Vicarious Liability in Indian Tort Law

Tort Law | July 6, 2025

Vicarious Liability in Indian Tort Law

Written by Subhasree Rath, 2nd year B.A L.L.B student at DES Shri Navalmal Firodia Law College, Pune

Vicarious liability is one of the tort law principles. It is when the law says that someone could be made liable for an unlawful act committed by another. In contradiction to the general rule that an unlawful act and liability rest on the person who commits the act, this is an exception to that rule. The most common relationship is between an employer and employee. In India, however, the doctrine has mostly grown through judicial interpretation instead of codification, thus demonstrating the influence of the English common law.

The purpose of this study is to delve into the scope, application, and growth of the doctrine of vicarious liability in India. It will then analyze the important Supreme Court decisions, consider public policy factors, and deal with the new legal challenges of present times. This legal research article is structured to start with the concept of vicarious liability in tort. It then expatiates on some important Indian case laws and finally concludes on implications and necessary reforms.

LEGAL FRAMEWORK-

According to the vicarious liability principle in law, an employer or principal will be held responsible for any wrongs committed by his employee or agent provided the acts are committed in the course of employment. It is based on the maxim in respondent superior, "let the master answer," meaning those who are in control of or gain from the acts of others should also be responsible for any injury caused as a consequence. Unlike the U.K., which has the Crown Proceedings Act, 1947, India does not have any articulated law specifying the State's liability in tort. Article 300 of the Indian Constitution permits the Union and the States to sue or be sued but does not specify the situations creating such liability. Supreme Court and various High Court decisions indicate that the State is held liable for wrongful acts of its employees only when such acts are done in the course of non-sovereign or administrative functions.

STATUTORY & JUDICIAL BASIS-

Vicarious liability is not directly defined in Indian laws. It has developed through common law principles and has been influenced by judicial interpretation over time. Some of the related provisions and laws are as follows:

SECTION 300 OF THE CONSTITUTION OF INDIA, Article 300 allows the Union and State to sue or be sued in their official names. It confirms their vicarious liability for actions taken by employees while performing their official duties. This keeps the legal stance on government accountability the same as before the Constitution.

INDIAN CONTRACT ACT, 1872. (Sections 182-238) Outline the rules that define the principal-agent relationship, the powers of the agent, and the duties of both parties.

INDIAN PARTNERSHIP ACT, 1932. Section 25 of the Indian Partnership Act, 1932, Partners are jointly and separately responsible for the firm's actions during their partnership. This means that any or all partners can be held accountable for the firm's debts or responsibilities.

Key Indian case laws that form the backbone of this doctrine include-

In Rajasthan State Road Transport Corporation v. Kailash Nath Kothari (1997) 7 SCC 481, The SC found the State Transport Corporation liable for negligent driving resulting in a fatal accident. The driver was on duty and was carrying out his employment duties. The Court rejected the contention that the corporation would not be liable for the personal negligence of the driver. The Court stated that even public authorities must hold their employees responsible for their actions. It thereby reinforced the principle that an employer is liable for wrongful acts committed by employees in the course of their duties and emphasized the need to pay compensation to victims in cases involving negligence of public service.

In Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co., (1977) 2 SCC 745 the Supreme Court found the employer responsible for the careless driving of its manager, which led to a fatal accident. The Court used the doctrine of res ipsa loquitur, meaning "the thing speaks for itself," to assume negligence due to the nature of the crash. This case confirmed that employers are liable for actions taken during work.

In Kasturi Lal v. State of U.P. (1965), the Supreme Court ruled that the State was not responsible for a police officer’s theft during official duties, such as making arrests and seizing property. Even with clear negligence, the Court maintained sovereign immunity. This decision established the doctrine in Indian tort law, but it received criticism for protecting public negligence.

“Vicarious liability has specific requirements. There must be a legally recognized relationship, like that between an employer and employee or a principal and agent. The wrongful act must happen within that relationship. In criminal or regulatory matters, the law must clearly state this liability.”

There are exceptions to this rule. If an act occurs outside of employment or after the relationship ends, then vicarious liability may not apply. Furthermore, without a law that states otherwise, vicarious liability cannot be enforced in criminal cases. Also, principals are usually not liable for the actions of independent contractors unless a statute explicitly states so.

“Indian courts have moved from the traditional "control test" to the "close connection" test to determine vicarious liability. They now focus on whether the wrongful act is closely tied to the employee’s duties. Even without statutory codification, the judiciary has depended on English common law and constitutional values. This reliance has created a consistent legal framework. The approach strikes a fair balance between justice, public interest, and administrative responsibility.”

ANALYSIS OF VICARIOUS LIABILITY IN INDIAN TORT LAW-

Issue:

Can an employer or principal be held responsible for the wrongful actions of an employee or agent that happen during work hours under Indian tort law? What are the requirements and limits for this kind of liability as set by Indian courts? What exceptions exist to this rule? What is the extent of the ‘course of employment’ requirement for vicarious liability?

Rule-

The principle of vicarious liability makes an employer legally responsible for wrongful acts done by their employees if two key conditions are met:

1. The person who committed the act was an employee (or in a similar role, like an agent) at the time.

2. The act occurred during their work and was closely related to the employee's duties, not done for personal reasons.

“This idea comes from the principle of respondent superior (“let the master answer”) and is commonly recognized in Indian court decisions. However, the rule has limits. Employers are typically not responsible for acts that happen outside the work context, those motivated by personal gain, or acts done by independent contractors.”

Application-

Focused Argument 1: Liability for Acts within the Course of Employment.

“Indian courts have consistently recognized that employers can be held responsible for wrongful acts committed by their employees, as long as those acts happen during their official duties. For example, in Rajasthan State Road Transport Corporation v. Kailash Nath Kothari, the Supreme Court held the corporation accountable for the bus driver's negligence, even though a private owner officially hired the driver. The Court emphasized that the key factor was the actual control and supervision the corporation had over the driver.”

Similarly, In the 1978 case of State Bank of India v. Shyama Devi, the bank clarified that when an employee acts outside their job responsibilities, it has important implications for vicarious liability in banking. This case involved claims that an SBI employee, Kapil Deo Shukla, had fraudulently taken money from Shyama Devi’s savings account. The Supreme Court ruled that the bank was not liable because the employee's actions were beyond his assigned duties and not related to his official role.

Focused argument 2- Foreseeability and Scope of Employment.

Courts look at both the nature of the wrongful act and whether it was a foreseeable result of the employee’s role in the organization.

This involves using the “scope of employment” test. This test asks if the employer could have reasonably predicted the type of conduct as part of the employee’s regular duties. If the act is seen as foreseeable, it boosts the chances of proving vicarious liability.

Courts also use the “control test,” which measures how much authority the employer has over how the employee performs their tasks. More control from the employer raises the likelihood of being held vicariously liable.

“Additionally, the “integration test” examines whether the employee’s responsibilities are an essential part of the business. If the role is strongly tied to the employer’s operations, the chances of proving vicarious liability are much higher. These tests help courts assess the link between the wrongful act and the employment, laying the groundwork for holding the employer liable.”

Counter arguments and limitations-

Personal Acts Beyond Employment: When an employee acts for personal reasons or outside their official duties, the employer is not responsible. This was confirmed in State Bank of India v. Shyama Devi, where the wrongful act had nothing to do with the employee’s role.

Independent Contractors: Employers usually aren't liable for the wrongful acts of independent contractors, unless the task is inherently dangerous or the law gives the employer a responsibility that cannot be passed on.

Sovereign Functions of the State: In cases involving sovereign authority, the State is not liable for the wrongful acts of its employees. This principle was established in Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh, where the act was seen as part of sovereign duties.

CONCLUSION-

“Indian tort law views vicarious liability as an important principle for holding employers or principals accountable for wrongful acts committed by their employees, as long as those acts happen within their job duties. This research article looks at how Indian courts evaluate this liability by examining the legal relationship, the link between the act and the employment, and whether the behaviour was reasonably predictable. It also discusses major limitations of the doctrine, particularly in cases involving independent contractors, acts motivated by personal interest, or those carried out under government authority. By using important case law and recognized legal tests, the article aims to provide a fair viewpoint that supports victims while preventing unjust liability for employers.”