DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSTIY

VISAKHAPATNAM, A. P., INDIA

PROJECT TITLE:

VICARIOUS LIABILITY IN CRIMINAL LAW

SUBJECT:

IPC-1

NAME OF THE FACULTY:

DR. P. VARA LAKSHMI, B.A (HONS.) LLB, M.L., PH.D.

(ASSOCIATE PROFESSOR)

NAME OF THE STUDENT:

A.SAI SARAYU

ROLL NO:

18LLB007

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 AKNOWLEDGEMENT:

I am highly indebted to my honourable IPC professor Dr. P. Vara Lakshmi madam for giving
me the opportunity to work on the topic vicarious liability in criminal law I want thank her
for me giving me this topic; I completed this project with great effort and interest. I thank my
seniors and friends who helped me to complete this project in time.

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TABLE OF CONTENT

1. INTRODUCTION ………………………………. .4
2. EVOLUTION OF THE CONCEPT……………………………….. 4
3. THEORIES OF CRIMINAL VICARIOUS LIABILITY …………..6
4. PROVISIONS IN INDIAN PENAL CODE ………………………..6
5. VARIENTS:…………………………………………………………8
6. LIABILITY OF MASTER UNDER INDIAN PENAL CODE:…….9
7. VICARIOUS LIABILITY UNDER CRIMINAL DEFAMATION…11
8. VICARIOUS LIABILTY OF CO- CONSPIRATORS:…………
9. POSITION UNDER IPC ………………………………………………
10. VICARIOUS CRIMINAL LIABILITY UNDER THE NEGOTIABLE
INSTRUMENTS ACT, 1881……………………………………………

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INTRODUCTION:

The civil law holds that if an employee commits a tort in the course of his employment the
employer, as well as the employee, is liable for it. Thus vicarious liability is difficult to
support if considered in terms of justice; but one of the objects of the law of torts is to
compensate the victim of the wrong and it is thought that the object is best effected by giving
him a remedy against the employer, who is more likely to satisfy the judgement than an
employee, and who can, after all, insure against his liability.

The reasoning does not apply in criminal law, the chief object of which is deterrence and
retribution. Here it would seem to be an elementary principle both of justice and of utility that
one person should not be held accountable for the wrong of another. Under this doctrine,
individual can be made vicariously liable for a criminal act of others even if they merely
helped to further the crime in some way example aiding and abetting criminal activities. In
general, utility and retribution cannot be achieved by imposing punishment on a person who
did not do the act and could not have been prevented it by any reasonable precaution.1

EVOLUTION OF THE CONCEPT:

In the earliest extent code of law, Code of Hammurabi, one section provided that if a builder
built a house so poorly that it fell upon the owner’s son and killed him, the builder’s son
should be put to death. In the oldtestament too, group responsibility was accepted, thought
the prophets Jeremiah and Ezekiel protested against it. By the time of the new testament, the
personal atomistic conception of dutyhad become fully established in religious thought. Even
then it did not completely permeate against it. Notwithstanding that the criminal courts do not
apply a wide general principle on this subject, something like vicarious criminal liability is
still recognised for certain minor criminal offences, the object being to induce the defendant
to exercise control over others. One instance occurs in relation to juveniles. The court may
order that fines, compensations and costs awarded against a young person shall be paid by his
parent or guardian unless, in the circumstances, the court thinks it would be unreasonable to
make them pay.2 There are various other examples of criminal liability for the act of another
which will be discussed in the further project.

1
Dennis J. Baker, Glanville Williams textbook of criminal law, fourth edition,2017, pg 209
2
Dennis J. Baker, Glanville Williams textbook of criminal law, fourth edition,2017, pg 210

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In the present times,the doctrine of vicarious liability is more frequently invoked under
special enactments, such as Defence of India Rules 1962, The India Army Act 1911, The
Prevention of Food Adulteration Act 1954, The Drugs Act 1940, etc. A master is held
criminally liable for the violation of rules contained under the aforesaid statutes, provided
that his agent or servant, during the course of employment, committed such act.

In common law, the state is not liable for the criminal acts, committed by its servants.
This is based on the principle that king can do no wrong and he is not bound by the statutes
unless he is expressly named. The position of India was also the same till 1967.However, in
superintendent and remembrance of legal affairs in west Bengal v. corporation of Calcutta a
full bench of 9 judges overruled its earlier decision in director of rationing and distribution v.
corporation of Calcutta. In this case it was held that the law doctrine which states that the
crown is not bound by a statute will not be applicable from the date after the commencement
of constitution.3

When it comes to the criminal liability of corporations, the early common law rejected
the concept of collective or imputed guilt that was pervasive in medieval law. Only
individuals who commit a crime with a guilty state of mind could be guilty of crime. this
ruled out corporate guilt, which is exactly what the chief justice of England said in 1701
when he announced that corporations could not be charged with crime. The point was also
obvious to Blackstone who, in his famous commentaries published in 1765, said simply that a
corporation cannot commit treason or felony or other crime in its corporate capacity. He
didn’t give any further clarifications regarding this. Later in 1909, in the case of New York
central and Hudson river railroad company v. united states the supreme court held that since
corporations were already liable in tort under the doctrine of Respondeat Superior, the court
considered it obvious that they could also be convicted criminally. Now, in India there are so
many provisions in IPC through which these corporations can be convicted. It will be
discussed further in the chapter “corporate criminal liability.”

3
J. LI. J. Edwards, vicarious liability in criminal law, the modern law review, vol 14, no:3, July 1951 pg 334-336

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THEORIES OF CRIMINAL VICARIOUS LIABILITY:

RESPONDEAT SUPERIOR:

The doctrine of Respondeat superior is developed from torts for which the master will be held
liable for the illegal acts of their servants.Under the Vicarious Liability model, corporation
may become criminally liable for the illegal acts of officers, employees or agents, provided it
can be established that:

a) The individual’s actions were within the scope of his employment; and

b) The individual’s actions were intended, at least in part, to benefit the corporation.

IDENTIFICATION THEORY:

It requires that the corporation takes responsibility for those, who have decision-making
authority over matters of corporate policy rather than those vested only with implementing
the policy. It is not sufficient merely to establish that any employee or agent acted criminally.
This theory was mainly developed in England and was criticised for its limited application.4

THEORY OF SANCTIONING:

With respect to sanctioning a corporate entity, the conventional and for the most part only,
approach has been to impose a fine. This has obvious drawbacks, since a fine, whether
imposed by an administrative agency or a judicial body, has only a limited preventive effect
and must be considered to be reactive rather than proactive, or preventive.

PROVISIONS IN INDIAN PENAL CODE:

There are some provisions in IPC regarding vicarious liability.

 According to section 2 of IPC every person shall be liable for punishment under this
code and not otherwise for every act or omission contrary to the provisions thereof, of
which he shall be guilty within India.

4
Gregory J. Elliis and Beth Anne Alcantar, franchisor liability for the criminal act of other, franchise law journal,
vol 18, no 1 1998, pg 12-15

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  The word person in section 2 is defined in section 11 of IPC which includes company
or association or body of persons. So, we can say that corporations shall be liable for
punishment under this code.

 Section 149 provides for vicarious liability, it states that if an offence is committed
by any member of an unlawful assembly in prosecution of a common object thereof
or such as the members of that assembly knew that the offence to be likely to be
committed in prosecution of that object, every person who at the time of committing
that offence was member would be guilty of the offence committed.

 Section 154 holds owners or occupiers of land, or persons having or claiming an

interest in land, criminally liable for intentional failure of their servants or managers
in giving information to the public authorities, or in taking adequate measures to stop
the occurrence of an unlawful assembly or riot on their land. The liability on the
owners or occupiers of land has been fixed on the assumption that such persons, by
virtue of their position as land-holders, possess the power of controlling and
regulating such type of gatherings on their property, and to disperse if the object of
such gatherings becomes illegal.5

 Section 155 fixes vicarious liability on the owners or occupiers of land or persons
claiming interest in land, for the acts or omissions of their managers or agents, if a
riot takes place or an unlawful assembly is held in the interest of such class of
persons.

 Section 156 imposes personal liability on the managers or the agents of such owners
or occupiers of property on whose land a riot or an unlawful assembly is committed.

 Section 268 and 269 explicitly deals with public nuisance. Under this section a
master is made vicariously liable for the public nuisance committed by servant.

 Section 499 makes a master vicariously liable for publication of a libel by his
servant. Defamation is an offence under this section.

5
AshwiniPriya, Vicarious liability under criminal law in India, International Journal of Law and Legal
Jurisprudence Studies, Volume 3 Issue 3

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VARIENTS:

MASTER AND SERVANT:

In criminal law the responsibility of the master for the wrongful acts of the servants depends
on the positive and negative by the statute concerned. Here the important factor is not master
and servant relationship but the breach of personal duty of the principal who is liable for
failing to ensure accurate performance statutory obligation.

Although it is like the master is punished for the offences of committed by others but if he
had been more careful the offence, the act would not have been committed. His guilt in a
sense, not vicarious but personal. This does not mean that master will be liable if servant does
act forbidden not all acts impose such heavy personal obligations but it depends on the
intention of the legislature in drafting the section.

The master is liable if the servant commits wrong act even after express commands given by
the master and it is of no importance that the delegation has been to servant rather than agent
or independent contractor. By analogy under criminal law once it is established that the duty
of ensuring performance is absolute and personal, the actual relationship of the two parties is
of no importance whether they be master and servant or principal and agent or joint licensees
and accused in such a cases whether they falls under any stringent law is guilty because being
responsible in law, he has chosen to delegate his duties, powers and authority to another who
has misperformed. He is liable not because his servant infringed the absolute prohibition but
by delegating a wrong person he failed in his personal duty to ensure performance of his
statutory obligation. Moreover it is not only for sections of absolute prohibition but also for
the sections requiring men’s rea. In sections requiring specific intent or guilty mind then the
guilty mind or specific intent of the servant or agent is sufficient even though master has no
knowledge of the criminal act.

In criminal law, apart from the questions of abetting and aiding this involves the personal
knowledge on the part of master, liability depends on the nature of prohibition and obligation
involved. The master is guilty because he cannot escape the liability of breach of his own
duty.6

6
Prevezer, S. "Master and Servant. Criminal Liability." The Modern Law Review 16, no. 2 (1953):
236-40. http://www.jstor.org/stable/1091965.

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LIABILITY OF MASTER UNDER INDIAN PENAL CODE:

In criminal law, unlike in the law of torts, a master is not held vicariously liable for the acts
of his servants or agents on the principle of respondent superior. This is to say, it is only the
man who commits a crime is liable for it. However, the IPC makes a departure from the
general rule in a few cases, on the principle of respondent superior.7 Such cases are

1. A master is vicariously liable and punishable for publication of a libel by his servant.
Defamation is an offence under Sec. 499 and is punishable under Sec. 500 of the
Indian Penal Code.

2. A master is vicariously liable and is punishable for a public nuisance committed by

servant. Sections 268, 269 to 290 of the IPC deals with Public nuisance.

3. In India, vicarious liability is imposed on owners or occupiers of land when unlawful

assembly or riot takes place in their land. Sections 154, 155 and 156 deal with
vicarious liability.

VICARIOUS LIABILTY OF MASTER UNDER OFFENCES AGAINST THE

PUBLIC TRANQUILITY:

Sections 154, 155 and 156 incorporate the principle of vicarious liability under criminal law.
The owner or occupier of land on which a riot takes place, or a person for whose benefit it
takes place, and also their agents or managers, if they fail to inform the police of such
happening, or if they do not use all means at their command to suppress or avert rioting, are
held liable and punished. A master is held criminally liable under sections 154 and 155 of
IPC for the acts of the agent or servants, whereas section 156 fixes personal liability on the
manager and agents.

SEC 154. LIABILITY OF OWNER OR OCCUPIER OF LAND USED FOR

UNLAWFUL ASSEMBLY:

The owner or occupiers of the land or claiming to have interest in land are vicariously liable
for intentional failure of their servants or managers in giving information to public
authorities, or to take adequate and lawful measures to stop the occurrence of an unlawful

7
KD GAUR “ CRIMINAL LAW CASES AND MATERIALS. “ SIXTH EDITION 2009 PP 193

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assembly or riot upon the land of such persons. Then the owners or occupiers of the land will
vicariously liable for the acts of their servants or managers.

The liability of the on the part of owners or occupiers of land has been fixed on the
assumption that such persons by virtue of their position as landlords possess the power of
controlling and regulating such type of gatherings upon their property and to disperse, if the
object of such gathering is illegal

SEC155. LIABILITY OF THE PERSON FOR WHOSE BENEFIT RIOT IS

COMMITTED:

Whenever a riot on behalf or in the benefit of any person who is the owner or occupier of any
land, respecting which riot takes place or who claims to have interest in any such land or in
the subject of any dispute which gave rise to riot or derived or accepted any benefit
therefrom, such person shall be liable even if he or his agent or manager, having reason to
believe such riot is likely to happen or an unlawful assembly by which such riot was
committed is likely to held, shall not respectively use lawful means in his or their power to
prevent such assembly or riot from taking place and for suppressing or dispersing the same.

Section 155 is aggravated form of the offence prescribed under section 154 of IPC. Sec 155
makes owners or occupiers of the land or persons claiming interest in such land vicarious
liable for the intentional failure of their servants or managers in informing adequate public
officer or to take lawful and adequate measures to prevent happening of riot or an unlawful
assembly by which such was committed upon such land. The riot or unlawful assembly
should be held in interest of such class persons i.e., owners or occupiers of land or persons
claiming interest in such land. The owners or occupiers should derive or accept benefit from
such riot.

SEC 156 LIABILITY OF AGENT OF OWNER OR OCCUPIER FOR WHOSE

BENEFIT RIOT COMMITTED:

When riot is happened in the benefit or on behalf of a person who is owner or occupier of
land or claims interest in such land then if it is proved that the agent or manager of such
person didn’t take any adequate action even after reasonably believe that the riot or unlawful
assembly is likely to happen then the agent or manager will liable under sec 156 of IPC.

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VICARIOUS LIABILITY UNDER CRIMINAL DEFAMATION:

In case of defamation, only the source of information on which the person accused has acted
and the justification for his so acting is to be considered. If the publisher of journal does not
take proper care and acted upon a gossip against the victim hereby defamed, then he will be
vicariously liable for the wrong information given by his employee. He ought not to escape
the consequence on the ground that he contracted the incorrect report. He has no defence in
the matter that he acted upon the information of others. It is for him to establish that the
source on which he acted is a proper source on which he is entitled and he did with care and
circumspection. Therefore the editor and publisher liable for the baseless and false matter
which was published in the journal.

In matter of defamation the position of newspaper is not different from that of member of the
public in general. The editor and the publisher of the newspaper are responsible the
defamatory statement made by the reporter. The reporter will be liable prima facie for the
article whereas the vicarious liability against the editor and publisher under press and
registration of books act, 18678. The publisher of a newspaper is responsible for the
defamatory matter in such paper whether he knows the contents of the paper or not. The
editor will be liable even though the libel is published in his absence and without his
knowledge when he entrusted responsibility to a competent person in his absence.

From the press and registration of books act, 1867 it is evident that it is the editor who
controls the selection of matter that is published. The editor controls the selection of the
article that is published. Therefore, he has to keep an careful eye on the selection. Blue
penciling of news articles by anyone other than the Editor is not welcome in a democratic
polity. Editors have to take responsibility of everything they publish and to maintain the
integrity of published record. Editors and publishers should be careful about what is being
published otherwise they will be vicariously liable for the false and baseless information.

VICARIOUS LIABILTY OF CO- CONSPIRATORS:

When two or more persons agreed to do a combined offence and entered in to conspiracy
agreement to do a wrongful act. While achieving the objective one of the members
committed a substantive crime then the remaining members will be vicariously liable for the
substantive crimes. This is approved in the landmark judgment of pinkerton v. United States.

8
T. VENAKATA RAMI REDDY V. SRI MALLA REDDY,1999 (2) ALD 110, 1999 (1) ALT 769

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Before the case the federal courts used to trail differently for substantive crimes and main
crime. But however the conspiracy are referred as ‘partnership in crime’ and by analogy the
civil law the liability of conspirator is extended to all other co-conspirators. But unlike civil
law the criminal law has its foundation from personal and individual guilt and any vicarious
liability is repugnant to common law principles9. But the liability of the co conspirators for
the substantive crime committed by the one of the conspirators is valid as the remaining
conspirators has aided or abetted the substantive crime or would have foreseen the happening
of substantive crime. But the wisdom of such of rule cannot be left in vaccum as it results in
difficulty of free trail of the crimes due to existence number of criminals, the lax rules of
evidence, the stigma of offence and the confusion of jury makes questionable any desirability
of extension of conspirators’ liability. It is easy to take the defence of that the act is not part
of the agreement. This makes the conspiracy liability very narrow and it will be difficult to
punish the conspirators till they have knowledge of commission of substantive crime. So,
after the pinkerton case they made additional safety under conspiracy by making co-
conspirators liable vicariously for the substantive crimes. The accused can be discharged
from the liability of the substantive crimes by proving his with drawl from the continuing
liability. Renunciation can be shown only by inaction, lack of knowledge of the substantive
crime. But if he failed to prove then he will not be exempted from the liability. Even though
innocents are being liable along with the conspirators, still the law stringent because of the
gravity.

POSITION UNDER IPC:

When a group of people with common intention entered into agreement to commit a crime
then it is known as conspiracy. The members are known as conspirators. They liable for the
common objective equally as others even only few of them actually committed the crime. In
same way when any member committed a crime in pursuit of main objective then all other
members will be vicariously liable for the substantial crime if they can reasonably
foreseeable the crime to occur. It should be done as part of the main crime.

9
"Vicarious Liability for Criminal Offenses of Co-Conspirators." The Yale Law Journal 56, no. 2 (1947):
371-78. doi:10.2307/793011.

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For example, when a group of people agreed to commit a robbery they foresee that to escape
they have to steal the car. If any member steals the car the remaining will liable for stealing
car even though few they didn’t gave accent to it. The co- conspirators will be held liable
vicariously for substantive crimes under sec 120B of IPC.

VICARIOUS LIABILITY OF STATE:

In England, the state is not liable for the criminal acts committed by its servants. This is
based on the contention that the ‘King can do no wrong’ and that the ‘ the King is not by a
statute unless he is expressly named or unless he is bound by necessary implication’.

In India, the position is same till 1967 was similar to that in england law and the state cannot
be proceeded against under the IPC or under any other statute. However the common law
doctrine, which states that the crown (state) is not bound by statute, save by express
provisions or necessary implication, is not the law of land after the constitution of India came
into existence. Under Article 300 it is stated that the government of India will be liable as
union of India and states under the name of state. It is also stated that the Government of
India can sue and sued under respective affairs. Both penal and civil statutes apply to citizens
and state alike.

The general Act applies to citizens and state alike unless it is expressly or by necessary
implication exempts the state from the liability. The state can make an Act, if it chooses,
providing for its exemption from its operation if such an Act provided does not infringe the
fundamental rights, will give the necessary relief to the state.

It is clear that the state cannot be sanctioned imprisonment as in practical sense that the state
cannot be kept in prison. It cannot be sanctioned with fine as the payer and receiver will be
same. The state cannot pay fine to itself but the state can be made vicarious liable for the acts
of the employee to pay compensation to the victims and also the employee can be
imprisoned.

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CORPORATE CRIMINAL LIABILITY

A corporation is a legal person , for example a limited company, a person distinct from the
persons who are members of it. The corporation, as distinct from its members, has no
physical existence .It exists only in law. It cannot therefore act or form intention except
through its members. But a corporation can incur legal liabilities, both civil and criminal. .
In criminal law the corporation can be held to be personally liable because the acts in the
course of the corporations business of those officers who control its affairs , and the
intentions with which those acts are done are deemed to be the acts and intention of the
corporation.10

In the case of HL Bolton (Engineering) Co. Ltd. v. T.J. Graham & Sons Ltd it was held that
, A company may in many ways be likened to a human body. It has a brain and nerve centre
which controls what it does. It also has hands which hold the tools and act in accordance with
directions from the centre. Some of the people in the company are mere servants and agents
who are nothing more than hands to do the work and cannot be said to represent the mind or
will. Others are directors and managers who represent the directing mind and will of the
company, and control what it does. The state of mind of these managers is the state of mind
of the company and is treated by the law as such.11

For a corporation to be liable for the acts of an individual: (1) the individual must be acting
within the scope of her employment; (2) the individual must be acting to benefit the
corporation; and the act and intent must be imputed to the corporation.12 A corporations
penal liability, in brief, depends on the nature of the offence, the relative position of the
individual vis-à-vis the corporate body and other relevant facts which could show that the
corporate body, as such, meant or intended to commit the act.

Corporate agents may commit a range of crimes that are unrelated to the existence or
activities of the corporation , it would be inappropriate to charge corporations with liability
for these crimes save for the rare case in which the corporation is particularly effective at
deterring them failing to take proper measures to discourage it.

10
DAVID ORMEROD & KARL LAIRD , SMITH AND HOGANS TEXT, CASES, MATERIALS ON
CRIMINAL LAW PG NO: 302(11 TH EDITION , 2014)
11
HL BOLTON (ENGINEERING) CO LTD V TJ GRAHAM AND SONS LTD: CA 1957
12
Joseph S.Hall , Corporate criminal liability, 35Am.Crim.L.Rev.549 pg no 550 (1998)

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Policies of this sort may be termed "negligence-based" liability. The term is something of a
misnomer, as liability on the corporation is always "strict" at some level-here, however,
instead of "strict" liability for the criminal acts of its agents, the corporation would bear
"strict" liability for the failure of its (possibly different) agents to put in place proper
measures to discourage corporate crime. 13

Federal scenario :

Federal courts have found corporations liable even when there was no single employee at
fault. The so-called "collective knowledge" doctrine permits the prosecution of a corporation
if its employees collectively knew, or reasonably should have known, that a criminal
violation existed. The apparent rationale behind this doctrine is a desire to prevent
corporations from evading liability by compartmentalizing and dividing duties such that the
corporation could plead ignorance in the face of any criminal prosecution. Willful Blindness
Doctrine Corporations also can be criminally liable for deliberately disregarding criminal
activity. This "willful blindness doctrine" usually is applied to situations in which a corporate
agent became suspicious of a criminal violation, but in order to avoid culpability took no
action to mitigate or investigate further. The deliberate avoidance of such investigation will
subject a party to liability. United States v. Bank of New England, N.A., a t illustrates this
doctrine. Corporations may be liable for conspiracies committed by their employees, or even
by one sole employee. In United States v. Hughes Aircraft, the Ninth Circuit affirmed a
conviction on the grounds that one employee's efforts to defraud the government, brought to
the attention of and ignored by supervisors, constituted conspiracy under the relevant federal
statute.

The message of the Pinto case was that big, profit- hungry corporations could be criminals
even if none of the their employees committed any criminal acts. Many of the cases were
high profile and involved big stakes. The government's criminal prosecution of the
investment banking firm of Drexel Burnham, and Drexel Burnham's eventual guilty plea,
eventually led to that firm's bankruptcy. Exxon pled guilty to a number of environmental
crimes after the Exxon Valdez oil spill and wound up paying the government $120 million in
criminal fines in addition to the billions of dollars it paid in cleanup efforts and civil

13
Daniel R.FIScheel and Alan Osyles The journal of legal nstudies, vol 25, No.2(jun., 1996) pp.319-349.

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settlements. Exxon is also currently appealing a $6 billion punitive damage award that an
Alaska jury awarded a class of fisherman. There have been other exam- ples of the new focus
on corporate criminal prosecutions. The govern- ment's Operation III Wind investigation into
defense-procurement fraud, for example, resulted in criminal convictions of virtually every
major defense contractor with total fines paid to the government in the hundreds of
millions.14

Many environmental crimes are strict liability or negligence offenses; criminal statutes
prohibiting making false statements to the government have been interpreted by courts as not
requiring any intent to defraud the government.

In many jurisdictions , corporations are responsible for punitive damages against an agent
whenever they are also responsible for compensatory damages- typically, when the agent
commits a wrong within the scope of employ- ment. Elsewhere, corporations are liable for
punitive damages if the culpable agent acted in a managerial capacity.

Development in India:

Section 11 defines that the ‘person’ would include “any Company of Association or body of
persons, whether incorporated or not". Hence, corporations can be prosecuted under IPC for
the crimes committed.

Section 2 of Ipc provides that, A company is liable to be prosecuted and punished, but
liability of the Managing Director and Director would arise provided any provision exists in
that behalf of statute.15

The issue of corporate liability was addressed in ground breaking cases of Assistant
Comissioner, Assesment, Bangalorevveliappa textiles and standard chartered bankv
directorate of enforcement. Companies cannot escape prosecution just because the offense for
which they must be prosecuted ,involves a mandatory sentence of imprisonement. In Iridium
India telecomltd v Motorola Incorporated and ors that the position of corporation is same as
any individual attracting conviction under common law and statutory offences including even
those where mens rea is necessary. It embraced the principles of attribution and imputation.16

14
Joseph S.Hall , Corporate criminal liability, 35Am.Crim.L.Rev.549 pg no 555-556 (1998)

15
Ratanlal&Dhirajlal , The Indian penal code 34 th edition(justice ks Thomas and ma Rashid)
16
Multi dimensional theories of corporate criminal liability by artitaneja ,Jamia law journal

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The imposition of criminal liability on the firm might be said to provide the firm with the
correct incentives to invest in cost-justified precautions to prevent crimes from occurring.
Likewise, it will force the firm to internalize the costs of its activities and induce it to operate
at the correct scale.

Like wise, a penalty in excess of the social cost of the crime (adjusted for the probability of
nondetection) will cause the private gains from monitoring to exceed the social gains. The
result will be an inefficiently high level of investment in monitoring. And, because the costs
of excessive monitoring must be recovered through prices, improperly high penalties create
additional inefficiencies because the price of goods or services produced by corporations will
exceed their social costs. Finally, higher penalties raise the stakes in litigation and tend to
produce socially unproductive litigation costs.

If at all, the imposition of criminal liability on a corporation is socially desirable, one must
compare the net benefits of imposing corporate criminal liability with the net benefits of
imposing alternative liability strategies. Such alternative liability options include imposing
civil liability on a corporation, imposing civil liability on a manager, imposing criminal
liability on a manager, and imposing criminal or civil liability on a third party. If corporate
civil liability always has greater net benefits than corporate criminal liability does, corporate
civil liability should simply replace corporate criminal liability. On the other hand, if
corporate criminal liability is sometimes preferable to corporate civil liability, then corporate
criminal liability must be compared to the other liability regimes as well.17

SPECIAL CASES WHERE THE SUPERIOR ASSUMES AN

EXCEPTIONAL POSITION OF VICARIOUS LIABILITY

The doctrine of vicarious liability, the entire course of its evolution ( both in English law and
furthermore in Indian law) and the variants and the constituents of the doctrine have been
analyzed in the above sections. In furtherance, the scope of the application of the doctrine, in
other words, all those cases over which the ambit of the concept of criminal vicarious liability
extends (criminal vicarious liability of the state, criminal vicarious liability arising out of
corporate crimes, liability of co-conspirators etc.) have been approach in light of relevant
legal principles and case laws. At this point it is significant to realize that the common law

17
Corporate liability , what purpose does it serve by V s khanna

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doctrine of vicarious liability is one that had been shaped and sculpted on the basis of critical
and contradicting nexus. Therefore, throughout the course of its evolution the doctrine has
been characterized with ever extending scope. The ambit has been extended to new areas
where the superior now assumes an exceptional position of criminal vicarious liability.
Nevertheless , this scope of the doctrine has been critically scrutinized.

THE LICENSEE CASES( A TYPE OF MASTER AND AGENT RELATIONSHIP)

Position in English law:

The licensee cases are one of those which have been given exceptional position under the
ambit of criminal vicarious liability. The doctrine has been strictly scrutinized in which the
principle is as follows; 'where a person having a public licensee delegates to a servant the
management of the business in respect of which the licensee is granted ...the licensee
becomes vicariously responsible not only for the acts but even the states of mind of his
delegate, though the statute makes no mention of the situation 18`.

In the case of Vane v. Yiannopoullos19the house of lords considered that the term
"knowingly" with reference to the state of mind of the licensee himself and not the servant
who committed the actus reus (though the prosecutors appeal was dismissed later as the
licensee has no such knowledge.).Therefore when the licensee intentionally or knowingly
authorizes his agent to do an act within the scope of authority the licensee provides for, he
will be vicarious liable. Further, in the absence of proof of actual knowledge, the licensee
may be held liable if he will be shown effectively to have " delegated ' his proprietary or
managerial functions .`20This was established to be the delegation principle.

The delegation principle was not extensive or elaborative enough, and was critically
subjected to the influence of many contradicting ideas and approaches. This has led to the use
of many defenses by the licensees to escape the consequential vicarious liability. One of the
most frequented defences is the defense of ' absence of knowledge or ignorance based on
reasonable grounds' . For example, In the case of Gifford vs police, regarding the 'supplying
' of liquor by a barman to a young man under the age of twenty one years and the liability of

18
Glanville Williams, ‘Mens rea and vicarious liability ‘91959) 9 C.L.P. 57 at p.61
19
(1966) I W.L.R 534
20
Glanville Williams,’Mens rea and vicarious liability’91959) 9 C.L.P.57 at p. 504

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the manager for the barman’s act21, it was argued that the manager could not be convicted in
the absence of knowledge . However, the arguments were dismissed and the conviction was
upheld.

Another such defence is ' even though there is Mens rea, the delegation is not complete' etc.
This was substantiated by lord Evershed, according to whom “delegation is the handling over
of all the effective management"22. However the same was critically contradicted by North. P
in the case of Gifford vs. Police as he stated that "I guard myself against appearing to assent
to the view that in order that vicarious responsibility should exist in the case of licensing
offences...it is necessary that the delegation should be complete"23. Moreover, considering
the need for the concept of vicarious liability as an established judicial instrument in the field
of statuatoty construction and the test accepted to be one of delegation, the application of "
the objective test" instead of " the subjective test on reasonable grounds " was upheld
subsequently. in this way the exercise is simplified as the delegation test would apply in
cases where Mens rea is applied and would be equally applicable to the licensing cases.

Position in Indian law

The position of this law in India regarding the vicarious liability of the licensee is not
substantially different from the English law. As in England, it is well established in India that
a licensee is responsible for the act of his employee done within the scope of his authority
(even though if in some cases the act is against the instructions of the license)24.

In the case of Emperor v. Mahadevappa Hanmantappa,25 the accused was given a license
under the Indian explosives act 1884 to manufacture gun powder. according to the
instructions the manufacturing process should take place only in an isolated building used
solely for that purpose. the licensee delegated the work a women who further carried on the
manufacturing process in the accused’s house in the village . There was an explosion. the
accused was held liable though the act of the servant was in contrary to the instructions of the
licensee since the act was within the scope of authority delegated by the licensee the

22
Burns .P, ‘vicarious liability in the criminal law ‘ ( 1960, Ota law rw 4; (1966)
23
Vane v. Yianopoullous (supra) at pp:504-505
24
K.D.Gaur, Criminal Law, 6th edition 2009
25
AIR 1927 Bom 209

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delegation principle). In other words, the act was done in furtherance to the licensees buisness
which was delegated to her but not in her personal interests.

VICARIOUS LIABILITY UNDER THE SPECIAL STATUTES

The doctrine of vicarious liability is more brought up and further is critically scrutinised
under the special enactments such as ;The Negotiable Instruments Act ,185 ; Foot Safety and
Standards Act,2006 etc. A master is held criminally liable for the violation of rules contained
under the aforesaid statutes, provided that his agent or servant, during the course of
employment, committed such an act that caters to such a violation.

VICARIOUS CRIMINAL LIABILITY UNDER THE NEGOTIABLE

INSTRUMENTS ACT, 1881

The Banking , Public financial institutions and Negotiable Instruments laws ( amendment)
Act,1988 has inserted chapter XVII comprising of sections 138 to 142 in the Negotiable
Instruments Act,with effect from 1 April, 1989. This chapter has increased the scope of the
concept of criminal vicarious liability under the Act.26

Under the provisions of Section 138 of the Negotiable Instruments Act ,for 'dishonor of
cheque for insufficiency, etc. of funds' , the drawer was made criminally liable . In other
words, if any cheque drawn by a person on an account maintained by him for the discharge
of any liability, is returned by the bank unpaid due to insufficiency of funds in the account
then such person shall be criminally liable. If, the cheque is issued by a drawer on behalf of
the principle, the principle cannot escape from his liability on a claim made by the affected
person27. Hence, a principle is always bound by the act of his or her agent, as long as he acts
in his authority. Hence he will be vicariously liable for such a criminal offence ( under
section 138 ) committed by the drawer of the cheque, being his agent.

The concept of vicarious liability has also been incorporated, by Section 141( offences by
companies) of the Negotiable Instruments Act , 1881 . under the section, the directors,
manager , secretary and every other person( including the partners of the firm ) who was in
charge of and was responsible to the company for conduct of the buisness of the company,

26
Bhashyam ,Adigas, The Negotiable instruments Act, 19th edition , 2014
27

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when the offence was committed shall be made liable for the offences committed by the
company ,thereby incorporating the concept of vicarious liability. However, even before the
person is made vicariously liable , strict compliance with the statutory requirements would be
insisted

In the case of S.M.S Pharmaceuticals ltd. Vs Neeta Bhalla , this legal positioning of
directors’ vicarious liability has been clearly laid. It was laid down that, by reason of the said
provision under section 141 , a person although is not personally liable for commission of an
offence under section 138 would be vicariously liable if the person accused was ‘incharge of
and responsible for the conduct of buisness of the company’.

Further, In the cases of National Small Industries corporation ltd. Vs. Harmeet singh
paintal and K.K.Ahuja vs. V.K.Vora it was added that, the person shall be vicariously
liable only if he is in charge of and responsible for conduct of biusness of the company at the
relevant time and not on the basis of merely holding a designation or office in the company.

Hence, every officer or employee of a company without an exception could be made liable
by merely making an averment that they were incharge of and responsible to the company for
the conduct or buisness of the company and that it was at the time when the offence was
committed

STATUTES RELATED TO THE PUBLIC WELFARE OFFENCES

When a person holds a profession or a buisness related to the manufacturing or distribution

of food, drugs, therapeutic devicese etc., he acquires greater responsibility and obligatory
duty towards society in general. In case of such responsibility towards the society as a whole
an important field to be considered are the "public welfare offences".’The crimes that
subordinate the personal character of criminal responsibility to the general social and
economic structure "public welfare offenses."’# Although such a public-welfare offence may
not have an expressed provision creating vicarious criminal liability, a superior may be held
liable for the criminal acts of his agent. One such field of “public wellfare offences” are the
offences related to “food safety and standards”.

Food Safety and Standards Act, 2006

The Food Safety and Standards Act, 2006 was established to establish the Food Safety and
Standards Authority of India (FSSAI) for laying down certain standards for articles of food

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and to regulate their manufacture, storage, distribution, sale and import, to ensure availability
of safe and wholesome food for human consumption.

In an effort to regulate the food industry, the FSSAI Act prescribes a number of penalties and
offenses for contravention .The Act prohibits manufacturing, storage ,distribution or sale of
sub-standard articles of food (section 27)#. Mens rea is completely ruled out of consideration
in an offence under the Act.

Further, the Act imputes vaicarious liability to the Directors, Managers, Secretaries or other
Officesr of the Companies for the offences committed by the company. According to section
66 of the Act, When an offence under this Act has been committed by a company, every
person who at the time when the offence was committed, was in charge of, and was
responsible to, the company for the conduct of the business of the company, shall be
vicariously liable for such an offence .

Further, If any person manufacturers, sells, stores or distributes or imports any article of food
without licence, through any person on his behalf , both the principle and the agent are liable
for the commission of the offence. This indicates the fixation of vicarious liability for
committing offences in rough others. However,a master cannot be made criminally liable for
criminal acts of his servant or agent without his association 'directly or indirectly' a deviation
has been intended under the Act

Hence The liability of the master is insisted in the statute itself, as otherwise every master
will be able to act profitably through servants or agents by disowning his liability frustrating
the enforcement of the provisions of the law. The liability as fixed under this Act is thus
absolute and vicarious.# Thus under the Act, an attempt has been made to curb the social
welfare offence of adulteration.in the writers point of view it is necessity rather than
desirability.

In the case of Centre for Public Interest Litigation vs Union of India and others# AIR 2014
SC 49, the Bombay High Court indicated that the Act was framed in order to confer
protection to health and well-being of human beings and in the interests of public health in
India vaicarious liability could be amputed to the superior in such cases.

Although the application of the doctrine of vicarious liability in criminal law, and particularly
under the ‘public welfare offence‘ such as ones related to food safety is heavily criticized that
heavy burden is placed upon a superior or employer for his subordinate's conduct, it is

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necessary to recognize that, rather than desirability it is necessity of the emphasis to be
given to the "public good", that has motivated the application of the doctrine of vicarious
liability to such “public-welfare offences”.

CONCLUSION:

An employer can be held liable for his employee‘s crime, as a general rule, only where the is
a participant in them within the rules governing. It is a matter of our understanding that
imposition of vicarious liability is the work of the courts rather than of Parliament. Statutes
do occasionally say, in terms, that one person is to be liable for another‘s crime. It is more
common, however, for the courts to detect such as intension in statutes. The reason most
commonly advocated by the judges for holding a person liable under vicarious liability is that
the statute would be rendered nugatory and the will of Parliament thereby defeated if he were
not made liable. It may seem rather odd for the courts to be willing to impose liability for the
acts of another on grounds of expediency when the foundation of the criminal law is that a
person should be made liable only for his personal wrongdoings. But in certain cases it
becomes utmost important to make the principal also liable for the act of his subordinate so as
to protect the interest of both the parties i.e. the injured and the offender and to stop the blame
game amongst the principle and his subordinate. It can be concluded by saying that though
principle of vicarious liability is a civil concept yet in a recent scenario it has taken a wide
role under criminal jurisprudence too. To a certain extend it is good also but every case
decided under criminal law for vicarious liability should be guided by basic rationality and
clear evidence in order to classify the test of just, fair and equal. Also, the State too has
vicarious liability in criminal offences. Moreover, the principle of vicarious liability, though
not mentioned specifically under any statute, but is well settled by the decided case laws.
According to American Realism, which relies on judge-made laws, vicarious liability in
criminal wrongs is well established through the judgements, which is incorporated under the
Indian Constitution, under Article 141(law declared by Supreme Court to be binding on all
courts).

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BIBLIOGRAPHY

Books:

1. KD Gaur, Criminal Law: Cases and Materials, 4th Ed., 2005

3. Pollock on Torts, 15th Edition.

4. Michael A. Jones, Textbook on Torts, 2000.

5. N.D. Basu, The Code of Criminal Procedure, 9th Edition, 2001

6. Ratanlal Dheerajlal, Code of Criminal Procedure, 17th Edition reprint 2009, Lexis Nexis
Butterworth Wadhwa, Nagpur.

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E-Sources:

7. http://lawmin.nic.in/ncrwc/finalreport/v2b1-13.htm Accessed on 25th April 2015 at 21.00

IST.

8. http://lawcommissionofindia.nic.in/1-50/report1.pdfAccessed on 25th April 2015 at 21.00

IST.

9. http://www.icsi.edu/webmodules/Programmes/33NC/CORP.CRIMINALLIABILITY.pdf
Accessed on 22nd April 2015 at 20.00 IST.

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