INTRODUCTION

Generally, a person is liable for his own wrongful acts and one does not incur any liability for
the acts done by others. In certain cases, however, vicarious liability, that is the liability of
one person for the act of another person, may arise. In order that the liability of A for the act
done by B can arise, it is necessary that there should be certain kind of relationship between
A and B, and the wrongful act should be, in certain way, connected with that relationship.

Liability that a supervisory party (such as an employer) bears for the actionable conduct of a
subordinate or associate (such as an employee) based on the relationship between the two
parties.Under common law, a member of a conspiracy can be held vicariously liable for the
crimes of his co-conspirators if the crimes committed by the co-conspirators were foreseeable
and if they were committed with the intent of furthering the objective of the conspiracy.The
TORT doctrine that imposes responsibility upon one person for the failure of another, with
whom the person has a special relationship (such as PARENT AND CHILD, employer and
employee, or owner of vehicle and driver), to exercise such care as a reasonably prudent
person would use under similar circumstances.

The common examples of such a liability are:

(1) Liability of the principal for the tort of his agent;
(2) Liability of partners of each other’s tort;
(3) Liability of the master for the tort of his servant.

So Vicarious Liability deals with cases where one person is liable for the acts of others. In the
field of Torts it is considered to be an exception to the general rule that a person is liable for
his own acts only. It is based on the principle of qui facit per se per aliumfacit per se, which
means, “He who does an act through another is deemed in law to do it himself”. So in a case
of vicarious liability both the person at whose behest the act is done as well as the person who
does the act are liable. Thus, Employers are vicariously liable for the torts of their employees
that are committed during the course of employment.1

Reasons for vicarious liability

1
http://www.legalservicesindia.com/article/1634/Vicarious-Liability-in-India.html
Several reasons have been advanced as a justification for the imposition of vicarious
liability:2
(1) The master has the ‘deepest pockets’. The wealth of a defendant, or the fact that he has
access to resources via insurance, has in some cases had an unconscious influence on the
development of legal principles.

(2) Vicarious liability encourages accident prevention by giving an employer a financial

interest in encouraging his employees to take care for the safety of others.

(3) As the employer makes a profit from the activities of his employees, he should also bear
any losses that those activities cause.

In the words of Lord Chelmsford: “It has long been established by law that a master is liable
to third persons for any injury or damage done through the negligence or unskilfulness of a
servant acting in his master’s employ. The reason of this is, that every act which is done by
servant in the course of his duty is regarded as done by his master’s order, and, consequently
it is the same as if it were master’s own act”.

Constituents Of Vicarious Liability

So the constituents of vicarious liability are:

(1) There must be a relationship of a certain kind.
(2) The wrongful act must be related to the relationship in a certain way.
(3) The wrong has been done within the course of employment.3

Servant And Independent Contractor

A servant and independent contractor are both employed to do some work of the employer
but there is a difference in the legal relationship which the employer has with them. A servant
is engaged under a contract of services whereas an independent contractor is engaged under a
contract for services. The liability of the employer for the wrongs committed by his servant is
more onerous than his liability in respect of wrongs committed by an independent contractor.
If a servant does a wrongful act in the course of his employment, the master is liable for it.

2
ibid
3
 Michael A. Jones, Textbook on Torts, 2000, p379.
The servant, of course, is also liable. The wrongful act of the servant is deemed to be the act
of the master as well. “The doctrine of liability of the master for act of his servant is based on
the maxim respondeatsuperior,which means ‘let the principal be liable’ and it puts the master
in the same position as he if had done the act himself. It also derives validity from the maxim
qui facit per alium facit per se, which means ‘he who does an act through another is deemed
in law to do it himself’.” Since for the wrong done by the servant, the master can also be
made liable vicariously, the plaintiff has a choice to bring an action against either or both of
them. Their liability is joint and several as they are considered to be joint tortfeasors. The
reason for the maxim respondeat superior seems to be the better position of the master to
meet the claim because of his larger pocket and also ability to pass on the burden of liability
through insurance. The liability arises even though the servant acted against the express
instruction, and for no benefit of his master.4

For the liability of the master to arise, the following two essentials are to be
present:
(1) The tort was committed by the servant.
(2) The servant committed the tort in the course of his employment.

A servant is a person employed by another to do work under the direction and control of his
master. As a general rule, master is liable for the tort of his servant but he is not liable for the
tort of an independent contractor. It, therefore, becomes essential to distinguish between the
two.

A servant is an agent who is subject to the control and supervision of his employer regarding
the manner in which the work is to be done. An independent contractor is not subject to any
such control. He undertakes to do certain work and regarding the manner in which the work
is to be done. He is his own master and exercises his own discretion. And independent
contractor is one “who undertakes to produce a given result, but so that in the actual
exclusion of the work, he is not under the order or control of the person for whom he does it,
and may use his own discretion in things not specified beforehand.”5

4
Baxi Amrik Singh v Union of India, (1973) 75 P.L.R. 1 at p.7.
5
Pollock on Torts, 15th ed., p.62.adopted by McKardie, J. in Performing Right Society Ltd. V. Mitchell, etc. Ltd.,
(1924) 1 K.B. 762, 767-768
Example:
My car driver is my servant. If he negligently knocks down X, I will be liable for that. But if
he hire a taxi for going to railway station and a taxi driver negligently hits X, I will not be
liable towards X because the driver is not my servant but only an independent contractor.

The taxi driver alone will be liable for that.

Traditional View: Test Of Control

A master is one who not only prescribes to the workmen the end of his work but directs or at
any moments may direct the means also; retains the power of controlling the work.

The traditional mode of stating the distinction is that in case of servant, the employer in
addition to directing what work the servant is to do, can also give directions to control the
manner of doing the work; but in case of an independent contractor, the employer can only
direct what work is to be done but he cannot control the manner of doing work. This was
stated by MCKARDIE, J. by taking the writings of Pollock on Torts in a case of Performing
Right Society Ltd. v Mitchell, etc. Ltd.6

In Short V.J. & W. Henderson Ltd. LORD THANKERTON pointed out four indicia of a
contract of service:
(1) Master’s power of selection of his servant;
(2) Payment of wages or other remunerations;
(3) Master’s right to control the method of doing the work, and
(4) Master’s right of suspension or dismissal.7

The important characteristic according to this analysis is the master’s power of control for
other indicia may also be found in a contract for services.

This was the traditional test. In Collins v Hertfordshire HILBERY J8 said; “the distinction
between a contract for services and a contract of service can be summarised in this way: In
one case the master can order or require what is to be done, while in other case he can not

6
(1924) 1 K.B. 762, 767-768
7
ibid
8
(1946) 62 TLR 427 (HL), p. 420
only order or require what is to be done, but how it shall be done.”

Modern View: Control Test Not Exclusive

A. The Control Test
The test of control as traditionally formulated was based upon the social conditions of an
earlier age and “was well suited to govern relationship like those between a farmer and an
agricultural labourer (prior to agriculture mechanisation), a craftsman and a journeyman, a
householder and a domestic servant and even a factory owner and an unskilled hand”. The
control test bricks down when applied to skill and particularly professional work and,
therefore, in recent years it has not been treated as an exclusive test.9 

The Supreme Court in Dharangadhara Chemical Works Ltd. v State of Saurashtra10 laid

down that the existence of the right in the master to supervise and control the execution of the
work done by the servant is a prima facie test, that the nature of control may vary from
business to business and is by its nature incapable of any precise definition, that it is not
necessary that the employer should be proved to have exercised control over the work of the
employee, that the test of control is not of universal application and that there are many
contracts in which the master could not control the manner in which work was done. The
English Courts have also recognised that the control test is no longer decisive.

B. The nature of the employment test

One accepted view is that people who have a contract of service (an employment contract)
are employees, but people who have a contract for services (a service contract) are
independent contractors. In Ready Mixed Concrete v Minister of Pensions and National
Insurance11,MACKEMA J., said that three conditions are to be fulfilled for contract of
service:

(1) Servant agrees that in consideration of a wage or other remuneration he will provide his
own work and skill in the performance of some service for his master;
(2) He agrees expressly or impliedly that in the performance of that service he will be subject
to others control in a sufficient degree to make that other master;
9
Michael A. Jones, Textbook on Torts, 2000, p379.
10
CC (1947) 1 All ER 633
11
AIR 1957 SC 264
(3) The other provisions of the contract are consistent with its being a contract of service.12

C. The ‘Integral Part Of The Business’ Test

LORD DENNING, as LORD JUSTICE, in Stevenson Jordan and Harrison Ltd. v Macdonald
and Evens, referred to the distinction between a contract of service and a contract for services
as a “troublesome question” and observed: “it is almost impossible to give a precise
definition of the distinction. It is often easy to recognise a contract of service when you see it,
but difficult to say wherein the difference lies. A ship’s master, a chauffeur, and a reporter on
the staff of a newspaper are all employed under a contract of service; but a ship’s pilot, a taxi-
man, and a newspaper contributor are employed under a contract for services. One feature
which seems to run through the instances is that, under a contract of service, a man is
employed as a part of the business; and his work is done as an integral part of the business;
whereas under a contract for services, his work, although done for the business, is not
integrated into it but it is only accessory to it.”13

D. Allocation Of Financial Risk/ The Economic Reality Test/ Multiple Test

In Montreal v Montreal Locomotive Works Ltd. LORD WRIGHT14 said that in the more
complex condition of modern industry, more complicated test have often to be applied.
According to him, it would be more appropriate to apply a complex test involving

(1) Control;
(2) Ownership of the tools;
(3) Chance of profit;
(4) Risk of loss; and Control in itself is not always conclusive.

In a later case Market Investigation Ltd. v Minister of Social Security, COOKE J. referred to
these factors and said that the fundamental test was; “Is the person who has engaged himself
to perform these services performing them as a person in business on his own account?” If
the answer is yes, it is a contract for services; if no, it is a contract of service. There is no
exhaustive list of considerations relevant to determining this question, and no strict rules
about the relative weight the various considerations should carry in a particular case.

12
http://www.legalservicesindia.com/article/1634/Vicarious-Liability-in-India.html
13
Kahn Freund, (1951) 14 Modern Law Review, p. 505
14
(1968) 1 All ER 433
The control will no doubt will always have to be considered, although it can no longer be
regarded as the sole determining factor; and that factors which may be of importance are:
(1) Whether the man performing the services provides his own equipment;
(2) Whether the person hires his own helpers;
(3) What degree of financial risk he takes;
(4) What degree of responsibility for investment and management he has; and
(5) Whether and how far he has an opportunity of profiting from sound management in the
performance of his task.

According to the Supreme Court of United States, the test is not “the power of control
whether exercised or not over the manner of performing service to the undertaking”, but
whether the persons concerned were employees “as a matter of economic reality” and the
important factors to be seen are “the degrees of control, opportunities of profit or loss,
investment in facilities, permanency of relations and skill required in the claimed independent
operations.”

E. Significant Outcome
DIXON J. in Humberstone v Northern Timber Mills made an observation that “The question
is not whether in practice the work was in fact done subject to a direction or control exercised
by an actual supervision or whether an actual supervision was possible but whether ultimate
authority over the man in the performance of his work resided in the employer so that he was
subject to the latter’s order and directions.”

The Supreme Court in Silver Jubilee Tailoring House v. Chief Inspector of Shops, after a
review of the most of the authorities mentioned above observed: “In recent years the control
test as traditionally formulated has not been treated as an exclusive test. It is exceedingly
doubtful today whether the search for a formula in the nature of a single test to tell a contract
of service from a contract for service will serve any useful purpose. The most that profitably
can be done is to examine all the factors that have been referred to in the cases on the topic.
Clearly, not all of these factors would be relevant in all these cases or have the same weigh in
all cases. It is equally clear that no magic formula can be pronounced, which factors should in
any case be treated as determining ones. The plain fact is that in a large number of cases, the
court can only perform a balancing operation weighing up the factors which point in one
direction and balancing them against those pointing in the opposite directions. It was also
pointed out that the control is obviously an important factor and in many cases it may still be
the decisive factor, but it is wrong to say that in every case it is decisive. It was further
observed that the degree of control and supervision would be different in different types of
business and that “if an ultimate authority over the worker in the performance of his work
resided in the employer so that he was subject to the latter’s direction that would be
sufficient.” 15

Liability For Independent Contractors

In Alcock v Wraith16, NEILL LJ stated: where someone employs an independent contractor to
do work on his behalf he is not in the ordinary way responsible for any tort committed by the
contractor in the course of the execution of the work.

The main exceptions to the principle fall into the following categories:
(1) Cases where the employer is under some statutory duty which he cannot delegate.
(2) Cases involving the withdrawal of support from neighbouring land.
(3) Cases involving the escape of fire.
(4) Cases involving the escape of substances, such as explosives, which have been brought on
the land and which are likely to do damage if they escape; liability will attach under the rule
in Rylands v Fletcher.
(5) Cases involving operations on the highways which may cause danger to persons using the
highway.
(6) Cases involving non-delegable duties of an employer for safety of his employees.
(7) Cases involving extra-hazardous acts.17

Tort Law or Civil Law

There are some essential conditions which should be fulfilled to constitute vicarious liability
under torts or civil law.

Relation
15
Supra@1
16
AIR 1957 SC 264
17
ibid
There should be some relationship between the wrongdoer and the other party. The
relationship can be of principal-agent, master-servant, employer-employee, etc. Under service
also there are two categories-

 Contract of Service- Under this contract, one person is already under the contract of
the other, and the service is of particular nature. This is a kind of general contract, and
there is not many limitations on the controlling power over the other, for instance,
master-servant relationship.

 Contract for Service- This is a contract for a particular reason, and there is a limitation
on the controlling power over the acts of the other, for instance, employer-employee
relation.

Ratification

Under torts or civil law, a person may also be liable for the wrongful act or omission of some
other party in the following ways-

 If the person abets the wrongful act or omission committed by the other person.

 If the former ratifies or authorizes the act of the other knowing that the act committed
or omission done was tortious in nature.

 As standing towards the party who committed a wrong in such a relation that it entails
responsibility for the acts or omission done by the other person.

The concept of “in the course of employment” also comes into play when the doctrine of
vicarious liability is evoked. An act is deemed to be done in the course of employment if the
authority to give a wrongful act is given by the master to the servant; or some legal act is
done by the servant in an illegal way.

The judicial pronouncement of Short v J&W Ltd18 is the first case which gave the conditions
that were needed to be fulfilled in order to make the master vicariously liable for the acts of
18
(1946) 62 T.L.R. 427
the servant. The Court observed that the master should have the power to select his servant.
Further the master controlled the way his servant worked, and the master also had the right to
dismiss or suspend the services of the servant. But in the Indian case of Dharangandhara
Chemical Works v State of Saurashtra19 it was held that sometimes these condition needed to
be diluted because it was not always possible to fulfill all the conditions simultaneously. But
the control of the master wouldn’t be diluted, and he’ll be liable for the acts of the servant.

Reasons for Holding the Master Vicariously Liable

 Respondent superior- this principle follows the rule that let the principal or master
be responsible.

 Damages- for the purpose of giving the damages to the aggrieved party and to stop
the blame game between the servant and the master.

 Avoiding exploitation of the servant- master is also held liable for the acts of the
servant because many time the masters exploit their servants by first directing the
servants to do some tortious act and then firing them to avoid responsibility.

 Qui facet alium facet perse– any act which is done by the servant in the course of his
employment is considered to be done by the master, and in principle means that the

 Law master has done the act.20

Criminal Law

Under criminal law also one person can become liable for the act of the other if he is a party
to the offense. For instance, a driver of a car which goes and robs a bank will also be liable
even though the driver did not get out of the car. The principle which is followed in the
criminal law is that a person may be held liable as the principal offender, even though the
actusreus was committed by some other person. The person committing the act on the

19
1957 AIR 264

20
See Supra@20
instruction of the other will not be considered as innocent and will also be held liable. The
law focuses on the relationship between the two parties and attributes the act of the one to the
other. It should be noted that the concept of vicarious liability is a civil concept and in the
case of criminal law it is an exception rather than a rule.21

Although the doctrine of vicarious liability is generally applicable to civil law, in some
exceptional cases it is applicable in criminal cases also. Section 149 of the IPC.Under
Section 149 of the IPC if any member of an unlawful assembly commits any offense in
furtherance of a common objective, every member of that unlawful assembly will be held
liable for that offense.

Section 154 of the IPC relates to occupiers or owner of a land. If such occupier or owner or
any person who has some interest in the piece of land does not inform the proper public
authority about unlawful assembly on that land, or do not take necessary steps taking place on
the land, will also be held liable for such activities. The liability has been fixed on the
assumption that being the owner or the occupier of the land; the person will be able to control
the activities which is happening on their property. Section 155 also makes a person
vicariously liable on the owner or occupier of the land for the omission of their agent or
manager if any activity takes place on the land and the agent or manager does not prevent
illegal activities happening on their property. Section 156 imposes personal liability on the
agent or the manager if some illegal activity takes place on the particular property.22

Section 268 and Section 269 deals with public nuisance and makes the master personally
liable if the servant is creating any public nuisance. Section 499 of the IPC also makes the
master personally liable in case the servant defames somebody (provided it falls under the
definition of defamation given under this section).23

Liability of Corporations in Cases of Criminal Wrongs

21
https://indiankanoon.org/doc/734195/

22
https://indiankanoon.org/doc/1034470/

23
ibid
The earlier view was that a corporation cannot commit a criminal wrong. But that view has
changed in the present scenario. A corporation has a separate legal entity and is an artificial
person. But it cannot work on their own. It works through its agents. So whenever some act is
committed by a company which is not legal, its agents are punished and hence, the liability is
necessarily vicarious. A corporation cannot commit crimes like rape, murder, perjury, etc.
But it has been recognized that a company can commit activities which have criminal intent.

Liability of State for Acts of Employees

In England, the state cannot be held liable for the acts which have been committed by its
servant. The principle behind this is based on the doctrine of Rex non-potest peccare which
states that the King can do no wrong.

In India also, the same position existed till 1967 and the State couldn’t be sued for the action
of its servants. But in the judicial pronouncement of Superintendent and Remembrance of
Legal Affairs, West Bengal v Corp. of Calcutta24it was held by the Court that the principle
that the State isn’t bound by any statute is not the law of the land after the Constitution has
come into force. Civil and criminal statues now apply to citizens and state alike. In the case
of Saheli  v, Commissioner of Police25 the Court was of the opinion that the concept of
sovereign immunity does not hold good with the evolution of law, and Constitutional Regime
and the State can also be made liable.

Licensee and his Liabilities

The licensee is responsible for the acts done by this employee I the course of the
employment. Even if the acts were done were opposite to the instructions given by the
licensee, he still would be held liable. In the case of Emperor v. Magadevappa Hanmantapp26
this proposition of law was made clear. The accused held a license under the Indian
Explosive Act, 1884. The Act stated that the manufacture of any explosives should be done
away from a dwelling place. It should be done in a building exclusively meant for the
manufacturing purpose. One day the servant took some material from the building to carry

24
AIR 1960 SC 1355
25
1990 AIR 513
26
AIR 1927 Bom 209
out some manufacturing process. At that time, there was an explosion. The accused was held
liable for the same by the Court.

Medical negligence and vicarious liability

Hospitals are corporations that are either public or private entities. In the context of medical
malpractice actions, hospitals can be held directly liable for their own negligence, and can
also be held "vicariously" liable for the negligence of their employees. Vicarious liability
means a party is held responsible not for its own negligence, but for the negligence of
another.

When a hospital employee's malpractice injures a patient, the hospital itself may be held
vicariously liable under the legal doctrine of "respondent superior." Under this doctrine, an
employer may be held liable for the negligent acts of its employee, if the employee was
acting within the scope of his or her employment when the negligent act or omission
occurred. This doctrine is very important to plaintiffs in medical malpractice cases, because it
helps ensure there will be a financially responsible party to compensate an injured plaintiff.

In some situations, health care providers such as physicians are considered independent
contractors rather than hospital employees, and the doctrine of "respondent superior" will not
be applicable. What this means is, if a doctor or other health care professional is an
independent contractor, and commits malpractice while treating a patient in a hospital, the
hospital cannot be held liable for the doctor's negligence. In certain situations, a hospital may
be vicariously or directly liable for the acts or omissions of contractors it retains to operate
emergency rooms and outpatient facilities.

Hospitals aren't the only ones who can be held vicariously liable in medical malpractice suits.
For example, a doctor may be held liable for any negligence on the part of his staff in
carrying out his orders or caring for his patients. Likewise, an attending physician may be
held liable for any negligence on the part of interns or medical students under the physician's
guidance. In addition, private medical practices may also be held liable for the negligence of
their partners and associates.

Defenses
Employers facing vicarious liability suits often defend themselves by trying to prove that
their employees weren't acting within the scope of employment. Since employers aren't liable
for the negligence of independent contractors, an employer may also argue that the employee
wasn't really an employee at all. For example, a hospital may emphasize the limited role it
plays in supervising its doctors' work and show evidence of the doctor's staff privileges.27

Historical study
28
History of vicarious Liability The vicarious Liability origin from England. During the kings
rule of an ancient period legal maxim Rex Non PotestPeccare( The king can do no wrong).
(Wade & Forsyth 2014)During the course of employment the tort committed by king servant
and king is not liable under the vicarious Liability. This remedy will available only in Torts
and not in contract to recovery the property. According to Manu, the king duty to uphold law
and himself as subject to law like ordinary citizen. In England absolute rights and Liabilities
lies in crown hands.(Magnus et al. 2004) Tortfeasor could not be sued in the name of crown
course of employment. Tobin vs R : the court observed, If the crown were liable in tort, the
king can do no wrong would have seemed meaningless. But with the increase of
governmental functions, the immunity afforded to the crown in tortious Liability proved to be
incompatible with the demands of justice. In various decisions the kings court criticized this
exemption were against justice, equity, and good conscience. The crown proceeding act 1947
by abolishing the maxim, king can do no wrong act passed in British parliament. The course
of employment principle of respondeat superior and king can also be sued for his servant
tortious act.Through this everyone are equal before law, no one is superior and inferior to
another. 31

POSITION IN INDIA

In India sovereignty is assumed in crown during 1858 and took over the administrative hands
of company. Th act declared to statute is secretary of India to be corporate body for the
purpose of using and being sued. Section 32 of 1915 government(Feldman 2015) of India act
declared corporate assumptions:

1. The name Secretary of State council may sue and be sued as a body corporate.

27
injury.findlaw.com/medical-malpractice
28
2. The East India company and government of India company act 1858 of the act did not
passed , Secretary of State in council shall have remedies for all person.

3. This provision was again mentioned in section 176(i) of the Government of India Act,
1935.29

The organization may sue or be sued by the name of the alliance of India and the
commonplace governments may sue or be sued by the name of region and without partiality
to the ensuing arrangement of this section, might be, liable to any arrangements which might
be made by the act of the league or common law making body authorized by prudence of
forces gave on that assembly by this demonstration, sue or be sued, in connection to their
particular issues in the like case as the secretary of State for India in gathering may have sued
or been sued in this demonstration has not been passed. The kingdom of sovereign power of
the state and such state is not liable for omissions, the state Liability used the cat in broader
defense. The state Liability first interpretation during east India company was made in john
Stuart cases 1775 (Cornford 2016) It was held that first time the governor in general has no
immunity from the court jurisdiction cases involving dismissal of government servant. In
moodalyprivy council doctrine of sovereign immunity is not applicable to India. British
crown later the assumption of sovereign powers were enacted the administration of country
during government of India act 1858. The vicarious Liability in administrative law as
sovereign and non- sovereign powers they are distinct by the court in exercise of non
sovereign power in act done with conduct of undertakings might carried by individuals
without having the power. (Gageler 2017)Non sovereign function some assumptions will
arise. The East India company had a two-fold character are (a) As a sovereign power and (b)
As a trading company. The responsibility of company could only extend in respect of its
commercial dealings with the act that done in exercise of delegated sovereign power. In the
present case, the harm was done to the offended party in the activity of non-sovereign
capacity, i.e. the upkeep of Dockyard which should be possible by any private individual with
no appointment of sovereign power and consequently the Government was subject for the
torts of the workers. The Secretary of State was not obligated for anything done in the
activity of sovereign powers.

Nobin Chandra Dey v. Secretary of State for India 30

29

30
(1876) ILR 1 Cal 12
This doctrine of immunity , for acts done in the activity of sovereign capacities, was
connected by the Calcutta High Court in NobinChanderDey v. Secretary of State. The
plaintiff for this situation battled that the Government had made an agreement with him for
the issue of a permit for the sale of ganja and had conferred break of the agreement. The High
Court held that upon the confirmation, no break of agreement had been demonstrated. Also
regardless of whether there was an agreement, the demonstration had been done in exercise
of sovereign power and was subsequently not noteworthy.

Secretary of State v. HariBhanji31

In this case the Madras High Court held that State immunity as limited to act of State. In the
P and O Case, the decision did not go beyond act of State, while giving outlines of
circumstances where the immunity as accessible. It was characterized that Acts of State, are
acts done in the activity of sovereign power, where the act grumbled of is professedly done
under the endorse of municipal law, and in exercise of forces gave by law. The insignificant
actuality that it is finished by the sovereign powers and isn't an act which should be possible
by a private individual does not expel the jurisdiction of the civil court. The Madras judgment
in HariBhanji holds that the Government may not be at risk for acts associated with public
safety , even though the fact that they are not act of State.

Rose vs Plenty: (1976), the facts were milkman advised by his managers not to give children
a chance to encourage him while he was doing his rounds. In any case, he allowed a child to
help and the kid was harmed while riding on his milk float, because of the careless driving of
milkman. The court of appeal found the employer vicariously at liable . The employee as
doing his activity, within in the scope of employment let him know not to. All things
considered, in light of the fact that the work he was performing was for the advantage of the
employer‘s business.

Mathis v Pollock [2003] the Court of Appeal32. In this case, the Claimant was stabbed by a
doorman that was employed by the Defendant to work in the Defendant's club. The
Defendant expected the doorman to do his obligations in a 'forceful way'.(Cornford 2016)
Where, like in this case, a worker is relied upon to utilize brutality as a feature of completing
their obligations, the odds of a court finding a specific act of violence of be within the scope
of employment is substantially higher.

31
(1882) ILR 5 Mad 273
32
(1940) 42 BOMLR 767
International Journal of Pure and Applied Mathematics Special Issue

LAISSEZ-FAIRE JUDICIAL THINKING AND THE EXCLUSION OF

SOVEREIGN FUNCTION.

In the old colonial era when the Government was concerned more with policing capacity
than with welfare exercises, the majority of the capacities practiced by the Government of
India were considered as sovereign capacities. Likewise safeguard elements of the State, (R.
J. F. B. & B. 1923)upkeep of peace, administration of equity through courts and matters
incidental thereto and furthermore inconvenience and gathering of duties were translated as
sovereign capacities.

CONSTITUTIONAL PERSPECTIVE

This provision has been incorporated in Article 300 (i) of the Constitution of India:The
government of India may sue or be sued by the name of the union of India and the
government of the state may sue or be sued by the name of the state, (Pandey&Srivastava
2014)and may subject to any provisions which may be made by act of parliament or of the
legislature of such state enacted by virtue of powers conferred by this Constitution, sue or be
sued in relation to their respective affairs in the like cases as the domination of India and the
corresponding Indian States might have sued or been sued if the constitution had not been
enacted.(Kulshreshtha& Gandhi 2005)

Neither the legislature of the states nor the parliament has made any law as contemplated by
clause (1) of Article 300 of the Constitution of India. The present position is that the state
would be liable for damages, if such suit could be filed against the corresponding province

The kingdom of sovereign power of the state and such state is not liable for omissions, the
state Liability used the crown in broader defense. The ancient period crown played vital role
in vicarious liability.
 Dr.Saleem Rehman vs State Of Jammu and Kashmir &
Ors. on 7 May, 2018

OWP No. 362 of 2012

FACTS

1. The facts leading to the filing of the instant petition, briefly and as stated by the petitioner
in this petition, are that under the framework of the National Rural Health Mission (NRHM),
the drug kits were required to be purchased from the Central Public Sector Enterprises
(CPSEs) and their subsidiaries, as per the Purchase Preference Policy (PPP) of the
Government of India and as directed by the Mission Director, NRHM, Jammu & Kashmir,
vide letter dated 28th of December, 2010. Before approaching the Central Public Sector
Enterprises (CPSEs), the petitioner took up the matter with the approved State Purchase
Committees vide communication dated 27th of January, 2011, with regard to the approval of
the rate contract. In pursuance to the said communication, the Purchase Committee No.1
assented to effect the purchase in accordance with the rules, however, the Purchase
Committee No.2 did not respond, which was intimated to the Mission Director, NRHM, vide
letter dated 7th of February, 2011. The Mission Director, vide communication dated 12th of
March, 2011, directed immediate procurement of the drug kits. Subsequently, a Committee of
four members was constituted on the 12th of March, 2011, and tender notices were published
in national Dailies, inviting bids by or before the 22nd of March, 2011. The department, as
stated, received four tenders quoting equal rates for the items and, as per the Resolution of the
Board of Members, it was unanimously recommended to purchase the drug kits from all the
four CPSEs on equal share basis and the payment to the respective CPSEs was made through
e-banking/ account payee cheques. On 16th of November, 2012, FIR No. 32/2012 came to be
registered at Police Station, Vigilance Organization Kashmir (VOK), for the commission of
offences punishable under Sections 5(1) (2), 5(2) of the Prevention of Corruption Act, Svt.,
2006 and Section 120(B) of the Ranbir Penal Code (R.P.C.), with regard to the transaction of
purchase of drug kits under the National Rural Health Mission Scheme, by the Directorate of
Health Services, Kashmir, for the year 2010-2011. The FIR is registered against the
petitioner, the then Director Health Services, Members of the tender Opening Committee,
officers/ official of NRHM, Members of the Verifying Committee, and Suppliers.
The petitioner, in the capacity of the then Director, Health Services, Kashmir, has been
implicated in the case and served with the questionnaire dated 6th of April, 2015, which
stands replied by the petitioner vide explanation dated 29th of April, 2015.

2 . The FIR, impugned in this petition, is registered with regard to the transaction of purchase
of drug kits under National Rural Health Mission Scheme, by the Directorate of Health
Services, Kashmir, for the year 2011-2011, against the petitioner, the then Director Health
Services, Members of the tender opening Committee, officers/ officials of the NRHM,
Members of the Verifying Committee and Suppliers.

3 . A perusal of the case diary and the material on record does not involve the petitioner in the
commission of offences attributed to him in the impugned FIR. The petitioner has,
admittedly, joined the post of Director, Health Services, Kashmir, when the process of
purchase of the drug kits under the National Rural Health Mission Scheme, was already
completed. Nothing has been brought on record or disclosed in the investigation regarding the
role of the petitioner in the commission of offences attributed to him.

Issues of the case

 a. Whether Section 3 of the Prevention of Corruption Act is a mandatory provision and
its non adherence vitiates the investigation?
b. Whether prior sanction of a Magistrate under Section 155 Jammu & Kashmir Cr.P.C.
is mandatory for investigating cognizable offences along with non- cognizable?
c. Whether under the pretext of Preliminary Verification the investigating agency can
verify the veracity of a complaint before registration of FIR?
d. Whether an offence like that of Criminal Conspiracy can be committed by a juridical
person like a company?

Laws involved
i. The Prevention of Corruption Act, 1988
ii. The Code Of Criminal Procedure, 1973
iii. Section 3 in The Prevention of Corruption Act, 1988
iv. The Indian Penal Code
v. The Jammu And Kashmir (Extension Of Laws) Act, 1956

Arguments for the petitioner

1. The Learned Counsel for the petitioner argued that the investigation under Prevention of
Corruption Act, 2006 Svt. (hereinafter as PC Act) is controlled by Section 3 of the Act and
carries a non obstante clause which precludes the procedure of investigation under Cr.P.C.
The amended section makes all the offences under the PC Act cognizable. The section further
contains two provisos which in effect create an embargo on the mode of investigation. As per
the first proviso inter alia, no police officer below the rank of DSP shall investigate any
offence under the PC Act without the order of the Magistrate. The second proviso creates an
exception to the condition provided in the first proviso. As per the second proviso, inter alia,
an officer of the Vigilance Organisation of and above the rank of Sub Inspector of Police may
investigate such offences but if specially authorised in writing by an officer of the Vigilance
Organisation not below the rank of Assistant Superintendent of Police. Mr.SalihPirzada
asserted that in the instant case, the investigation of the FIR under challenge is entrusted to
Inspector NisarHussain of Vigilance Organization Kashmir (Respondent no. 5). This officer
being a non-designated officer for the purposes of Section 3, must be specially authorised by
an officer of Vigilance Organisation not below the rank of ASP in terms of the second
proviso by way of a separate and a reasoned order, for carrying the investigation. It was
emphasized by the Learned Counsel that the authority conferred upon such authorising
officer of the Vigilance Organisation being a statutory one, can neither be arbitrary nor
unreasonable. Therefore, the authorising officer while conferring authority upon a non-
designated investigating officer, which in the instant case is an Inspector, has to grant the
same by a special and a separate reasoned order. Section 3, as per Mr.SalihPirzada, is a
mandatory provision and the statutory obligations created under it must be adhered to. Any
deviation from the same would render the entire investigation void. The Learned Counsel for
the petitioner reiterated that in the instant case there is no reasoned authorization order, for
conferring special power of investigation upon the Inspector. Such order according to him
cannot be a mechanical one and thus has to reveal the reasons for deviating to an exceptional
course of investigation. Absence of the reasons from the order, if any, would also render the
order as nullity. As a corollary, the investigation is also rendered void. Therefore, the
investigation in the instant case being unauthorized is liable to be quashed. Mr.Pirzada placed
reliance on State of Haryana v. BhajanLal 33in which the Hon'ble Supreme Court while
discussing Section 5-A of the Prevention of Corruption Act, 1947 (Central) which
corresponds to Section 3 of our PC Act, though with some changes, has quashed the
investigation therein for non adherence to the mandatory provision of Section 5.

2. Learned Counsel for the petitioner while taking the attention of the Court towards
investigation into cases of criminal conspiracy and argued that the punishment of criminal
conspiracy as provided under section 120-B RPC is dichotomised; a party to a criminal
conspiracy to commit an offence is punishable with death, imprisonment for life or rigorous
imprisonment for a term of 2 years or upwards shall be punished in the same manner as he
had abetted the same offence, a party to a criminal conspiracy other than a criminal
conspiracy to commit an offence punishable as per the first part shall be punished with an
imprisonment for a term of 6 months. Under Schedule II Chapter V-A, the mode of
investigation for Section 120-B also stands dichotomised. For the first part, the offence is
cognizable. However, for the second part, the offence of criminal conspiracy is non-
cognizable. As per Mr.SalihPirzada, learned counsel for the petitioner, in the instant case, the
allegation of criminal conspiracy is for an offence under Prevention of Corruption Act which
carries a punishment of one year and may extend to 7 years and also fine. Hence, the
allegation of conspiracy is attracted by Section 120-B (2) which makes it a non- cognizable

33
1992 Supp. (1) SCC 335
offence. He accentuated that Section 155 Cr.P.C. creates a restriction on the Investigation
Agency to investigate a non-cognizable offence without the order of a Magistrate. Non-
adherence to such embargo is tantamount to vitiation of investigation. He again placed
reliance on the dictum of law as laid down in State of Haryana v/s BhajanLal.

3.Company does not function on its own but through persons running its affairs which
include Directors, Managers, etc. An offence alleged to be committed by a company cannot
be imputed automatically to the persons running its affairs by way of vicarious liability. The
general principle under criminal jurisprudence is that there is no vicarious liability under
criminal law unless specified under a Statute. The Income Tax Act 1961, The Drugs
and Cosmetics Act 1940, The Negotiable Instruments Act, 1881 contain specific provisions
which make the person running the affairs of a company vicariously liable for the offences
committed by the company. However, the Ranbir Penal Code does not contain any provision
which creates such vicarious liability

ARGUMENTS FOR THE RESPONDENTS

1.while justifying the action of the investigating agency has argued that the prayer for
issuance of writ of certiorari seeking quashment of the impugned FIR and writ of mandamus
for not conducting investigation cannot be granted because the investigation has already
culminated in the manner prescribed under law. The Learned Counsel reiterated that the
allegation of corruption stand proved against the petitioner and that the FIR has culminated
into investigation and thus the FIR cannot be quashed as the relief has become infructuous.
He further submits that the FIR discloses commission of offence and under such a
circumstance FIR cannot be quashed. Learned Additional Advocate General placed reliance
upon a judgment of this Hon'ble Court in the case of Dilar Singh and Ors. v. State of J&K 34.
The relevant portion of the judgment is extracted below:

2. It is well settled that inherent powers under Section 561-A Cr.P.C. because of their

plentitude are to be exercised rarely, sparingly and with due circumspection. The court in
view of exercise of powers under Section 561-A Cr.P.C. is not expected to hijack trial
proceedings pending before Trial Court or investigation from Investigating Officer and
assume its role to sift evidence and find out whether investigation or trial should proceed. It is

34
[2017 (1) SLJ 437]
only to prevent abuse of process of court and prevent miscarriage of justice that inherent
powers are to be exercised."

3.He further placed reliance on Abdul Rashid Lone v. State of J&K 35 in which this Court has
reiterated the above position of law of sparing exercise of inherent jurisdiction by this Court.

4. The Learned AAG while rebutting the claim of the petitioner with regard to investigation
of Section 120-B being non-cognizable, states that the offence under Section 120-B is not
itself, but it becomes an offence when the object for which conspiracy is entered into
becomes an offence and in the present case object conspired was to commit the act of
corruption by abusing the official position. Therefore, as per him, Section 120-B becomes a
warrants case under Chapter V-A of Schedule 2nd of Cr.P.C., because the offence which is
the object of conspiracy is an offence under Section 5 (2) and punishable by imprisonment
upto 7 years.

5. Mr.Rathore further submitted that a police officer can investigate a non-cognizable offence
without an order of a magistrate, if he investigates cognizable offence along with a non
cognizable one, and if ultimately from the investigation only the cognizable offence is
established, the investigation of non- cognizable offence so conducted cannot be said to be
bad. He has placed his reliance on a judgment of Punjab and Haryana High Court
titled Chattar Singh v. State of Haryana36.

6. Learned AAG has further argued that the Inspector who was entrusted with the
investigation of the instant case has been granted the authority by the SSP, VOK, by passing
an order as required under Section 3 of the PC Act. He further submits that the preliminary
verification does not suffer from any infirmity as it has been carried out in harmony with the
Vigilance Manual. With regards to the offence committed by a company, learned AAG,
Mr.Rathore submits that the offence of conspiracy may be entered into by the persons
running the affairs of the company. Lastly, Mr.Rathore submits that the ground taken by the
petitioner regarding registration of two FIRs on the same transaction including the
one registered at Police Station, Vigilance Organization Jammu (FIR No. 19/2011) is
misplaced as both the FIRs are registered on different transactions and against different

35
[2017 (1) SLJ 213]
36
[1980 CRI. LJ 315]
persons. For this he places reliance on the judgment of Hon'ble Supreme Court in the case
of AnjuChaudhary v. State of UP37.

Related cases

1. Lalita Kumari v. Government Of UP 38 12. On the basis of the dictum of law as laid
down in Lalita Kumari's (Supra) case, the petitioner argued that preliminary
verification cannot be used to verify the veracity of a complaint and that a
preliminary verification cannot exceed more than 7 days. Therefore, as per the
Learned Counsel for the petitioner, Investigating Agency has registered the FIR on
the basis of information gathered during the illegal investigation launched under
the pretext of Preliminary Verification. Hence, the impugned FIR being an
outcome of illegality is liable to be quashed. He placed reliance on Christie Fried
Gram Industries v/s State of Karnataka (Supra).
2. Abdul Rashid Lone v. State of J&K39  in which this Court has reiterated the above
position of law of sparing exercise of inherent jurisdiction by this Court

DECISION

1.The learned counsel for the petitioner has not laid stress on the overlapping of FIRs and the
distinction urged about the irregularity while drawing a distinction between the tenor of
FIR under Section 154 and 157 Cr.P.C. Therefore, this Court will not go into scrutiny of such
question. The petitioner has also questioned the conduct of respondent no. 5 during the course
of investigation. This Court cannot go into such disputed actual aspects, but the petitioner is
left with liberty to invoke appropriate remedy.

2. On the basis of facts of the case and the position of law as discussed above, I therefore
hold as under:

37
(Crl) No.9475 of 2008

38
[AIR 2014 SC 187].

39
2017 (1) SLJ 213
i. Section 3 of Jammu & Kashmir Prevention of Corruption Act, Svt. 2006 is a mandatory
provision and non- adherence renders the investigation void.

ii. The impugned investigation for offence under Section 120-B (2), being without a sanction
of Magistrate under Section 155 Cr.P.C. is also illegal.

iii. The Investigating agency has illegally investigated the case prior to the registration of FIR
under the pretext of Preliminary Verification for over a year.

REASON FOR THE DECISION

On the basis of the above position of law and the law laid down by the Hon'ble Supreme
Court, neither the accused private limited companies nor their in-charge persons can be held
liable for any offence as alleged in the FIR. The petitioner who joined the office (01.04.2011)
when the entire tendering process as well as the contract was complete cannot by any stretch
of imagination or any amplified interpretation of Criminal Statutes be held liable in absence
of the main conspirators. Dropping of the main conspirators from the ambit of conspiracy and
the legal embargo placed on vicarious liability disintegrate the fabric of criminal conspiracy.
Therefore, the allegations made in the FIR, even if accepted to be true in its entirety, are
legally not tenable.

41. Apart from the legal repercussions of the actions of respondents, the purchase in question
appears to be materialized after inviting tenders from CPSE's upon the instructions issued by
Mission Director vide letter dated 12.03.2011 which is on record. It is urged that there was no
occasion to conduct post tendering negotiations in context to the Circular of State Vigilance
Commission, taken on record through rejoinder affidavit filed by the petitioner. Bidding of
uniform rates by CPSEs (Central Public Sector Undertakings) does not seem unusual in
reference to letter of Ministry of Chemicals &Fert. Department, Government of India dated
23rd Feb 2007 pertaining to purchases from CPSEs under the Preference Purchase Policy
adopted by the Government. The price index of previous year, i.e., 2011 loses significance on
account of black listing of supplier for sub standard supplies which becomes discernible from
the letter dated 03.03.2010 of Controller of Stores, Jammu, accompanying the rejoinder
affidavit. These documents have not been controverted by the Learned Counsel for
respondents. Mere omission to bargain after tendering as asserted by the respondents does not
by itself attach criminality especially when prefaced with the guidelines to the contrary.
42. Another aspect which cannot be ignored is that there is no departmental enquiry or report
to suggest misappropriation of amount entrusted with the petitioner or any expert finding to
hold the spuriousness of drugs as asserted in the reply of respondents. Moreover, no official
from NRHM is bracketed as accused in the list exhibited in letter dated 21.07.2015 of
Vigilance Organization to snap their collaboration with the petitioner in the perpetration of
alleged offence which further erodes the element of conspiracy otherwise put forth in the
FIR. No investigative material has been brought on record by the respondents to suggest the
pecuniary gain derived by the petitioner while misusing his official position or diversion of
funds beyond contracted rates

COMMENTS

Due to the issues which situates and continuously revolving around the state of Jammu and
Kashmir, it becomes very difficult in providing uniformity in justice which is due to colliding
minds and inter colliding laws of the country and the state of Jammu and Kashmir . Here in
this case there exist vicarious liability which is of definite nature, but one thing that lacks, the
question of fact ,here is the absence of conspirators. The question was whether a company
can be held liable individually for the offence of criminal conspiracy. Which means the
meeting of minds with a guilty intention is an essential. An artificial juridical person without
the direct involvement of the related agent lacks such meeting of minds.
 KasthuriLalRalia Ram Jain V. State of U.P

( AIR 1965 SC 1039 )

FACTS :

1.The appellant is  a firm which deals in bullion and other goods was duly registered under
the Indian partnership at Amritsar. Ralia Ram was one of its partners. Sep 1947, ralia Ram
arrived at Meerut by the frontier Mail about midnight. His object is going to Meerutt to sell
gold, silver and other gold in the Meerut market. While he was passing through the chaupta
bazaar with this object, he was taken into custody by three police constables.
2. His belongings were then searched and he was taken into kotwal police station.

3. He was detained in the police lock and his belongings which consisted of gold weighing
103 tolas 6 mashas and 1 ratti and silver. Weighing 2 maunds and 6 and half sees, were
seized or on him and kept in police custody. On the 21 st Sep 1947 he was released on bail,
and sometime thereafter the silver seized from him was returned to him. Ralia Ram then
made repeated demands for the return of the gold which had been seized from him. And since
he could not receive the gold from the police officers, he filed the reset suit against the
respondent in which he claimed a decree that the gold seized from him should either be
returned to ,or , in the alternative its value should be ordered o be paid to him. The alternative
claim thus made by him consisted of Rs.355/- as interest by way of damages as well as future
interest.

ISSUE :

1. Whether the respondent was liable to compensate the appellant for the loss caused to
it by the negligence of the public servants employed by the respondent?

2. whether the police officers in question were guilty of negligence in the matter of
taking care of the gold which had been seized from Ralia Ram?

3. whether the respondent was liable to compensate the appellant for the loss caused
to it by the negligence of the public servants employed by the respondent. ?

LAWS INVOLVED

I. The Indian Penal Code

II. The Police Act, 1888
III. Article 65 in The Constitution Of India 1949
IV. Article 300(1) in The Constitution Of India 1949
V. The Indian Partnership Act, 1932

ARGUMENTS FOR THE APPELLANT :

On behalf of the appellant ,Mr.M.KSastri has urged that the High Court was in error in both
the findings recorded by it in favor of the respondent

.Mr .M.S.K Sastri argued that once he is able to establish negligence of the police officers,
there should be no difficulty in our decreeing the appellants claim against the respondent,
because he urged that in passing a decree against the respondent in the present case, the court
should merely be extending the principle recognized by this court in State of Rajasthan V.
Vidyavathi40. A claim was made by the respondents for damage against the state of Rajasthan
and the said claim was allowed by this court in upholding the decision of the High court
which had granted the claim, this court observed that the liability of the state for damages in
respect of a tortuous act committed by its servant within the scope of his employment and
functioning as such was the same as that of any other employer. In support of thus
conclusion, this court observed that the immunity of the crown in the united kingdom on
which basically the State of Rajasthan, resisted the respondents claim , was based in the ld
feudalistic notions of justice, namely , that the king was incapable of doing and therefore of
authorizing or instigating one, and that he could not sued on his own courts. Such notion, it
was said , was inconsistent with the reputation from government, in our country , particularly
because on pursuit of their welfare and socialistic objectives, states in India undertook
various industrial and other activities and had to employ a large number of servants that is
why it was observed that there would be no justification , in principle, or in public interest ,
why the state should not be held liable vicariously for the tortuous acts of its servants. And
the counsel intends that the said observations as well as the decision itself can be easily
extended and applied to the facts in the present case

ARGUMENTS FOR THE RESPONDENT :

The respondent alleged that the gold in question had been taken into custody by one
Moohammed Amir who was then the Head Constable, and it had been kept in the police
Markhavauder his carge. MohdAmir , however, misappropriated the gold and fled away to
Pakisthan n 17th October 1947. He had also misappropriated some other cash and articles
deposited in the Markhava before he left India.

It was further alleged that a case under section 409 of Indian Penal code as well as S 29 of the
Police Act had been registered against MohdAmir .but nothing effective could b done in
40
1962 AIR 933
respect of the said case because in spite of the best efforts made by the police department
Mohd. Amir could not be apprehended

It was pleaded by the respondent hat it was not a case of negligence of the police officers; and
that even if negligence of the police officers and that even if negligence was held proved
against the said police officers, the respondent state could not be said liable for the loss
resulting from such negligence

RELATED CASES

Council v. A. Cockcraft & Anr41, a claim for damages against the Secretary of State arose
in respect of injuries sustained by the plaintiff in a carriage accident which was alleged to
have been due to the negligent stacking of gravel on a road which was stated in the plaint
to be a military road maintained by the Public 'Works Department of the Govern- ment.
The Madras High Court held that the plaintiff had in law no cause of action against the
Secretary of State for India in Council in respect of acts done by the East India Company
in the exercise of its sovereign powers. This conclusion was based on the finding that the
provision and maintenance of roads, especially a military road, is one of the functions of
Government carried on in the exercise of its sovereign powers and is not an undertaking
which might have been carried on by private persons.

In the Secretary of State for India in Council v. Shreegobinda Chaudhuri42, it was held by
the Calcutta High Court that a suit for damages does not lie against the Secretary of State
for India in Council for misfeasance, wrongs, negligence or omissions of duties of
managers appointed by the Court of Wards, because the acts giving rise to the claim, were
done by officers of Government in the course of exercise of powers which cannot be
lawfully exercised save by the sovereign power. It is in this connection that Rankin C.J.,
enunciated the principle that no action in tort lies against the Secretary of State for India
in Council upon the 'respondent superior'. The learned C. J., however, recognised that a
suit may lie against the Secretary of State for India in Council for torts committed by the
Government in connection with a private undertaking or an undertaking not in exercise of
sovereign power. The same view has been taken by the Allahabad High Court in

41
(1914) I.L.R. 39 Mad. 351.
42
(1932) I.L.R. 59 Cal. 1289
Mohammad Murad Ibrahim Khan & Anr. v. Government of United Provinces. (3) In
Uma Parshad v. The Secretary of State(4), certain property which had been stolen from
the plaintiff was recovered by the police and was thereafter kept in the Malkhana under
orders of the Magistrate during the trial of the thieves. It appears that the receiver, H. A.,
the man in charge of the Malkhana, absconded with it. That led to a suit by the plaintiff
for the recovery of the property, or in the alternative, for its price. The Lahore High Court
held that the liability in the case having clearly arisen under the provisions of the
Criminal Procedure Code, the defence plea that the act was an act of State could not
succeed

DECISON :

The appeal fails, but in the circumstances of the case, the court directed that the parties
should bear their own costs throughout

REASON FOR DECISION :

In dealing with the question of negligence, it is necessary to refer to the evidence adduced in
this case. The material fact leading with the seizure og gold are not in dispute. The only
question which decals for our decision on this part of the case is whether the loss of gold can
be legimately attributed to the negligence attributed to the negligence of the police officers in
charge of the police station where the gold and silver had been kept in custody. Ganga Prasad
is the first witness to whose evidence it is necessary to refer. He was class2 officer in
meerutkotawli at the relevant time. He swears that M.Amir who was in charge of Malkhana,
had fled away to Pakisthan without delivering the keys to anyone and without to btainng
permission for leaving his post of duty. Ganga Prasad then refers to the investigation carried
against Mohd Amir for a offence misappropriation and his evidence shows that Mohd Amir
had absconded and since the police department was unable to apprehend him from pakisthan ,
the investigation in question became  in effective.

This next witness is MohdUmar .he was such Inspector II in the kotwali in September, 1947.
He swears to the seizure of the god and silver articles from Ralia Ram and deposes to the fact
that they were not keptin the Nakhana and his presence. Both the arrested persons and the
seized articles were left in charge of the Head Constable who had been instructed by Mohd
Umar to keep the goods in Markhava. This witness admitted that no list was prepared of the
seized goods and he was not able to say whether  proper precautions were taken to safeguard
the goods in Markhava.

It is clear that this case recognizes a material distinction between acts committed by the
servants employed by the state where such acts are refer able to the exercise of the sovereign
owners delegated to public servants , and acts committed by the public servants which are not
referable to of any sovereign powers . If the tortuous act is committed by a public servant, it
gives rise to a claim for damages, the question to ask is was the tortuous act committed by the
public servant in discharge of statutory functions which are reorable to, and ultimately based
on , the delegation of sovereign power, an action of damage would lie. The act of the public
servant committed by him during the course of his employment is in this category of cases,
an act of servant who might have been employed by a private individual for the same
purpose. This distinction is clear and precise in law

InThe Secretary of State for India in Council v. Moment 43the Privy Council had occasion to
consider the effect of the provisions of S.41 (b)of Act IV of 1898 (Burma) ,which is similar
to the provisions of S 65 of the Government of India Act ,1958. While holding that a suit for
damages for wrongful interference with the plaintiff’s property in land would have lain
against he East India Company, the Privy council ha expressly approved of the Principles
incited by Chief Justice Peacock in the case of Peninsular and oriental steam Navigation Co.

In ShivabhajanDurga Prasad V. Sec of State of India 44, the High court upheld the plea raised
by the defense on the ground that the chief constable seized goods not in obedience an order
of the executive Government, but in performance of a statutory power vested in him by the
legislature. The principle on which the decision was based as stated to be that where the duty
to be performed is in posed by law and not by the will of party employing the will of the
party employing the agent, the employer s not liable for the wrong done by the agent in such
employment.

43
(1913) 15 BOMLR 27
44
(1904)ILR 28 LAH 314
In secretary of state for India in rate inCouncil V. A. cockcraft&Anr45 ,  the Madras High
Court held that the plaintiff had in law no cause of action against the secretary of State for
India in council in respect of act done by the East India company in the exercise of its
sovereignty powers.

In Sec of State for India V. ShreegobindaChudari, the Calcutta46 High Court held that a suit
for damages does not lie against the secretary of State for India in council for misfeasance,
wrongs , negligence omissions of duties of managers appointed by the court of wards,
because the ads giving rise to the claim were done by the officers of Government in the
course of exercise powers which cannot be lawfully exercised save the sovereign power

The material facts leading to the seizure of gold are not in dispute. The only question which
calls for our decision on this part of the case is whether the loss of gold can be legitimately
attributed to the negligence of the police officers in charge of the police station where the
gold and silver had been kept in custody. Ganga Prasad is the first witness to whose evidence
it is necessary to refer. He was Class II Officer in Meerut Kotwali at the relevant time. He
swears that Mohammad Amir who was in charge of the Malkhana, had fled away to Pakistan
without delivering the keys to any one and without obtaining permission for leaving his post
of duty. The Malkhana was accordingly checked and it disclosed that considerable properties
kept in the Malkhana were missing. On the 26th October, 1947, Ganga Prasad returned the
silver articles to the appellant. Gold was, however, not found in the Malkhana, and so, it
could not be returned to it. Ganga Prasad then refers to the investigation carried out against
Mohd. Amir for an offence of misappropriation and his evidence shows that Mohd. Amir had
absconded, and since the police department was unable to apprehend him from Pakistan, the
investigation in question became ineffective. According to this witness, the silver and gold of
the appellant had not been attached in his presence. He admits that the goods of the .appellant
remained in the Malkhana of the Kotwali. No list of these goods was forwarded to any
officials. This witness further added that valuables are generally kept in the wooden box and
the key is kept by the officer-in-charge of Malkbana. The gold -and silver articles seized from
the appellant had not been kept in that box in his presence. He could not explain why the said
gold and silver articles were not kept in the Treasury. The next witness is Mohd. Umar. He
was Sub-Inspector II in the Kotwali in September, 1947. He swears to the seizure of the ,gold
and silver articles from Ralia Ram and deposes to the fact that they were not kept in the
45
(1914) I.L.R. 39 Mad. 351
46
(1932) I.L.R. 59 Cal. 1289
Malkhana in his presence. Both the arrested person and the seized articles were left in charge
of the Head Constable who had been instructed by Mohd. Umar to keep the goods in the
Malkhana. This witness admitted that no list was prepared of the seized goods and he was not
able to say whether proper precaution were taken to safeguard the goods in the Malkhana.
The third witness is Agha BadarulHasan. He was station officer of the police station in
question in September, 1947. He swears that it was a routine requirement that every day in
the morning one Sub-Inspector had to inspect the, Malkhana under his order. He knew that
Ralia Ram had been kept in the lock-up and his articles were kept in the Malkhana, but he
added that in his presence these articles were neither weighed nor kept in the Malkhana. He
claims to have checked up the contents of the Malkhana. but he conceded that he had made
no note about this check in the Diary. He purported to say that when he checked the
Malkhana, gold and silver were there. He kept the valuables in the Malkhana without any
further instructions from the officers, and he was not present when they were kept in the box.
This witness claims that valuables are not sent by the police officers to the Treasury unless
they got orders to that effect. That is the whole of the material evidence bearing on the
question of negligence of the police officers.
In appreciating the effect of this evidence, it is necessary to refer to some of the relevant
provisions, in regard to the custody of the goods seized in the course of police investigation.
Section 5 4 (I) (iv) of the Code of Criminal Procedure provides that any police officer may,
without an order from a Magistrate and without a warrant, arrest any person in whose
possession anything is found which may reasonably be suspected to be stolen property and
who may reasonably be suspected of having committed an offence with reference to such
thing. It is under this provision that Ralia Ram was arrested at midnight. It was apprehended
by the police officers that the gold and silver articles which he was carrying with him might
be stolen property, and so, his arrest can be said to be justified under section 54 (I) (iv).
Section 550 confers powers on police officers to seize property suspected to be stolen. It
provides inter alia, that any police officer may seize property which may be suspected to have
been stolen; and so, gold and silver in the possession of Ralia Ram were seized in exercise of
the powers conferred on the police officers under s. 550 of the Code. After Ralia Ram was
arrested and before his articles were seized, he was searched, and such a search is justified by
the provisions of s. 51 of the Code. Having thus arrested Ralia Ram and searched his person
and seized gold and silver articles from him under the respective provisions of the Code, the
police officers had to deal with the question of the safe custody of these goods. Section
523 provides for the procedure in that behalf. It lays down, inter alia, that the seizure by any
police officer of property taken under s. 51shall be forthwith reported to a Magistrate, who
shall make such order as he thinks fit respecting the disposal of such property or the delivery
of such property to the person entitled to the possession thereof, or, if such person cannot be
ascertained, respecting the custody and production of such property. These are the relevant
provisions of the Code in respect of property seized from a person who has been arrested on
suspicion that he was carrying stolen property.
That takes us to the U.P. Police Regulations. Chapter XIV of these Regulations deals with the
custody and disposal of property. Regulation 165 provides a detailed procedure for dealing
with the disposal of movable property of which the police takes possession. It is not
necessary to refer to these provisions; it would be enough to state that these provisions
indicate that when property is seized by the police officers, meticulous care is required to be
taken for making a proper list of the property seized, describing it, weighing it, and taking all
reasonable steps to ensure its safety. Clause (5) of Regulation 165 provides that when the
property consists of gold, silver, jewellery or other valuables, it must be sent in a sealed
packet after being weighed, and its weight must be noted in the general diary and on the list
which accompanies the packet. It requires that a set of weights and scales should be kept at
each police station. Regulation 166 is important for our purpose. It reads thus :-
"Unless the Magistrate otherwise directs, property of every description, except cash
exceeding Rs. 100 and property of equal value and_property pertaining to cases of
importance, which will be kept by the Prosecuting Inspector in a separate box under lock and
key in the treasury, will remain in the custody of the malkhanamoharrir under the general
control and responsibility of the Prosecuting Inspector until it has been finally disposed of."

The wording of the Regulation is somewhat complex and con- fusing, but its purport and
meaning are clear. In substance, it provides that property of every description will remain in
the custody of the malkhanamoharrir under the general control and responsibility of the
Prosecuting Inspector until it has been finally disposed of. This provision is subject to the
instructions to the contrary which the Magistrate may issue. In other words, unless the
Magistrate directs otherwise, the normal rule is that the property should remain in the
Malkhana. But this rule does not apply to cash exceeding Rs. 100 and property of equal value
and property pertaining to cases of importance. Property falling under this category has to be
kept by the Prosecuting Inspector in a separate box under lock and key in the treasury._ If the
Magistrate issues a direction that property not falling under this category should also be kept
in the treasury that direction has to be followed and the property in such a case cannot be kept
in the custody of the malkhanamoharrir. It is thus clear that gold and silver which had been
seized from Ralia Ram had to be kept in a separate box under lock and key in the Treasury;
and that, admittedly, was not done in the present case. It is in the light of the provisions
contained in Regulation 166 that we have to appreciate the oral evidence to which we have
already referred. Unfortunately, in dealing with Regulations 165(5) and 166, the High Court
has erroneously assumed that there was no obligation on the police officers to deposit Ralia
Ram's property in the Treasury. This conclusion is apparently due to the fact that the words
used in Regulation 166 are not as clear as they should be and their effect has been
misconstrued by the High Court. It is in the light of this position that the oral evidence in the
case has to be considered.
Thus considered, there can be no escape from the conclusion that the police officers were
negligent in dealing with Ralia Rani's property after it was seized from him. Not only was the
property not kept in safe custody in the treasury, but the manner in which it was dealt with at
the Malkhana shows gross negligence on the part of the police officers. A list of
-articles seized does not-appear to have been made and there is no evidence that they were
weighed either. It is true that the respondent's case is that these goods were misappropriated
by Head Constable Mohd. Amir; but that would not assist the respondent in contending that
the manner in which the seized property was dealt with at the police station did not show
gross negligence. Therefore, we are satisfied that the trial Court was right in coming to the
conclusion that the loss suffered by the appellant by the fact that the gold seized from Ralia
Ram has not been returned to it, is based on the negligence of the police officers employed by
the respondent;
Thus an act of negligence was committed by the police officers while dealing with the
property of Ralia Ram which they had seized in exercise of their statutory powers . Now the
power to arrest a person, to search him, and to seize property found with him, are powers
conferred on the specified are powers by statute and in the last analyses they are powers
which can be properly characterized as sovereign powers and so in difficulty in clam the
special characteristic of sovereign power, the claim cannot be sustained, and so , we
inevitably hark back to what chief justice .Peacock decided in 1861 and hold that the
presence claim is not sustainable.

COMMENTS
It is unfortunate that Rallia ram had no opportunity in receiving a proper justice in my
opinion, why because the actual gold or ornaments kept by the particular Rallia ram was
attached and kept in the station locker , which later was stolen by the police constable who
absconded to Pakisthan made it impossible to recover the property back to the party , along
with which the state plainly denied the claim of compensation/damages which was to be
provided , the act of or the wrongful act of the state official alone makes it clear that there
exist a vicarious liability, but the state plainly escaped with the defence of sovereign
immunity.
 Dr.Jeppiar vs State Of Tamil Nadu on 29 November, 2016

Criminal Original Petition No.25259 of 2016

Facts

complainant along with other workers are engaged in construction work and that the
construction work was undertaken by one Mr.Rajkumar who is the contractor and first
accused and the actual construction is undertaken by Mr.Sudanandan, the mason (Maistry)
the 2nd accused. The building was constructed as per the direction of the contractors and the
mason who are the named accused and they were raising cement pillars and on
06.08.2016,the contractors and mason directed the defacto complainant to construct Arch and
the defacto complainant and others protested that the Pillars themselves were wet and
therefore if arch is constructed then it will lead to destruction and therefore requested that the
arch can be constructed after 10 days for which the contractor and mason overruled their
objections and informed them that they will take care of whatever harm that comes in the way
and pursuant to the direction of the contractor and mason, they were scaffolding the pillar and
at that juncture the pillar as well as the scaffolding gave way and fell down and in the said
accident 9 workers lost their lives and 3 persons were seriously injured as a result of which
the defacto complainant gave a complaint to the first respondent, who had registered the FIR
in Crime No.679 of 2016 for the offence under Sections 338, 304(2) IPC and one person died
subsequently and the first petitioner being the trustee of the Institution, was arrested on
09.08.2016 for the above said incident

ISSUES

1.Whether there exist no vicarious liability against the Directors since it is the Trust property?

2.Whether petitioners for the offence punishable under Section 304(ii) of IPC for vicarious
liability ?

LAWS INVOLVED

I. The Indian Penal Code

II. The Negotiable Instruments Act, 1881
III. Section 304 in The Indian Penal Code
IV. Section 11 in The Indian Penal Code
V. Section 149 in The Indian Penal Code

ARGUMENTS FOR THE PETITIONER

The contention of the learned counsel appearing for the petitioners is that the name of the
petitioners is not find a place in the FIR and the statements recorded by the police will reveal
only about the designation of the petitioners and nothing has been mentioned about the
occurrence as well as the participation of the accused at the time of occurrence. Therefore,
the petitioners have not committed any of the offence much less the offence under Section
304(ii) IPC. The learned counsel further contended that as on date investigation reveals only
against the other accused and not against the present petitioners except one or two references
has been made regarding the designation. Except this, they have not mentioned anything
about the petitioners. The learned counsel further contended that at the time of enlarging the
petitioners on bail it has been already held that the petitioners were not incharge of the
construction of the particular institution which is come under the trust in which the first
petitioner is the Chairman and the second petitioner is one of the Directors. At the time of
granting bail to the petitioners reliance was placed on the judgment reported in 1969 Law
Weekly (Crl.) 158 in which this Court had occasioned a defective construction of the building
causing death of several members and in that case it has been held that for this purpose, the
owner of the building cannot be held liable for the negligence on the person who actually
constructed the building and on that basis the said case has ended in acquittal. Further he
contended that there is no vicarious liability against the Directors since it is the Trust
property. Further, on the medical ground also the petitioners cannot go in to the ordeal of
trial. Further, as directed by this Court, a sum of Rs.26,00,000/- has been deposited by the
petitioners before the learned District Munsif cum Judicial Magistrate, Sriperumbudur
towards ex gratia amount at the rate of Rs.2,50,000/- each in favour of the legal heirs of the
deceased persons and Rs.50,000/- each to the injured victims. Under such circumstances, the
FIR against the petitioners has to be quashed.

ARGUMENTS FOR THE RESPONDENTS

1 The learned Additional Public Prosecutor appearing for the first respondent contended that
only after receiving the report investigation has been started. Since the building has been
constructed with the consent and knowledge of the Trustees one cannot say without the
knowledge of the trustees the building has been constructed. The Engineer and the supervisor
gave statement stating that the Chairman has requested them to complete the construction of
Arch immediately and that is the reason the workers were doing non-stop work without
giving time for the curing. The other aspects can be considered only after filing of the final
report. Hence, he prays that the petition has to be dismissed.

3. The next contention of the Additional Public Prosecutor is that the first Accused
Maria Wilson has given a confession statement under Section 24 of the Indian
Evidence Act in the presence of one Arumugam, Village Administrative Officer,
Kunnam and the Revenue Inspector, Sunguvarchatram and the said statement is
sufficient to hold that the prima facie case has been made out. While considering the
said statement it is seen that he has stated that he has informed his father-in-law
 Jeppiar about the proposed construction of Indoor Stadium for Basket Ball Game. In
another so called confession statement given by the second Accused viz., Arul Jaya
Abrose, he has stated that he has been working at Sathyabama Engineering College at
Kunnam Village, as Civil Engineer along with the other Civil Engineer Mr.Rajkumar
the first Accused Maria Willson, Jeppiar and his wife Remibai are the Trustees of the
JeppiarRemibai Trust. The first Accused is the Managing Trustee and he has been
administrating the College. The said college has proposed to construct an Indoor
Stadium for Basket Ball and for the said construction 40 persons have been working
for the said construction work. Since the Management has insisted to complete the
construction expeditiously on or before 15th September, 2016 which is the first
Annual Day of the said College, the workers have been working on day and night
basis. The other accused viz., P.Annadurai in his statement has stated that he is the
supervisor for the said construction. Therefore, constructing the building continuously
will not constitute the offence. Therefore, I am of the view that as on date except the
statement of three persons viz., son-in-law, and other two persons who are working as
Civil Engineers nothing has been made against the present petitioners. Therefore, on
the facts and on the basis of the statement of witnesses, no incriminating
circumstances have been made out against the petitioners.

RELATED CASES

47
1. Supreme Court in Maksud Syed vs. State of Gujarat and others  reported in
wherein in paragraph No.13, it is held as follows:

#...The bank is a body corporate. Vicarious liability of the Managing Director and
Director would arise provided any provision exists in that behalf in the statute. Statutes
indisputably must contain provision fixing such vicarious liabilities. Even for the said
purpose, it is obligatory on the part of the complainant to make requisite allegations
which would attract the provisions constituting vicarious liability.#

47
(2008) 5 SCC 668
 2.  Public Prosecutor v. Pitchaiah Moopanar 48 alias Pitchaiah Pillai), this Court had
an occasion to consider the defective construction of a building which collapsed
causing the death of several persons. This Court held as follows:

"It is not the case of the prosecution that the respondent himself constructed the
building. It is not disputed that he sought the assistance of the masons and the
masons constructed the building. If the masons had not done the work properly
and if they had been negligent in not mixing the lime and mortar in proper
proportions, the respondent could not be liable for the negligence of those persons
who actually constructed the building, who are supposed to be skilled. The
respondent is a layman. He therefore, cannot be held liable for the negligence of
the persons who actually constructed the building, which negligence is the Causa
Causons for the collapse of the building. "

DECISION

Already this Court at the time of granting bail to the petitioners also considered this aspect
elaborately. Considering all these aspects, the FIR in Cr.No.679/2016 dated 06.08.2016 on
the file of the first respondent as against the petitioners alone is quashed. The respondent is at
liberty to proceed with the investigation in so far as the other accused are concerned and file
final report as per law. FIR against the petitioners. This Criminal Original Petition is allowed.

REASON FOR THE DECISION

From this, it is very clear that the said Judgment squarely applies for the present facts of the
case also. The construction work has been done by the mason and it has been supervised by
the skilled persons viz., two Civil Engineers who are also arrayed as accused in this case. The
owner of the building is not responsible for the negligence on the part of the skilled workers
48
1969 L.W. (Crl.) 158
under whose supervision the building has been constructed. The Civil Engineers and other
supervising staff alone are responsible for the rash and negligence. This Court at the time of
granting regular bail to the first petitioner has recorded that the first petitioner has deposited a
sum of Rs.26,00,000/- as directed by this Court towards ex gratia amount at the rate of
Rs.2,50,000/- each in favour of the legal heirs of the deceased persons and Rs.50,000/- each
to the injured victims will prove the gesture shown by the trustees towards the legal heirs of
the deceased workers and the injured persons. From this one can easily come to the
conclusion that it is a case arising out of sympathy. The incident must have been happened
only because of the negligence on the part of the workers and certainly there is no negligence
on the part of the trustees. The Investigating Officer has very fairly recorded the Statements
under Section 161 of Cr.P.C. without any embellishment. Otherwise the officer could have
written the statements suit for his convenience also to be noted. So far as the first petitioner is
concerned, he is also taking treatment for his ailment. So far as the second petitioner is
concerned nothing has been recorded against her except she is the trustee of the said trust.
Further, at the time of granting bail in Crl.O.P.No.19301 of 2016 dated 31.8.2016 itself this
Court has held that no case has been made out and further concluded on relying on 1969
L.W. (Crl.) 158 holding that no incriminating statement is available against the petitioners.
Under this juncture, this Court has no option except to sail with the earlier view taken by this
Court. Hence, I am of the view that there is no case is made out against the petitioners.

COMMENTS

Being the owner of the building or a particular piece of land does not mean that any liability
or any kind of injury caused to any person while dealing with one’s property should solely be
pointing towards such owner. A property provided for some special purpose to someone other
than the actual owner of the property directly means that who ever takes care or whoever is
there during the course of employment is liable towards the wrongful acts committed either
by him or by his servant, agents , minor if in case of a guardian.
 Ram Ghulam v. Government of U.P.

AIR 1950 All 206

FACTS

1. The suit for revision was instituted by plaintiff against the Government of United
Provinces so as to recover certain ornaments or their price.

2. Plaintiff’s ornaments got stolen. Subsequently, they were recovered from another
house. The police searched and seized the property by exercising the powers
conferred to it under the Code of Criminal Procedure. Thereafter, they were kept in
Collectorate Malkhana.But, this time again, they were stolen and were untraceable.
 3. The plaintiffs applied unsuccessfully to the Magistrate for an order for the restoration
of the ornaments. But, it was dismissed on finding that the Government is not liable to
compensate.

4. The plaint alleged that the plaintiffs have learnt that the ornaments are not available at
the Malkhana on account of the defendant’s servants, and that they have not been
returned inspite of notice and ended the prayer with alternative reliefs.

ISSUES

 Whether or not the Government was liable to indemnify the plaintiffs since it was in
the position of a bailee and the ornaments were lost through its negligence or that of
its servants?

 Whether or not the Government was liable to indemnify the plaintiffs in accordance
with the rule that a master is liable for the tortuous acts of his servants?

 Whether or not the Government was liable to indemnify the plaintiffs since it was in
the position of a bailee and the ornaments were lost through its negligence or that of
its servants?

LAWS INVOLVED

The Constitution Of India 1949

ARGUMENTS FOR PETITIONER

It appears that the claim for the return of the ornaments was not pressed before the
Court below, as indeed it could not be pressed for want of any cause of action,
disclosed in the plaint. After reciting the facts mentioned above, except the theft at the
Malkhana, the plaint went on to allege that the plaintiffs have learnt that the
ornaments are not available at the Malkhana, on account of the negligence of the
defendant's servants, and that they have not been returned inspite of notice and ended
with prayer for the aforesaid alternative reliefs.
 Arguments for respondents

allegations do not disclose any cause of action for the return of the ornaments. There
is no averment of any wrongful detention, but on the contrary there is the suggestion
that the ornaments are not in the possession of the defendant. Indeed, it was an
admitted fact during the trial that the ornaments were stolen from the Malkhana and
were untraceable. The plaintiffs, therefore, pressed the alternative relief only, for the
recovery of their price on the ground that the ornaments were lost on account of the
negligence of the Government servants

DECIDED CASES

In the case of Secretary of State v. Hari Bhanji49it was held that the jurisdiction of the
Court was ousted in respect of acts of State and not with respect to acts done under colour
of Municipal law. The case of Peninsular and Oriental Steam Navigation Co. v. Secy. of
State was discussed. Accordingly, it has not decided beyond that no character of
sovereignty attached to the commercial operations of the Company and that it was liable
to be sued in respect of wrongs done in the course of such operations, that it does not
decide that no suit could be maintained in respect of wrongs done in the operation of
sovereign rights, that every act performed in the exercise of sovereign rights is not an act
of State and that acts of State are only such acts which do not pretend to justify
themselves by any canon of Municipal law.

In the case of Dhackjee Dadaji vs. The East India  Company50, Sir Erskine Petre said that
before Charter Act, 1833, no distinction was made between acts committed by the
company in its commercial and political capacities. The learned judges had referred to the
prior statutes at page 330 and observed that those statutes clearly provide for actions to be
brought against the Company for its torts.

In the P&O casethe learned Judges pointed out that the East India Company was not a
sovereign and therefore, not entitled to immunity. Though certain sovereign powers were
delegated, but the servants were not public servants. The learned Chief Justice held :
49
(1882) ILR 5 Mad 273
50
1962 AIR 1893, 1963 SCR (3) 338
 “But where an act is done or a contract is entered into, in the exercise of powers usually
called sovereign powers by which we mean powers which cannot be lawfully exercised
except by a sovereign or a private individual delegated by a sovereign to exercise them,
no action will lie”

All relevant provisions of Charter Acts and the Government Of India Act, 1858 were
considered. The conclusion was that the company is not sovereign. Therefore, it cannot
exercise any immunity

DECISION OF THE COURT

Given by Seth J.

In Ram Ghulam , the first issue was overlooked. Since, the obligation of a bailee is a
contractual obligation and cannot arise independently from a contract. In the given case, the
plaintiff did not hand over the ornaments to the Government.

The rule embodied in the maxim “Respondent Superior”is a known exception. Accordingly,
master is not liable for the acts of the servants which he performed in discharge of duty
imposed by law. Therefore, the Government is not liable to compensate for the stolen
ornaments.

REASONS FOR THE DECISION OF THE COURT

The first issue was not seriously considered. Since, the obligation for a bailee is a contractual
one and shall not arise independently. In this case, the ornaments were not made over to the
Government under any contract. So, the government never acquired the position of the bailee
and is not liable to indemnify the plaintiffs.

The second issue was considered as a substantial question of law. Accordingly, Justice Seth
said “Government is the political organizations through which the sovereign will of the State
finds expression, and through which the State functions”. On reading the Section 176,
Constitution Act, 1935 and Section 32, together it is found that such suits are  only
maintainable against the Provincial Governments in respect of affairs of the Provinces, as
could be maintained against East India Company before Government Of India
Act,1858.Therefore, it was determined whether a suit for compensation was maintainable
against East India Company for the tortious acts of its servants.

East India company held a dual character till 1858. It was that of a trading corporation and a
body possessed of certain sovereign rights, although not fully sovereign. This reference was
made in the case to decide whether the tortuous acts were committed to determine the
responsibility of the Company or Secretary of State pursuant to commercial or non-
commercial undertakings. Judicial opinion is divided on the point whether the immunity
extends in respect of torts committed in the performance of all transactions carried on in the
exercise of sovereign powers or is confined to particular kinds of transactions only .The suit
shall fail on the ground that the alleged tortuous act was performed in discharge of an
obligation imposed by law.

COMMENTS

A recognised exception to Respondent Superior is where acts are done in discharge of duty
imposed by law. If the act of a servant is alleged to be wrongful, then the aggrieved person
has no remedy against the master (the State), as such. The rationale underlying this approach
is that the State does not, in such cases, act as an employer. The public servant concerned acts
under the statute, not a contract; and his action is not subject to the control of the State.
Hence, the principle of vicarious liability of the master (for the wrongs committed by the
servant in the course of his employment) does not apply.
State of Rajasthan vs Mst Vidhyawati

1962 AIR 933, 1962 SCR Supl. (2) 989

FACTS

1. Lokumal was a temporary employee of the State of Rajasthan, as a motor driver on

probation. In February 1952, he was employed as the driver of a Government jeep car,
registered as No. RUM 49, under the Collector of Udaipur. The said car was given for
necessary repairs at a workshop.
2. After the repairs were finished, Lokumal, while driving the car back along a public
road, in the evening of February 11, 1952, knocked down one Jagdishlal, who was
walking on the footpath by the said of the public road in Udaipur city, causing him
multiple injuries, including fractures of the skull and backbone, resulting in his death
three days later, in the hospital where he had been removed for treatment.
3. The plaintiffs who are Jagdishlal’s widow, Vidyawati and a minor daughter, aged
three years, through her mother as next friend sued the said Lokumal and the State of
Rajasthan for damages for the tort aforesaid. They claimed the compensation of Rs.
25,000/- from both the defendants.
4. The suit was majorly contested by the state of Rajasthan, i.e. defendant no. 2 and
defendant no. 1, Lokumal, remained ex parte. The present suit has been contended
before the Hon’ble Supreme Court, by the State of Rajasthan, as the appellant on the
ground that it was not liable for the tortious act of its employee.

ISSUES

1. Whether the state, earlier to the commencement of Constitution, Art. 300, be liable
in a similar situation akin to the state of Rajasthan.
2. Whether the rash and negligent driving of Jeep car, which led to the claim in the suit
was being maintained “in exercise of sovereign power” and not as part of any
commercial activity of the State.

LAWS INVOLVED

1. Article 133(1), Constitution of India, 1950

2. Article 294, Constitution of India, 1950
3. Article 295 Constitution of India, 1950
4. Article 300 Constitution of India, 1950
5. Section 2(1), Crown Proceedings Act, 1947
Arguments for the petitioner

The State cannot be liable for damages occasioned by the negligence of its officers or of
persons in its employment. It was pointed out, "it is true that it is an attribute of
sovereignty that a State cannot be sued in its own courts without its consent." "In
England, the Crown", it was further pointed out, "cannot be made liable for damages for
the tortious acts of its servants either by petition of right or in any other manner, as laid
down by Lord Lyndhnrst in the case of Viscount Canterbury v. The Attorney-General"
(1). That decision was based upon the principle that the King cannot be guilty of personal
negligence or misconduct, and consequently cannot be responsible for the negligence or
misconduct of his servants. The Court further pointed out that it was in view of these
difficulties in the way of getting redress that the liability of the Secretary of State, in place
of that of the East India Company, was specifically provided for by s. 10, aforesaid. The
East India Company itself could not have claimed any such immunity as was available to
the sovereign. This view was based on the opinion expressed by Grey, C.J., in the case of
the Bank of Bengal v. The East India Company (2), that "the fact of the Company's
having been invested with powers usually called sovereign powers did not constitute them
sovereigns". This dictum was also founded upon the recital in 53 Geo. III c. 155, by
which the territories in the possession and under the government of the East India
Company were vested in them without prejudice to the undoubted sovereignty of the
Crown. The Court also pointed out that the liability of the Secretary of State was in no
sense a personal liability, but had to be satisfied out of the revenues of India. This case
also meets the second branch of the argument that the State cannot be liable for the
tortious acts of its servants, when such servants are engaged on an activity connected with
the affairs of the State. In this connection it has to be remembered that under the
Constitution we have established a welfare state, whose functions are not confined only to
maintaining law and order, but extend to engaging in all activities including industry,
public transport, state trading, to name only a few of them. In so far as the State activities
have such wide ramifications involving not only the use of sovereign powers but also its
powers as employers in so many public sectors, it is too much to claim that the State
should be immune from the consequences of tortious acts of its employees committed in
the course of their employment as such. In this respect, the present set up of the
Government is analogous to the position of the East India Company, which functioned
not only as a Government with sovereign powers, as a delegate of the British
Government, but also carried on trade and commerce, as also public transport like
railways, posts and telegraphs and road transport business

Arguments for the respondents

on a certificate granted by the High Court of Rajasthan under Art. 133(1)(c) of the

Constitution, raises a question of considerable importance, namely, the extent of the
vicarious liability of Government for the tortious acts of its employees, acting in the
course of their employment as such. The Trial Court dismissed the claim for
compensation as against the State of Rajasthan, which was the second defendant in the
suit for damages for tortious act of the first defendant. Lokumal, who is not a party to this
appeal. On appeal by the plaintiffs against the judgment and decree of the Trial Court, the
High Court of Rajasthan passed a decree in favour of the plaintiffs allowing
compensation of Rs. 15,000/- against the State of Rajasthan also, which is the appellant in
this Court.

DECISION

The position of law, obtaining both prior and subsequent to 1858, the position obtaining
under Article 300of the Constitution and the facts and circumstances leading to the
formation of the State of Rajasthan, were all reviewed by the Supreme Court in State of
Rajasthan v. Vidyawati, The act of the driver was not an act in the exercise of a
sovereign function. The Court said that the employment of driver of a jeep car for the use
of a civil servant was an activity which was not connected in any manner with the
sovereign power of the State at all.  In this case, court rejected the plea of immunity of the
State and held that the State was liable for the tortious act of the driver like any other
employer.

REASON FOR THE DECISION

Viewing the case from the point of view of first principles, there should be no difficulty
in holding that the State should be as much liable for tort in respect of a tortious act
committed by its servant within the scope of his employment and functioning as such as
any other employer. The immunity of the Crown in the United Kingdom, was based on
the old feudalistic notions of Justice, namely, that the King was incapable of doing a
 wrong, and, therefore, of authorising or instigating one, and that he could not be sued in
his own courts. In India, ever since the time of the East India Company, the soversign has
been held liable to be sued in tort or in contract, and the Common Law immunity never
operated in India. Now that we have, by our Constitution, established a Republican form
of Government, and one of the objectives is to establish a Socialistic State with its varied
industrial and other activities, employing a large army of servants, there is no
justification, in principle, or in public interest, that the State should not be held liable
vicariously for the tortious act of its servant. The Court has deliberately departed from the
Common Law rule that a civil servant cannot maintain a suit against the Crown. In the
case of State of Bihar v. Abdul Majid51, this Court has recognised the right of a
government servant to sue the Government for recovery of arrears of salary. When the
rule of immunity in favour of the Crown based on common Law in the United Kingdom
has disappeared from the land of its birth, there is no legal warrant for holding that it has
any validity in this country, particularly after the Constitution. As the cause of action in
this case arose after the coming into effect of the Constitution in, our opinion, it would be
only recognising the old established rule, going back to more than 100 years at least, if we
uphold the vicarious liability of the State. Art. 300 of the Constitution itself has saved the
right of Parliament or the Legislature of a State to enact such law as it may think fit and
proper in this behalf. But so long as the Legislature has not expressed its intention to the
contrary, it must be held that the law is what it has been ever since the days of the East
India Company.

The Court has very aptly decided the instant case and formed a strong precedent for many
more cases that arose with respect to the vicarious liability of the state for the acts of its
employers.

Comments

In this case, the claim for damages was made by the dependants of a person who died in
an accident caused by the negligence of the driver of a jeep maintained by the
Government for official use of the Collector of Udaipur while it was being brought back
from the workshop after repairs. The Rajasthan High Court took the view-that the State
was liable, for the State is in no better position in so far as it supplies cars and keeps

51
1954 AIR 245, 1954 SCR 786
drivers for its Civil Service. The Supreme Court upheld the same and observed that for
acts done in the course of employment but not in connection withsovereign powers of the
State, State like any other employer is vicariously liable.
 COMPARITIVE STUDY OF VICARIOUS LIABILITY

UNITED KINGDOM/ENGLAND

Comparative study of tortious Liability and administrative Liability in various country India
and U.k Law of tort is a part of English civil law. A tort is a act that harms somebody
somehow, and for which the harmed individual may sue the wrongdoer for harms. A careless
or purposeful common wrong isn't arising out of an agreement or statute. (Anon 1982)These
include "intentional torts, for example, battery or defamation , and torts for carelessness. At
the point when there is an obligation of care and a breach of that obligation mind causes a
harm that makes the tort of carelessness. The definition of tortious liability is as: ―Tortious
liability arises from the breach of a duty primarily fixed by law; this duty is towards persons
generally and its breach is redressible by an action for unliquidated damages.‖ Law prior to
the Crown proceedings Act : There were two ancient but fundamental principles before the
Crown Proceedings Act, 1947 representing the law identifying with the risk of the (Massey
2008)Crown and its workers: (I) The rule of substantive law that the King can't be blamed
under any circumstance, and (ii) the decide of procedural law that the King couldn't be sued
in his own Courts. The survival of these tenets into the twentieth century implied that till first
January, 1948 the Crown could be sued neither in regard of wrongs that had been explicitly
approved nor in regard of wrongs submitted by Crown's servant course of employment .52

The King can do no wrong

: The maxim that the "The king can do no wrong is an ancient and cardinal principle ,
however it doesn't imply that the King is exempt from the laws that apply to everyone else
and that all that he does, is fundamentally just and legal. It has two meaning as per the
according observer Firstly, that whatever is exceptionable in the conduct(Giliker 2008) of
public affairs is not imputed to the King, nor is he answerable for it personally to his people
for this doctrine would totally destroy that Constitutional independence of the Crown, which
is necessary for the balance of Power in free and active and therefore compounded

52
https://acadpubl.eu/hub/2018-120-5/2/171
Constitution: and secondly, it means that the prerogative of the Crown extends not to do any
injury; it is created for the benefit of the people and therefore cannot be extended to their
prejudice. Maitland then again clarified the maxim in this way: " English law does not
provide any means(Voyiakis 2017) whereby the King can be punished or compelled to make
redress‖. The maxim simply implied that the King was not privileged to do wrong. In the
event that his act were illegal, they were injuria. In this way, what the King does by and by,
the law presumes (A. L. G. & A. 1924)won't be a wrong, what he does by his summon to his
servant can't not be right in him for if the order be unlawful, it is in law no charge and the
servant is by and by in charge of the unlawful act. King couldn't be sued in his own Courts
The decide that the King couldn't be sued in his own Courts depended on the pyramid
remnant that a medieval Lord couldn't be held obligated in his own particular Court. The
social states of England were in charge of the non-responsibility of the Crown (Van Hoecke
2011). The medieval rulers were Supreme. The law was of a very antiquated compose. The
Lords practiced their forces and even secured their men who had submitted the offenses. As
indicated by Street, "Similarly as no Lord could be sued in the Court which he held to attempt
the instances of his inhabitants, so the King, at the zenith of the pyramid and subject to the
jurisdiction of no other Court, was not suable". A judgment of the King's Court declared
(Harlow 2002)"our Lord the King can't be summoned or get an order from anybody.‖
Subsequently, under civil Law no human organization could implement the law against the
King. He could be an plaintiff party but he couldn't be made a defendant . The oblivious
injustice form that the Crown couldn't be sued for the wrongs of his servant , was to some
degree looked to be lightened by the Courts by making a legitimate fiction of selected
respondent, in which, the lawful procedure was issued exclusively against the individual
servant , however his guard was practically speaking led by the Crown, and if harms were
granted they were paid out of open assets. Government offices did their best to be useful
influencing this training to work easily, and if there was any uncertainty as to which worker
to sue, they would supply the name of a filed case. This practice was otherwise called fiction
respondent, However the report was Pigeon holed as it was contradicted by some
administration offices. Donoughmore Committee again suggested a case for enactment,
however the Administration of Justice (Miscellaneous Provisions) Act, 1933 just improved
the Crown's situation as a defendant and it didn't make the Crown subject in tort. Liability for
Breach of Statutory Duty : An action for a breach of statutory obligation is not the same as an
activity alleging careless exercise of statutory powers. The general rule is that a breach of
statutory obligation provides for a man harmed in this way a privilege of activity for harms if
that is given by the statute breach actionable. Occasionally , a statute expressly states whether
a breach will be actionable.Section 2(2) of the Crown Proceedings Act forces two limitations
on the obligation of the Crown. They are (a) the Crown is bound by a statutory obligation just
if the Act being referred to so gives, and (b) the Crown is subject just where statutory
obligation is binding upon people other than the Crown and its officers. The Crown isn't
accordingly, obligated where the obligation ties just itself. Street is very critical o f the
second provision when he says.that there is no justification for last requirement. Can civil
liability arise as a consequence of the violation of constitutional right? Though the fact state
Liability risk was incorporated way back during British rule, the fundamental concern was
that whether a common obligation can emerge as a result of the infringement of protected
right. In this way, the main case (Cane n.d.)which managed this issue was Rudul shah v. State
of Bihar, In this case, the petitioner Rudul Shah suffered an unlawful detention for around 14
years. It was for this situation that the court held that it would be lip-service as to assurance
of central rights if the advocate isn't (Gifford 2010)granted the ideal compensation or the
gross infringement of Right to life and freedom. After the previously mentioned case the idea
of protected tort was featured in various cases one such being Bhim Singh v. State of Jammu
and Kashmir, For this situation, the court held that if a person complains that his/her lawful
right has been attacked the court has ward to give the bothered party financial compensation.
In Nilabati behera v. State of Orissa, the court gave an essential suggestion that sovereign
immunity from tortious acts of state authorities is unique in different to state's liability for
contravention of the fundamental right. Consequently, the protection of sovereign immunity
finds no place in the claim for constitutional remedies under Article 32 and 226 opposite the
pay for compensation of established rights.53

State of Rajasthan v. Vidyawati54 :

The respondents filed a suit for the harms made by a employee of a State and the case
addressed whether the State was question for the(Voermans & Stremler 2017) tortious act of
its servant – The Court held that the liable of the State in regard of the tortious act by its
worker inside the extent of his business and working functioning was like that of some other
employer . It was held for this situation that the State ought to be as much obligated for tort in
regard of tortious acts submitted by its servant in course of employment and working thusly,
as some other employer.The facts of this case shortly stated . All things considered, the claim

53
.ibid
54
. 1962 AIR 933, 1962 SCR Supl. (2) 989
for harms was made by the dependants of a man who passed on in a misfortune caused by the
carelessness of the driver of a jeep kept up by the Government for official utilization of the
Collector of Udaipur while it was being brought once again from the workshop after repairs.
The Rajasthan High Court took the view-that the State was liable , for the State is in no better
position in so far as it supplies and keeps drivers for its Civil Service. In the said case the
Hon'ble Supreme Court has held as under― Act done in the course of employment but not in
connection with sovereign powers of the State, State like any other employer is vicariously
liable.‖ In the aforementioned case, the Hon'ble Apex Court while approving the qualification
made in Steam Navigation Co's. case between the sovereign and non-sovereign Function
observed hat the immunity of crown in the United Kingdom depended on the old feudalistic
thoughts of Justice, specifically, that the King was incapable of doing wrong.The said
common law immunity never worked in India. Kasturi Lal v. State of U.P.: The ruling for this
situation was given holding the act, which gave rise to the present claim for harms, has been
submitted by the employee of the respondent throughout its employment . Likewise, that
employment had a place with a class of sovereign power(Giliker n.d.). This removed any
obligation with respect to the state. For this situation, the plaintiff had been arrested by the
police officers on a doubt of having stolen property. Upon investigation , an large quantity of
gold was found and was seized under the provisions of the Code of Criminal Procedure.
Eventually, he was discharged, yet the gold was not returned, as the Head Constable
accountable for the maalkhana, where the said gold had been put away, had fled with the
gold. The plaintiff immediately brought a suit against the State of UP for the arrival of the
gold or on the other hand, for harms for the misfortune caused to him. It was found by the
courts underneath, that the concerned cops had neglected to take the essential care of the gold
seized from the respondents , as gave by the UP Police Regulations. The trial court
announced the suit, yet the pronouncement was switched on claim by the High Court. At the
point when the issue was taken to the Supreme Court, the court found, on a valuation for the
evidence that the cops were careless in managing the plaintiff property and furthermore, that
they had not agreed to the arrangements of the UP Police Regulations.However , the Supreme
Court dismissed the plaintiff case, on the ground that "the act of carelessness was conferred
by the cops while managing the property of Ralia Ram, which they had seized in exercise of
their statutory powers . The ability to capture a man, (Wambaugh & Baty 1916)to seek him
and to seize property found with him, are powers conferred on the specified officers by
statute and they are powers which can be appropriately sorted as sovereign forces.
Consequently the premise of the judgment in Kasturi Lal was two-fold – The act was done in
the indicated exercise of a statutory power. Also, the demonstration was done in the activity
of a sovereign Function.

Satyawati Devi v. Union of India 55

The Delhi High Court held that the carrying of a hockey group in a military truck to the Air
Force Station to play a match isn't a sovereign function . For this situation an Air Force
vehicle was carrying hockey group of Indian Air Force Station to play a match. After the
match was finished, the driver would stop the vehicle when he caused the fatal accident by
his carelessness. It was argued that it was one of the function of the Union of India to keep
the armed force fit as a fiddle and tune and that hockey group was carrying by the vehicle for
the physical exercise of the Air Force work force and along these lines the Government was
not obligated. The Court dismissed this contention and held that the conveying of hockey
group to play a match could by no procedure of augmentation be named as exercise of
sovereign power and the Union of India was consequently at risk for harms caused to the
plaintiff. Chairman, Railway Board v. Chandrima Das In this case, the Supreme Court held
that the functions of the State not only relate to the defence of the country or the
administration of justice, but they extend to many other spheres e.g. education, commercial,
social, economic, political etc. These activities cannot be said to be related to sovereign
power. Saheli, A Women’s Resources v. Commissioner Of Police : Saheli v. Commissioner
of Police was another milestone in the evaluation of compensation jurisprudence in writ
courts. The masterpiece judgement in Vidyawati, which was freezed by asturi Lal was rightly
quoted in this case. The State was held liable for the death of nine year old child by Police
assault and beating. Delhi Administration was ordered to pay compensation of Rs. 75000/-.
The significance of this case is that firstly, the revival of Vidyawati ratio and secondly that
the Delhi Administration was allowed to recover money from those officers who are held
responsible for this incident.

Basava Kom Dyamgonde Patil v. State of Mysore 56

Wherein Articles seized by the police were produced before a Magistrate, who guided the
Sub-Inspector to keep them in his sheltered care and to get them checked and esteemed by a
goldsmith. The articles were lost, while they were kept in the police watch room. In a
procedure for the reclamation of the merchandise, it was held that when there was no at first

55
. AIR 1967 Delhi 98, (1969) IILLJ 195 Del.
56
. AIR 1977 SC 1749, 1977 CriLJ 1141
sight safeguard made out, that due care had been taken by officers of the State to protect the
property, the court can order the State to pay the estimation of the property to the proprietor.

The comparative study of vicarious liability in India and England , State in regard of the
tortious act by its worker inside the extent of his business and working functioning was like
that of some other employer

VICARIOUS LIABILITY IN THE CONTEXT OF THE SOUTH AFRICAN LABOUR

LAW: A COMPARATIVE STUDY

The requirements for the vicarious liability of an employer are threefold: an employment

relationship, the commission of a delict, and the fact that the delict must have been
57
committed within the scope (sometimes course and scope) of employment .The last

requirement ensures that there is a measure of fairness towards the employer who is held

strictly liable. Courts in common law countries have grappled with the question under which

circumstances an act would be within the scope of employment, especially in the case of

intentional wrongdoing by the employee. Courts in Canada, the United Kingdom and

Australia have in recent times moved away from a strict interpretation of the scope of
employment and applied the ‘close connection’ test 2 to answer this question. This trend has

been followed in South Africa by the Constitutional Court in NK v Minister of Safety and
Security (hereafter the ‘NK case’).3 The Constitutional Court developed the close
connection

test to reflect constitutional values, which raises questions on how this test is to be applied to

cases in which constitutional rights and duties are less prominent. The aim of this thesis is to

examine the meaning of the close connection test as formulated by the Constitutional Court

against the background of the development of the test in those common law countries

57
. 1 Mkize v Martens 1914 AD 382 390.
2 Lister v Hesley Hall [2001] UKHL 22 para 25.
3 2005 26 ILJ 1205 (CC)
referred to above. It commences with a discussion of the NK, followed by an assessment of

the origin of the close connection test and its development in common law countries.

Thereafter the meaning of the test as applied by the Constitutional Court is analysed, and its

applicability to those cases where constitutional rights and duties are less prominent is

discussed. South African cases decided after the NK case is then examined, and in

conclusion some remarks are made on the possible application of the test in future.

The objective of this research was to discover what constitutes vicarious liability in the

workplace as same is a controversial topic. It is prevalent in every country around the world,

and seems to be occurring more frequently here in South Africa with every passing year.

As we struggle to overcome previously entrenched social and cultural mores and practises,

the incidence of an employee causing misfortune and damage to third parties is becoming

ever more apparent. Whether this represents an increase in the occurrence of the damage

itself, or merely a rise in the number of reported cases, the problem represents a growing

threat to South African employers. In turn, this represents the South African employer with a
proportionately even greater risk.

After all the employer is the one who will, at the end of the day, most likely be liable for

paying the heavy financial cost of dealing with the problem.

The incidence of vicarious liability seems to be increasing in South Africa.

In this dissertation I have sought to clarify the notion of liability for vicarious liability as it

relates to the employer. The different avenues open to an employer are, in essence, related

to the practical considerations of where the third party is most likely to obtain the relief

necessary to assuage the damage caused by the employee. Such damage also causes

physical and psychological stresses brought about by the actions of the employee. The
concepts of direct and vicarious liability are examined from statutory and common law

perspectives, taking into account the relevant case law and more specifically Constitutional

Court case law.

It was important to compare the concept of vicarious liability in relation to the interpretation

thereof in other countries such as the United Kingdom, Canada and Australia, as vicarious

liability has traditionally been founded upon no more than the existence of the employment

relationship – thus directing the enquiry only to whether the wrongdoer was engaged in the

affairs or business of his or her employer when the delictual act was committed – recent

cases in Canada and England reflect a principal shift by introducing into the enquiry duties

on the part of the employer. Such cases all concern an intentional act of employees which

are usually difficult to conceive as having been committed within the course of the

wrongdoer’s employment as being improper modes of doing an act authorized by the

employer.

Formal duty, in the form of employment, often defines an individual. It is not uncommon to

refer to someone as “John the architect” or to introduce a friend by saying: “Ingrid is a

writer.” This close association between an individual’s name and his or her occupation is

indicative of society’s expectations that people will generally act in accordance with their

duties, training and expertise. Members of the public would be justified in their expectation

that police on stand-by duty would not harm them, but protect them. It is to be expected that

a police officer is to behave like a police officer should.

Vicarious liability in terms of the relationship between employer and employee is an ever

increasing drain on the resources of the modern employer and, takes up much time in terms

of legal battles and court cases. The concept of vicarious liability has undergone much
revision over the past decades.

The Constitution protects and enshrines important rights like dignity, equality and the right to
fair labour practices. These are further defined and protected through the application of
various statutes. In terms of statutory liability, the employer will be liable for the illegal act(s)
of its employees, unless it takes a proactive stance and implements comprehensive
precautionary measures in order to avoid such liability by employing honest, honourable,
well qualified employees. In this way the employer will at least have a clear conscience when
held liable for the actions of his or her employee and even escape liability.
The common law vicarious liability of the employer cannot be escaped as easily. The entire
concept of the law of delict is to remedy harm suffered. In terms of the common law,
employers will be held vicariously liable for the act of their employees if it can be shown that
the act(s) occurred within a valid working relationship, if the act(s) actually occurred through
a delict, and if the act occurred within the course and scope of employment. Vicarious
liability in English law is a doctrine of English tort law that imposes strict liability on
employers for the wrongdoings of their employees. Generally, an employer will be held liable
for any tort committed while an employee is conducting their duties. This liability has
expanded in recent years to better cover intentional torts. Historically, it was held that most
intentional wrongdoings were not in the course of ordinary employment, but recent case law
suggests that where an action is closely connected with an employee's duties, an employer
can be found vicariously liable. Historical tests centered around finding control between a
supposed employer and an employee, in a form of master and servant relationship. The
control test effectively imposed liability where an employer dictated both what work was to
be done, and how it was to be done.

United Arab Emirates: Vicarious Liability Under The UAE Companies

Law

Forming a partnership or establishing a company to do business in the UAE is common

practice. But it seems far less common for persons entering in to these arrangements to give
due consideration to the potential liabilities they risk. These liabilities need to be carefully
considered, especially the liabilities they risk, without directly committing any fault.

"Vicarious liability" is a legal doctrine that can fasten liability for an injury or loss to a person
to someone who is not directly responsible for that injury or loss, but who has a particular
legal relationship with the person who principally caused the injury or loss. Legal
relationships that can lead to imputed negligence would include a relationship between a
principal and an agent, employer and an employee, and a company and its directors.

Vicarious liability as a concept is, in legal terms, a variant of secondary liability that arises
under the common law doctrine of agency – respondeat superior – the responsibility of a
superior for the acts of his subordinate, or, in a much broader sense, the responsibility of a
third party that had the 'right, ability or duty to control' the activities of the person who
caused the injury or loss.

There are myriad of provisions in the UAE Federal Law No. 8 of 1984 concerning
Commercial Companies (Companies Law) that may cause a person to be held "vicariously
liable" for the actions of third parties. A brief analysis of the principle of vicarious liability
from the perspective of a company officer or a senior functionary in a UAE company is
summarized below. While some of the legal provisions referred to below may not squarely
fall under the principle of vicarious liability, it is sufficient to note their potential application,
if not, only to raise awareness of these issues in the business community.

Under the Companies Law, the first reference on vicarious liability is found associated with
General Partnership, the first of the 7 forms of companies prescribed by the Companies Law.
The Companies Law stipulates that the name of a General Partnership may consist of the
names of all the partners, or it may be confined to the name of one or more of the partners. If
the name of an individual, who is not a partner, is, with his knowledge, mentioned in the
name of the company, that individual will be jointly liable for all of the liabilities of the
company.

This principle might seem harsh, but it is consistent with international partnership laws and
practice, and however you view it, it imposes liability upon a person even on account of "his
presence" in a company's name. This issue assumes more significance if the person is not in
any manner allied with the company's business. It is common knowledge that searches in the
registry can readily disclose the true owners of a company, in the UAE. Be that as it may, the
fact remains that the person, whose name appears in the name of the company, can be held
vicariously liable as regards all the liabilities of the company.
Further, any person who joins a General Partnership as its partner is jointly liable for all the
liabilities of the company incurred prior and subsequent to his joining the company, to the
extent of all his assets, along with the other partners.

There are benefits to partnerships and burdens as well. One such "burden" is the fixing of
accountability on certain definite individuals associated with the company for all the
company's liabilities, which may, in turn, safeguard the genuine interests of the creditors of
the company.

A liability incurred upon a person consequent to the inclusion of his name in the company's
name is applicable in the cases of Simple Limited Partnership and Partnership Limited with
Shares also. As per the Companies Law, the names of such companies shall be composed of
the names of one or more general partners [who are jointly liable to the extent of all their
assets for the company's liabilities]. The names of the limited/participating partners [who are
liable only to the extent of their shares in the company] may not be mentioned in the
company's name. However, if their names are mentioned in the company's name, with their
knowledge, they shall be deemed as general partners towards bona fide third parties.
Consequently, such persons can be liable to the extent of all their assets for the company's
liabilities.

The limited/participating partners of a Simple Limited Partnership and Partnership Limited

with Shares are prohibited from carrying out any management functions of the companies
involving third parties. If the limited/participating partners act contrary to that prohibition,
they can be liable for the liabilities arising from their performance of management functions
to the extent of all their assets. Further, if these functions are performed in accordance with
the authorization of the general partners, the partners who gave the authorization can also be
jointly liable for liabilities arising from the performance of these actions.

The vicarious liability that may be fastened to the general partners in the above circumstances
stems from the legal maxim "delegatus non potest delegare", meaning "a delegate cannot
further delegate".

The Companies Law distinctively reserves the management functions to the general partners,
whose names are required to be stipulated in the company memorandum.
The board of supervisors of a Partnership Limited with Shares (Board) is vested with
authority to achieve this objective, which includes: requiring the managers to present a report
on their management, examining the company books and documents, calling the general
assembly to convene if it ascertains that a serious violation in the company management were
committed etc. The Board is also bound to submit to the general assembly, at the end of each
financial year, a report on the results of its supervision of the company's business.

The Companies Law endeavors to cast strict accountability on the Board by stipulating that
the members of the board shall be liable for the actions of managers, or the results of their
actions, if they were aware of the mistakes made in the management, and failed to notify the
general assembly.

In addition, the Companies Law binds the company itself, vicariously liable for the actions of
the board members in certain cases. The Companies Law stipulates that a public/private joint
stock company shall be bound by the actions of the board of directors performed within its
competence. The company must indemnify third parties for the damages caused by unlawful
actions that might be performed by the members of the board, in the context of managing the
company.

Overall, many of these issues are quite complex and requires legal analysis. The main
purpose of this article is to make individuals who participate in business in the UAE – in
companies or partnership style arrangements – aware of the pitfalls and to counsel caution.58

58

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aw
Conclusion

Under any definition, the criminal law disfavors vicarious liability. The general
rule is that one is liable only for one’s own actions and not for the actions of
others. Although this general rule against vicarious liability has some
exceptions, the principle that one is criminally responsible only for one’s own
actions has considerable force, influencing both legislation and judicial
decisions.

Laws that punish a defendant’s own act or omission that allows another person
to do something unlawful impose direct liability, not vicarious liability,
although such laws are sometimes mislabeled. Parents, for example, sometimes
face criminal liability for allowing their minor children to use guns or
automobiles or to skip school. These crimes are examples of direct liability, not
vicarious liability, because the statutes explicitly hold the parent liable for the
parent’s own act (e.g., negligently storing a weapon) or omission (e.g., culpably
failing to see that a child attended school) that caused the harm, rather than for
the child’s conduct.

In all of the cases discussed previously, the substance looked to be made subject isn't the
legislature yet the State. So far as the legislature is concerned, it might well say that the
statutory specialist is neither responsible nor subordinate to it. Subsequently the legislature
can't be chatted with the results spilling out of a wrong request made by a statutory specialist.
To the extent the State is concerned, it can't advance any such request in as much as the
statute is established by it by Legislature. The appointment of the specialist is additionally
done either by the Statute itself or by such expert as might be approved by the Statute. The
act of the statutory expert in such a case is a act improved the situation and for the State.
Consequently the state is held liable. The government is liable for the servant during exercise
sovereign function. State's risk for the act of statutory specialists emerges just in situations
where the statutory expert acts outside his legitimate specialist while implying to act
according to the lawful specialist presented upon him and the act ,which causes or results in
harm to a man, isn't inside the ambit of the statutory assurance, assuming any, contained in
such establishments. The Government of India may sue or be sued by the name of the Union
of India and the Government of a State may sue or be sued by the name of the State and may,
subject to any arrangements which might be made by Act of Parliament or of the Legislature
of such State authorized by uprightness of forces gave by this Constitution, sue or be sued in
connection to their separate undertakings in the like cases as the Dominion of India and the
comparing Provinces or the relating Indian States may have sued or been sued if this
Constitution had not been established." Consequently hypothesis is proved