Question

PRINCIPLES

I. A master is liable for the wrongful acts of his servant.
II. 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 ₹10 per day. Y, an unemployed youth, collected money from several customers, and on behalf of them deposited the money at the bank every day. The bank gave to Y a small commission. After some time, Y disappeared without depositing the money given by the customers. The customers bring a suit alleging that the bank is liable. Decide 

Options

• the bank is liable because it paid commission to Y

• the bank is liable because Y was their servant

• the bank is not liable because Y was not their servant

• No one is liable

Answer 1

the bank is liable because Y was their servant