Question

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.

Legal Principle: Master/Principal is vicariously liable for the tort committed by a servant/agent, in the performance of his duties as a servant/agent.

Factual situation: A gave some cash and cheques to his friend B, who was an employee of the State Bank of India, to deposit the same in that Bank in the account of A. B misappropriated the amount. If A sues the Bank for damages, then the Bank is DECISION:

Options

• Liable to pay because it was the employer of B

• Liable to pay because the employee did it during business hours and while working as an employee

• Not liable because he turned out to be the friend of the plaintiff’s husband

• Not liable because while committing the fraud, he was not acting as the agent or employee of the Bank 

Answer 1

Not liable because while committing the fraud, he was not acting as the agent or employee of the Bank

Explanation:

From the factual position it is clear that the act of B  has been done outside the course of employment. Here "Not liable because while committing the fraud, he was not acting as the agent or employee of the Bank" is the correct answer.