on the right side of the road wherein the vehicle had dashed
against a tree beyond the pavement so violently as not only
to damage the vehicle badly but also entailing death of its
three occupants, maxim ’res ipsa loquitur’ applies (See
Ellor v. Selfridge [1930], 46 T.L.R. 236)". The Tribunal
proceeded to discuss the evidence of P.W. 1 and found on the
evidence that it cannot.help concluding that the dashing of
the car against the tree was most violent and that it was
for the respondents to establish that it was a case of
inevitable accident. They have led no evidence. It may at
once be stated that though the opposite parties had pleaded
that this is a case of inevitable accident they have
(1) [1966] 3 S.C.R. 527.
(2) A.I.R. 1943 P.C. 63.
(3) [1951] 1 A.E.R. 363.
377
not led any evidence to establish their plea. The burden
rests on the opposite party to prove the inevitable acci-
dent. To succeed in such a defence the opposite party will
have to establish that the cause of the accident could not
have been avoided by exercise of ordinary care and caution.
"To establish a defence of inevitable accident the defendant
must either show what caused the accident and that the
result was inevitable, or he must show all possible causes,
one or more of which produced the effect, and with regard to
each of such possible causes he must show that the result
could not have been avoided." (Halsbury’s Laws of England,
Third Ed., Vol. 28, p. 81). No such attempt was made and
before us the plea of inevitable accident was not raised.
We have therefore to consider whether the claimants have
made out a case of rash and negligent driving. As found by
the Tribunal there is no eye-witness and therefore the
question is whether from the facts established the case of
rash and negligent act could be inferred. The Tribunal has
applied the doctrine of "resipsa-loquitur". It has to be
considered whether under the circumstances the Tribunal
was justified in applying the doctrine.
The normal rule is that it is for the plaintiff to prove
negligence but as in some cases considerable hardship is
caused to the plaintiff as the true cause of the accident is
not known to him but is solely within the knowledge of the
defendant who. caused it, the plaintiff can prove the acci-
dent but cannot prove how it happened to establish negli-
gence on the part of the defendant, This hardship is sought
to be avoided by applying the principle of res ipsa loqui-
tur. The general purport of the words res ipsa loquitur is
that the accident "speaks for itself" or tell’s its own
story. There are cases in which the accident speaks for
itself so that it is sufficient for the plaintiff to prove
the accident and nothing more. It will then be for the
defendant to establish that the accident happened due to
some other cause that his own negligence. Salmond on the
Law of Torts (15th Ed.) at p. 306 states: "The maxim res
ipsa loquitur applies whenever it is so improbable that such
an accident would have happened without the negligence of
the defendant that a reasonable jury could find without
further evidence that it was so caused." In Halsbury’s Laws
of England, 3rd Ed., Vol. 28, at p. 77, the position is
stated thus: "An exception to the general rule that the
burden of proof of the alleged negligence is in the first
instance on the plaintiff occurs wherever the facts already
established are such that .the proper and natural inference
arising from them is ,that the injury complained of was
caused by the defendant’s negligence, or where the event
charged as negligence "tells its own story’ of negligence on
the part of the defendant, the story so told being clear
and unambiguous." Where the maxim is applied the burden is
on the defendant to show either that in fact he was not
negligent or that the accident might more probably have
happened in a manner which did not connote negligence on his
part. For the application of the principle it must be shown
that the car was under the management of the defendant and
that the accident is such as in ordinary course of things
does not happen if those who had the management used proper
care. Applying the principles stated above we have to see
whether the requirements of the principle
378
have been satisfied. There can be no dispute that the car
was under the management of the company’s manager and that
from the facts disclosed by P.W. 1 if the driver had used
proper care in the ordinary course of things the car could
not have gone to the right extreme of the road, dashed
against a tree and moved it a few inches away. The learned
counsel for the respondents submitted that the road is a
very narrow road of the width of about 15 feet on either
side of which were fields and that it is quite probable that
cattle might have strayed. into the road suddenly causing
the accident. We are unable to accept the plea for in a
country road with a width of about 15 feet with fields on
either side ordinary care requires that the car should be
driven at a speed in which it could be controlled’if some
stray cattle happened to come into the road. From the
description of the accident given by P.W. 1 which stands
unchallenged the car had proceeded to the right extremity
of the road which is the wrong side and dashed against a
tree uprooting it about 9 inches from the ground. The car
was broken on the front side and the vehicle struck the tree
so heavily that the engine of the car was displaced from its
original position one foot on the back and the steering
wheel and the engine of the car had receded back on the
driver’s side. The car could not have gone to the right
extremity and dashed with such violence on the tree if the
driver had exercised reasonable care and caution. On the
facts made out the doctrine is applicable and it is for the
opponents to prove that the incident did not take’ place due
to their negligence. This they have not even attempted to
do. In the circumstances we find that the Tribunal was
justified in applying the doctrine. It was submitted by the
Learned counsel for the respondents that as the High Court
did not consider the question this point may be remitted to
the High Court. We do not think it necessary to do so for
the evidence on record is convicing to prove the case of
rash and negligent driving set up by the claimants.
The second contention that was raised by the counsel for
the appellants is that the High Court was in error in hold-
ing that the incident did not take place in the course of
the employment or under the authority of the company. The
High Court found that there is no evidence that the owner of
the vehicle was aware that Purshottam was being taken in the
car as a passenger by Madhavjibhai and in the circumstances
the owner cannot be held liable for the tortious act of the
servant. The High Court found that the car was going from
Nagpur to Pandhurna on the business of the company and it
may also be that Madhavjibhai, the Manager of the owner’s
car, was also going on the business of the owner and it may
also be that he had implied authority to drive the
vehicle. Having agreed with the contentions of the claim-
ants so far the High Court came to the conclusion that there
were no pleadings or material on record to establish that
Purshottam was travelling in the vehicle either on some
business of the owner of the vehicle or under any ostensible
authority from them to their manager Madhavjibhai to take
Purshottam as a passenger in the vehicle. Before dealing
with the right of Purshottam as a passenger, we will consid-
er the question whether the
379
accident took place during the course of the employment of
Madhavjibhai by the company. It is admitted in the written
statement by the owner, that Madhavjibhai was the Manager of
opposite party No. 1 and that the vehicle was proceeding
from Nagpur on its way to Pandhurna for purpose of deliver-
ing an amount of Rs. 20,000 to the Ginning. and Pressing
factory at Pandhurna. The Tribunal found on the plead-
ings that Madhavjibhai was the employee of the company and
during the course of employment by driving the motor car he
negligently caused the death of Purshottam. The High Court
also confirmed the findings and found that Madhavjibhai, the
Manager .of the owner of the car, was going on the business
Of the said owner and that it may be that the Manager had
the implied authority to drive the vehicle. On such a
finding which is not disputed before us, it is difficult to
resist the conclusion-that the accident was due to the
negligence of the servant in the course of his employment
and that the master is liable. On the facts found the law
is very clear but as the question of the company’s liability
was argued at some length we will proceed to refer to the
law on the subject.
It is now firmly established that the master’s liability
is based on the ground that the act is done in the scope or
course of his employment or authority. The position was
stated by Lord Justice Denning in Young v. Edward Box and
Co. Ltd.(1). The plaintiff and fellow workmen were given a
lift on one of the defendants’ lorries with the consent of
his foreman and of the driver of the lorry. On a Sunday
evening the plaintiff, in the course of that journey, was
injured by the negligence of the driver of the lorry and the
plaintiff brought an action against the defendants claiming
damages for his injuries. The defence was that the plain-
tiff, when on the lorry, was a trespasser. The traffic
manager of the defendants pleaded that he had never given
instructions to the foreman that he should arrange for lifts
being given to the plaintiff and his fellow-workmen on
Sundays and that the foreman had no authority to consent to
the plaintiff’s riding on the lorry. While two learned
Judges held that the right to give the plaintiff leave to
ride on the lorry was within the ostensible authority of the
foreman, and that the plaintiff was entitled to rely on that
authority and in that respect was a licensee, Lord Denning
held that although the plaintiff, when on the lorry, was a
trespasser, so far as the defendants were concerned, the
driver was acting in the course of his employment in giving
the plaintiff a lift and that was sufficient to make the
defendants liable and that he did not base his judgment on
the consent of ’the foreman. Lord Justice Denning stated the
position thus:
" .... the first question is to see
whether’ the servant was liable. If the
answer is Yes, the second question is to see
whether the employer must shoulder the serv-
ant’s liability. So far as the driver is
concerned, his liability depends on whether
the plaintiff was on the lorry with his con-
sent or not. XXXXX.
(1) (1951) 1 T.L.R. 789 at 793.
380
The next question is how far the employers
are liable for their servant’s conduct. In
order to make the employers liable to the
passenger it is not sufficient that they
should be liable for theft servant’s negli-
gence in driving. They must also be responsi-
ble for his conduct in giving the man a lift.
If the servant has been forbidden, or is unau-
thorised, to give anyone a lift, then no.
doubt the passenger is a trespasser on’ the
lorry so far as the owners are concerned; but
that is not of itself an answer to the claim.
X XXXX In my opinion, when the owner of a
lorry sends his servant on a journey with it,
thereby putting the servant in a position, not
only to drive it, but also be give people a
lift in it, then he is answerable/or the
manner in which the servant conducts himself
on the journey, not only in the driving of it,
but also in giving lifts in it, provided, of
course, that in so doing the servant is acting
in the course of his employment."
Lord Justice Denning concluded by observing that the passen-
ger was therefore a trespasser, so far as the employers were
concerned; but nevertheless the driver was acting in the
course of his employment, and that is sufficient to make the
employers liable. It will thus be seen that while two of
the learned Judges held that the right to give the plaintiff
leave to ride on the lorry was within the ostensible author-
ity of the foreman and the plaintiff was entitled to rely on
that authority as a licensee, Lord Denning based it on the
ground that even though the plaintiff was a trespasser so
far as the defendants were concerned, as the driver was
acting in the course of his employment in giving the plain-
tiff a lift, it was sufficient to make the defendants li-
able. Applying the test laid down there can be no difficul-
ty in concluding that the right to give leave to Purshottam
to ride in the car was within the ostensible authority of
the Manager of the company who was driving the car and that
the Manager was acting in the course of his employment in
giving lift to Purshottam. Under both the tests the respond-
ents would be liable.
We will now refer to the three cases relied on by the
High Court for coming to the conclusion that the accident
did not take place during the course of employment. The
first case referred to is Sitaram Motilal Kalal v. Santanu-
prasad Jaishankar Bhatt(1). The owner of a vehicle entrust-
ed it to A for plying it as a taxi. B who used to clean the
taxi was either employed by the owner or on his behalf by A.
A trained B to assist him in driving the taxi and took B for
obtaining a licence for driving. While taking the test B
caused bodily injury to the respondent. A was not present
in the vehicle at the time of the accident. On the question
whether the owner was liable the majority held the view that
the owner was not liable. On the facts the court found that
the person who had borrowed the taxi for taking out a
licence and the driver who lent the same was not acting in
the course of his business. The court on an application of
the test laid down in various decisions held that there is
no proof that the second defendant, the driver, was author-
ized to coach the cleaner so that the cleaner’
(1) [19661 3 S.C.R. 527.]
381
might become a driver and drive the taxi and that it ap-
peared more probable that the second defendant wanted some-
one to assist him in driving the taxi for part of the time
and was training the third defendant to share the task of
driving. The owner’s plea that it had not given any such
authority was accepted by the court. Holding that it had
not been proved that the act was impliedly authorized by the
owner or to come within any of the extensions of the doc-
trine of scope of employment the court held that the owner
is not liable. This Court has held that the test is whether
the act was done on the owner’s business or that it was
proved to have been impliedly authorized by the owner. At
page 537 it is stated that the law is settled that master is
vicariously liable for the acts of his servants acting in
the course of his employment. Unless the act is done in the
course of employment, the servant’s act does not make the
employer liable. In other words, for the master’s liability
to arise, the act must be a wrongful act authorised by the
master or a wrongful and unauthorized mode of doing some act
authorised by the master. The extension of the doctrine of
the scope of employment noticed in the judgment refers to
the decision of Ormrod and Another v. Crosville Motor Serv-
ices Ltd., and Another (1), where Lord Denning stated: "It
has often been supposed that the owner of a vehicle is only
liable for the negligence of the driver if that driver is
his servant acting in the course of his employment. This is
not correct. The owner is also liable if the driver is,
with the owner’s consent, driving the car on the owner’s
business or for the owner’s purposes." The Supreme Court
accepted the test and to that extent this may be taken as an
extension of the doctrine of scope of employment. Thus, on
the facts as we have found that the accident took place
during the course of employment the decision in Sitaram
Motilal Kalal is of no help to the respondents.
The next ease which is referred to by the High Court is
Canadian Pacific Railway Company v. Lockhart(2). In that
case one S was employed as a carpenter by the railway compa-
ny. In the course of his employment he was required to make
repairs of various kinds to employer’s property. He made a
key for use in a lock in the station at N far away from his
headquarters at W. He was paid per hour and the railway
company kept vehicles to be used by S available for him. S,
however, had a car of his own and without communicating his
intention to anyone he used it on his way to N. An accident
happened on the way owing to S’s negligence. It was also in
evidence that the railway company had issued notice to its
servants particularly to S warning him against using
their private cars unless they had got their cars insured
against third party risk. On the facts, the Privy Council
held that the means of transport used by the carpenter was
clearly incidental to’ execution of that for which he was
employed. As what was prohibited was not acting as a driver
but using a non-insured car, the prohibition merely limited
the way in which the servant was to execute the work which
he was employed to do and that breach of the prohibition
did not exclude the liability of the master to third party.
We do not see how this case would help the respondents. On
(1) (1953) 2 All. E.R. 753.
(2) (1942) A.C. 591.
382
the other hand it supports the contention of the counsel for
the appellants that when the Manager was driving the car
for the purposes of the company it was in the course of his
employment.
The third case that is referred to by the High Court is
Conway v. George Wimpey & Co. Ltd. (1). The defendants, a
firm of contractors, were engaged in building work at an
aerodrome, and they provided lorries to convey their employ-
ees to the various places of their work on the site. In the
cab of each lorry was a notice indicating that the driver
was under strict orders not to carry passengers other than
the employees of the defendants during the course of, and in
connection with, their employment, and that any other person
travelling on the vehicle did so at his own risk. Further
the driver of the lorry had received clear oral instructions
prohibiting him fro.m taking other persons. The plaintiff
who was employed as a labourer by another firm Of contrac-
tors at the aerodrome, while on his way to work, was permit-
ted by the driver to ride on one of the defendants’ lorries
for some distance across the aerodrome and while dismounting
the plaintiff was injured owing to driver’s negligence. The
court held that on the facts of the case the taking of the
defendants’ employees on the vehicle was not merely a wrong-
ful, mode of performing an act of the class which the driver
in the present case was employed to perform but was the
performance of an act of a class which he was not employed
to perform at all. The facts stated above are entirely
different from those which arise in the present case before
us as in the case before the Court of Appeal(2) there was a
notice indicating that the driver was under strict orders
not to carry passengers and the driver was instructed not to
carry others while in the present case a responsible officer
of the company, the Manager, had permitted Purshottam to
have a ride in the car. Taking into account the high posi-
tion of the driver who was the Manager of the company, it is
reasonable to presume, in the absence of any evidence to the
contrary, that the Manager had authority to carry Purshottam
and was acting in the course of his employment. We do not
see any support for the conclusion arrived at by the High
Court that the driver was not acting in the course of his
employment.
We will now proceed to refer to some cases which were
cited by the learned counsel for the respondents. The
learned counsel placed reliance on the decision in Houghton
v. Pilkington.(1) In that case the plaintiff at the request
of a servant of the defendant got into the defendant’s cart
which was then in the chrage of the servant, in order to
render assistance to another servant of the defendant who
had been rendered unconscious by an accident. The plaintiff
fell out of the cart and was injured through the negligence
of the servant in charge of the cart in causing the horse to
start. In an action against the defendent for damages for
the injuries sustained by the plaintiff it was held that the
existence of an emergency gave no implied authority to the
servant to invite the plaintiff into. the cart and that the
defendant was not liable
(1) (1951) (1) All. E.R. 363.
(2) 62 T.L.R. 458.
(3) (1912) 3 K.B. 308.
383
to the plaintiff. Justice Bankes while agreeing with Justice
Bray who delivered the leading judgment expressed his view
that the lower court had taken the view that an emergency
had arisen which gave the defendant’s servant implied au-
thority to invite the plaintiff into the cart for the pur-
pose of rendering assistance to. the injured boy. The
learned Judge was first inclined to agree with that view but
because of the case being governed by Cox v. Midland Coun-
ties Ry. Co. (3 Ex. 268) he felt he could not consistent-
ly with that decision hold that in the circumstances the
driver of the cart had any implied authority to invite the
plaintiff to get into the car. The facts in Houghton v.
Pilkington are entirely different and the decision was based
on the ground that existence of the emergency did not confer
on the driver of the cart authority to invite the plain-
tiff into the cart.
The next case that was cited by the learned counsel for
the respondents was Twine v. Bean’s Express, Limited(1).
The defendants provided for the use of a bank a commercial
van and a driver on the terms that the driver remained the
servant of the defendants and that the defendants accepted
no responsibility for injury suffered by persons riding in
the van who were not employed by them. There were two
notices on the van, one stating that no unauthorized person
was allowed on the vehicle, and the other that driver had
instructions not to allow unauthorized travellers in the
van, and that in no event would the defendants be responsi-
ble for damage happening to them. One T who was not author-
ized to ride in the van got a rift in the van with the
consent of the driver. Owing to the negligence of the
driver the accident occurred and T was killed. The conten-
tion that the accident arose while the driver was engaged on
a duly authorized journey was negatived and it was held that
defendants owed no duty to T to take care. This case was
taken up on appeal which confirmed the view of the trial
court holding that the driver in giving the lift to T was
clearly not acting within the Scope of his employment and
his employers were consequently not liable. The facts are
totally different. The learned counsel for the respondents
was not able to produce any authority which would support
his contention that on the facts of the case found, the
company should not be held liable.
Before we conclude, we would like to point out that the
recent trend in law is to make the master liable for acts
which do not strictly fall within the term "in the course of
the employment" as ordinarily understood. We have referred
to Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhat
(supra) where this Court accepted the law laid down by Lord
Denning in Ormrod and Another rs. Crosville Motor Services
Ltd. and Another (supra) that the owner is not only liable
for the negligence of the driver if that driver is his
servant acting in the course of his employment but also when
the driver is, with the owner’s consent, driving the car on
the owner’s business or for the owner’s purposes. This
extension has been accepted by this Court. The law as laid
down by Lord Denning in Young v. Edward Box and Co. Ltd.
already referred to i.e. the first question is to see wheth-
er the servant is liable
(1) 62 T.L.R. 19. 155, year 1945-56.
10--36SCI/77
384
and if the answer is yes, the second question is to see
whether the em1oyer must shoulder the servant’s liability,
has been uniformally accepted as stated in Salmond Law of
Torts, 15th Ed., p. 60’6, in Crown Proceedings Act, 1947 and
approved by the House of Lords in Staveley Iron & Chemical
Co. Ltd. v. Jones(1) and I.C.I. Ltd. v. Shatwell(2). The
scope of the course of employment has been extended in
Navarro v. Moregrand Ltd. & Anr(3) where the plaintiff who
wanted to acquire the tenancy of a certain flat, applied to
the second defendant, a person with ostensible authority to
conduct the business of letting the particular fiat for the
first defendant, the landlord. The second defendant demand-
ed from the plaintiff a payment of Pound 225 if he wanted
the flat and ’the plaintiff paid the amount. The plaintiff
sought to recover the sum from the landlord under the Land-
lord and Tenant (Rent Control) Act, 1949. The Court of
Appeal held that the mere fact that the second defendent was
making an illegal request did not constitute notice to the
plaintiff that he was exceeding his authority and that,
though the second defendant was not acting within his actual
or ostensible authority in asking for the premium, a.s the
landlord had entrusted him with the letting of the flat, and
as it was in the very course of conducting that business
that he committed the wrong complained of he was acting in
the course of his employment. Lord Denning took the view
that though the second defendant was acting illegally in
asking for and receiving a premium and had no actual or
ostensible authority to do an illegal act, nevertheless, he
was plainly acting in the course of his employment, because
his employers, the landlords, had entrusted him with the
full business of letting the property, and it was in the
very course of conducting that business ’that he did the
wrong of which complaint is made. This decision has extended
the scope of acting in the course of employment to include
an illegal act of asking for and receiving a premium though
the receiving of the premium was not authorized. We do. not
feel called upon to consider whether this extended meaning
should be accepted by this Court. It appears Lord Goddard,
Chief Justice, had gone further in Barker v. Levinson(4) and
stated that "the master is responsible for a criminal act of
the servant if the act is done within the general scope of
the servant’s employment." Lord Justice Denning would not
go to this extent and felt relieved to find that in the
authorized Law Reports (1951) 1 K.B. 342, the passage quoted
above was struck out. We respectfully agree with the view
of Lord Denning that the passage attributed to Lord Chief
Justice Goddard went a bit too far.
On a consideration of the cases, we confirm the law as
laid down by this Court in Sitararn Motilal Kalal v. Santa-
nuprasad Jaishankar Bhatt (suvra) and find that in this case
the driver was acting in the course of his employment. and
as such the owner is liable. We therefore set aside the
finding of the High Court that the act was not committed in
the course of employment or under the authority of the
master, and allow the appeal.
(1956) A.C. 627.
2) (1965) A.C. 656.
(3) (1951) 2 T.L.R. 674.
(4) 66 The Times L.R. (Pt. 2) 717.
385
The only point that remains is the determination of the
quantum of compensation to which the appellants are entitled
to. The High Court did not go into this question but the
Tribunal after taking into consideration the various facts
fixed the compensation at Rs. 33,209.15 with costs and
directed that the insurance company shall indemnify the
owner to the extent of Rs. 15,000. The Tribunal fixed
special damages for funeral and post-funeral expenses in-
cluding transport charges at Rs. 2,000. This item is not
disputed. The second item is a sum of Rs. 31,209.15 which
according to the Tribunal would have been the amount which
the deceased would have earned by continuing to work for a
period of 5 years. The Tribunal accepted the documents
produced by the claimants regarding the income of the de-
ceased and fixed it at Rs. 9,316.83 per annum. Out of this
amount the Tribunal rightly excluded a sum of Rs. 1,875
which is the bonus the deceased would have got as it cannot
be taken into account and fixed the net amount of earning at
Rs. 7,441.83 per year and Rs. 37,209.15 for 5 years. After
deducting Rs. 6,000 which the deceased might have spent on
himself the Tribunal arrived at a figure of Rs. 31,209.15
under this head. The learned counsel for the respondents
referring to item No. 27 pointed out that the pay of the
deceased was only Rs. 425 per month and that the Tribunal
was in error in including the dearness allowance, conveyance
allowance and other expenses and that the income of the
deceased should have been taken as only Rs. 425 per month.
The learned counsel for the appellants accepts this figure.
Taking Rs. 425/- being the monthly income the annual income
totals up to Rs. 5,100/-and for 5 years to Rs. 25,500/-.
Adding to this Rs. 2,000/- which was given as special dam-
ages the total amount will come to Rs. 27,500/-. We accept’
this calculation as correct and restore the award passed by
the Claims Tribunal but restrict it to an amount of Rs.
27,500/-.
As the Union Fire Accident & General Insurance Co. Ltd.,
Paris, carrying on business at Nagpur has been nationalised,
though the second respondent before the Tribunal was repre-
sented by a counsel, we directed notice to the nationalised
insurance company so. that they would also be heard.
The nationalised insurance company has taken notice and
appeared through Mr. Naunit Lal, advocate. The insurance
company had nothing further to add except as to the quantum
of liability of the insurance company so far as injuries to
the passengers are concerned. Mr. Naunit Lal submitted that
the scope of the statutory insurance does not cover the
injury suffered by the passengers and as the owner has
specifically insured under the insurance policy the risk to
passengers to the extent of Rs. 15,000 only the liability of
the insurance company should be limited to Rs. 15,000. On
behalf of the owner it was submitted that the insurance
cover under the Act extended to the injury to the passengers
also and sought to support his contention by referring to
section 95(1)(b)(i) which provides against any liability to
the owner which may be incurred by him in respect of death
of or bodily injury to any person or damage to any property
of a third party caused by or arising out of the use of the
vehicle in a public place.
386
As section 95 of the Motor Vehicles Act, 1935 as amended
by Act 56 of 1969 is based on the English Act it is useful
to refer to that. Neither the Road Traffic Act, 1960, or
the earlier 1930 Act required users of. motor vehicles to be
insured in respect of liability for death or bodily injury
to passengers in the vehicle being .used except a vehicle in
which passengers were carried for hire or reward or by
reason of or in pursuance of a contract of employment. In
fact, sub-section 203(4) of the 1960 Act provided that the
policy shall not be required to cover liability in respect
of death of or bodily injury to persons being carried in or
upon, or entering or getting on to or alighting from, the
vehicle at the time of the occurrence of the event out of
which the claims arise. The provisions of the English Act
being explicit the risk to passengers is not covered by the
insurance policy. The provisions under the English Road
Traffic Act, 1960, were introduced by the amendment of
section 95 of the Indian Motor Vehicles Act. The law as
regards general exclusion of passengers is stated in Hals-
bury’s Laws of England, Third Edition, Vol. 22, at p. 368,
para 755 as follows :--
"Subject to certain exceptions a policy
is not required to cover liability in respect
of the death of, or bodily injury to, a person
being carried in or upon, or entering or
getting into or alighting from, the vehicle at
the time of the occurrence of the event out of
which the claim arises,"
It is unnecessary to refer to the subsequent development of
the English law and as the subsequent changes have not been
adopted in the Indian statute. Suffice it to say that the
Motor Vehicle (Passenger Insurance) Act, 1971, made insur-
ance cover for passenger liability compulsory by repealing
paragraph (a) and the proviso of sub-section 203(4). But
this Act was repealed by Road Traffic Act, 1972 though under
section 145 of 1972. Act the coming into force of the provi-
sions of Act 1971 covering passenger liability was delayed
under December 1, 1972. (vide Bingham’s Motor Claims
Cases, 7th Ed., p. 704).
Section 95(a) and 95(b)(i) of the Motor Vehicles Act
adopted the provisions of the English Road Traffic Act,
1960, and excluded the liability of the insurance company
regarding the risk to the passengers. Section 95 provides
that a policy of insurance must be a policy which insures
the persons against any liability which may be incurred by
him in respect of death or bodily injury to any person or
damage to any property of a third party caused by or arising
out of the use of the vehicle in a public place. The plea
that the words "third party" are wide enough to cover all
persons except the person and the insurer is negatived as
the insurance cover is not available to the passengers made
clear by the proviso to sub-section which provides that a
policy shall not be required
"(ii) except where the vehicle is a vehi-
cle in which passengers are carried for hire
or reward or by reason of or in pursuance of a
contract of employment, to cover liability in
respect of the death of or bodily injury to
persons being
387
carried in or upon or entering or mounting or
alighting from the vehicle at the time of the
occurrence of the event out of which a claim
arises."
Therefore it is not required that a policy of’ insurance
should cover risk to the passengers who are not carried for
hire or reward. As under section 95 the risk to a passenger
in a vehicle who is not carried for hire or reward is not
required to be insured the plea of the counsel for the
insurance company will have to be accepted and the insurance
company held not liable under the requirements of the
Motor Vehicles Act.
The insurer can always take policies covering risks
which are not covered by the requirements of section 95. In
this case the insurer had insured with the insurance company
the risk to. the passengers. By an endorsement to. the
policy the insurance company had insured the liability
regarding the accidents to passengers in the following
terms:
"In consideration of the payment of an
additional premium it is hereby understood and
agreed that the Company undertakes to pay
compensation on the scale provided below for
bodily injury as hereinafter defined sustained
by any passenger ..........."
The scale of compensation is fixed at Rs. 15,000. The
insurance company is ready and willing to pay compensation
to the extent of Rs. 15,000 according to this endorsement
but the learned counsel for the insured submitted that the
liability of the insurance’ company is unlimited with regard
to risk to the passengers. The counsel relied on Section II
of the Policy which relates to liability to third parties.
The clause relied on is extracted in full:
"Section II--Liability to Third Parties.
1. The Company will indemnify the in-
sured in the event of accident caused by or
arising out of the use of the Motor Car
against all sums including claimant’s costs
and expenses which the insured shall become’
legally liable to pay in respect of
(a) death of or bodily injury to any person
but except so far as is necessary to meet the
requirements of Section 95 of the Motor Vehi-
cles Act, 1939, the Company shall not be
liable where such death or injury arises out
of and in the course of the employment of such
person by the insured."
It was submitted that the wording of clause 1 is wide enough
to cover all risks including injuries to passengers. The
clause provides that the Company will indemnify the insured
against all sums including claimant’s costs and expenses
which the insured shall become legally liable. This accord-
ing to the learned counsel would ’include legal liability to
pay for risk to passengers. The legal liability is re-
stricted to
388
clause 1 (a) which states that the indemnity is in relation
to the legal liability to pay in respect of death of or
bodily injury to any person bur except so far as is neces-
sary to meet the requirements of section 95 of the Motor
Vehicles Act. The Company shall not be liable where such
death or injury arises out of and in the course of the
employment of such person by the insured. Clause 1 and 1
(a) is not very clearly worded but the words "except so far
as is necessary to meet the requirements of Section 95 of
the Motor Vehicles Act, 1939," would indicate that the
liability is restricted to the liability arising out of the
statutory requirements under section 95. The second part of
clause 1(a) refers to the non-liability for injuries arising
in the course of employment of such person. The meaning of
this sub-clause becomes clear when we look to the other
clauses of the insurance policy. The policy also provides
for insurance of risks which are not covered under section
95 of the Act by stipulating payment of extra premium.
These clauses would themselves indicate that what was in-
tended to be covered under clause 1 and 1 (a) is the risk
required to be covered under section 95 of the Motor Vehi-
cles Act.
On a construction of the insurance policy we accept the
plea of the insurance company that the policy had insured
the owner only to the extent of Rs. 15,000 regarding the
injury to the passenger. In the result we hold that the
liability of the insurance company is restricted to Rs.
15,000. There shah be a decree in favour of the claimants
appellants to the extent of Rs. 27,500 against’ the respond-
ents out of which the liability of the insurance company
will be restricted to Rs. 15,000. The appeal is allowed
with the costs of the appellant which will be paid by the
respondents in equal share.
P.H.P. Appeal allowed.
389