1.

VICARIOUS LIABILITY

Introduction

Whenever a person commits an act which is unlawful, that person is held liable for violating the
law and thus he is punished accordingly. For e.g. A enters into the property of B without his
permission, such an act of A amounts to trespass and thus he is liable.

This is the general rule of torts but in some situations a person can be made liable even if he has
not done any wrong, if it is done by some other person with whom he shares a certain relation,
such as master and servant or principal and agent and in these cases his liability is called
vicarious liability.

What is Vicarious Liability?

Vicarious liability means the liability of a person for an act committed by another person and
such liability arises due to the nature of the relation between the two. For e.g. A, is a driver who
works for B and while driving B’s car for taking him to his office, he hits C, a pedestrian due to
his negligence in driving. In such a case even though B was not driving the car he will still be
liable for the accident which was caused due to the negligence of A.

Relations in which Vicarious Liability arises

These are the major relations in which vicarious liability of a person arises

1. Master and Servant.

2. Partners in a Partnership Firm.
3. Principal and Agent.
4. Company and its Directors.
5. Owner and Independent Contractor.
Vicarious Liability of Master for torts by Servant

In a Master-Servant relationship, the master employs the services of the servant and he works on
the command of master and thus a special relation exists between the two and in case of a tort
committed by the servant, his master is also held liable.

There are many cases in which the servant does an act for his master and thus in law, it is
deemed that the master was doing that act himself, therefore if the servant commits an unlawful
act the master will also be held liable for the same. This liability of the master is based on the
following two maxims

1.Qui facit per alium facit per se: – It means that whenever a person gets something done by
another person then the person is viewed to be doing such an act himself.

Illustration: If A is the owner of many trucks and employs drivers to drive them for the purpose
of trade and in case one of his drivers gets into an accident because of his rash driving, then even
though A did not drive the truck himself, he will be liable for the accident.

2. Respondant Superior: – It means that the superior should be held responsible for the acts
done by his subordinate.

These two maxims have played a significant role in the development of the law of vicarious
liability of the master.

Essentials of Vicarious liability in Master-Servant Relationship

These essential conditions have to be followed for the vicarious liability of master to arise: –

1. The servant has committed an act which amounts to a tort.

2. Such a tortious act is committed by the servant during the course of his employment under the
master.

Reasons for liability of the Master

There are several reasons behind holding the master liable for the acts of his servants which are:
–

1. An act which is committed by the servant is considered to be done by the master

through him and therefore in the law of torts, it is assumed that if any wrong is done
by the servant, it has been committed by his master indirectly and so the master is held
liable for these wrongs.
2. The master is in a better financial position as compared to his servant and thus in case
of any loss caused by the tortious act of the servant, the master is better suited to pay
off the damages to the victim of the act. Also, since the master is made liable he
makes sure that all reasonable care and precautions are carried so that he can avoid
such liability.
3. When a servant does any act, the benefit from such an act is enjoyed by the master and
thus for the liability arising out of the servant’s act, the master should also shoulder
that liability.

Test for Determining Master-Servant Relationship

For the determination of a Master-Servant relationship, certain tests have been developed over a
long period of time.

Traditional View – Control Test

As per this test, for the determination of a master and servant relationship, it should be seen
whether the master has the power to not only instruct what should be done but also the manner of
doing the act and if such power exists then as per this test, the master and servant relationship
exists between the two.

Illustration: A is the owner of a big area of land on which farming activities are carried out and
he has hired many workers for farming. A, not only instructs them how to do their jobs but also
how to do it. Here, by the test of control, the relation between A and his employees is established
as that of a master-servant.
Modern View

The old Control test is not applicable as an exhaustive test because in cases of work requiring
skill such as a doctor working in a hospital, the owner of the Hospital cannot instruct the doctor
on how to treat a patient and can only instruct him to treat patients. Thus certain other tests have
been developed for determining the Master and Servant Relationship.

The test of work being an Integral Part of Business

In the case of Stevenson Jordan & Harrison Ltd. V Macdonald & Evans (1952) 1 TLR 101,
the test of an integral part of the business was applied. Here, a contract of service was held to be
a contract for such work which is an integral part of the business and a contract for service was
held to be a contract for such work which is not an integral part of the business.

Illustration: In an IT company the programmers are the employees of the company and there is
a master-servant relationship but if the company has hired catering services, the company does
not have a master-servant relationship because the act of providing food is not an integral part of
an IT company.

Multiple Test

This test provides that people who are in a contract of service are deemed to be employees
whereas the people who are in contract for service are independent contractors. In the case
of Ready Mixed Concrete v Minister of Pensions and National Insurance (1968) 2 QB 497,
three conditions were laid down for a contract of service

1. The servant agrees to provide his skill and work to the master for performing some
service in exchange for wages or some other consideration.
2. He agrees to be subjected to such a degree of control so as to make the person his
master in performance of his work.
3. The other provisions of the contract are consistent with this provision of being a
contract of service.

This view was also reiterated in the case of The Management of Indian Bank v. The Presiding
Officer.
This test also includes other important factors that are used to determine the master-servant
relationship such as who owns the tools being used for the work, is the employee paid wages
monthly or on a daily basis and all other relevant factors.

Thus the old view of using Control test is no longer the only method of determining the relation
of master and servant as it has been realized that in the present complex world where there are a
wide number of factors which affect the process of determining the relation between the
employee and the employer, it is not possible to use just one test and thus the various aspects of a
case are seen to determine the nature of the relationship and to decide whether such a relation is
that of master and servant or not.

Difference between Servant and Independent contractor

A servant and an independent contractor both do the work at the behest of another person and
thus what shall be done is not decided by them but by some other person and thus on the face of
it appears, that both are in the same category and a master should be liable for the torts
committed by both of them but there is a difference between the two which separates them and
consequently, while, in case of tort by servant, the master is liable but in case of independent
contractor the master cannot be held liable.

In case of a servant there is a contract of service which means that along with instructing what
task should be done by the servant, the master also has the right to instruct the manner in which
that act has to be done and thus the servant does not have autonomy in the performance of his
duties.

Illustration: P is the owner of a newspaper in which many editors are working. Here P as the
owner has the right of telling them which news should be covered and how it should be written.

Whereas in the case of an independent contractor there is a contract for service which means
that he can only be instructed as to what should be done but how to do the work is left at his will
and he does not take any instructions from the master.

Illustration: If P is the owner of a newspaper and his machinery is damaged and he calls J to
repair it. Here P can instruct him what to do but how to repair the machinery is left to be done by
J without any instructions from P.
Various ways in which liability of Master arises

A master becomes liable in the following situations:

Wrong done as a natural consequence of an act by Servant for Master with due care

If the employee does an act which is done in pursuance of the instructions of the master, then the
master will be held liable for any wrong which arises out of such an act even if all due care is
taken by the employee in discharging his work.

In Gregory v. Piper(1829) 9 B & C 591, the defendant and plaintiff had some disputes between
them and the defendant, therefore, ordered his servant to place rubbish across a pathway to
prevent the plaintiff from proceeding on that way and the servant took all care to ensure that no
part of it was touching the part of the plaintiff’s property but with the passage of some time. The
rubbish slid down and touched the walls of the plaintiff and thus he sued for trespass. The
defendant was held liable despite his servant taking all due care.

Wrong due to Negligence of Worker

A master is also liable for an act of servant which he does negligently or fails to take due care in
carrying out.

In Pushpabai Purshottam Udeshi & Ors. v. Ranjit Ginning & Pressing Co. (P) , deceased was
travelling in a car driven by the manager of the respondent company and it met with an accident
as a result of which he died. The dependents of the deceased filed a claim and the tribunal
allowed damages but on appeal to the High Court, it was set aside on the grounds that the
accident does not make the respondent company liable. But the Supreme Court in its judgement
overruled the judgement of the High Court and held that from the facts of the case it was clear
that the accident had occurred due to the negligence of the manager who was driving the vehicle
in the course of his employment and therefore, the respondent company was liable for his
negligent act.

Illustration: If H works as a house cleaner for K then there is a master and servant relationship
between them but, if H instead of cleaning the house decides to cook food even though he has
only been hired for cleaning the house and due to his negligence causes a fire which also causes
loss to K’s neighbour L, then K, will not be liable because H did an act which was outside the
course of his employment.

Wrong by excess or mistaken execution of a lawful authority

For making the master liable in such a case it has to be shown that: –

1. The servant had intended to do an act on behalf of his master, which he was
authorized to do.
2. The act would have been lawful if it was done in those circumstances which the
servant mistakenly believed were true or if the act would have been lawful if done
properly.

In Bayley v Manchester S&L Railway (1873) LR 8 CP 148, a porter of a railway company

while working mistakenly believed that the plaintiff was in the wrong carriage even though he
was in the right one. The porter thus pulled the plaintiff as a result of which the plaintiff
sustained injuries. Here, the Court held the railway company vicariously liable for the act of the
porter because it was done in the course of his employment and this act would have been proper
if the plaintiff was indeed in the wrong carriage.

In Anita Bhandari & Ors. v. Union of India , The husband of the petitioner went to a bank and
while entering inside it, the cash box of the bank was also being carried inside and as a result, the
security guard in a haste shot him and caused his death. The petitioner had claimed that the bank
was vicariously liable in the case because the security guard had done such act in the course of
employment but the bank had contended that it had not authorized the guard to shoot. The Court
held the bank liable as the act of giving him gun amounted to authorize him to shoot when he
deemed it necessary and while the guard had acted overzealously in his duties but it was still
done in the course of employment.

Wrong committed willfully by a servant with the intention of serving the purpose of the master

If a servant does any act willfully, recklessly or improperly then the master will be held liable for
any wrong arising out of such act, if such an act is done in the course of employment.
In Limpus v. London General Omnibus Co. (1862) EngR 839, the driver of the defendant
company, willfully and against the express orders not to get involved in racing or to obstruct
other omnibuses, had driven to obstruct the omnibus of the plaintiff. In the case, the Court held
that the defendant company was liable for the act of driver because the driver’s act of driving the
omnibus was within the scope of the course of employment.

In Peterson v. Royal Oak Hotel Ltd. (1948) N.Z.I.R. 136, The plaintiff was a customer who on
being intoxicated was refused further drinks by the barman, who was employed under the
respondent and thus the plaintiff threw a glass at him. The barman took a piece of the glass and
threw it at him which hit his eye. The respondent hotel was held liable due to the act of the
barman who had a master-servant relation with them.

Wrong by Servant’s Fraudulent Act

A master can also be held liable for any fraudulent act of the servant.

In Lloyd v. Grace Smith & Co. (1912) A.C. 716, the plaintiff was a widow who owned 1000
pounds as dues on a mortgage and a cottage. She went to the manager of the defendant, which
was a firm of solicitors, and she asked for his advice to get richer. The manager told her to sell
her cottage and to call up the amount of mortgage. She authorized the manager to sell the
property and to collect her money but he absconded with the money. Thus, she sued the
defendant company. It was held that the defendant was liable for the fraudulent act of the
manager because even a fraudulent act is not authorized, the manager was authorized to take her
signature and thus it was within the course of employment.

Illustration: If A goes to a bank and deposits a check with C, an employee of the bank and C
fraudulently transfers that amount to his wife’s account. Here for the fraudulent act of C, the
bank will be liable.

B. SOVEREIGN IMMUNITY
The old and archaic concept of sovereign immunity that “the king can do no wrong” still
haunts us, whereby the state claims immunity for its tortious acts and denies compensation to
the aggrieved party.”

Meaning And Origin

Sovereign immunity is a justification for wrongs committed by the State or its

representatives, seemingly based on grounds of public policy. Thus, even when all the
elements of an actionable claim are presented, liability can be avoided by giving this
justification.

The doctrine of sovereign immunity is based on the Common Law principle borrowed
from the British Jurisprudence that the King commits no wrong and that he cannot be
guilty of personal negligence or misconduct, and as such cannot be responsible for the
negligence or misconduct of his servants. Another aspect of this doctrine was that it was an
attribute of sovereignty that a State cannot be sued in its own courts without its consent. [2]

This doctrine held sway in Indian courts since the mid nineteenth century until recently.
When a genuine claim for damages is brought to the courts, and it is refuted by an ancient
doctrine seemingly having no relevance, there is bound to be resentment and demands for
review. The Indian courts, in order to not let genuine claims be defeated, kept narrowing
the scope of sovereign functions, so that the victims would receive damages.[3] The Law
Commission of India too, in its very first report, recommended the abolition of this
outdated doctrine. But for various reasons, the draft bill for the abolition of this doctrine
was never passed, and thus it was left to the courts to decide on the compatibility of this
doctrine in accordance with the Constitution of India.[4]

Article 300

Initially in India, the distinction between sovereign and non-sovereign functions was
maintained in relation to the principle immunity of the Government for the tortuous acts of
its servants. In India, there is no legislation which governs the liability of the State. It is
Article 300 of the Constitution of India, 1950, which specifies the liability of the Union or
the State with respect to an act of the Government.

The Article 300 of the Constitution originated from Section 176 of the Government of India
Act, 1935. Under Section 176 of the Government of India Act, 1935, the liability was
coextensive with that of Secretary of State for India under the Government of India Act,
1915, which in turn made it coextensive with that of the East India Company prior to
the Government of India Act, 1858. Section 65 of the Government of India Act, 1858,
provided that all persons shall and may take such remedies and proceedings against
Secretary of State for India as they would have taken against the East India Company. [5]
It will thus be seen that by the chain of enactment beginning with the Act of 1858, the
Government of India and Government of each State are in line of succession of the East
India Company. In other words, the liability of the Government is the same as that of the
East India Company before, 1858.

Article 300 reads as:

1. 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 any may,
subject to any provision 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 Dominion of India and the
corresponding provinces or the corresponding Indian States might have sued or been
sued if this Constitution had not been enacted.

2. If at the commencement of this Constitution –

i) any legal proceedings are pending to which the Dominion of India is party, the
Union of India shall be deemed to be substituted for the Dominion in those
proceedings; and
ii) Any legal proceedings are pending to which a Province or an Indian State is a
party, the corresponding State shall be deemed to be substituted for the province or the
Indian State in those proceedings.

An overview of Article 300 provides that the first part of the Article relates to the way in
which suits and proceedings by or against the Government may be instituted. It enacts that
a State may sue and be sued by the name of the Union of India and a State may sue and be
sued by the name of the State.

The Second part provides, inter alia, that the Union of India or a State may sue or be sued
if relation to its affairs in cases on the same line as that of Dominion of India or a
corresponding Indian State as the case may be, might have sued or been sued of the
Constitution had not been enacted.

The Third part provides that the Parliament or the legislatures of State are competent to
make appropriate provisions in regard to the topic covered by Article 300(1).
Types Of Sovereign Immunity:

The State generally benefits from two forms of immunity –

1) Immunity to jurisdiction –

A state’s immunity to jurisdiction results from the beliefthat it would be inappropriate for
one State’s courts to call another State under its jurisdiction. Therefore, State entities are
immune from the jurisdiction of the courts of another State. However, this immunity can
generally be waived by the State entity. Reference to arbitration is in many legal systems
sufficient to demonstrate a waiver of immunity to jurisdiction by the State. However,
certain developing countries may be hesitant to submit themselves to international
arbitration, believing that arbitration is dominated by Western principles and would not
give a developing country a fair hearing. These same developing countries may feel more
secure submitting to arbitration under the UNCITRAL rules, which are often considered
more culturally neutral than those of the ICC or other Western tribunals.[6]

2) Immunity from execution–

The State will also have immunity from execution, as it would be improper for the courts of
one State to seize the property of another State. Immunity from execution may also
generally be waived. Waiving immunity from execution may be difficult for a government
to address. As a general proposition under most legal systems, certain assets belonging to
the state should not be available for satisfaction of the execution of an arbitral award; for
example, the country’s foreign embassies, or consular possessions. Therefore, some method
may have to be made available for the private party to seize certain state assets, possibly
through careful definition of those possessions available for seizure.

Journey Of The Doctrine Of Sovereign Immunity

Pre Constitutional Era –

In India, the story of the birth of the doctrine of Sovereign Immunity begins with the
decision of Peacock C.J. in P. and O. Navigation Company v. Secretary of State for India [7],
in which the terms “Sovereign” and “Non-sovereign” were used while deciding the liability
of the East India Company for the torts committed by its servants.[8]

In this case the provision of the Government of India Act, 1858 for the first time came
before the Calcutta Supreme Court for judicial interpretation and C.J. Peacock
determined the vicarious liability of the East India Company by classifying its functions
into “sovereign” and “non-sovereign”.

Two divergent views were expressed by the courts after this landmark decision in which
the most important decision was given by the Madras High Court in the case of Hari Bhan
Ji v. Secretary of State[9], where the Madras High Court held that the immunity of the East
India Company extended only to what were called the ‘acts of state’, strictly so called and
that the distinction between sovereign and Non-sovereign functions was not a well-founded
one.[10]

No attempt however has been made in the cases to draw a clear and coherent distinction
between Sovereign and Non-Sovereign functions at all.

Post-Independence –

After the commencement of the Constitution, perhaps the first major case which came up
before the Supreme Court for the determination of liability of Government for torts of its
employees was the case of State of Rajasthan v. Vidyawati [11] 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.[12]

Later, in Kasturi Lal v. State of U.P.[13], the Apex Court took a different view and the
entire situation was embroiled in a confusion. In this case, the Supreme Court followed
therule laid down in P.S.O. Steam Navigation case by distinguishing Sovereign and non-
Sovereign functions of the state and held that abuse of police power is a Sovereign act,
therefore State is not liable.[14]

In practice, the distinction between the acts done in the exercise of sovereign functions and
that done in non-Sovereign functions would not be so easy or is liable to create considerable
difficulty for the courts. The court distinguished the decision in Vidyawati’s case as it
involved an activity which cannot be said to be referable to, or ultimately based on the
delegation of governmental powers of the State. On the other hand, the power involved in
Kasturilal’s case to arrest, search and seize are powers characterized as Sovereign powers.
Finally the court expressed that the law in this regard is unsatisfactory and the remedy to
cure the position lies in the hands of the legislature.

The Courts in later years, by liberal interpretation, limited the immunity of State by
holding more and more functions of the State as non-Sovereign.

To ensure the personal liberty of individuals from abuse of public power, a new remedy
was created by the Apex court to grant damages through writ petitions under Article 32
and Article 226 of the Constitution. In the case of Rudal Shah v. State of Bihar[15], the
Supreme Court for the first time awarded damages in the writ petition itself. [16]

In Bhim Singh v. State of Rajasthan[17], then principle laid down in Rudal Shah was
further extended to cover cases of unlawful detention. In a petition under Article 32, the
Apex court awarded Rs. 50,000 by way of compensation for wrongful arrest and detention.
The latest case of State of A.P. v. Challa Ramakrishna Reddy[18] on the point clearly
indicates that the distinction between Sovereign and non-Sovereign powers have no
relevance in the present times. The Apex Court held that the doctrine of Sovereign
immunity is no longer valid.

Recent Developments

The courts in successive cases continued with the policy of narrowing the scope of sovereign
immunity, rather than attempt an express overruling of Kasturilal. Though there were
murmurs of disapproval at the principle of Kasturilal in a number of cases,[19] the most
explicit disapproval came in State of Andhra Pradesh v. Challa Ramkrishna Reddy.

The petitioner and his father were lodged in a jail, wherein one day bombs were hurled at
them by their rivals, causing the death of the father and injuries to the petitioner. The
victims were having previous knowledge of the impending attack, which they conveyed to
the authorities, but no additional security was provided to them. On the contrary, there
was gross negligence since there was a great relaxation in the number of police men who
were to guard the jail on that fateful day. Thus, on the grounds of negligence a suit was
filed by the petitioner against the Government.

While the case had been dismissed in trial court, the case was allowed in the High Court,
where the Court even while accepting the principle of Kasturilal, took consideration
of Article 21 of the Constitution and came to the conclusion that since the Right to Life was
part of the Fundamental Rights of a person, that person cannot be deprived of his life and
liberty except in accordance with the procedure established by law. Further, by virtue
of Maneka Gandhi v. Union of India[20], the procedure too should have been fair and
reasonable. Thus, the High Court held that since the negligence which led to the incident
was both unlawful and opposed to Article 21, and that since the statutory concept of
sovereign immunity could not override the constitutional provisions, the claim for violation
of fundamental rights could not be violated by statutory immunities. On appeal by the
State, the Supreme

Court dismissed the appeal and ruled: “The Maxim that King can do no wrong or that the
Crown is not answerable in tort has no place in Indian jurisprudence where the power vests,
not in the Crown, but in the people who elect their representatives to run the Government,
which has to act in accordance with the provisions of the Constitution and would be
answerable to the people for any violation thereof.”

Thus, the ratio of this case was that sovereign immunity, which is a statutory justification,
cannot be applied in case of violation of fundamental rights, because statutory provisions
cannot override constitutional provisions. The procedural aspect of this was that aggrieved
persons can successfully file their petitions in trial courts for tortious acts committed by
State, and there is no need to approach High Court or Supreme Court under Articles
226 or 32. However, the court in this case even while holding that Kasturi Lal’s case had
paled into insignificance and was no longer of binding value, did not consider the cases
where no fundamental rights but other legal rights might be violated. The question that
arises is whether in violation of such statutory rights, the sovereign immunity can be
effectively claimed. This issue can be decided only by a Constitutional bench of seven or
more judges, if the need arises to overrule the Kasturi Lal case.[21]

Consequently, there has been an expansion in the area of governmental liability in torts.

Sovereign Functions & Non-Sovereign Functions

Need for Distinction

The Supreme Court has emphasized upon the significance of making such a distinction as
in the present time when, in the pursuit of their welfare ideal, the various governments
“naturally and legitimately enter into many commercial and other undertakings and
activities which have no relation with the traditional concept of governmental activities
which have no relation with the traditional concept of governmental activities in which the
exercise of sovereign power is involved”[22]

Therefore, it is necessary to limit the area of sovereign powers, so that acts committed in
relation to “non-governmental and non-sovereign” activities did not go uncompensated.

Interpretation

The immunity of the crown in the United Kingdom was based on the feudalistic notions of
justice, namely, that the King was incapable of doing wrong, and, therefore, of authorizing
or instigating one, and that he could not be sued in his own courts… Now that we have, by
our constitution, established a Republican form of Government, and one of its 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 for its acts. [23]

However, as the Competition Act, 2002, specifies that any activity of the Government
relatable to the sovereign functions of the Government including all departments of
Central Government dealing with atomic energy, space, defence and currency are excluded
from the Act’s purview, establishing a distinction between the sovereign and nonsovereign
functions becomes inevitable.

Thus, an attempt has been made to distinguish the sovereign and nonsovereign functions
with the help of principles laid down in the various judgments rendered by the Apex Court.
However, as no interpretation of the term ‘sovereign functions’ in context of Section 2(h) of
the Comeptition Act, 2002 exists, the differentiation has to be made with the help of
interpretation of the term as has been carried out for other legislations.

On the question of ‘what is sovereign function’, different opinions have been given time
and again and attempts have been made to explain in different ways.

D. STRICT AND ABSOLUTE LIABILITY

The strict liability principle is an extremely important concept under the law of torts. The basis of
this principle basically lies in the inherent harm that some activities can inflict. For example, leaking
of poisonous gasses, as it happened in the Bhopal Gas Tragedy, will attract this rule.

The underlying principle of compensation in torts generally depends on the extent of precautions a
person takes. Hence, if he takes abundant precautions to prevent some harm, the law may exempt
him from paying damages. This principle, however, does not apply to strict liability.

Under the strict liability rule, the law makes people pay compensation for damages even if they are
not at fault. In other words, people have to pay compensation to victims even if they took all the
necessary precautions. In fact, permissions allowing such activities often include this principle as a
pre-condition.

The principle of strict liability evolved in the case of Rylands v Fletcher[1]. In the year 1868, the
principle of strict liability states that any person who keeps hazardous substances on his premises
will be held responsible if such substances escape the premises and causes any damage. Going
into the facts of the case, F had a mill on his land, and to power the mill, F built a reservoir on his
land. Due to some accident, the water from the reservoir flooded the coal mines owned by R.
Subsequently, R filed a suit against F. The Court held that the defendant built the reservoir at his
risk, and in course of it, if any accident happens then the defendant will be liable for the accident
and escape of the material.
Essentials of Strict Liability
Dangerous Substances: The defendant will be held strictly liable only if a “dangerous”
substances escapes from his premises.

For the purpose of imposing strict liability, a dangerous substance can be defined as any
substance which will cause some mischief or harm if it escapes. Things like explosives, toxic
gasses, electricity, etc. can be termed as dangerous things.

Escape: One more essential condition to make the defendant strictly liable is that the material
should escape from the premises and shouldn’t be within the reach of the defendant after its
escape.

For instance, the defendant has some poisonous plant on his property. Leaves from the plant
enter the property of the plaintiff and is eaten by his cattle, who as a result die. The defendant
will be liable for the loss. But on the other hand, if the cattle belonging to the plaintiff enter the
premises of the defendant and eats the poisonous leaves and die, the defendant would not be
liable. In the judicial pronouncement of Reads v. Lyons & Co.[2] it was held that if there is no
escape, the defendant cannot be held liable.

Non-natural Use: To constitute a strict liability, there should be a non-natural use of the land. In
the case of Rylands v. Fletcher, the water collected in the reservoir was considered to be a non-
natural use of the land. Storage of water for domestic use is considered to be natural use. But
storing water for the purpose of energizing a mill was considered non-natural by the Court.
When the term “non-natural” is to be considered, it should be kept in mind that there must be
some special use which increases the danger to others. Supply of cooking gas through the
pipeline, electric wiring in a house, etc. is considered to be the natural use of land. For instance,
if the defendant lights up a fire in his fireplace and a spark escapes and causes a fire, the
defendant will not be held liable as it was a natural use of the land.

Exception to the Rule of Strict Liability

There are certain exceptions to the rule of strict liability, which are-

Plaintiff’s Fault: If the plaintiff is at fault and any damage is caused, the defendant wouldn’t be
held liable, as the plaintiff himself came in contact with the dangerous thing.

In the judicial pronouncement of Ponting v Noakes,[3] the plaintiff’s horse died after it entered
the property of the defendant and ate some poisonous leaves. The Court held that it was a
wrongful intrusion, and the defendant was not to be held strictly liable for such loss.

Act of God: The phrase “act of God” can be defined as an event which is beyond the control of
any human agency. Such acts happen exclusively due to natural reasons and cannot be prevented
even while exercising caution and foresight.[4] The defendant wouldn’t be liable for the loss if
the dangerous substance escaped because of some unforeseen and natural event which couldn’t
have been controlled in any manner.

Act of the Third Party: The rule also doesn’t apply when the damage is caused due to the act of
a third party. The third party means that the person is neither the servant of the defendant, nor the
defendant has any contract with them or control over their work. But where the acts of the third
party can be foreseen, the defendant must take due care. Otherwise, he will be held responsible.

For instance, in the case of Box v Jubb,[5] where the reservoir of the defendant overflowed
because a third party emptied his drain through the defendant’s reservoir, the Court held that the
defendant wouldn’t be liable.

Consent of the Plaintiff: This exception follows the principle of violenti non fit injuria.
For instance, if A and B are neighbors, and they share the same water source which is situated on
the land of A, and if the water escapes and causes damage to B, he can’t claim damages, as A
wouldn’t be liable for the damage.

Absolute Liability

The rule of absolute liability, in simple words, can be defined as the rule of strict liability minus
the exceptions. In India, the rule of absolute liability evolved in the case of MC Mehta v Union of
India.[6] This is one of the most landmark judgment which relates to the concept of absolute
liability.

The facts of the case are that some oleum gas leaked in a particular area in Delhi from industry.
Due to the leakage, many people were affected. The Apex Court then evolved the rule of
absolute liability on the rule of strict liability and stated that the defendant would be liable for the
damage caused without considering the exceptions to the strict liability rule.

According to the rule of absolute liability, if any person is engaged in an inherently dangerous or
hazardous activity, and if any harm is caused to any person due to any accident which occurred
during carrying out such inherently dangerous and hazardous activity, then the person who is
carrying out such activity will be held absolutely liable. The exception to the strict liability rule
also wouldn’t be considered. The rule laid down in the case of MC Mehta v UOI was also
followed by the Supreme Court while deciding the case of Bhopal Gas Tragedy case. To ensure
that victims of such accidents get quick relief through insurance, the Indian Legislature passed
the Public Liability Insurance Act in the year 1991.

The Public Liability Insurance Act, 1991[7]

This act was introduced with the aim of providing immediate relief to people who are victims of
accidents in which handling of hazardous substances is involved. The main focus of the Act is to
create a public liability insurance fund which can be used to compensate the victims.

The Act states that any person who is carrying out inherently dangerous or hazardous activities
should have insurances and policies in place where he will be insured against liability to provide
compensation to the victims in case any accident takes place, and some injury occurs. This
liability is based on the principle of “no fault liability” or in other words, the rule of strict
liability and absolute liability. Inherently dangerous or hazardous substance covers under its
scope any mixture, preparation or substance which because of its properties can cause serious
harm to human beings, animals, plants, property or the environment. If any substance is
inherently dangerous or hazardous due to its handling also, then also the absolute liability of the
defendant arises.

D. DEFAMATION

Introduction

Defamation as the meaning of the word suggests is an injury to the reputation of a

person resulting from a statement which is false. A man’s reputation is treated as his property
and if any person poses damage to property he is liable under the law, similarly, a person
injuring the reputation of a person is also liable under the law. Defamation is defined in section
499 of Indian Penal Code 1860 and section 500 provides that a person committing an offense
under this section is liable with simple imprisonment for a term of 2 years or fine or with both.

Essentials of Defamation

A. The statement must be defamatory

The very first essential of the offense of defamation is that the statement must be defamatory i.e.
which tends to lower the reputation of the plaintiff. The test to check if a particular statement
is defamatory or not will depend upon how the right thinking members of society are likely
to take it. Further, a person cannot take a defense that the statement was not intended to be
defamatory, although it caused a feeling of hatred, contempt or dislike.

In the Case of Ram Jethmalani v. Subramanian Swamy court held Dr. Swamy to be liable for
defaming Mr. Jethmalani by saying that he received money from a banned organization to
protect the then CM of Tamil Nadu in the case of the assassination of Rajiv Gandhi. In another
recent case of Arun Jaitley v Arvind Kejriwal, the court held the statement said by Arvind
Kejriwal and his 5 other leaders to be defamatory. However, the matter was finally disclosed
after all the defendants apologized for their actions.

Illustration

A publishes an advertisement in a local newspaper stating false information that the company of
B has committed fraud of Rs 20,00,000. Now, this statement will amount to defamation as this
newspaper will be read by many readers and will surely injure the reputation of B’s company.

However, it is to be noted that mere hasty expression spoken in anger, or vulgar abuse to
which no hearer would attribute any set purpose to injure the character would not amount
to defaming a person.

Illustration

If A an employer scolds his employee B for not coming on time in front of the whole staff, then
B cannot take the plea that A has injured the reputation of B.

B. The statement must refer to the plaintiff

In an action for defamation, the plaintiff has to prove that the statement of which he Complains
referred to him, it will be immaterial that the defendant did not intend to defame the plaintiff. If
the person to whom the statement was published could reasonably infer that the statement
referred to him, the defendant will then be liable
Illustration- If A, a bank publishes a notice to all its branches to not give the loan to any person
from xyz as the people of xyz are more often repeated defaulters. Now due to this B, a resident
of xyz has suffered a huge loss. Now B can hold A liable for defaming him although the bank did
not directly focus on him.

In the case of T.V., Ramasubha Iyer v. A.M.A Mohindeen Court held the defendants liable for
publishing a statement without any intention to defame the defendants. The statement mentioned
that a particular person carrying business of Agarbathis to Ceylon has been arrested for the
offense of smuggling. The plaintiff was also one of the person carrying on a similar business, and
as a result of this statement his reputation also severely damaged.

C. The statement must be published

Publication of defamatory statement to some person other than the person defamed is a most
important aspect for making any person liable, and unless that is done, no action for defamation
will lie.

However, if a third person wrongfully reads a letter meant for the plaintiff, then the defendant
likely to be liable. But if the defamatory letter sent to the plaintiff is likely to be read by
somebody else, there will be a valid publication.

In the case of Mahendra Ram v. Harnandan prasad the defendant was held liable for sending a
defamatory letter to plaintiff written in Urdu knowing that the plaintiff did not knew Urdu and
the letter will very likely be read over by another person.

Forms of Defamation

1. Slander– It is the publication of a defamatory statement in a transient form For

example- Defaming a person by way of words or gestures.
2. Libel– It is the representation made in some permanent form.

For example- Defaming a person through a representation made in some permanent form like
writing, printing etc.
English law on libel and slander

Under English criminal law, libel is treated as a crime but slander is not. Slander is only a civil
wrong. This distinction between libel and slander is mainly on two reasons-

1. Under Criminal law, only libel has been recognized as an offense. Slander is no
offense.
2. Under the law of torts, slander is actionable, except in few cases where special damage
has to be proved. Libel is always actionable i.e. without any proof. However, slander
is also actionable in the following 4 cases:

 Imputation of a criminal offense to the plaintiff.

 Imputation of an infectious disease to the plaintiff which has the effect of preventing
others from associating with the plaintiff. Example A makes a statement in his office
that his colleague is suffering from AIDS. He can here be liable for defaming his
colleague.
 The imputation that a person is incompetent, dishonest or unfit in regard to the office,
profession, trade or business carried on by him.
 Imputation of unchastity or adultery to any woman or girl.

Indian law on Libel and Slander

Unlike English law, Indian law does not make any distinction between libel and slander and both
are treated as criminal offenses under section 499 IPC. In the case of Hirabai Jehangir v.
Dinshawdulji the Bombay and Madras high court both held that no distinction needs to be made
between treating libel and slander as criminal offenses.

Innuendo

A statement is prima facie defamatory when its natural and obvious meaning leads to that
conclusion. Sometimes it may happen that the statement was prima facie innocent but because of
some secondary meaning, it may be considered to be defamatory. For this secondary instance
plaintiff must prove the secondary meaning i.e. innuendo which makes the statement defamatory.
Illustrations

Z makes a statement that X is an honest man and he never stole my watch. Now this statement is
at first instance may be innocent, but it can be defamatory if the person to whom it was made,
interprets from this that X is a dishonest man having stolen the watch.

Defamation of class of persons

When particular words spoken are referred to a group of individuals or a class of persons, then
no single person of that group or class can sue unless he proves that the words could reasonably
be considered to referring him.

Illustration- If a person wrote that all doctors were thieves, then no particular doctor could sue
him unless there was something that pointed out that the person actually intended to defame him
individually.

This situation will be different if the person wrote that all doctors of Ganga ram hospital are
thieves and then doctors of Ganga ram hospital can sue him for defaming them.

Communication between husband and wife

In the eyes of law, both husband and wife are one person and the communication of a defamatory
matter from the husband to the wife or vice versa is no publication and will not come within the
purview of section 499. Section 122 of the Indian Evidence Act 1872 deals with privileged
communications between husband and wife and makes them out of the scope of section
499 except in suits between married persons, or in a proceeding in which one married
person is prosecuted for any crime committed against the other.

In a leading case of T.J. Ponnen v. M.C Verghese the court held that the letter from husband to
his wife containing defamatory matter concerning the father-in-law will not amount to
defamation. It will very much be covered within the scope of privileged communications
between husband and wife as laid in section 122 of the Indian Evidence Act 1872.
Defenses defamation

The defenses to an action for defamation are

1. Justification of truth
2. Fair comment
3. Privilege

Justification of truth

In a civil action for defamation, the truth of the defamatory matter is a complete defense and the
reason for this is that “ Law will not permit a man to recover damages for something being true
about him “.

Under criminal law on the other hand merely proving that the statement was true is not a good
defense and besides this, the defendant has to show that it was made for public good also.

If the defendant is not able to prove the truth of the facts, the defense cannot be availed. In the
case of Radheyshyam Tiwari v. Eknath court held the defendants for publishing defamatory
matter against the defendants. Later the defendants were not able to prove that the facts
published by him were true and, therefore he was held liable.

Fair comment

Making a fair comment on matters public interest is a valid defense to an action for defamation.
For this, the following must be proved

 It must be a comment i.e, an expression of opinion rather than an assertion of

fact

For example, If X says that A has been guilty of breach of trust and therefore he is a dishonest
man. Here the latter words are a comment on the former. But if A did not commit any breach of
trust and X still says to him as a dishonest man. Then it will not be a comment and will amount
to an assertion of fact.

 The comment must be fair

The comment should be fair i.e. should not be based upon untrue facts.

For example, X publishes serious allegations of bribery against Y in a newspaper. Later X is not
able to prove the truthness of these allegations and therefore his comment will not amount to fair
comment.

 The matter commented upon must be of public interest-

The matter on which the defendant has commented must be of public interest. Matters like
administration of government departments, courts, ministers, public meetings, textbooks, etc are
considered to be matters of public interest.

Privilege

As the word suggests itself i.e. giving special status. These special occasions when the law
recognizes that the right of free speech outweighs the plaintiffs right to defamation and a
defamatory statement made on such occasion is not actionable. Privileges are of two types.

1. Absolute privileges– In matters of these complete immunity is given to person speaking and
no action for defamation can lie against him. It includes 3 aspects

 Parliamentary proceedings– Article 105(2) of the Indian constitution gives

immunity to parliamentarians to speak anything during the course of business of
parliament and no action would lie against them.
 Judicial proceedings– This protection has been given to judges under judicial officers
protection act of 1850. It also extends to counsels, witnesses, and parties to a suit.

2. Qualified privilege– This privilege is also available and under this, it is necessary
that the statement must have been made without a malice i.e a wrongful
intention.

For example, A, a shopkeeper, says to B, who manages his business, “ Sell nothing to Z unless
he pays you ready money, as I am doubtful of his honesty. Now A will fall under this exception
if he has made his imputation on Z in good faith for the protection of his own interest.
The distinction between English Law and Indian Law

An act of defamation can occur in two forms, libel and slander.

Libel- it is a kind of defamation that is present in some permanent form such as in writing,
printed or a picture.

Slander- it is a kind of defamation that is present in an unwritten form such as spoken words,
gestures or representation made with hands.

In English law, there is a distinction made between both of the forms under the categories of
criminal defamation and civil defamation.

Under criminal law, only libel is an offense and not slander. Whereas in civil law, libel is an
offense just like in criminal law but the change here is that slander is also an offense when
provided with proof.

In Indian law, both slander and libel are recognized as criminal offenses under Section 499 of
IPC. Whereas, in the law of torts libel is actionable per se and slander is actionable. It means in
the case of slander there has to be proof of the act of defamation.

D.P. Choudhary v. Kumari Manjulata

In this case, it was published in a newspaper that Manjulata, a 17-year-old girl belonging to a
well-known family, eloped with a boy who lived closeby. After this, her reputation got tainted
and she suffered a lot of disgrace, as this news was completely false and was published with
irresponsibility.

Later on, the Court, in this case, ruled out the Rs. 10000, should be provided to the defendant as
it amounted to defamation.

Forms of Publication

There are various forms of publication in which the act of defamation can take place, let’s look at
them.
Direct communication to the Defamed

If any defamation is made directly to the defamed and is not heard by anybody else, then it is not
defamation. It is necessary that any third party hears it through which the reputation of the
defamed goes down.

Publication by Repetition

There is a limited period to sue for defamation. It is maintainable till one year since the act of
defamation took place. For a single publication, an action for libel can arise but for repetitive or
multiple publications, the action can arise every time the libel is published.

The Limitation Act, 1968 makes the limitation period of the libel on the internet to 1 year. After
every publication on the internet, this period will get renewed.

Khawar Butt vs Asif Nazir Mir

This case was decided in the year 2013. The Delhi High Court, in this case, ruled out to set aside
the multiple publication rule on the internet and to follow only the single publication rule.

Printed Matters: Liability of editor and others

Section 501 of the Indian Penal Code talks about the printing of defamatory things.

It says that any person who prints or engraves such a matter which he knows or has reason to
believe that such matter is of defamatory nature and hence, will lower down the reputation of the
person and bring ridicule and disgrace to his/her character.

This Section checks for the printed defamatory matters and provides the provision for the
punishment to the person who printed it. The punishment of a maximum of two years in jail or
fine or both is provided under this Section.

Now, let’s understand what is the provision for the people who further sells the defamatory
printed content.
Section 502 of the Indian Penal Code says that any person who sells or offers to sell any printed
content that he knows or has reason to believe that it contains defamatory matter will be
punished.

The punishment will either be imprisonment which can be extended to a term of two years or
could be fine. In some instances, both can be imposed.

Therefore, through both of these Sections, the printing or engraving, selling or offering to sell,
such a matter which contains some defamatory content, is a crime and is punishable.

Imputations concerning ‘Any Person’

In Section 499 of the Indian Penal Code the ‘imputation concerning any person’, is mentioned.
Imputation in general terms means accusation or claim that someone has done something wrong.

As far as the term ‘concerning any person’ is concerned, this means that defamation should be
clear enough to point out the person to whom the defamation is intended to be made and if it is
published to others then the third person is also able to clearly understand who is defamed by the
publication.

Intention to Injure

There has to be a knowledge or reason to believe that the act will certainly cause the defamation
of the character of the person. It implies the mens rea of the person, that is the person should
have the intention to harm the reputation of the other person.

To win a defamation lawsuit, the defendant should prove that he had honest intentions and no
malice, and it was just an honest mistake.

Analysis of provisions of Sections 499 and 500, IPC

The provisions regarding defamation are provided in Section 499 to 502. Section
501 and Section 502 has already been explained earlier in this article. Now, let’s understand the
provisions contained in Section 499 and Section 500.
Section 499 provides the definition of defamation and all the cases and exceptions of the act of
defamation. This is a lengthy Section with explanations and in total 10 exceptions included in it.

Section 500 provides for punishment for the act of defamation.

Explanation l: Defamation of the Dead

In case, a person defames another person who has passed away or is already dead, by any means
that is written, spoken, by gestures or pictures.then, it will be an act of defamation, this act would
have harmed the reputation of the person if he would have been still alive, or in case it harms the
reputation of the family or close relatives of the deceased.

Explanation 2: Defamation of a Company or a Collection of Persons

If an act is intended to cause harm to a company or association or a group of people, then it will
amount to defamation. This means under it companies or associations can slap a defamation suit
against an individual.

Priya Parameshwaran Pillai v. Union of India and Ors.

In this case, Priya, a Greenpeace activist, wrote in her blog that the environment is degraded by
the power project which was set up by the Essar group. After which a suit of defamation was
filed by the Essar group.

Priya, in her argument, contended that the private companies should not be given the right to file
a defamation suit against an individual. But her contention was set aside by the Court, not
allowing any more questions and contentions to be added further.

This particular case has its roots in the previous Subramaniam Swamy v. Union of India case.
Let us discuss that now.
Subramaniam Swamy v. Union of India

In the year 2014, Dr. Subramaniam Swamy alleged corruption charges on Ms. Jaylathitha. After
which Ms. Jaylathitha framed defamation charges on Dr. Subramaniam Swamy. He in return
challenged the constitutional validity of Section 499 and Section 500 of the India Penal Code.

The court, in this case, upheld the constitutional validity of the offense of criminal defamation.

And ruled out that Section 499 and Section 500 of the India Penal Code, impose reasonable
restrictions on the right to freedom of speech and expression.

Explanation 3: Defamation by Innuendo

Well, to be able to understand it we must first understand what innuendo in general terms means.

Innuendo is a clever way to speak negative sentences in a very sarcastic way, which may appear
to be positive at the surface of it.

Under Section 499, defaming of any person by innuendo is a form of criminal defamation.

Illustration

 A says to B, pointing out to C, ‘C is a very even-handed person, I have not seen him
making any discrimination against G.

This is discrimination as A intended to point at C has a discriminatory person and that he has
discriminated in the case of G.

 B asks A,’ do you think someone discriminated?

A in return pointed at C and said, ‘well you know, who can’.

This is discrimination has it was said in a sarcastic way while pointing at C.

Explanation 4: What is Harming Reputation?

Defamation is an act by which a person’s reputation is harmed, but what is harming reputation?

According to explanation 4 given in Section 499, the reputation of a person is harmed when the
act injures the moral or intellectual character of the person or lowers his credit. It also hampers
the reputation if the act lowers down the person’s character in the respect of his cast or his
calling.

The act of defamation which let the others believe that the body of any particular person is in a
detestable condition.

All of these acts are considered to harm the reputation of the person and comes under the offense
of criminal defamation.

Exceptions provided in Section 499

As mentioned earlier, there are ten exceptions in this Section.

We will now have a look at them one by one.

First Exception: Truth for Public Good

This exception provides that if any information which is true and for the good of the public at
large, then that is not covered under the act of defamation.

Things to be noted here is, first, the information should compulsorily be true. Second, the
information should be of a kind that it benefits the public.

Also, it is compulsory to publish that information.

Second Exception: Fair Criticism of Public Servants

This exception provides that if an act in which the public servant is criticized for discharging any
of his public functions or and the act of criticizing his conduct and character when it appears to
be wrong and not otherwise. Then, such an act will not amount to defamation.
Illustration

If Ramesh mentions that the particular officer Z is very bad at his job, then this is not defamation
under the following exception.

The element of Good Faith-Importance

It is to be noted that any such comment made or views expressed must be made in good faith.
That is, if it is made out of malice or in bad faith, it will be considered as an act of defamation.

The Opinion must be Fair and Honest

Any opinion made criticizing the conduct, character or discharge of any functions of a public
servant must be fair and honest. Otherwise, it will be considered as an offense of defamation.

Third Exception: Fair comment on public conduct of public men other than public
servants

If any person expresses his/her views and opinion on the conduct of any other person who
discharges any kind of public functions, he will not be liable for the act of defamation.

The condition in regards to this is that such views and opinions should be made in good faith and
with honesty. If it is made otherwise then the act will fall under the offense of defamation.

Illustration

If there is a meeting taking place which requires the support of the public or if Z applies for a
petition against some action or doing of the government.

Rights of the Press: Summary of principles governing Rights of Press and Media

No direct freedom is given corning the media law, but Article 19 which gives the right to
freedom of speech and expression per se provides this freedom to the media. The press is the
watchdog of the public, that is why it is necessary to make certain that a positive impact is
formed by the public after receiving any news and no negative opinion arises.
The owner, editor, and publisher, all of them in the line, are responsible if any news which
defames anyone is published to any third person.

Defaming again here means the news which lowers someone’s reputation or character.

Google India Pvt Ltd. v. Visakha Industries

In this case, an article was published with a caption ‘Poisoning the system: Hindustan Times’. In
this article, the names of many famous politicians were mentioned which had nothing to do with
the Visakha Industries.

The case ruled out that all of it does not amount to defamation. It should be noted that there is a
difference of publication on the internet and publications in print media.

Fourth Exception: Report of proceedings of Courts of justice

If any proceedings of the court or the result of any case given by the court are published then that
will not amount to defamation.

The conditions pertaining to this are such that publication should be true and apt.

Fifth Exception: Comment on Cases

If any person publishes any information regarding the merits of the case or in regard to the
conduct of any person who was a witness, in that case, it will not be defamation.

It is important to note, the element of good faith is requisite here.

Illustration

If A says that B seemed to lie on the witness stand.

Here, this condition will fall under the ambit of this exception.

But if A says that B was lying on the stand, as I know him as a man who can lie.
Here, this will fall out of the exception and will amount to defamation. Why? Because he is
applying his knowledge which is not included in the court proceedings.

Sixth Exception: Literary criticism

If any person in good faith expresses his opinion in regards to the performance or character of
the author, which the author has submitted to the judgment of the public or viewers, then it does
not amount to defamation.

To explain this, the author must have by acts or expressly submitted her/his performance to the
judgment of the public. If that is not the case, the act will amount to defamation.

Some examples:

1. An author of a book who publishes it submits it to the judgment of the public.

2. An actor who does a film submits it to the public to give its judgments.
3. A performer, who performs on the stage in front of the viewers submits it to the
judgment of the public.

The thing to be noted is that any opinion which is made should be in consideration of the
performance.

Illustration

X says ‘Y must be a man with the wrong mindset’. This will fall under the exception.

But if X says, ‘no wonder his book is indecent, for I know him as a man who is indecent
himself’. This will not fall under this exception and amount to defamation.

Seventh Exception: Censure by One in Authority

If any person passes censure on the conduct of any other person, then it will not amount to
defamation, provided that the person applying censure should have the lawful authority or any
authority arising out of a valid contract, over the person on whose matters the censure is applied.

Illustration
  Any employee being censored by the employer in good faith.
 In good faith, any teacher censures the conduct of a student in front of any other
student.

Eighth Exception: Complaint to Authority

If any person who has lawful authority over the other person, accuses him then it will not amount
to defamation.

Illustration

If A in good faith prefers any accusation regarding X to a judge.

If a warden in good faith accuses a hosteller C to the dean of the college.

Kanwal Lal v. the State of Punjab

In this case, it was noted that the defense to fall under exception 8, the publication must be made
before the authority of law. The District Panchayat Officer or the Panchayat had no such lawful
authority in regards to the provisions of the Punjab Gram Panchayat Act, 1952, in which the
Panchayats only had the jurisdiction.

Ninth Exception: Imputation for Protection of Interests

If any accusations or imputations are made on another person in order to protect the interests of
oneself, then it is not defamation.

Illustration

An employee D, who has been told to make a monthly report on the conduct of the employee of
that sector, writes about the bad conduct of one employee Z then, he will fall under this
exception.
Tenth Exception: Caution in Good Faith

If any caution is made for the good of that person or for the good of the public then it will not
amount to defamation.

Whether accurate and true report of Assembly Proceedings published in newspapers

would amount to Defamation

In Exception 4, it has been mentioned that true and accurate proceedings of the court will not fall
under the ambit of defamation in reference to that, let’s look at a case.

In Dr. Suresh Chandra Banerjee v. Punit Goala, it was ruled out that, the reports of the
proceedings of the Parliament do not fall under the exception 4.

It was discriminatory on the part of the law. Later on, it was changed when Article 361A was
introduced by the 44th Amendment Act, in the year 1978.

Under the Parliamentary Proceedings Act which came in the year 1977, protection by law has
been given to the publication in newspapers or broadcasts by wireless telegraphy of substantially
true reports of any proceedings of either House of Parliament. Further, it is provided that it
should be made in good faith.

The publication can take place with the authority given by both Houses of the Parliament
under Article 105(2) and by the State Legislature under Article 194(2).

Who should in a newspaper be prosecuted for making Defamatory Imputations?

In the case of the newspaper, generally, people will think that only the editor will be held
responsible for publishing defamatory matter but the fact is that the owner, author, editor, or
distributor, all can be held liable for the act of defamation. It should be noted that vicarious
liability will arise which will make the proprietor of the newspaper liable to pay damages arising
out of it.

In the case of Narayan Singh v. Rajmal, the editor of the newspaper was absent and the
defamatory matter was published by the sub-editor. The court ruled out that the editor was not
responsible as he was absent with no bad intentions.

In the case, Mohammed Koya v. Muthukoya, it was ruled out that the Press and Registration of
Books Act, 1867, only recognizes the editor as the legal entity and no one else, in the matter
concerning the publishing of matter in a newspaper.

It was further clarified in another case of K.M. Mathew v. K.A. Abraham & Ors, the publisher of
a book was charged with the offense of defamation. He moved to the High Court contending that
under Section 7 of the Press and Registration of Books Act, 1867, only the editor can be held
liable and not the chief editor of the newspaper. The High Court rejected his plea, then he
further, sought plea to the Supreme Court that also rejected it.

The rationale of the court was that there can arise a presumption against the editor that he is
responsible because he checks and selects the material which is to be published. But this is a
matter which can be rebutted and under Section 7 of the Press and Registration of Books Act, the
same presumption can also arise for someone else which has to be proved.

Defamation of Wife by Husband

Law considers husband and wife as one and the private communication between them is
privileged, according to Section 122 of the Indian Evidence Act, 1872.

In the case of T.J. Ponnen v. M.C Verghese, the husband wrote a letter to his wife containing
defamatory matter. The court held that this was under Section 122 of the Indian Evidence Act
1872.
UNIT - IV

CONSUMER PROTECTION ACT

1. Definition of Consumer
2. Rights and Duties of Consumer
3. Authorities for Consumer Protection
4. Remedies.

CONSUMER PROTECTION ACT AND ITS NECESSITY

A consumer may be regarded as a person who purchases goods and services for self-
consumption, and also includes the use of goods for his occupations.

Consumer- A person who purchases goods and services for personal use.
Consumerism- The protection or promotion of the interest of consumers.

In India, the journey started way back in 1969 when the “Mumbai” housewives raised their
voices against the quality of goods. The consumer is a movement by consumers and consumer
organisation to ensure that producers, whole sellers and retailers use ethical practices in the sale
and purchase of goods and services.
Meaning of Consumerism:
The consumer is a wide term and can notes:
1. A movement by which the welfare of consumers is ensured and there are protective.
2. Protective consumers from unfair and restrictive trade practices.
3. Saving them from economic exploitations by trained sellers.
4. A theory stating that the consumption of goods is economically beneficial.
5. A movement for greater protection of consumer rights.
6. Public concern over the right of consumers.
7. Promoting consumers interest.
8. Equating personal happiness with the consumption of goods and services.
9. Promoting consumer interests.
10. Movement of protecting and informing the consumers by honest packaging, advertising
etc.
Concept of Caveat Emptor:
 The concept of Caveat Emptor is attributed to English common law.
 It means ‘let the buyer beware’.
 Basically, any buyer has the right to be satisfied before purchasing any article goods or
services.
 Presently this rule is stated under Sec.16 of the Sale of Goods Act, 1930.
Cases:-
  Jones v. Padgett (1890):- In this case, the plaintiff purchased a piece of cloth without
stating its use and later on when he used it for making garments, he faced some problems.
Courts held that the defendant is not liable because the plaintiff must have been aware of
what he is purchasing.
 Raretto v. T.P. Pruce (1939):- In this case customer approached for a set of false teeth
and the dentist gave a set of teeth which did not fit his mouth. He was held liable under
the principles of caveat emptor.

Anti-Consumerism:
It refers to the socio-political movement against the concept of consumerism and the equation of
personal happiness. The concept points outs that the rights of a consumer and human rights are
of no significance and only the corporation are answerable to shareholders and the consumers are
outrightly ignored.

Objectives & Importance of the Act

The Consumer Protection Act was implemented in order to provide better protection to the rights
of the consumers. Prior to the implementation of this Act, there was no special act for protecting
the consumers and the only remedy available to the consumers was under the Law of Torts i.e
filing a civil suit for damages against the shopkeeper or the service provider. This act is based on
the doctrine of Caveat Emptor which means that it is the responsibility of the buyer to identify
the defects in the good.

There are various objectives which are sought to be protected under the Consumer
Protection Act such as-

1. To promote and protect all the six rights of the consumers which will be discussed
later.
2. To provide simple and speedy disposal to the cases by providing quasi-judicial
machinery for the redressal of consumer disputes.
3. The act also aims to provide inexpensive redressal to the issues of the consumer.
4. A consumer dispute redressal forum called state commission has been set up in order
to settle the disputes of each and every consumer in all the states of the country.
Who is a consumer?

According to Sec-2(1)(d) of the Act, a consumer is a person who purchases any goods or
services or hires or avails the services of some person for his own personal use and not for
manufacturing or resale of that good. For instance, a person purchasing wheat flour for his own
personal use is a consumer but a person purchasing wheat flour for baking bread which he is
going to sell in his bakery shape is not a consumer.

Rights and Duties of a Consumer

The Consumer Protection Act has recognised six rights of a consumer which are :

1. Right to Safety
2. Right to Information
3. Right to Choose
4. Right to be heard
5. Right to Redressal
6. Right to Consumer Education

Right to Safety

This right refers to as the right to be protected against the marketing of goods and services which
are hazardous to life and property of the consumers. This right has a very wide scope of
application, for instance, this right is available in the areas of electrical appliances, healthcare,
automobile, pharmaceuticals, housing, travel etc. Nowadays, each and every field has an office
for researchers who research and experiment and launch new products and appliances
accordingly. Most of these products are not tested by the producers which prove to be harmful to
the consumer. Therefore, after the implementation of this act, there is a mandate for each and
every field to get all their products which are a danger to the life to be carefully tested and
validated before launching it to the market.
Right to Information

It refers to the right of a consumer to be informed of the quality, quantity, potency, purity,
standard and price of the goods and services being sold by the shopkeeper. This right is given to
the consumer in order to protect them from the various unfair trade practices conducted by the
seller in order to earn more profits. Therefore, it is an obligation on the seller to provide the
consumer with all the relevant information of the product he wishes to purchase.

Right to Choose

It is defined in the act as the right to be assured, wherever possible, to have access to a variety of
goods and services at competitive prices. It is very common to find one product being sold at
different possible prices by different sellers. This reflects the age of market competition which is
found in almost all the countries. Therefore it is the right of all the consumers to purchase any
product at any price which according to him is the best. A consumer cannot be forced to
purchase a product of some particular brand or quality.

Right to be heard

It is referred to as the right to be heard and to be assured that consumers’ interests will receive
due consideration at appropriate forums. This right was introduced for a consumer in order to
ensure that all the complaints and issues of the consumers are heard duly under the appropriate
authority. This is because of this right that almost all the big selling companies have a separate
department known as the customer service to help the consumers in case of any dispute or any
complaint regarding the quality or quantity of the product.

Right to seek Redressal

If any consumer has been exploited by the seller or faced any unfair trade practices he can seek
redressal i.e. compensation or damages under this right. This right ensures that all the issues of
the consumers are dealt with and justice is done to him. A proper redressal mechanism has been
set up by the government of India such as the consumer courts and forums at district and national
level which is discussed later in this article.

Right to Consumer Education

It is the right of each and every person who is a citizen of India to have knowledge about all the
laws and policies relating to the consumer. Therefore it is made sure the material regarding the
consumer-related laws is easily available all over India but there is still a major part of the
population who is not aware of his laws and rights. This is the reason many awareness
programmes have been organized by the government of India such as ‘jago grahak Jago’ and the
camps organized by various lawyers in the remote areas of the country.

Duties of a consumer

Every consumer right comes with the opposite duty. Right of one consumer is the duty of the
others. Accordingly, there are various duties such as:-

 On purchasing of goods or hiring of any services, it is the duty of the consumer to pay
for the same.
 While purchasing something it is his duty to check weights, balances, prices etc. and
also to give a careful reading to the labels.
 It is the duty of the consumer to update himself about the various consumer protection
schemes.
 Duty to be careful while purchasing and not to fall in the trap of misleading
information and advertisements.
 It is the duty of the consumer to not purchase anything from the black markets.
  It is the duty of the consumer to be aware of his rights and duties and also spreading
the awareness of the same among others.
 It is the consumers’ duty to file a complaint if the goods which he purchased are
defective.
 Each and every consumer should secure the bills of the goods purchased or the
services availed so that if in the future he finds the goods or services to be defective he
can easily file a complaint against the same and can prove it.

Major definitions

 Complaint– According to Sec-2(1)(c) any allegation made by the consumer regarding

any restrictive or unfair trade practice which the traders have adopted such as goods
bought by a consumer are defective, services hired or availed by him suffer some
deficiency, trader has charged an excessive price of the goods mentioned in the
complaint, goods or services which are hazardous to the life and property of the
consumer has been offered for sale to the public by the trader or the service provider.
 Consumer Dispute– according to Sec-2(1)(e) of the act it is a situation when a person
denies the allegations filed against him in a complaint.
 Person– according to Sec-2(1)(m) of the act the word person includes a registered or
unregistered firm, a Hindu undivided family, co-operative society and any other
association which is registered as a person under the Societies Registration Act of
1860.

 Service– according to Sec-2(1)(o) service means any description or any facility which
is provided to the potential users and is not rendered free of charge or under a contract
of personal service.
Redressal Mechanism

The Consumer Protection Act proposes three-tier redressal mechanism: quasi-judicial machinery
at the National, state and district level. The jurisdiction of each consumer redressal forum has
been described under this act.

District Consumer Disputes Redressal Forum

Each and every district has a District Consumer Disputes Redressal Forum. According to Sec-
11 of this act, this forum has the jurisdiction to entertain complaints and disputes only where the
value of the goods or services and the value of the compensation claimed does not exceed Rs 20
Lakhs. The District Forum shall have the same powers as that of a civil court in the
following matters:

 In the summoning and enforcing of attendance of any defendant or witness

 In examining the witness on an oath
 In receiving the evidence on affidavit
 In any other matter which may be prescribed
 Demanding of the report of concerned analysis or test from the appropriate laboratory
or from any other authorized relevant source.
 In discovering and producing any document or other material objects which are
producible as evidence in the forum.

The District forum shall consist of a President i.e. the head of the commission who is or has been
or is qualified to be a district judge and two other members possessing a bachelors degree from a
recognized university and one of them shall be a woman.

The members of a commission shall be the persons of ability, integrity and standing and have
adequate knowledge and experience regarding the field of a consumer. Each and every member
of the district forum shall either hold the office for a term of 5 years or up to the age of 65 years,
whichever is earlier.
State Consumer Disputes Redressal Commission

Each and every State has a State Commission. According to Sec-17 of the act, the pecuniary
jurisdiction of a State Commission for entertaining complaints or issues where the value of goods
or services and the value of the compensation claimed exceeds Rs. 20 Lakhs but is less than Rs.
1 crore.

The State Commission shall consist of a President and the other two members. The President
shall be a person who is or has been qualified to be a Judge of High Court and the other two
members shall be possessing a bachelors degree from a recognized university. Out of two
members, one shall be a woman.

The members of a commission shall be the persons of ability, integrity and standing and have
adequate knowledge and experience regarding the field of a consumer. Each and every member
of the district forum shall either hold the office for a term of 5 years or up to the age of 67 years,
whichever is earlier.

National Consumer Disputes Redressal Commission

The National Commission was instituted in 1988. It is headed by a sitting or retired Judge of the
Supreme Court of India. The present President of the commission is Justice R.K. Agrawal who is
a former Judge of the Supreme Court of India. According to Sec-21 of the act, the pecuniary
jurisdiction of a National Commission for entertaining complaints or issues where the value of
goods or services and the value of the compensation claimed is more than Rs. 1 crore.

The National Commission has been constituted with various powers such as:

 It has the powers of administrative control over all the State Commissions. It can call
all the State Commissions or any one of them for periodical returns regarding the
institution, disposal and pendency of cases.
 It can adopt a uniform procedure in the hearing of the matters.
 It can provide a speedy grant of copies of documents to the parties.
 It also has a general power of overseeing the functioning of the State Commissions
and the District Forums.
  It has the power of providing prior service of the copies of the documents produced by
one party to the opposite parties.

In addition to the President of the commission, it shall consist of 4 other members, out of which
at least one shall be a woman. All of these members shall fulfil the following conditions to be
able to qualify as a member in the National Commission:

1. Their age should not be less than 35 years of age.

2. They shall be possessing a bachelors degree from a recognized university.
3. They shall be a person of ability, integrity and standing and have adequate knowledge
and experience regarding the field of a consumer.

Every member of the commission shall hold office for a term of 5 years or up to the age of 70
years whichever is earlier.

Who can file a complaint?

According to sec-2(1)(b) a complainant can be a person who is:

 A consumer, or
 Any voluntary consumer association registered under the Companies Act of 1956 or
under any other law for the time being in force, or
 The Central Government or any State Government, who or which makes a complaint,
or
 One or more consumers, where there is more than one consumer they shall have the
same interest for filing a collective complaint, or
 In the case of death of a consumer, his legal heir or representative who or which
makes a complaint.
How to file a Complaint?

The very first step before filing a complaint the aggrieved party should do is to send a notice to
the service provider from whom the goods were purchased or the service was availed informing
him about the defects in the goods or the deficiency in the service or unfair practice. This notice
is sent to the trader or the aggrieved party in order to see if that company or trader is willing to

give the compensation or offer any other remedy. If in case the trader or service provider is not
willing to provide with any remedy, the aggrieved party shall go ahead with filing a formal
complaint.

The next step is to file a formal complaint under the Consumer Protection Act of 1986. Here the
aggrieved party does not need to hire a lawyer in order to file a complaint. He can file the
complaint on his own. The aggrieved party just need to write down the following contents on
a plain paper:

 Name, description and the address of the complainant and of the opposite party or
parties
 Facts relating to the complaint and time and venue where it arose
 All the possible documents in support of the allegations contained in the complaint
 The relief or the remedy claimed by the complainant
 The complaint should consist of signatures of the complainant or his authorized agent

The next step after the drafting of the complaint is to choose the appropriate authority under
whom the complaint is to be filed. The complainant shall choose the authority according to
pecuniary jurisdiction of his complaint i.e. the total value of the goods or services and the
compensation claimed by him. It is to be noted here that the complainant can also file an online
complaint on www.consumerhelpline.gov.in
Furthermore, the complainant needs to pay the prescribed court fees according to the pecuniary
value of his case. Following are the fee details of the court fees:

For District forums

 Up to Rs 1 lakh: Rs 100
 Between Rs 1-5 lakh: Rs 200
 Between Rs 5-10 lakh: Rs 400
 Above Rs 10 lakh and up to Rs 20 lakh: Rs 500

For State Commissions

 Above Rs 20 lakh but less than Rs 50 lakh: Rs 2,000

 Above Rs 50 lakh and up to Rs 1 crore: Rs 4,000

For the National Commission

A standard amount of Rs 5,000

The Forum under which the complaint has been filed by the aggrieved party is under a mandate
to provide the resolution to the parties within a period of 30 days. If it fails to adhere with the
same the party can move to the next commission.

The limitation period for filing a Complaint or Appeal to higher commission

 Filing of a complaint– the complainant can file a case against the trader or the service
provider only within two years from the date on which the cause of action arose. The
 forum may entertain the case in case of delay only if the complainant gives sufficient
cause.
 Appeal to the State Commission– according to sec-15 of the act an appeal can be
filed to the State Commission by any person who is aggrieved by an order passed by
the District Forum within a period of thirty days from the date of an order, in a form
and manner prescribed under the act. If an appeal is filed after the expiry of the period
of limitation the State Commission has the discretion to entertain that appeal if the
complainant shows sufficient cause for not filing an appeal within the limitation
period.
 Appeal to the National Commission – according to sec-19 of the act an appeal can be
filed to the National Commission by a person aggrieved by the order passed by the
State Commission within 30 days from the date of receipt of order. The appeal to be
accompanied by a copy of an affidavit.
 Appeal to the Supreme Court of India– according to sec-23 of the act an appeal
may be referred to the Supreme Court of India by the party aggrieved by the order
passed by the National Commission within a period of 30 days from the date of order
passed.

 Revision Petition to the National Commission– sec-21(b) of the act vests the power
in the National Consumer Disputes Redressal Commission to call for the records and
pass appropriate orders in any consumer dispute which is either pending or has been
decided by the State Commission. The National Commission can exercise its
revisional jurisdiction only if it appears to the commission that the State Commission
has acted illegally or with irregularity or outside its jurisdiction. Such a Revision
Petition can be filed within a period of 90 days from the date of the order passed by
the aggrieved party.
Remedies available under the Act

The Consumer Protection Act provides consumers with various remedies. Following are the
remedies available under the act:

 Removal of Defects– if the consumer after conducting a proper test by using the
product finds the product to be defective then the authority can pass an order of
removing the defects in the product.
 Replacement of goods
 Refund of the price paid by the consumer while purchasing the product.
 Award of Consumption– a consumer can demand compensation from the trader or
service provider if because of his negligence the consumer has suffered some physical
or any other loss.
 Removal of Deficiency in Service – the authority can pass orders for removal of the
deficiency if there is any deficiency in delivery of the service, for instance, if the
consumer has applied for a loan and has fulfilled all the formalities but the bank is
making unnecessary delay in sanctioning the loan, then the court can pass orders to
sanction the loan.
 Discontinuance of Unfair/ Restrictive Trade Practice– if a complaint is filed by the
consumer against any unfair trade practice in the market, the authority can order an
immediate withdrawal of such practice and can also pass an order for banning such
trade practice.
 Stopping of sale of hazardous goods
 Withdrawal of hazardous goods from the market.
 Payment of the adequate cost
Consumer Protection Amendment Bill of 2018

The Consumer Protection Act of 1986 has been amended thrice but the act is still not sufficient
to deal with challenges such as online transactions, multi-level and digital marketing. The Bill
has proposed to make various changes in the ancient act in order to provide better protection to
the rights and interests of the consumer. Following are the changes which the Bill proposes:

 Central Protection Councils(CPCs)– in the act of 1986 CPCs just has the authority
to promote and protect the rights of consumers but as proposed in the Bill CPCs will
be advisory bodies for promotion and protection of consumer rights.
 The ambit of law– the 2018 Bill includes all goods and services, telecom and housing
construction and all modes of transactions for consideration while excludes free and
personal services.
 Unfair trade practice– this Bill proposes the addition of three more types to the list
of unfair trade practices as given in the act of 1986 i.e.

1. Failure to issue a bill or receipt

2. Refusal to accept a good returned within 30 days
3. Disclosure of personal information given in confidence, unless required by law or in
public interest.

 Product liability– earlier there was no provision of product liability in the act of 1986
but now this Bill proposes that claim for product liability can be made against the
manufacturer, service provider and seller. Moreover, compensation can be obtained by
just proving one of the various conditions mentioned in the Bill.
 The pecuniary jurisdiction of the Commissions – this Bill proposes to change the
pecuniary jurisdiction of the commissions to Rs 1 crore for District Forum; between
Rs 1 crore and 10 crores for State Commission; and above Rs 10 crores for National
Commission.
 Alternate dispute redressal mechanism– there was no such provision in the original
act but now the Bill proposes to attach Meditation cells to the District, State and
National Commissions.
 E-commerce– the Bill mentions and defines direct selling, e-commerce and electronic
service provider which were not there in the act of 1986. Moreover. The central
government may prescribe rules for preventing unfair trade practices in e-commerce
and direct selling.

 Penalties– the Bill proposes a change in the penalty i.e. imprisonment up to three
years or fine not less than Rs 25,000 which can be extended to Rs one lakh or both.