Vicarious liability in vehicle use turns on scope of authority; third-party admissions cannot enlarge an owner's liability.

Admissions made by a third party in pleadings or a reply notice cannot be used against an owner unless they are shown to bind him. On the evidence accepted by the majority, the owner had merely entrusted the taxi to another for hire, but there was no proof that he authorised that person to train or permit a third driver to use it for his own purposes. As the accident occurred outside the owner's business and authorised sphere, the necessary element of course of employment or scope of authority was absent, and vicarious liability did not arise. A dissenting judge took the opposite view and found the owner liable.

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Issues: (i) Whether statements made by the third defendant in his written statement and reply notice could be relied upon against the appellant owner; (ii) Whether the appellant owner was vicariously liable for the accident caused by the third defendant when the vehicle was being used under the second defendant's management.

Issue (i): Whether statements made by the third defendant in his written statement and reply notice could be relied upon against the appellant owner.

Analysis: The admissions contained in the third defendant's pleadings and reply notice were not made by the appellant and were not otherwise shown to bind him. They were therefore not admissible against the appellant and had to be excluded from consideration.

Conclusion: The statements of the third defendant could not be used as evidence against the appellant.

Issue (ii): Whether the appellant owner was vicariously liable for the accident caused by the third defendant when the vehicle was being used under the second defendant's management.

Analysis: The appellant had entrusted the taxi to the second defendant for running it on hire, but the majority found no proof that the appellant authorised the second defendant to train the third defendant or permit him to drive for his own purposes. Once the inadmissible material was excluded, the evidence did not establish that the third defendant was acting in the appellant's business or within any implied authority conferred on the second defendant. The accident occurred while the vehicle was being used for a purpose outside the appellant's business, and the necessary element of course of employment or scope of authority was absent.

Conclusion: The appellant was not vicariously liable for the accident.

Final Conclusion: The decree against the appellant could not stand because the evidentiary basis for fastening liability failed and the accident was not shown to have occurred within the appellant's business or authorised sphere.

Ratio Decidendi: An owner is vicariously liable only when the negligent act occurs in the course of employment or within the scope of authority, and inadmissible statements of a third party cannot be used to enlarge that liability.

Concurring/Dissenting Opinion: Subba Rao J. dissented and held that the second defendant had authority to employ and permit the third defendant to drive the taxi, making the appellant liable in damages.

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