LIABILITY IN MASTER SERVANT

RELATIONSHIP

Submitted by: Submitted to:

Name: Prateek Singh Dr Sangeeta Taak
Roll No: 18096 RGNUL, Punjab
Group: 5

Rajiv Gandhi National University of

Law
2018
 Index
1. Acknowledgement
2. Introduction to the topic
3. Vicarious liability
4. Objectives
5. Research methodology
6. Meaning and history
7. Master-servant laws in India
8. Master-servant laws in England
9. Landmark cases
10. Conclusion
 ACKNOWLEDGEMENT
It gives me immense pleasure to present the project
on ‘Master-servant relationship. It would not have
been possible without the kind support of my
teacher in charge, Dr Sangeeta Taak, under whose
guidance and constant supervision the project was
brought to the present state.
I would also like to express my gratitude towards
my parents for their kind co-operation and
encouragement which helped me in the completion
of this project.
I am also thankful to the university for giving me
such an amazing opportunity for making this
project, and giving suitable instructions and
guidelines for the project.
Last but not the least, I thank my friends who
shared necessary information and useful web links
for preparing my project.
 RESEARCH METHODOLOGY
Doctrinal research is the chosen research method
for this study.
Doctrinal research asks what the law is on a
particular issue. It is concerned with analysis of the
legal doctrine and how it has been developed and
applied. This type of research is also known as pure
theoretical research.

Doctrinal research involves:

1. Systematic analysis of statutory provisions and of
legal principles involved therein derived from.
2. Logical and rational ordering of the legal
propositions and principles. [1]

[1] Legal Research Methodology, Rattan Singh

 INTRODUCTION
The master-servant rule, which is also known as
respondeat superior (Latin: “Let the master
answer”) is a theory that states that a master is
liable for all acts done by his agents done under the
course of employment.
The master-servant rule comes under a broader
term, known as vicarious liability. The concept is
based on how a superior is liable for acts done by
his subordinates, or simply the responsibility of a
third-party that had the ability to control/prevent
the wrong doings of a violator.
 OBJECTIVES
The objective of this study is to gain fundamental
knowledge in the field of vicarious liability. This
will enable me to learn about the various
conditions, reasons and implications that exist in
this field of law. To do this, I have studied and
examined various research papers and journals
which are relevant to this field and I have also
taken help of a few notable books based on ‘Law of
Torts’.
 MEANING AND HISTORY
The concept of respondeat superior originated in
ancient Rome and was mainly applied on slaves, as
that was the meaning of what we today call
servants, and was applied wherever the slave could
not pay for his wrongs. However, in the coming
years this was also freely applied on animals and
family members of the master of a family.

In 1698 the teaching was specified in dicta by Lord

Holt in the British case of Jones v. Hart, 2 Salk
441, 90 Eng. Rep. (K.B. 1698). In the US, the
concept was applied in Wright v. Wilcox, 19 Wend.
343, 32 Am. Dec. 508 (1838), in which a young
child hopped on a wagon driven by the litigant's
hireling, who drove his horses faster, badly injuring
the child. The judge decided that the master was
not responsible under respondeat superior, in light
of the fact that the servant had acted in a way in
driving the horses that he had not consented to, and
subsequently it was not in the course of his
employment.

In 1891, American Judge OW Holmes Jr stated that

it may be hard to reason why a master is liable for
the wrongs of his servant, especially when he is
absent from the scene. Holmes believed that the
law was against the interest of the common man.
 VICARIOUS LIABILITY
Vicarious liability is a type of a strict, secondary
liability that emerges under the precedent-based
law teaching of organization, respondeat superior,
the obligation of the predominant for the
demonstrations of their subordinate or, in a more
extensive sense, the obligation of any outsider that
had the "right, capacity or obligation to control" the
exercises of a violator. It can be recognized from
contributory obligation, another type of auxiliary
risk, which is established in the tort hypothesis of
big business risk in light of the fact that, not at all
like contributory encroachment, learning isn't a
component of vicarious obligation. [1] The law has
built up the view that a few connections by their
tendency require the individual who draws in
others to acknowledge obligation regarding the bad
behaviour of those others. The most vital such
relationship for down to earth intentions is that of
boss and representative. [2]

1. "Religious Tech. Center v. Netcom On-Line Comm., 907 F. Supp. 1361 (N.D. Cal
1995)". Google Scholar. Google. Retrieved  6 September  2017. citing 3 Nimmer on Copyright §
12.04(A)(1), at 12-70] (1995)
2. Quill, Eoin (2014). Torts in Ireland. Dublin 12: Gill & Macmillan. p. 506.
 RESPONDEAT SUPERIOR LAWS
IN INDIA
In the Indian Contract Act of 1872, there is no
special mention of the term ‘respondeat superior’ or
‘vicarious liability’, however, in the sections 182 to
238, terms such as ‘principal’ and ‘agent’ have been
mentioned along with the various provisions and
duties that are applicable to both, the principal and
the agent. Section 183 of the act states that no
person who is below the age of 18 can be an agent
to another person. Lord Chelmsford, former
Viceroy of India stated, “it has been established by
law that a master is liable to third persons for any
injury or damage done through the negligence or
unskillfulness of a servant acting in his master’s
employ. The reason is that every act done by the
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 act.”

In instances where the master does not want to

accept the liability for the wrongs done by his
servant, the following pointers are looked at:

 Was the act committed during the course of

employment?
 Was the servant authorized to conduct such an
act?
  Was the servant motivated to conduct such an
act in for his personal gain?

In the contract act, it is upto the principal to prove

whether the action committed by his servant was
under their master-servant relationship.

The following are the exceptions to the liability in

Indian law:
 The act was done by a servant other than the
one stated by the master
 Act was done by the servant who does not
come under the agency norms set by the
master
 Act was done by the servant out of the time
period of his employment
 RESPONDEAT SUPERIOR LAWS
IN ENGLAND
In the English law, the master is entirely obligated
for torts committed by those under his command,
when they are observed to be his servants. To this
end, the courts must locate an adequate relationship
to this impact, where issues of vicarious liabilities
are raised. It has been expressed judicially that no
one test can sufficiently cover all the types and
cases of employment; in this way, for the most part,
the tests utilized and ultimate determination rest
upon the individual parts of each case, looking at
all the elements in the case. For instance, it need
not matter that an employer classifies a relationship
as one of an independent contractor, if all the other
factors represent a relationship of employee.

Since the Indian constitution is highly inspired by

the British legal system, there are various
similarities in the respondeat superior laws in the
two countries.
 Landmark Cases
State bank of India v Shyama Devi, 1978 AIR
1263
Date of final decision: 5th May 1978

Brief facts and Procedural History: The respondents, in this case, opened a

savings account in the plaintiff bank (formerly known as ‘Imperial bank of India’)
having introduced by one of their friends and employee of the bank, Kapil Deo
Shukla.

 There was an arrangement between KD Shukla and respondent that former

will deposit money in the bank given by the respondent. KD Shukla duly deposited
amount of Rs. 1932 but embezzled other amounts.
 On suspicion about the deposits, respondent’s husband wrote a letter to the
bank confirming the deposits are made in the account.
 The bank replied that they accept deposits made of a part, but reject any kind
of information about Rs. 12205/ in her account.
 The respondent sued the bank in the trial court contending that they are
responsible for acts committed by one of their employees, the trial court agreed to
the amounts except for Rs.5000/.
 The plaintiff appealed to the high court and the high court ordered the bank to
compensate for the whole amount with 6% simple interest. The plaintiffs aggrieved
by this decision went to the Supreme Court.
Issues before the court:

1. Whether KD Shukla misappropriated the money in course of employment of

the bank?
2. If yes, then to what extent is the bank responsible for the acts of the employee?

Arguments on behalf of the plaintiff: The plaintiff primarily contended that the

misappropriation done by the employee was not in his course of employment in the
bank, as he was not assigned duties on the savings counter of the bank.
Arguments on behalf of the respondent: The respondents argued that the
employee used to get passbook signed fraudulently, and the bank reacted to his
actions with negligence. They relied on the principle of vicarious liability and said
that as KD Shukla was the employee of the bank, the bank was also responsible for
his misdemeanour.

Held: The court allowed the appeal of the plaintiff bank and exempted them from
the amounts of Rs 11000/.

Source: lawbriefs.in, article by Aarsh Chokshi

 UCO BANK V HEM CHANDRA
SARKAR, (1990) 3 SCC 389

Date of final decision: 25th April, 1990

Brief facts and Procedural History:
In the year 1945, Hemchandra was carrying out the business of textile yarn and
cloth at Agartala. During that course, he was appointed as the government nominee
to indent for and uplift the quantities of cloth and yarn received from different
mills situated in Bombay, Bengal, Ahmedabad and Other places. For this business,
the respondent maintained a current account with the UCO bank in Agartala.

On September 2, 1950, there was an oral agreement between the bank and
Hemchandra wherein bank was asked to receive bills, documents and air receipts
from the agents and suppliers of Hemchandra and the bank was also asked to
accordingly release goods whenever they reach Agartala. The bank was to hold and
keep the said goods in the godown for the benefit of plaintiff. It was further states
that the banker constituted himself as the express trustee and/or the agent of the
respondent and thus there stood a fiduciary relationship between them.

At a point of time, it was observed that the goods were not delivered by the bank
even after receiving payments for the same. Thus the respondent filed a suit for
accounts, damages, compensation, and delivery of goods or their equivalent money
which was valued at Rs 2, 68, 198.97. The bank contended that there existed no
such oral agreement with the respondent. The bank also denied the contentions
with regards to the existence of fiduciary relationship. It was rather contended by
the bank that all such activities were done in the normal course of its business. 
According to the decision of the trial court, there existed an agreement between the
parties, the bank acted as a trustee and/or agent of the plaintiff and there was also a
fiduciary relationship between them. These observations were further affirmed by
the High Court.

The bank after obtaining a special leave has appealed to the Supreme Court.

Ratio given by the author of the judgement:

The interference drawn by the lower courts in reaching the conclusion that there
existed a fiduciary relationship between the parties is erroneous according to the
Supreme Court. According to the Supreme Court, the bank conducted all the
activities in normal course of business and there was no special relationship which
can be established from it. Further it is also true that the bank in the present case
acted as a bailee and not as a trustee or an agent of the respondent. One of the most
important distinctions between an agent and the bailee is that the bailee does not
represent bailor. Moreover, the bailee has no power to make contracts on behalf of
 the bailor nor can he be made liable for any act he does. In the instant case, there is
nothing to indicate that the bank represented the Calcutta parties or the plaintiff
with authority to change the contractual or legal relationship of the parties and
therefore, there is no justification to hold that the bank acted as agent of the
plaintiff.

But these observations do not decree the suit in favour of the bank. It was observed
from the facts that the bank even after receiving payments failed to deliver the
goods to the agents of the plaintiff. The bank was responsible for these actions on
the basis of following three principles:

 The banker bailee gratuitous or for reward is bound to take same care of the
property entrusted to him as a reasonably prudent and careful man may fairly be
expected to take of his own property of the like description.
 A paid bailee must use the greatest possible care and is expected to employ all
precautions in respect of the goods deposited with him.
 If the property is not delivered to the true owner, the banker could not avoid
his liability in conversion.
Held:
The appeal was dismissed with cost, with the Supreme Court agreeing with some
reasons given by the lower courts.

Source: lawbriefs.in, Authored by Aditya Gor

CONCLUSION
Liability in master servant relationship, ie
respondeat superior laws are present in the system
majorly because of two reasons. One being the
inability of the servant to pay for his wrongs due to
lack of funds. The second reason is related to the
concept which makes the master responsible for all
deeds done by his servant in the course of his
employment.
 BIBLIOGRAPHY
1. RK Bangia – Law of torts, Allahabad Law
Agency, 2012
2. Dr NV Paranjape – Law of torts, Central Law
Agency, Third Edition, 2015
3. Rattan Singh - Legal Research Methodology,
LexisNexis
4. lawbriefs.in for case reports
5. indiankanoon.org for topic research