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Liability of Owners of Commercial Vehicles given out to Ola/Uber for criminal acts of the drivers

By Lawfarm Team February 02, 2017

According to the Terms & Conditions mentioned on the websites of Uber/Ola and other such companies, the transportation services qualities requested through Uber is entirely the responsibility of the vehicle operator or provider. Uber/Ola only acts as an intermediate between the vehicle provider and the customer. Uber/Ola are not the employers, the drivers are not their employees. They are independent contractors, however Uber/Ola acquire some control on them and also they do some limited police verification and background check of the drivers.

Liability of the owner of the vehicle for the criminal acts done by the driver:

Scenario: When the driver is the employee of the car owner:                                                  
To identify this we have to first see ‘what is the relationship between the driver and the owner?’
There must be a relationship:
1.    Master-Servant;
2.    Principle-Agent;
3.    Independent Contractors:

a.    Contract of Service:- Owner can allot the work as well as describe the manner in which the work has to be done;
b.    Contract for Service:- Owner can only allot the work to the contractor and do not specify the manner in which the work is to be done.

And if the owner of the vehicle has any such relation with the driver except the relation of Contract for services as in the case of independent contractor, then the owner will be liable only for the tortious acts committed by his driver in the course of the employment. The owner will be liable to compensate to the victim or injured for the loss occurred to him/her due to the act/omission committed by the driver of that vehicle. But, Is the owner of the vehicle liable criminally for the acts committed by their driver? Of course not criminal liability of the acts committed by the servant could not pass on to the master unless the act committed by the servant is in the course of employment and also in the furtherance of the common objective or motive of the master.

In India, sometimes the master can also be held liable for the acts committed by the servant on the “Principle of Respondent Superior”. Section 149 of IPC, 1860 provides for the vicarious liability of the master in several cases, when offence is committed by a member of unlawful assembly in the prosecution of common object.

An innocent master is not held liable criminally for the acts of his servant given under the provision of clause 22 of the Motor Spirit rationing Order 1941, but the master is liable in the case of absolute prohibition under clause 27A of the Act.

Leading Cases:-

1.    Sitaram Motilal Kalal v. Santanu Prasad Jaishankar Bhatt AIR (1966) SC…. : In this case, the court held that there is a presumption that the vehicle is driven on master’s business but it has to be met. For the Master’s liability to arise the act must be a wrongful act authorized by the master or an unauthorized node of doing some act authorized by the master. The master is vicariously liable if the driver met with an accident but the master is not liable for any act done by the driver which is not within the scope of his employment as a servant but doing something himself as a master.

2.    Pushpabai Purshottam Udeshi & Ors v. Ranjit Ginning and Pressing Co. (P) Ltd. AIR (1997) SC.. :
In this case, the apex court held the owner of the company liable to pay compensation to the claimants to account the loss suffered by them due to the rash and negligent driving by their employee or driver as the accident took place during the course of the employment.

Why the Master is Vicariously Liable?

Master is held liable for:

1.    Compensation/Damages to the injured or the victim. An application for compensation can be filed in Section 166 of the Motor Vehicle Act, 1988.
2.    If any tortious act committed by the servant on the direction of the Master, the master should not do away with it by escaping his liability and exploiting the servant.
3.    On the basis of a principle in tort law known as Respondent Superior which means ‘Let the Principle be Liable’.
4.    Another Principle of law ‘Qui facet alium facet perse’ which means that every act done by the Servant is his duty in regard to the Master and is same as the Master’s own act.

Scenario: When the vehicle is a commercial vehicle given to Ola/Uber:
 Frankly, it does not matter if you had given your car to Ola/Uber for commercial purposes as there is already specified in the terms and contract of Ola and other like companies that they shall not be liable for the quality, safety, reliability, legality, delivery or any other aspect of any services that the customer may avail using the application, they have only the limited role of providing the cab booking facility which is authorized or initiated only by the customer. They also stated that they shall not be liable for any kind of loss, damages, claim, expense or cost arising out directly or indirectly from the use of their services. Thus, the only the owner of the vehicle will be liable for claims or damages to the injured or victim for any act committed by the driver in the course of his employment and with the use of the vehicle as the driver is appointed only by the owner and he has control over him.

Thus, to ensure the safety the criminal background check, police verification and other such measures must be taken by the employer or vehicle owner before appointing driver.

How to escape from the liability?

There is no escape from the liability to indemnify the losses or to compensate the victim or injured person. But, if you had insured your vehicle, a certificate of insurance had been issued under Section 147(3) of the Motor Vehicle Act, 1988 and any liability, if covered by the insurance policy, then it is the duty of the insurer under Section 149 of the act to satisfy the judgement, awards against them in respect of third party claims. Thus, where vehicle is insured the insurance company will take the compensation liability.


If in any case you are using your vehicle for commercial purposes with Ola/Uber cabs, your personal  vehicle insurance would not going to cover the liability for any incident occurred when you are using your vehicle for commercial purposes i.e; when the Ola/Uber app is on. For this case, with the personal vehicle insurance it is suggested to purchase any commercial vehicle insurance policy like the Uber is offering for their raisers a commercial vehicle insurance policy known as Ridesharing insurance policy. (https://newsroom.uber.com/56463/)

Authored By: Vaibhav Luthra

Tags: liability of vehicle owners , ola , uber , criminal act of driver , negligence of driver , legal liability for acts of drivers , accident , road accident

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