Question

PRINCIPLES: A master is liable for the wrongful acts of his servants
A person can be called a servant, only if there is a relation of employment and he acts under the order and on behalf of his master.

FACTS: X bank launched a saving scheme for poor sections of the society and the customer can deposit Rs. 10 per day. Y, an unemployed youth collected money from several customers and on behalf of them deposited the money at the Bank everyday. The bank everyday. The bank gave to Y a small commission. After sometime, Y disappeared without depositing the money given by the customers. The customers bring a suit alleging that the Bank is liable.

DECIDE.

• A. The Bank is liable because it paid commission to Y.
• B. The Bank is liable because Y was their servant.
• C. The Bank is not liabled because Y was not their servant
• D. No one is liable.

Answer 1

Answer: (B)

The Bank is liable because Y was their servant.

Vicarious liability can be defined as a legal doctrine that assigns liability for an injury to a person who did not cause the injury who has a particular relationship to the person who did act negligently. It can also be called as imputed negligence. This doctrine arises under the common law doctrine of agency, respondeat superior, the responsibility of the superior for the acts of their subordinate or, in a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the activities of a violator. Hence, the bank will be held liable.

B is the correct option.