Multiple choice

Directions: Go through the problem and encircle the most appropriate answer.

A master will be liable for the wrongful acts of his servants in the course of employment. Ramadevi was an old widow who opened an account with the Syndicate Bank, whereunder she would deposit Rs. 5 everyday in the Bank. Sundar was the neighbour who used to collect the amounts and deposit them in the Bank. Sundar would get a small commission from the Bank for the money deposited. It was discovered one day that Sundar fro more than three months did not deposit the money and vanished with that money. Ramadevi filed a suit against Syndicate Bank.

  1. Syndicate Bank would not be liable, because Sundar was not its employee.

  2. Syndicate Bank would not be liable for the failure of Ramadevi to check the status of her accounts.

  3. Syndicate Bank would be liable, because Sundar was paid commission by the Bank for doing its work.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The key issue is whether Sundar was acting as the bank's servant/agent. Since the bank paid him commission for collecting deposits, he was performing work on behalf of the bank and in the course of that employment relationship. Even though he wasn't a formal employee, the commission payment creates an agency relationship, making the bank vicariously liable for his wrongful acts committed while performing bank-related duties.

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