The Supreme Court ruled that the appellant, Vaibhav Jain, a dealer, cannot be held liable for compensation arising from a fatal car accident during a test drive. The Court concluded that Hindustan Motors, the vehicle manufacturer, was the legal owner and held the vehicle's command and control at the time of the accident. Consequently, Hindustan Motors is solely responsible for the compensation, with the appellant entitled to recover any payments made.

1. Accident Details:

• The accident occurred during a test drive of a vehicle, which involved two employees of Hindustan Motors (the driver and the deceased). The vehicle was taken from Vaibhav Jain's dealership for the test drive.

2. Legal Claims:

• A compensation claim was filed by the heirs of the deceased under Section 166 of the Motor Vehicles Act, 1988.
• The Claims Tribunal and the High Court had previously held both Hindustan Motors (manufacturer) and Vaibhav Jain (dealer) jointly and severally liable.

3. Supreme Court Findings:

• Hindustan Motors was the registered owner of the vehicle at the time of the accident, and its employees were in possession and control of the vehicle.
• The appellant, as a dealer, was not in control and hence cannot be held liable for the accident.

4. Final Ruling:

• The Court ruled that Hindustan Motors alone is liable for the compensation. Vaibhav Jain, the dealer, is cleared of liability but can recover any payments made from Hindustan Motors with interest.

Acts and Sections Discussed:

1. Section 2(30) of the Motor Vehicles Act, 1988:

• Defines the "owner" of a vehicle as the person in whose name the vehicle is registered.

2. Section 166 of the Motor Vehicles Act, 1988:

• Governs the filing of compensation claims for accidents involving motor vehicles.

3. Section 168 of the Motor Vehicles Act, 1988:

• Provides for the Tribunal to determine compensation and specify the liable parties, including the owner or driver.

Ratio Decidendi:

The Court emphasized that liability for motor accidents primarily rests with the owner of the vehicle. In this case, Hindustan Motors was the legal owner and had control over the vehicle at the time of the accident. Therefore, the dealer, Vaibhav Jain, was not liable for the compensation, as he was merely a dealer and not in command of the vehicle or its employees during the accident.