Question

A handed over ₹5,000 to her neighbour B, who was an employee of a bank, and asked him to deposit the money in her account, instead of doing so, B spent the money. A sues the bank for damages.

Options

• The bank will be liable since B was its employee

• The bank will not be liable since B was not authorized to collect money from A

• The bank will not be liable since A gave money to B in his capacity as a neighbour and not as an employee of the bank

• The bank will not be liable since this is a criminal act

Answer 1

The bank will not be liable since B was not authorised to collect money from A

Explanation:

"The bank will not be liable since B was not authorised to collect money from A" is correct because 'B' was not instructed to collect money. Though 'A' knows 'B' as his neighbor and he works in a bank, but it does not apply the principle that the Bank will be liable. The authority to collect money was hence unauthorized Act.