Case: Sitaram Motilal Kalal Vs. Santanuprasad Jaishankar Bhatt

2. Sitaram Motilal Kalal, hereinafter called the 1st defendant, is an agriculturist having lands at Kathwada village. He owned a motor-car bearing registration No. BYD 816. He entrusted the said car to Mohammed Yakub Haji, hereinafter called the 2nd defendant, for plying the same as a taxi in Ahmedabad. The 2nd defendant ran the taxi, collected the fare, met the expenditure incurred in connection with the said service, rendered account to the 1st defendant and remitted the balance to him. In short, the 2nd defendant was not merely the driver of the taxi but he was also in entire charge of plying the taxi in Ahmedabad. The 2nd defendant appointed the 3rd defendant as a cleaner for the taxi. Presumably because the 2nd defendant wanted another to assist him in driving the car during his absence from the city, he trained the 3rd defendant to drive the car and on April 11, 1940, the 2nd defendant took the 3rd defendant to the Regional Transport Authority for obtaining a licence for him. On that date a test was being conducted by the Regional Transport Officer on the capacity of the 3rd defendant to drive a car for the purpose of issuing to him a permanent licence for driving. At about 5 p.m. on that day, the plaintiff, who is a pleader practising in the courts of the district of Ahmedabad, was going out of the compound of the office of the Regional Transport Authority. At that time, the 3rd defendant was driving the car towards Lal Darwaja side; without giving any signal, he took a sudden turn towards the gate of the Office of the Regional Transport Authority, accelerated the speed and dashed the car with great force against the pillar of the gate of the said office. In that process, the plaintiffs leg was pinned between the compound wall and the gate, with the result it was crushed and later on amputated. After recovering from a long illness, the plaintiff filed a suit, being Special Suit No. 66 of 1950, in the Court of the Civil Judge, Ahmedabad, for recovery of damages in a sum of Rs. 80,000 from defendants 1, 2 and 3 and the 4th defendant, the Indian Globe Insurance Company Limited, with whom the said car was insured. All the defendants denied their liability3. The learned Civil Judge held that the 3rd defendant was negligent in driving the taxi, that he was the servant of the 2nd defendant and not of the 1st defendant, and that even if he was the servant of the 1st defendant as a cleaner of the car, he did not act within the scope of his authority when he drove the car and caused the accident. In the result, he gave a decree against defendants 2 and 3 in a sum of Rs. 20,000 and dismissed the suit against the 1st defendant; he also dismissed the suit against the 4th defendant, as the 1st defendant, who insured the car, was exonerated from liability Against the said judgment and decree the plaintiff preferred an appeal to the High Court of Bombay in so far as the decree went against him. A Division Bench of the said High court came to the conclusion that the entire management of the car was given to the 2nd defendant, that in discharge of his duty as such manager he appointed the 3rd defendant with the consent of the 1st defendant and that by clearest implication the 1st defendant, in the circumstances of the case, must be regarded as having authorised the act of the 2nd defendant in training the 3rd defendant as a car-driver and that, therefore, he would be liable in damages for the accident caused by the negligence of the 2nd and 3rd defendants in the course of their employment. So far as the 4th defendant was concerned, the High Court held that in view of S. 96 (1) of the Motor Vehicles Act, 1939, no decree could be directly passed against it, but the decree against the 1st defendant could be executed against it in terms of the said section. It raised the quantum of damages from Rs. 20,000 to Rs. 25,000. The suit was decreed in favour of the plaintiff against defendants 1, 2 and 3 with costs. The 1st defendant, by certificate, has preferred the present appeal.

Court's reasoning:
27. The law is settled that a master is vicariously liable for the acts of his servant acting in the course of his employment. Unless the act is done in the course of employment, the servants act does not make the employer liable. In other words, for the masters liability to arise, the act must be a wrongful act authorised by the master or a wrongful and unauthorised mode of doing some act authorised by the master. The driver of a car taking the car on the masters business makes him vicariously liable if he commits an accident. But it is equally well settled that if the servant, at the time of the accident, is not acting within the course of his employment but is doing something for himself the master is not liable. There is a presumption that a vehicle is driven on the masters business and by his authorised agent or servant but the presumption can be met. It was negatived in this case, because the vehicle was proved to be driven by an unauthorised person and on his own business. The de facto driver was not the driver or the agent of the owner but one who had obtained the car for his own business not even from the master but from a servant of the master. Prima facie, the owner would not be liable in such circumstancesThe master was held liable vicariously, because the driver was negligent in the performance of the masters work. The driver in fact seated by the side of the conductor at the time when the omnibus was turned round. In other words, the turning round of the vehicle was an act within the employers business and not something outside it. When the driver asked the conductor to drive the omnibus for his masters business, he did the masters work in a negligent way. The master was therefore rightly held responsible31. The scope of employment of a servant need not of course be viewed narrowly, but the essential element that the wrong must be committed by the servant during the course of the employment, i.e. in doing the masters business ought always to be present32. We know of no further extension of the doctrine of a masters liability for the act of his servants during the course of his employment which would cover this case. It cannot possibly be stated today that the master is responsible for the acts of his servant done, not in the course of employment, but outside it.In the present case, the third defendant was not doing the masters work nor was the second defendant acting within the scope of his employment when he lent the taxi. The third defendant had borrowed the taxi for a work of his own and the second defendant in lending it was not acting in the masters business. The second defendant was not present in the taxi so that he could be said to be in control on behalf of his employer when the taxi was drivenWe find it simpler to state the law that an agent will make the principal responsible so long as the agent does the act within the scope of his authority or does so under the actual control of the principal. We do not subscribe to the extension of the doctrine that the act of the servant or the agent must be for the masters benefitThe word benefit is vague and it is better to adhere to the words course of employment or the scope of authority. There is much institutional criticism of such extension. Similarly, we are doubtful whether the extension of the principle by the introduction of the doctrine of implied authority, which was relied upon in the school masters case referred to above, was quite correct. If the dictum is accepted, not only the master would be liable for what he may be supposed to have impliedly authorised the servant to do (however Illegal) but also for all the servants negligence not in doing his duty but in doing something on his own account when he should be properly acting for the master34. Applying the above tests to the facts of this case, we find that there is no proof that the second defendant was authorised to coach the cleaner so that the cleaner might become a driver and drive the taxi. It appears more probable that the second defendant wanted someone 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 stated on oath that he had not given any such authority to the second defendant. The trial Judge accepted that evidence. The High Court differed from the trial Judge by relying upon inadmissible evidence. Once the inadmissible evidence is rightly excluded, it is quite clear that this was an act done not on the owners business but either on the business of the third defendant or that of the third and the second defendants together. It has not been proved to have been even impliedly authorised by the owner or to come within any of the extensions of the doctrine of scope of employment which we have noticed above. The High Court would probably not have passed a decree against the owner if it had not been persuaded to hod the three pieces of evidence to be admissible and relevant. In the absence of that evidence the acts of the second and the third defendants viewed separately or collectively were not within the scope of their respective or even joint employment and the owner was therefore not responsible. We would accordingly allow the appeal, in so far as the appellant is concerned but in the circumstances of the case would direct that there should be no order as to costs throughout24. We are not concerned with the quantum of damages and the above facts therefore suffice for the purpose of our judgment. Since the responsibility of the owner of the vehicle is vicarious, the relationship between him and the other two defendants must be properly determined and something may now be said about that relationship. Admittedly the owner of the vehicle had handed it over to the second defendant to ply it on hire as a taxi in Ahmedabad. The second defendant drove the taxi collected the fares, met the expenses and handed over the balance with accounts to the owner. The second defendant, of course, did not do this free. Either he was a servant or an agent. The difference between a servant and an agent is that the principal has the right to order what should be done, but the master has an additional right to say how it should be done. The evidence does not establish that the owner directed how the taxi should be run and the relationship would be that of principal and agent. The owner, however, stated that he paid Rs. 90 per month to the second defendant and this would show that the second defendant was his servant. We shall consider the matter under both heads25. The relationship between the third defendant (who was at the wheel when the accident happened) and the owner on the one hand and the second defendant on the other is in dispute. There is, however, evidence which has been believed that the third defendant used to clean the taxi. He was probably employed by the owner or on his behalf by the second defendant. In addition, it appears, that he was being trained to take out a drivers licence, presumably with the idea of taking a share in the driving of the taxi. There is nothing to show that in this arrangement, the owner had taken any part whatever. The Trial Judge held that the third defendant was a servant of the second defendant and relied for this purpose on a statement (Ex. P.97) made by the second defendant to the police when proceedings were taken against the driver for negligently causing hurt to the respondent. The Trial Judge further held that the third defendant was not employed by the owner and the owner was not liable. Alternatively, he held that even if the third defendant was employed by the owner, the duty of the third defendant was to clean the car and not to drive it, and the owner was again not liable because the cleaner was not acting within the scope of his employment. The High Court relying on the reply of the third defendant (Ex. P. 87) in answer to a notice from the respondent and on the written statement (Ex.16) filed by him in the suit held that the third defendant was himself probably a servant and in any event, the second defendant as manager of the taxi was clearly authorised to allow the third defendant to drive it. The High Court therefore decreed the claim against the owner also and enhanced the amount of damages awarded by the Court of trialThe facts were not deposed to by any one and the truth of these statements was not in any way tested. To admit them would be prejudicial to the appellant and strictly speaking no provision of law makes the admissions admissible against a person other than the person making them, unless such person can be said to be bound by the admission. This condition does not obtain here. Learned counsel for the respondent, although he attempted to do so at first, did not also rely upon them. We are of the opinion that these documents were inadmissible against the owner. With this evidence excluded there is nothing to show that the owner had employed the third defendant to drive the taxi or given him permission to drive the taxi or asked him to take a test to obtain a drivers licence. There is also nothing to show that he had given any authority to the second defendant to employ strangers to drive the taxi or to take driving tests. The upshot thus is that second defendant was a servant of the owner and the third defendant was a servant of the second defendant or at best a cleaner of the taxi. There is evidence, however, to show that the second defendant was present when the vehicle was borrowed for taking the test and had willingly allowed the third defendant to drive the vehicle for the purpose.On these facts, the question iswhether the owner of the vehicle can be held