Justification of Vicarious Liability

Author : Sourabh Prakash Ahirwar
Vicarious liability may be imposed on a person for loss or injury resulting from the wrongdoing of another person, even though the person who is vicariously liable may not have been personally at fault.  Vicarious liability in tort arises by virtue of the relationship between the wrongdoer and the person who is vicariously liable. The doctrine of vicarious liability in modern times derives support from the notion that a party who engages others to advance that party’s economic interests should be placed under a liability for losses incurred by third parties in the course of the enterprise. 

The modern justification of vicarious liability is justified by the principle of loss distribution. In the great majority of cases an employer who has to pay damages for the tort of his servant does not in fact have to meet these facilities out of his own pocket. The cost of liabilities is distributed over a large section of the community, and spread over some period of time. This occurs partly because of the practice of insurance and partly because most employers are anyhow not individual but corporation. Where the employer insures against his legal liabilities he will charge the cost of insurance to the good and services which he produces. In general this cost will be passed on by the employer in the form of higher prices to the consumer. 
The consumer himself may also be able to play his part in spreading the cost in his turn, because not all consumer are themselves individuals. Liability of employers for torts that their employee committed without asking them always considers whether the act is negligent or unlawful. First, the vicarious liability regime allows the plaintiff to obtain compensation from someone who is financially capable of satisfying a judgment. The plaintiff benefits greatly from the doctrine of vicarious liability, which allows access to the deep pockets of the employer even when the employer is blameless in any ordinary sense. 
Second, a person, typically a corporation, who employs others to advance its own economic interest should in fairness be placed under a corresponding liability for losses incurred in the course of the enterprise. Third, the regime promotes a wide distribution of the tort losses since the employer is a most suitable channel for passing them on through liability insurance and higher prices. Fourth, vicarious liability is also a coherent doctrine from the perspective of deterrence. Given that it the employer will be held liable it has every incentive to encourage its employees to perform well on the job and to discipline those who are guilty of wrongdoing.
MEANING
Vicarious liability is a form of strict, secondary liability that arises under the Common law doctrine of agency-respondeat superior– the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the “right, ability or duty to control” the activities of a violator. It is rooted in the tort theory of enterprise liability. The rationales of vicarious liability are- Benefits and Burdens of the enterprise – Employee employed to advance employer’s economic interests. Imposes liability for losses created by the activity on person who benefits from it. As employer/master have to carry the burden of his employee/servant wrongful act.
Enterprise Liability –employer is in the best position to know or atleast find out overall cost of accident associated with business proves too much. A means of internalizing losses created by a particular activity to that  enterprise with the aim of broadening the range of persons from whom compensation could be sought. Deterrence/Accident Prevention – Employer is in the best position to adopt safer practices to prevent or reduce accidents. Assumes that person who has introduced risk should be capable of managing risks to reduce or prevent harm to others. Vicarious liability give the employer an incentive to discover which employee are likely to cause harm to other so that the employer can control them or sack them, if necessary. It raises the incentives for vicarious liability encourages accident prevention by giving an employer a financial interest in encouraging his employees to take care for the safety of others .
Arguments that do not depend on incentives of vicarious liability are the social superior and deep-pocket defendant responsible for their employee’s tort. Fair and Efficient Compensation allowed Plaintiff to seek compensation from a deep-pocket defendant who not only is able to absorb and spread losses but has also introduced a risk into the community that has materialized in harm to Plaintiff.  Economic Efficiency and Loss Distribution – Liability is borne by the person best able to spread losses through prices for goods and services and/or insurance premiums. The role of insurance-Insurance effect to the principle of loss distribution, in that the loss is spread across a number of people, who each pay premiums to an insurance company.
EXISTENCE OF RELATION –
“The common law has long recognized that liability for one person’s fault may be imputed to another who is himself entirely without fault solely because of the relationship between them.” There should be a certain kind of relationship between A and B, and the wrongful act done should be connected in certain way connected with the relationship. Two conditions must be met:
  1. Special relationship between primary tortfeasor and the person to be held vicariously liable such as Employer-Employee, Principal-Agent, Master-Servant relationship.
  2. Tort committed in the course of primary tortfeasor’s employment

Vicarious Liability in respect of independent contractors-
A distinction is made between a contract for service and a contract of service. Only the latter gives rise to an employment relationship.Whether tortfeasor is an employer or independent contractor depends on a functional inquiry.
Functional Inquiry-
Stated intentions of parties not determinative Commercial context: Was tortfeasor a person in business of his/her own bearing the risks and responsibilities as well as the benefits of the enterprise.
Non-Profit Enterprises: Whether tortfeasor was acting on his/her own account or on behalf of the employer 
Relevant factors include:- 
Level of control that the employer has over tortfeasor’s activities 
Ownership tools/equipments
Power to hire/fire subordinates
Whether tortfeasor exercises managerial responsibilities
Whether tortfeasor receives a salary/wages or receives payment for specific work. 
RELATIONSHIP OF MASTER-SERVANT IN VICARIOUS LIABILITY-             
If a master does a wrongful act in the course of his employment, the master is liable for it. The servant of course is also liable. According to the doctrine of liability of master on maxim Respondeat superior which means ‘let the principal be liable and it put the master in the same position as if he had done the act himself.’  The maxim qui facit per alium facit per se means “he who does an act through another is deemed in law to do it himself. 
A multitude of very ingenuous reasons have been offered for vicarious liability of a master:-
He has a more or less fictitious ‘control’ over the behavior of the servant.
He has ‘set the whole thing in motion,’ and is therefore responsible for what has happened.
He has selected the servant and trusted him, and so should suffer for his wrongs, rather than an innocent stranger who has had no opportunity to protect himself.
It is a great concession that any man should be permitted to employ another at all, and there should be a corresponding responsibility as the price to be paid for it – or, more frankly and cynically ‘In hard fact, the reason for the employers’ liability is the damages are taken from a deep pocket.’ None of these reasons is so self-sufficient as to carry conviction, although they are all in accord with the general common law notion that one who is in a position to exercise some general control over the situation must exercise it or bear the loss.
A plaintiff has a choice to bring against both master and servant as joint tortfeasors. The liability arises even though the servant acted against the express instructions, and no benefit for the master. The liability of master or master-servant relationship arises when following essentials are present:
1.The tort was committed by the ‘servant’.
 2.The servant committed the tort in course of employment.
A servant is a person employed by another to do work under the direction and control of his master. As a general rule a master is liable for its servant torts not for his independent contractor. If a tort was committed by an employee but not in the course of employment, the employer may still be liable if the situation involved a non-delegable duty.
The Test For Determination Of Relationship
(a) The Control Test-
The basis of control test is to distinguish between servant and independent contractor. Though the servant is under the control of his master regarding of manner of his doing the work, there are many cases in master cannot control his servant. The control test developed from a series of cases that emphasised the degree of control that could be exercised over a worker. The distinction between an employee and an independent contractor was explained in Performing Right Society Ltd v Mitchell & Booker (Palais De Danse) Ltd:
A servant is a person subject to the command of his master as to the manner in which he shall do his work.  …  An independent contractor is one who undertakes to produce a given result, but so that in the actual execution of the work he is not under the order or control of the person for whom he does it, and may use his own discretion in things not specified beforehand.
The trend of modern authorities is to bring into the category of “servants” even those servant which are not subjected to any such control, thus, enormously increasing the ambit of the branch of vicarious liability. The trend of the modern authority is to apply ‘HIRE’ and ‘FIRE’ test. If this should be the only control test this allow the state authority and municipal corporation escape from liability of wrongful act of their servants like house-surgeons and engineers. 
The application of the test meant that, for a long time, employers were not considered to be vicariously liable for the actions of their professional staff where those actions involved the exercise of professional skill.
Cassidy v Ministry of Health [1951] 1 All ER 574, 
The hospital authorities were held liable when due to the negligence of the house surgeon and other staff, during post-operation treatment let the plaintiff hand was rendered useless. Referring to the liability of hospital authorities, 
Denning L.J. observed:–…It is no answer for them (hospital authorities) to say that their staff’s are professional men and women who do not tolerate any interference by their master in the way they do work. The doctor who treated a patient in the Walton hospital can say equally like the crane driver and ships captain…., “I take no order from anybody.” That “sturdy answer” as lord Simonds described it, not only means in each case that he’s skilled men who know his work and carry out in his own way, but it does not mean that the authorities who employ him are not liable for its negligence.”               –
It may be noted that in England, the hospital authority has a duty, under the National Health service Act, 1946, to provide treatment to the patient. If there is a lapse from on the part of the surgeon, etc., it is now possible that the hospital authority may be made primarily liable for the same and the question of vicarious liability may not arise.
The traditional control test was found to be unsatisfactory as the exclusive means of determining who was an employee:
… a false criterion is involved in the view that if, because the work to be done involves the exercise of a particular art or special skill or individual judgment or action, the other party could not in fact control or interfere in its performance, that shows that it is not a contract of service but an independent contract.  …  The duties to be performed may depend so much on special skill or knowledge or they may be so clearly identified or the necessity of the employee acting on his own responsibility may be so evident, that little room for discretion or command in detail may exist.
Technological developments and increased specialisation in the workplace have meant that an employee often exercises a degree of skill and expertise inconsistent with the notion of being subject to the control of the employer. Control is therefore now regarded as having more to do with the right of the employer to exercise control, rather than the actual exercise of it.
(b) The nature of the employment test 
One accepted view is that people who have a ‘contract of service’ (an employment contract) are employees, but people who have a ‘contract for services’ (a service contract) are independent contractors.
CONTACT OF SERVICE(insurable employment income)-                                       
Major points on contract of service-                                                                                
The master can order or require what is to be done                                                         
The master’s power of selection of his servant                                                                
The payment of wages or other remuneration                                                                     
The master right of suspension or dismissal
Person employed as employee base on these factors-                                                        
  1. The person is engaged to work full time during specified hours for a regular salary.                              
  2. The employer has the first call on the person’s services.                                                                        
  3. The person needs the consent of the employer to work for some one else

“Performing Right Society Ltd v. Mitchell and Booker Ltd” [1924] 1 KB 762                                                                                                    “The defendant was the occupier of a dance hall. It engaged a band to provide music in the hall. The agreement provided that the band should not infringe copyright, and that the band would be liable for damages and costs caused by any such infringement. There was also a notice displayed in the hall stating that “[o]nly such music as may be played without fee or license is allowed to be played in this Hall.” The band performed several pieces of music, the copyright in which was held by the Performing Right Society, without its permission. The defendant did not know, and had no reasonable grounds for suspecting, that the infringement was to take place. The PRS abandoned its earlier claim that the defendant had “permitted” the infringement under Copyright Act 1911 (UK). However, it claimed that the band members were the defendant’s employees, and so the defendant was vicariously liable for the infringement. McCardie J. examined the agreement and found that it gave to the defendant “the right of continuous, dominant, and detailed control on every point, including the nature of the music to be played”. Decision-The band is Employee of defendant and defendant is liable for infringement.
CONRTACT FOR SERVICE(non-insurable contract work)-                                  
 Factor for person not employees as a employee-                                                             
  1. The person provides his/her own equipment.                                                                                               
  2. Authority to hire his/her helper.                                                                                                                
  3. Takes a financial risk(including the risk of bad debt and not finding enough  work), has responsibility for investment and management decision.                                                                              
  4. Has an opportunity of profiting from sound management decisions, charges different amount for different jobs, Invoices the employer rather than is paid regularly.                                                                                                    
  5. Send substitute to do the work, spend a large amount of expenses of the work, and is not dependent on one or few clients.

Ready Mixed Concrete v Minister of Pensions and National insurance [1968] 1 All ER 433                                                                                       
Latimer worked for Ready Mixed as an “owner-driver”. He was paid at mileage rates, and was obliged to buy the truck through a financial organization associated with Ready Mixed. The truck was painted in the company’s colors, and he had to wear a Ready Mixed uniform. Latimer was obliged to meet the costs of maintenance, repair and insurance of the truck. The Minister determined that Latimer was employed under a contract of service and therefore an “employed person” under the National Insurance Act 1965 (UK), making Ready Mixed liable to make weekly contributions.                                                                                                               FACTS- In that case the employer did not direct the manner in which the work was to be done-the worker was allowed to use her/his own discretion in doing an aspect of the work that was not specified beforehand-The employer would not make a profit/loss if the work performed by the worker cost less/more than expected-the employer neither supervised nor inspected the work-the worker was allowed to employ others to assist with her/his work; the employer did not pay the worker by time-and the employer did not deduct PAYE tax installments from the worker’s pay; McKenna J examined the contract and held that the rights it conferred, and the duties it imposed, between Latimer and Ready Mixed were not such to make it a contract of service and he is working as Independent contractor.              
c) The ‘integral part of the business test’                                                                          
The “integration test” was developed as an alternative to the control test. It relied upon the role played by the worker within the organisation for which the work was performed:      Denning LJ:… under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas, under the contract for services, his work, although done for the business, is not integrated into it but is only accessory to it  This test was proposed by Lord Denning in later case. It is often easy to recognize a contract of service when you see it, but difficult to say wherein the difference lies. A ship’s master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service; but a ship’s pilot, a taxi-man, and a newspaper contributor are employed under a contract for services. This test provides flexibility necessary to deal with varying types of employment relationships and the changing nature of work practices.
Done for business                                                                                                    
Stevenson Jordan and Harrison Ltd v McDonald and Evans [1952] 1 TLR 101:CA”[1952] 1 TLR 101″ (1)                                                                     
“Evans-Hemming was an accountant who had been employed (first as a servant, then as an executive officer) by Macdonald and Evans. Shortly after he left them, he wrote a textbook on business management and submitted the manuscript to Stevenson Jordan and Harrison (a firm of publishers). He died before the book was published. Macdonald and Evans claimed that the book was written while Evans-Hemming was their employee, and so they owned the copyright in the work under s. 5(1)(b) of the Copyright Act 1911 (UK). The book was divided into five sections. The first section consisted of the text of three public lectures that Evans-Hemming had given while employed by Macdonald and Evans. The Court of Appeal held that he had given these lectures as an independent contractor. 
As Denning LJ said:The lectures were, in a sense, part of the services rendered by Mr Evans-Hemming for the benefit of the company. But they were in no sense part of his service. It follows that the copyright in the lectures was in Mr E.Hemming(plaintiff).
Mr.Evan Hemming Was working as Independent contractor & right under Jordan Ltd.
Integral part of business
“Stevenson Jordan and Harrison Ltd v. Macdonald and Evans (2)” 
SUMMARY:-“Evans-Hemming was an accountant who had been employed (first as a servant, then as an executive officer) by Macdonald and Evans. Shortly after he left them, he wrote a textbook on business management and submitted the manuscript to Stevenson Jordan and Harrison (a firm of publishers). He died before the book was published. Macdonald and Evans claimed that the book was written while Evans-Hemming was their employee, and so they owned the copyright in the work under s. 5(1)(b) of the Copyright Act 1911 (UK).\par The book was divided into five sections. The second section was written in its final form while Evans-Hemming was employed by Macdonald and Evans. The Court of Appeal held that he wrote the second section as an employee, and hence the copyright in the second section was in Macdonald and Evans.” 
RESULT:-Mr. Evan Hemming was Working as an Employee & rights under McDonald’s.
(d) Allocation of financial risk/the economic reality test/multiple facet test-
The proper approach for determining whether a relationship is one of employer and employee, or principal and independent contractor, is to apply what can be described as the multi-facet test.  
Lord Wright suggested a complex test involving for integral part of service-         (a)Control(b) ownership of the tools(c) chance of profit(d) Risk of loss
Is the person who has engaged himself to perform these services performing them as a person in business on his own account?’ 
If the answer is YES, it is a contract for services; if NO, it is a contract of service. 
Cooke J referred to these factors and said that the fundamental test was:: 
(i) whether the person hires his own helpers; and 
(ii) what degree of responsibility for investment and management he has(below case)
Market Investigations v Minister of Social Security [1968] 3 All ER 732-independent contractor
National Insurance -Employed person -Part-time employment -Series of contracts of employment -nether contract of service or for services -Interviewer working for market research company -Extent and degree of control -Nature and provisions of contracts -National Insurance Act 1965 (c 51), s ](2)- National Insurance (Industrial Injuries) Act 1965 (c 52), s ](2),
Question- Market investigation appointed Mrs.Irving under series of service. While working under agreements with the company, Mrs Irving was included in the class of “employed persons”(i.e. persons employed under a series contract of service) for the purposes of the National Insurance Act 1965 s 1(2) ‘, and was employed in “insurable employment” within the meaning of the National Insurance (Industrial Injuries) Act 1965 1(2)b
Fact-MRS. Irving was under a series of contract providing her skill under fixed remuneration. -Mrs. Irving did not provide her own tools or risk her own capital, nor did her opportunity of profit depend in any significant degree on the way she managed her work.- No provision was made in the agreements between Mrs.Irving and the company for time off, sick pay or holidays.
Degree of responsibility for investment and management- The company might specify the persons to be interviewed, the questions to be asked, the order in which questions should be asked and recorded, how answers were to be recorded and how she should probe for answers.-She might be required to attend the company’s office for instructions or might receive these from a supervisor. Within the period specified for completion of a survey, however, she was normally free to work when she wanted, could undertake similar work for other organizations, and could not be moved by the company from the area in which she had agreed to work. 
Furthermore, when she was working in the field the supervisor would have no means of getting into touch with her, and the company’s officers were of the opinion that she could not be dismissed in the middle of a survey.                                                  Here,Mrs.Irving failed to fulfill Major points on contract of service-the master can order or require what is to be done-the master’s power of selection of his servant-the payment of wages or other renumeration-the master right of suspension or dismissal.
Commentary of  J.Cooke-Cooke J referred to these factors and said that the fundamental test was: ‘Is the person who has engaged himself to perform these services performing them as a person in business on his own account?’ If the answer is yes, it is a contract for services; if no, it is a contract of service. There is no exhaustive list of considerations relevant to determining this question, and no strict rules about the relative weight the various considerations should carry in a particular case                      
 Decision-As Mrs.Irving appeal by the Minister was right in concluding that Mrs Irving was employed by the company under a series of contracts of service, and the appeal accordingly must fail.
The J.Cooke factors- done for the business  
Ready Mixed Concrete v Minister of Pensions and NI [1968] 1 All ER 433 – 
Facts-‘Owner-drivers’ who delivered concrete in vehicles hire from an associated company.
-Painted in company colors and which could not be used for private purposes or other haulage business, were employed under a contract of carriage than of service.
-Ownership of the assets (the vehicle), the chance of profit and the risk of loss were the driver’s.
DECISION- These factors were inconsistent with a master-servant relationship. 
INDEPENDENT CONTRACTORS 
The general rule is that a principal is not vicariously liable for the tort of an independent contractor. Where a tort is committed in the course of the performance of work for the benefit of another person, that other person cannot be vicariously liable unless the tortfeasor was the person’s employee or unless the person directly authorized the doing of the tortious act.
Rationale:(A)Principal lacks control over how work is done.
                  (B)Contractor best situated to prevent risks associated with work.
                  (C)Contractor has opportunity to absorb and spread risks incidental to work                                                                                                      Neill LJ : where someone employs an independent contractor to do work on his behalf he is not in the ordinary way responsible for any tort committed by the contractor in the course of the execution of the work.”
Providing an injured plaintiff with a financially viable defendant
The imposition of vicarious liability on an employer for the tort of an employee is said to be justified on the basis that an employer is usually wealthier than an employee and is therefore in a better position to meet an award of damages However, it has been suggested that a principal who engages an independent contractor is not necessarily any wealthier than the contractor
Advancement of the economic interest of an enterprise
When a person employs a contractor, it is his business which is being done, he is the party benefiting from the work, and in the long run he should pay his share of the costs – as indeed, he will since the contractor will charge him appropriately, bearing in mind the liabilities which the law imposes on him.  Further, the imposition of liability for independent contractors encourages employers to seek out and contract with financially responsible contractors who can meet any damages awarded against them 
Distributing the loss
It has been suggested that a principal who engages an independent contractor may not necessarily be better able to spread the cost of the damage. The principal may not be in a position to pass on the loss in the form of higher prices, and may not be covered by insurance against damage caused by the negligence of an independent contractor.
Deterrence of future harm
However, a principal who engages an independent contractor to perform a task may have less knowledge and expertise about the task than the independent contractor, and therefore little capacity to control the independent contractor’s actions.
INDEPENDENT CONTRACTOR PERFORMING NON- DELEGABLE FUNCTION
-Employer has a non-delegable duty to provide a safe system of work for employees.
-Hospitals have been held to owe non- delegable duties of care to their patients.
-school authorities have been held to owe non-delegable duties to their pupils.
-A person in control of land or premises who authorizes the dangerous use of the land or premises in circumstances that impose a foreseeable danger on another person, also owes that other person a non- delegable duty of care.
Non-Delegable Duties:
Principal is vicariously liable for torts of an independent contractor where the duties in question were non delegable either at common law or under statute. A non-delegable duty is a duty imposed by the common law upon a person who has undertaken responsibility for the person or property of another who is in a position of special vulnerability. The special duty arises because the person on whom it is imposed has undertaken. The care, supervision or control of the person or property of another or is so placed in relation to that person or his property as to assume a particular responsibility for his or its safety, in circumstances where the person affected might reasonably expect that due care will be exercised.
The effect of a non-delegable duty is to impose on the person who owes the duty liability for the conduct of another person, in circumstances in which the first person may not be vicariously liable for the consequences of the other person’s conduct. Consequently, although a principal is not vicariously liable for loss or injury caused by an independent contractor, he or she may be personally liable if the conduct of the independent contractor constitutes a breach of a non-delegable duty owed by the principal to the injured person.
The duty is said to be non-delegable because it cannot be met by simply delegating the task to a competent person.
Factors under which an employer can be held liable for the tort of Independent contractor are-
If an employer the doing of an illegal act, or subsequently ratifies the same, he can be made liable for such an act. The reason for such an liability is that employer himself is a part to the wrongful act, along with the independent contractor, and, therefore, he is liable as a joint tortfeasor.
An employer can be liable for the act of an independent contractor in case of strict liability. In Ryland v. Fletcher, the employer could not escape the liability for the damage caused to the plaintiff, when the escape of water from reservoir got which was constructed by the defendant from an independent contractor flooded the plaintiff’s coalmine.
He case of Extra-hazardous work which has been entrusted to an independent contractor, in the case of breach of statutory duty. 
CASE-Maganbhai v. Ishwarbhai-
The chief trustee of the properties of the temple called upon an electrical contractor for illegal diverting the electric supply given for  agriculture purpose, to the temple for one month for the purpose of lighting and mike, the job done by contractor in a palpably obvious Hazardous manner and, Without informing the electricity board.  After about a fortnight, the service line was snapped and the agriculturist who was working in the field, from whose meter the electricity is diverted injured and file a suit against the electricity board. The court held the chief trustee of temple and agriculturist under his knowledge electricity is diverted were held liable.
Cases involving operations on the highway which may cause danger to persons using the highway.                                                                      
Lewis v. BC (1997), 153 D.L.R. (4th) 594 (S.C.C.)–                   
The BC Ministry of Transportation hired an independent contractor to remove dangerous rocks beside a highway. The contractor’s negligence in the performance of the work caused a loose rock to fall, fatally injuring a driver. Ministry of Transportation was held vicariously liable for the negligence of the contractor on the ground that highway maintenance is a non-delegable duty under the Highway Act. Though work may be delegated, the duty to ensure reasonable care in the maintenance of highways cannot because that duty attaches to the power of the Minister.
Negligent selection/hiring of contractor
Negligent supervision of work
contractor hired to do an unlawful act
If the wrong caused to the plaintiff is nuisance in the form of withdrawal of support from the neighbour’s land, the defendant would be liable irrespective of the act  causing the said damage was done by an independent contractor.
When the tort result in the master’s common law duties to his servant, he would be liable for the same and it is no defence that the master was acting through an independent contractor.
INDEPENDENT CONTRACTOR PERFORMING DELEGABLE FUNCTIONS
The master is liable for the tort committee by his servant, but an employer is not liable for the tort committed by an independent contractor employed him.
Morgan V. Incorporated central council of the girls friendly society
Plaintiff was on his way to visit the tenant of offices in a building owned by the defendants. The door leading to the lift was partially open and the plaintiff thinking that the lift was there, stepped through the door, fell down through the shaft and was injured. In an action for damages for the injuries received, the defendant contended that they had contracted with independent contractor to keep the lift in good working order, as they were not responsible.
LIABILITY OF VEHICLE OWNER
There are many cases of accident caused by mechanics or owners of the workshop during test drive of vehicles entrusted to them by the owners of the vehicles for repairs.
Govindarajulu v. M.L.A. Govindraja Mudaliar
After the motor lorry was entrusted by its owner  for repairs, while an employee of the repair workshop drove it, there was an accident. It was held by the Madras High Court that for this accident, the owner of the lorry was not held liable vicariously, because the owner of the workshop was an independent contractor not the servant of the lorry owner.
As the owner of the workshop was held liable.
Similar was also held to be the position in the decision of Punjab&Haryana high court in Devinder Singh v. Mangal Singh, 
In the case, Devinder singh entrusted his truck for repairs to a workshop. While the truck was driven by the owner of the workshop, there was an accident which resulted in the accident which resulted in the injuries to a cyclist Mangal Singh. It an action by the injured cyclist against the owner the truck, it was held that the owner of the workshop was an independent contractor and not the servant of the owner of the truck, and therefore, the owner of the truck could not be made vicarious liable for the negligence of the owner of the workshop.
GREY AREA-                                                                                                                  
The trend of the recent decision of various high court is to allow compensation to the accident victim against the owner of the vehicle and through hi, the insurance company. The aspect of relationship of the independent contractor and employer between the mechanic or the workshop and the owner of the vehicle has been generally ignored. Such liability has been recognized on the basis of the law of agency by considering he owner of the workshop or the mechanics as an agent of the owner of the vehicle.
The concept of principal-agent relationship and the liability of the former was thus explained by the Bombay High court in 
Ramu Tularam v. Amichand –
“ when the car is given to the garage for repairs, the control of the car certainly stand transferred to the owner of the garage. But the point is that in such a case the owner of the garage is constituted by the owner of the car as his agent. Everything done or omitted to be done by the agent will be something for which the principal will be vicariously liable …In case the owner of the garage make various purchases for the repair of the car, the owner of the car has to pay for those purchase…If the doctrine of agency extend to other situation where the car is allowed by the agent to go out of the garage berserk. The liability of the agent will have to be vicariously fastened even upon the principal in such a case”.  
Counter reasoning-“It is submitted that extending the principles of agency for making the principle s of the agency for making the owner of a vehicle liable for the act of the repairer of the vehicle is not correct interpretation of the law. When the repairer test drive my vehicle, he is doing something furtherance of his own independent business rather than acting as my agent. It will not be correct to say that when he purchase s material for the repair of my car, I am liable as principal toward the third party from whom the material is purchase. I may be liable toward the repair only unless the repair has any expressed or implied authority from me to act as an agent in respect of some specific transaction. If the logic of the above mentioned case is accepted, then if there is an explosion due to the negligence of the workman, who is wielding my car, I should be liable for the same, or when I entrust a parcel to railway for being transported and they make it to fall on X, causing injuries to him, my liability for same would be there”. 
FINDING AND CONCLUSION-
Retaining the principle of vicarious liability
In my view’s, there are sound policy considerations justifying the retention of the general principle of vicarious liability, although there is no single policy ground that can always be identified as a sufficient justification.  In some circumstances, the element of control over the activities of the tortfeasor will be the paramount consideration; in other cases, there may be only minimal control, but the benefit to the other party of the tortfeasor’s conduct will justify the application of the principle.
However, I considers that a financial capacity to meet an award of damages is, on its own, an unacceptable basis for imposing vicarious liability. It should be the overall nature of the relationship between the parties, and the circumstances of the case, that determine whether policy considerations justify the application of the principle.
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Further, it is conscious of the need for caution in extending the application of the principle of vicarious liability to the other relationships.
Non-delegable duty
Because the liability imposed for breach of a non-delegable duty is personal rather
than vicarious, the law relating to non-delegable duties is outside the terms of this reference.
However, given some consideration to the question of whether there is a need for legislation to define with more precision the circumstances that should give rise to a non-delegable duty.
We note that certain legislative provisions impose a non-delegable duty on individuals or organizations. These statutory provisions, which are specific and protective in nature, impose liability in circumstances where the person charged with the statutory duty engages another person to carry out the obligations imposed by the statute.
Conclusion on extending the doctrine of agency-
There is no justification for extending the rule of vicarious liability so wide. Moreover, well established rule of law could be changed by legislation rather than extending the law of agency to a situation, which it apparently does not cover.

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