MEGHALAYA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
SHILLONG
BEFORE
Honble President Mr. Justice P.K. Musahary (Retd.)
Honble Senior Member Mr. Ramesh Bawri
F.A. No.1 of 2014
The Chairman
Women Thrift and Credit
Co operative Society Ltd
Iawmawsiang, Jowai
…………………….Appellant
Versus
1. Smt. Wa I sa Sumer
Panaliar, Jowai,
West Jaintia Hills District
2. Smt. Rilung Sumer
Panaliar, Jowai
West Jaintia Hills District
………………….Respondents
For the Appellant Mr. H. Kharmih, Advocate
Mr. L. Shongwan, Advocate
For the Respondent No.1 Mr. P. Nongbri, Advocate
Smt. A. Thangkhiew, Advocate
For the Respondent No.2 Mr. S. Jindal, Advocate (Amicus
Curiae)
Date of Judgment and Order 19.06.2015
Judgment and Order
Per Mr. Justice (Retd) P.K. Musahary, President This appeal is preferred against the order dated 27.01.2014 passed in Consumer Case No. 52 2013 by the District Consumer Disputes Redressal Forum, West Jaintia Hills District, Jowai (District Forum in short).
2. The relevant facts as could be gathered from the pleadings of the parties before the District Forum are that the Respondent No. 1 Complainant, along with others have been making daily deposits ranging from Rs. 10 to 1000 in the Appellant OP society. Respondent No. 2 OP No. 2 is the Agent of the Appellant society. She used to collect the daily deposits from the investors but defaulted in depositing some amounts in the respective accounts of the investors with the Appellant. She had allegedly misused misappropriated the amounts collected from the investors. The amount involved is Rs. 2,10,550.
3. The District Forum, vide the impugned order, directed the Appellant society to pay the said amount in full or in installments to the complainants within a period of three months and close the complainants accounts on expiry of the period granted and after due release of all permissible amounts.
4. We have heard Mr. H. Kharmih, learned counsel for the Appellant and Mr. P. Nongbri, learned counsel for the Respondent No. 1. We have also heard Mr. S. Jindal learned counsel appearing as amicus curiae for the Respondent No. 2.
5. The learned counsel for the appellant, without pressing all the 22 grounds taken in the Memo of Appeal, concentrated his arguments on the following points only
- That the District Forum illegally entertained the complaint petition filed by the Respondent No. 1 although he was not authorized by other investors in any manner and as such the impugned order is liable to be quashed,
- That even if the impugned order is held valid, it should be made applicable to Respondent No. 1 only without extending the benefit thereof to other investors who were are not made party complainants,
- That the District Forum misconstrued and wrongly applied the principle of vicarious liability on the appellant for the wrongful act committed by Respondent No. 2 for her own benefit without the knowledge and consent of the Appellant society,
- That the learned District Forum fixed determined the amount of liability without consulting the record of the Appellant society and taking any evidence, particularly on the amounts allegedly not deposited by the Respondent No. 2 i.e. agent of the society.
6. The main thrust of argument of the learned counsel for the Appellant is on the applicability of the principle of vicarious liability. It is submitted that the District Forum failed to appreciate the evidence on record that Respondent No. 2 admitted in writing that as an Agent she collected the money from the customers investors and misused it for her own benefit. It is also submitted that the District Forum failed to consider the evidence on record that the Appellant society, having come to know about the misappropriation of money, lodged an FIR and got it registered against the Agent Respondent No. 2. The misappropriation of money, as argued by Mr. Kharmih, learned counsel, was not done in collusion with the Appellant and it was an independent act of the Agent not committed in the course of employment for which the master (Appellant society) cannot be held liable by application of the principle of vicarious liability. In support of the above submission, the learned counsel has relied upon the following decisions
- Patel Maganbhai Bapujibhai and others Vs Patel Ishwarbhai Motibhai and others, reported in AIR 1984 Gujarat 69
- Sitaram Motilal Kalal Vs Santanu Prasad Jaishankar Bhatt, reported in AIR 1966 SC 1697 and
- State of Maharashtra and others Vs Kanchanmala Vijaysing Shirke and others, reported in (1995) 5 SCC 659 equal AIR 1995 SC 2499.
7. In Patel Maganbhais case, a trustee of temple directed an independent contractor to provide facility of lighting and mike at temple for a month by diverting electric supply from connection given for agricultural purpose without informing the electricity board which was palpably hazardous. The electric connection remained on the spot for about 15 days without any untoward incident. But thereafter on a particular day the plaintiff, while he was working in his field got electric shock on account of the electricity escaping from the naked wire which was passing over his field. The plaintiff suffered grievous injuries as a result of electric shock. We are afraid that the decision rendered by the Gujarat High Court has no applicability to the present case inasmuch as the Respondent No. 2 is admittedly an agent of the Appellant society who was appointed so and authorized to collect the daily deposits from the investors. The said Respondent No. 2, as an agent, is not an independent contractor.
8. The case of Sitaram Motilal involves three persons the owner of the motor car, the driver of the motor car engaged by the owner and the cleaner of the car engaged by the driver. The driver allowed the cleaner to drive the vehicle for obtaining a licence for assisting him as a driver. An accident was committed by the cleaner due to his negligence. It was held that the cleaner was a de facto driver and he was not the driver or agent of the owner but one who had obtained the car for his own business not even from the master but from the servant of the master. It was, therefore, held that the acts of the appointed driver and the cleaner, who was engaged by the driver and caused the accident, were not within the scope of their respective or even joint employment and hence the owner of the car was not held liable. The present case before us is clearly distinguishable inasmuch as the appellant society admittedly engaged the Respondent No. 2 as a collector of the society. The Respondent No. 2 is an agent of the appellant society and she was not appointed engaged by any intermediary authority of the society. We wonder how the ratio of decision in the above case is applicable to the present case.
9. In Kanchanmalas case, a jeep was used for official purpose to transport the government employees to meet the workload in the office during the year ending in the month of March. The driver of the vehicle consumed liquor and he allowed an employee of the office to drive the jeep. The jeep unfortunately met with an accident causing death to a scooterist. It was a case where the authorized act was done in an unauthorized manner. The vehicle being used in connection with the affairs of the state and for official purpose, the accident that took place due to negligent driving of the person authorized by the government driver who was not in a position to drive the vehicle due to consumption of liquor, the court granted exemption under Section 94 (1) of the Motor Vehicle Act 1939. It was held that the state was vicariously liable for motor accident occurred due to negligent act of its employee. We fail to understand how the said case extends a helping hand to the Appellant.
10. The Supreme Court ruling in Sitaram Motilals case (Supra) settles the position of law against the appellant. It is held in paragraph 33 that just as the tort must be committed by a servant either under the actual control of his master or while acting in the course of his employment, the act of the agent will only make the principal liable if it is done within the scope of his authority. In other words, an agent will make the principal responsible so long as the agent does the act within the scope of his authority or does so under the actual control of the principal. It is not required to show that the act of the servant or the agent must be for the masters benefit. What is to be shown is that the servant or agent acted in the course of his employment. We do not want to refer to other case laws on this point because the said legal position still holds the field. The appellant could not prove that the Respondent No. 2 was not appointed or engaged as its Agent. Nor could it prove that the wrongful act was not committed by the Respondent No. 2 in the course of her employment. What the appellant was trying to show is that it did not authorize the Respondent No. 2 to do the wrongful act and it had no knowledge about the wrongful act of its agent. This pleading or submission of the appellant does not help the appellant to escape from the vicarious liability for the wrongful act done by the Respondent No. 2 during the course of employment. The filing of FIR against the agent (Respondent No. 2) for the purpose of showing that the wrongful act was done by the Respondent No. 2 independently without being authorized by the appellant (master) cannot save the position and exempt the Appellant from its vicarious liability. We are, therefore, of the firm opinion that the principle of vicarious liability is indeed applicable to the present case. The appellant is to make good the loss suffered by the investors for the wrongful act committed by its agent. If the Appellants wish to proceed against Respondent No. 2 in separate proceedings they are obviously at liberty to do so, in accordance with law.
11. Now we examine the allegation of illegally entertaining the complaint petition filed by the Respondent No. 1 on behalf of other investors without any authority vested on her. On perusal of the records we have found that the complaint was filed by the Respondent No. 1 alone furnishing the names of the investors and the details of investment made by eight persons including Respondent No. 1 and one Sri O. R. Challam. The names of present Respondent No. 1 Smt. Wa l sa Sumer and Sri O.R. Challam stood as claimants in the compliant petition before the District Forum in case No. 52 of 2013. How Shri O. R. Challam was singled out and added as a party is not clear to us. This ought not to have been done when the Complaint was signed by the Respondent No. 1 alone and there was nothing to show that it was a representative complaint. The impugned judgment was delivered directing the opposite party to make and release the admissible payments to all the investors including the aforesaid two complainants in general without impleading all the investors as party petitioners. In the impugned judgment, it is reflected that the investors invested money at different rates per day for different durations starting from different dates. The cause of action of the investors arose on different dates and as such it required adjudication in separate proceedings. We find the submission of the learned counsel for the appellant quite reasonable and sound. In the aforesaid facts and circumstances and for the ends of justice it is desirable that the impugned order, in so far as it is made applicable to investors, other than Respondent No. 1 who are not impleaded as party petitioners, is liable to be quashed. It is accordingly quashed, however without interfering with the portion of the order pertaining to payment release of undisputed amount to all the Investors as indicated in column 4 of the statement given in the later portion of the order inasmuch as the appellant had submitted before the Commission on 25.07.2014 that the amounts mentioned in column 4 would be paid by the appellant within 30 days from the date of order. The appellant is, therefore, directed to pay the undisputed amounts to all the investors, if the same are not yet paid.
We are also of the considered view that the disputed amounts which have allegedly been misappropriated by the agent (Respondent No. 2) are required to be examined and proved by examining the relevant records of the appellant society and appreciation of all evidence, oral and or documentary, to be adduced by the parties in support of their cases. It must not be forgotten that Section 13(2)(b) of the Consumer Protection Act, 1986 mandates that the District Forum is required to settle disputes only on the basis of evidence brought to its notice by the Complainant and the Opposite Parties. The records do not show that any evidence was taken in the case although 28.11.2013 was fixed for the purpose. The impugned order is therefore set aside and the matter is remanded to the District Forum for a limited purpose to adjudicate upon and decide the question of payment of the disputed amount even in respect of Respondent No.1, on the basis of evidence to be adduced by the parties and available records within a period of 60 days from the date of receipt of this order along with the records. The other investors, including Shri O.R. Challam, who are aggrieved/affected by the wrongful act or misappropriation of the invested money, are left with liberty to file individual or joint petition before the District Forum and if such petition petitions are filed, the District Forum shall adjudicate upon and decide their cases in accordance with law and on the basis of evidence adduced before it by the parties.
12. In the aforesaid facts and circumstances of the case, this appeal stands partly allowed holding however, that the principle of vicarious liability of the Appellant is applicable to the present case. The appellant is directed to make payment of the undisputed amounts to all the investors as mentioned in the impugned order if not yet paid, leaving the disputed amounts to be decided by the District Forum on receipt of separate individual petitions or joint petition from the investors concerned claiming return of the invested money allegedly misused misappropriated by the appellant societys agent (Respondent No. 2), in accordance with the law. The Respondent No.1 shall not be required to file fresh petition like the other investors. With the above observations and directions the appeal stands disposed of. Return the records forthwith. Also return the deposit made by the Appellant while filing the Appeal.
13. Before parting, we would like to express our thankfulness to Shri Sandeep Jindal, Advocate, who readily agreed to act as Amicus Curiae in the case as Respondent No. 2 expressed her inability to engage a lawyer and admirably assisted us in the matter. His services are now dispensed with.
14. Per: Mr. Ramesh Bawri, Senior Member While in complete agreement with the Judgment and Order passed by my Honble President, on the issue of vicarious liability of the Appellant I would respectfully add as follows.
15. To support his case, learned counsel for the Appellant has vehemently stressed on the following observations of the Honble Supreme Court made in Para 27 of the judgment in the case of Sitaram Motilal Kalal v. Santanuprasad Jaishanker Phatta (AIR 1966 SC 1697), in which the Honble Apex Court held as under
(27) The law is settled that a master is vicariously liable for the acts of his servant acting in the course of his employment. Unless the act is done in the course of employment, the servants act does not make the employer liable. In other words, for the masters liability to arise, the act must be a wrongful act authorized by the master or a wrongful and unauthorized mode of doing some act authorized by the master. The driver of a car taking the car on the masters business makes him vicariously liable if he commits an accident. But it is equally well settled that if the servant, at the time of the accident, is not acting within the course of his employment but is doing something for himself the master is not liable. There is a presumption that vehicle is driven on the master's business and by his authorized agent or servant but the presumption can be met. It was negatived in this case, because the vehicle was proved to be driven by an unauthorized person and on his own business. The de facto driver was not the driver or the agent of the owner but one who had obtained the car for his own business not even from the master but from a servant of the master. Prima facie, the owner would not be liable in such circumstances.
16. Although at first glance these observations may appear to partly support his case, the true import of the Sitaram judgment has been made clear by the Honble Supreme Court itself in several later judgments which reveal that the law with regard to vicarious liability is evolving and developing. Over the years, the approach of the Courts is becoming more liberal and the trend is moving towards making the master liable for the acts of the servant.
17. The Sitaram judgment was considered by the Honble Supreme Court in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. (AIR 1977 SC 1735). In this case one P was travelling in the car being driven by the Manager of the respondent-company. The car dashed against the tree resulting in the death of P. The widow of P filed claim petition under the Motor Vehicles Act against the company the owner of the Car. The High Court following the decision of Sita Ram Motilal Kalal case (supra) held that the owner cannot be held to be vicariously liable in taking Purshotam as a passenger as the said act was neither in the course of employment nor under any authority of the owner. The Supreme Court upset the findings of the High Court and held that the owner was liable to pay the compensation. The Apex Court in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. (supra) held thus:
14. Before we conclude we would like to point out that the trend in law is to make the master liable for acts which do not strictly fall within the term in the course of the employment as ordinarily understood. We have referred to Sitaram Motilal Kalal v. Santanuprasad Jaishankar Batti, where this Court accepted the law laid down by Lord Denning in Ormrod v. Crosville Motor Services Ltd. 1953 (2) All ER 753 (supra) that the owner is not only liable for the negligence of the driver if that driver is his servant acting in the course of his employment but also when the driver is, with the owners consent, driving the car on the owners business or for the owners purposes. This extension has been accepted by this Court.
18. A similar point came up before the Apex Court in State of Maharashtra v. Kanchanmala Vijaysing Shirke (AIR 1995 SC 2499) which has been relied upon by the Appellants themselves, where the Hon’ble Apex Court held as follows
15. On behalf of the appellants reliance was placed on the judgment in the case of Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt. In that case the owner of the vehicle entrusted it to A for plying as a taxi. B used to clean the taxi. He was either employed by the owner or by A. A trained B to drive the vehicle and took B for obtaining the licence for driving. While taking the test B caused bodily injury to the respondent. At the time of the accident, A was not present in the vehicle. On the question whether the owner was liable, it was held in the majority judgment that the owner was not liable because evidence did not disclose that owner had employed B to drive the taxi or given him the permission to drive the taxi. However, Subba Rao, J. (as he then was) held that the owner was liable because A did not exceed the authority conferred on him by the owner in employing B as a servant and permitted him to drive the vehicle in order to obtain the licence for assisting him as a driver. This case was considered by this Court in the case of Pushpabai and it was said that recent trend in law is to make the master liable for acts which do not strictly fall within the term in the course of the employment as ordinarily understood. The learned Counsel for the appellants sought to distinguish Pushpabai case by contending that therein this Court accepted the unauthorized act of the driver being within the course of employment because of his occupying high position of Manager, whereas in the case at hand Appellant 3 the driver was a Class IV employee. We do not think that the ratio of the case turns on the opposition occupied by the driver. The real thrust of the decision is acceptance of the trend to make the master liable for acts which do not strictly fall within the term in the course of employment as ordinarily understood.
Further referring to the Sitaram case and elucidating its true import, it was held therein as follows This Court has held that the test is whether the act was done on the owners business or that it was proved to have been impliedly authorized by the owner. At page 537 (of SCR) it is stated that the law is settled that master is vicariously liable for the acts of his servants acting in the course of his employment. Unless the act is done in the course of employment, the servants act does not make the employer liable. In other words, for the masters liability to arise, the act must be a wrongful act authorised by the master or a wrongful and unauthorized mode of doing some act authorised by the master.
19. The aforementioned Pushpabai and Kanchanmala judgments were again reiterated and relied upon in Sohan Lal Passi vs P. Sesh Reddy and Ors (AIR 1996 SC 2627). The Honble Supreme Court also cited with approval Halsburys Laws of England, Fourth Edn., Vol.16, paragraph 739 where it is stated as follows
Where the act which the employee is expressly authorised to do is lawful, the employer is nevertheless responsible for the manner in which the employee executes his authority. If, therefore, the employee does the act in such a manner as to occasion injury to a third person, the employer cannot escape liability on the ground that he did not actually authorise the particular manner in which the act was done, or even on the, ground that the employee was acting on his own behalf and not on that of his employer.
20. From a reading of the various judgments cited above it is thus clear that the law with regard to vicarious liability has been made more liberal and the rule of vicarious liability has been expanded by judicial pronouncements, based on which we have no hesitation whatsoever in holding that the Appellants are vicariously liable for the actions of its Agent, under the facts and circumstances of the case.
SENIOR MEMBER PRESIDENT
