CERTIFICATE COURSE ON LIABILITIES UNDER

TORT

Module 3 : Vicarious Liability Explained

Having learned the Types of Liability in the previous Module we shall now focus on
Vicarious Liability and discuss it at the fullest.

As a general rule, if a person commits a wrong, he is liable for it himself. However, there lie
exceptions to this rule and one may be held liable for torts committed by others. One may be
held liable for the acts of others even though he may be free from personal blame of faults,
because of some legally relevant relationship between the two. This form of liability is
known as Vicarious Liability, which means the liability of a person for someone else’s tort in
which he played no role. Vicarious’ is derived from Latin term ‘vice’ i.e., in the place of. The
expression “Vicarious Liability” signifies the liability which A may incur to C for damage
caused to C by the negligence or other tort of B.

The concept of Vicarious Liability is based on two Principles :-

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 1. Respondeat Superior – It is a Latin term with the literal meaning – ‘Let the master
answer or Let the principal be held responsible.’ It means that a party is vicariously
responsible for the acts of his agent.
2. Quit facit per alium, facit per se – The maxim plainly means – He who does an act
through another is deemed to do it himself.

There are several reasons for the justification of imposition of Vicarious Liability :-

1. The master has the deepest profits and he is anyways wealthier than his employee.
2. Vicarious liability encourages accident prevention by giving the 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 activity of his employees, he should also
bear any losses that those activities lead to.

They are various relationships which satisfy the requirement of Vicarious liability, like
Master-Servant Relationship, Principal Agent Relationship, Owner and Independent
Contractor, Guardian and ward, Company and its Directors and Liability of Partners for each
other’s Torts. It was held in Farewell v. Boston and Worcester Rly. Co., ‘ This rule is
obviously founded on the great principle of social duty, that every man, in the management of
his own affairs, whether by himself or by his agents or servants, shall so conduct them as not
to injure another; and if he does not, and another thereby sustains damage, he shall answer
for it.’

Principle Agent Relationship

Vicarious liability applies to the principle and he may be held liable to third parties for the
acts of his agents. Dal Pont has identified three reasons underlying the imposition of liability
on a principal for the tortuous acts of his or her agent.

1. The principal chooses the agent and can ascertain his strength and weakness.
2. The principle as he has delegated his authorities to the agent and therefore, he would
be deriving the benefits out of his acts and therefore, he must be held liable to bear the
losses of the same, if any.

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 3. Thirdly, the principal has given the agent general authority to commit the wrongs.

Partnership

Partners in a firm are vicariously liable for the acts of other partners. Section 18 of the
Partnership act makes a partner the agent of the firm for the purposes of the business of the
firm. This bestows upon the partner all the responsibilities and liabilities of an agent. Every
partner is liable jointly as well as severally for all the acts of the firm done while he is a
partner. Section 27 lays down that, Where, by the wrongful act or omission of a partner
acting in the ordinary course of the business of a firm or with the authority of his partners,
loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefor
to the same extent as the partner.

Husband and Wife Relationship

In common law husband wife tortuous relationship in the cases of vicarious liability was not
recognised. This rule was based on the doctrine that the husband and wife were one legal
person, and that person was the husband. The immunity rule does not negate the fact that the
wife was injured by her husband when he was acting for his employer. It should not serve to
relieve the employer of his legal responsibility.

Master Servant Relationship

A servant is a person who agrees to follow the lawful orders and direction of his master. A
master is held liable to third parties for every wrong of his servant as has been committed
during the course of his employment. It is pertinent to note that a wrongful act is said to be
done in the course of the masters employment if it is –

 Authorised by the master

OR
 A wrongful and unauthorised mode of doing an act authorised by the master.

Defining Course of employment has not been simple for the courts and is not a straightjacket
formula as well. It would depend upon the facts and circumstances of each case. It is as well

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an accepted position beyond this that the master can be held liable for the acts even if they are
not committed by the servant while in the course of employment if he has expressly
authorised or subsequently ratified them. Therefore, an act can be said to within the course of
employment if it is an authorised act or a wrongful way of doing an authorised act. The
employer can be held liable for acts which involves a wrongful action of doing something
authorized by the employer, even when the acts were expressly forbidden by the employer.

Landmark Decisions

Limpus v . London General Omnibus Co.1 a bus driver racing to a stop to collect
passengers deliberately obstructed the driver of a bus of a rival company, overturning the
latter's vehicle. This was done despite express prohibition by his company against obstructing
other buses. However, the defendants were liable. The rationale was that the driver was
acting within the course of his employment at the time; it was immaterial whether his act was
forbidden.

In the landmark decision of State Bank of India v. Shyama Devi2, the respondents, opened a
savings account in the State Bank of India having introduced by one of their friends and
employee of the bank, KD Shukla. There was an arrangement between respondent between
KD Shukla, that he would deposit the money in the bank but he embezzled the amounts. The
Court did not held the bank liable as he was not liable as he was not assigned the required
duties by the bank.

Vicarious Liability of the State

The Government may be held liable for the acts committed by the people working under the
Government and this liability of the government arises by the principle of Vicarious liability.
The purpose and need of this liability is same as that of Vicarious liability added to that of the
concept of Socialisation of Compensation.

The position in England was such that the ‘King can do no wrong’ and thus he was never
held liable for the acts of his servants. This position changed with the commencement of

1
( 1862) 1 H&C 526
2
1978 AIR 1263
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Crown Proceedings Act 1947, and presently the king can be held liable for the acts of his
servants similarly like private individuals.

India does not have any such act in force. The position of State liability as stated in Article
300 of the Constitution is as under: Clause (1) of Article 300 of the Constitution provides
first, that 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.

When it comes to the liability of government for its servants actions, the ruling principle is
that the Government is not liable for torts committed by its employees in the exercise of
sovereign functions. Sovereign functions are those functions which can be exclusively
performed by the government.

Though, here it is pertinent to note that this position is being construed very liberally in
modern India, when the State has become a Welfare State. Today the expectation from the
government is not only to protect its people from external aggression and internal disturbance
but also to take care of its citizens from the cradle to the grave. This is to say that, earlier
sovereign functions were construed very broadly and strictly but today the case is to the
contrary.

The distinction between the two i.e. sovereign and non-sovereign functions has been
considered at length in N. Nagendra Rao v. State of AP3,

‘In the modern sense, the distinction between sovereign or non-sovereign power thus does not
exist. It all depends on the nature of the power and manner of its exercise. It is in(the ) public
interest that for acts performed by the State, either in its legislative or executive capacity, it
should not be answerable in torts. That would be illogical and impracticable. It would be in
conflict with even modern notions of sovereignty. One of the tests to determine if the
legislative or executive function is sovereign in nature is, whether the State is answerable for
such actions in courts of law.’

A landmark case for the concept of State’s Vicarious liability is Peninsular and Oriental
Steam Navigation Company v. Secretary of State for India. A servant of the plaintiff’s

3
AIR 199 4 SC 2663
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company was proceeding on a highway in Calcutta, driving a carriage which was drawn by a
pair of horses belonging to the plaintiff. He met with an accident, caused by negligence of the
servants of the Government. The Court in the present case held that maintenance of dockyard
is a commercial function and a government is liable vicariously while performing such duties.

Further in State of Rajasthan v. Vidyawati4, a person died in an accident caused by the

negligence of a jeep driver maintained by the Government for official use, which was being
brought back after repairs from the garage. Hon’ble Supreme Court held that the State would
be held liable as,

‘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.’

Later in State of Uttar Pradesh v. Kasturi Lal5, a constable ran away with the gold
ornaments of a person detained who was suspected of possessing stolen property. It was held
by the Apex Court that the claim against the state could not be sustained despite the fact that
the negligent act was committed by the employees during the course of their employment
because the employment was of a category which could claim the special characteristic of a
sovereign power. The court held that the tortuous act of the police officers was committed by
them in discharge of sovereign powers and the state was therefore not liable for the damages
caused to the appellant.

The law of the land has been completely overhauled in these years of judicial activism. The
Apex Court in State of Gujarat v. Memon Mahomed Haji Hasam6 held that,

‘If any property (moveable) is seized by the police/custom officials or any other department
of the government, they are under the same responsibility as a Bailee to take care of the
goods as a ordinary man would take care of his own goods under similar circumstances.’

Thus today, the Courts have diluted the distinction between sovereign and non sovereign
functions and is rather looking into the ideal functions a welfare state must perform. The

4
AIR 1962 SC 933
5
AIR 1965 SC 1039
6
1967 AIR 1885
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State cannot put before a plea that it was performing a sovereign functions as that would
certainly not suffice and a lot more would be looked into by the Courts.

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