17 Dec 2010

Municipal Corporation remains vicariously liable for acts of contractors: High Court

In a recently reported decision [Criminal Justice Society v. Union of India, AIR 2010 Del 194], the Delhi High Court has declared that the Municipal Corporation continues to remain liable for deficient acts even if the same have been handed over to an independent contractor and due to mismanagement lead to death or injury of the citizens. The High Court in its decision, authored by its Chief Justice Dipak Mishra, was concerned with entitlement of compensation by the wife of a deceased for his accidental death caused due to the fall in a pit on the divider which was required to be covered (but was not so done) by a barricade with warning signs meant for pedestrians by the contractor. 

Holding that the Municipal Corporation remained vicariously liable  for the acts (and omissions) of the contractor who had been assigned the task, the High Court enunciated the public law doctrine in the following terms;
8. On a perusal of the aforesaid pleadings, it is clear as noon day, that a 77 year old man fell into an unbarricaded pit without reflective signs and met his end. The counter affidavit filed by the MCD is crystal clear in that regard. What has been stated in defence is that the MCD is not liable to pay the compensation as it is the obligation of the respondent No.4, the contractor, who was engaged for the work in question to compensate. It is also the stand that action has been taken against the said contractor. The stand of the respondent No.4 is that though the accident had occurred if eventually if any liability is fixed it has to be made good by the subcontractor.
9. The question that emerges for consideration is whether the shifting of the responsibility would deny the wife of the deceased whose cause has been espoused by the society. In this context, we may refer to Section 324 of the Act, which provides that the Commissioner shall, as far as is practicable, during the construction or repair of any public street, or any municipal drain or any premises vested in the Corporation caused the same to be fenced and guarded; take proper precautions against accident by shoring up and protecting and adjoining buildings and cause such bars, chains or posts to be fixed across or in any street in which any such work of construction or repair is under execution as are necessary in order to prevent the passage of vehicles or animals and avert danger. It also stipulates that the Commissioner shall cause such street, drain or premises to be sufficiently lighted or guarded during night while under construction or repair. There is also a stipulation that no person shall without the permission of the Commissioner or other lawful authority remove any bar, chain, post or shoring, timber, or remove or extinguish any light set up under this section. Thus, the provision casts a responsibility on the Commissioner of the MCD. 
10. As is evincible, the Corporation has admitted in its counter affidavit that the respondent No.4 did not fix the barricades or any reflective sign. A mercurial plea has been taken by the respondent No.4 that it was the responsibility of the labour contractor engaged by him and expected measures were taken.
11. The learned counsel for the MCD submitted that if any liability has to be fixed the same has to be determined against the respondent No.4. There is no scintilla of doubt that the MCD had entered into a contract. Condition No.29 of the schedule of the work clearly stipulates that if there is any violation of barricading, the owner has the power to deduct payment for nonbarricading of the pits and non-display of any warning sign including reflective lights and blacklist the firm and debar it from undertaking any work under MCD for a period of five years. True it is, the MCD has the power to take action under the contract against the respondent No.4 but the fact remains whether it can advance a plea that it has no liability to pay any compensation to the wife of the deceased when the facts are clear. In this regard, we may note a few citations in the field. 
12. In Pushpabai Parshottam Udeshi and others Vs. M/s Ranjit Ginning & Pressing Co. Pvt. Ltd. and another, AIR 1977 SC 1735, it has been held that when an act is committed by a driver in the course of employment or under the authority of the master, the liability would be that of the master. 
13. In State Bank of India Vs. Smt. Shyama Devi, AIR 1978 SC 1263, the Apex Court held that an employer is not liable for the act of the servant if the cause of the loss or damages arises without his actual fault or privity and without the fault or neglect of his agents or servants in the course of their employment. Emphasis has been led on liability of a master for wrongs done by the servant if it is in the course of his employment.
14. In State of Maharashtra and others Vs. Kanchanmala Vijaysing Shirke and others, AIR 1995 SC 2499, where clerk in a Government Department was driving a vehicle under the authority of driver at the time of accident and the vehicle was used in connection with the affairs of State and for official purpose, it was held by the Lordships under the circumstances the State cannot escape its vicarious liability to pay compensation to the heirs of the victim.
15. In Machindranath Kernath Kasar Vs. D.S. Mylarappa & Ors., AIR 2008 SC 2545 their Lordships referred to the decision in Sitaram Motilal Kalal Vs. Santanuprasad Jaishanker Bhatt, AIR 1966 SC 1697 wherein it has been held that law is well 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 servant‟s act does not make the employer liable.
16. In the case at hand the MCD admittedly has entered into a contract. There is a stipulation in the contract enabling the owner to take steps against the contract. Section 29 of the Act casts responsibility on the Commissioner what steps to be taken when there is construction or repair of any public street. Cumulatively understood, the liability of the MCD cannot be denied. The liability in our considered opinion would come within the domain of in public law remedy which covers grant of compensation when right to life under Article 21 of the Constitution of India is jeopardized. 
17. In this regard, we may fruitfully refer to Nilabati Behera Vs. State of Orissa (1993) 2 SCC 746 wherein it has been held thus: 
“A claim in public law for compensation for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is "distinct from, and in addition to, the remedy in private law for damages for the tort" resulting from the contravention of the fundamental right. The defence of sovereign immunity being inapplicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy. It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaranteed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the State or its servants in the purported exercise of their powers, and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution.”
18. Dr.A.S. Anand J., (as his Lordship then was), in his concurring opinion, expressed thus:
“...Convicts, prisoners or under-trials are not denuded of their fundamental rights under Article 21 and it is only such restrictions, as are permitted by law, which can be imposed on the enjoyment of the fundamental rights by such persons. It is an obligation of the State to ensure that there is no infringement of the indefeasible rights of a citizen to life, except in accordance with law, while the citizen is in its custody.
The public law proceedings serve a different purpose than the private law proceedings. The relief of monetary compensation, as exemplary damages, in proceedings under Article 32 by the Supreme Court or under Article 226 by the High Courts, for established infringement of the indefeasible right guaranteed under Article 21 is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasible rights of the citizen. The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights. Therefore, when the court moulds the relief by granting 'compensation' in proceedings under Article 32 or 226 seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalizing the wrongdoer and fixing the liability for the public wrong on the State which has failed in its public duty to protect the fundamental rights of the citizen. The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making 'monetary amends' under the public law for the wrong done due to breach of public duty, of not protecting the fundamental rights of the citizen. The compensation is in the nature of 'exemplary damages' awarded against the wrongdoer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort, through a suit instituted in a court of competent jurisdiction or/and prosecute the offender under the penal law.”
19. In Sube Singh v. State of Haryana , AIR 2006 SC 1117, a three-judge Bench of the Apex Court, after referring to its earlier decisions, has opined as follows:
“It is thus now well settled that award of compensation against the State is an appropriate and effective remedy for redress of an established infringement of a fundamental right under Article 21, by a public servant. The quantum of compensation will, however, depend upon the facts and circumstances of each case. Award of such compensation (by way of public law remedy) will not come in the way of the aggrieved person claiming additional compensation in a civil court, in enforcement of the private law remedy in tort, nor come in the way of the criminal court ordering compensation under Section 357 of Code of Civil Procedure.”
20. The aforesaid citations also cover the vicarious liability of a principal in respect of the act of the agent on certain conditions. In the case at hand, the MCD is the principal and the executing agency is the agent. Reading the statutory provisions in conjunction with the terms and conditions of the contract, the inescapable conclusion is that the MCD is primarily liable to make good the loss and thereafter, it may proceed to realise the amount after causation of enquiry from any of its officers and if found responsible, take such action for recovery from the respondent No.4 with which it had the privity of contract.
21. Presently to the quantum of compensation, the deceased retired from the services as an Additional Secretary. He was less than four scores. His children, as set forth, have pre-deceased him. The wife is the lone survivor. The society as pro-bono-publico has taken up the cause. The plight and misery of the wife can be well imagined. In old age the husband and wife become each other's companion and friend. Very rarely a person can feel comfortable with loneliness. The dreariness of winter of loneliness corrodes the marrows of life. The silence of loneliness can be quite killing. Every human being desires to belong. One ordinarily always intends to open oneself and that is the greatest function of companionship. It should be borne in mind from the innermost core, as one grows older, one seeks company. That adds to meaning of life. The memory of one may sometimes be a source of existence but it can never substitute the cherished companionship. The marital bliss matures into a total sweet dependence and respectable friendship. It is worth noting that the husband was able to go to the market and purchase the grocery. That would indicate his state of mind and the activity he was capable of undertaking. In a way, he was sustaining his wife. By the unfortunate accident his life spark got extinguished. The wife has become a loner and loneliness is the breeding place for melancholia. The agony and anguish is understandable. Regard being had to these aspects, we determine the compensation at Rs.5 lacs to be initially paid by the MCD to the wife of the deceased and thereafter proceed to enquire about the responsibility of any officer involved in the work and take appropriate action against the respondent No.4 within the realm of privity of contract between the two. The amount shall be paid by way of a bank draft drawn on a nationalised bank within a period of four weeks.
22. The other issue that also has been raised deserves to be dealt with. The MCD cannot afford to enter into contract of this nature and leave the citizens to their fate. It has the statutory obligation and, therefore, a sacred duty to see that such kinds of accidents are not caused due to negligence of a contractor. Hence, we direct the Commissioner MCD to constitute a task force which would be responsible to see that the contractors carry out the safety measures to the optimum level, so that no hazard is caused to any person and it would be easy on the part of the MCD to fix the responsibility on its task force rather than entering into an unnecessary labyrinth. 


Diwakar said...

Dear Tarun,


I am a Law Student studying at NLS, Bangalore and follow this blog religiously. I would like to tell you that you are doing a great job.

In the MCD post, you have quoted a lot of judgments on "Master-Servant" Relationship. My little knowledge of law tells me that the same should not be applicable in this case. MCD being held liable because the "Contractor" was negligent, cannot and should not come under the 'Master-Servant Relationship' ambit as the basic foundation of the two relationships are different. In Master-Servant Relationship, master is held liable, mainly because Servant is not in a position to pay compensate, the same cannot be held true, especially in this case with a 'Contractor' in the picture.

I believe MCD can and should be held liable for its own failure to act, but not because the 'Contractor' was negligent.

Just a thought.


Tarun Jain said...

Dear Diwakar,

Thanks for the nice words.

As for the decision, your observation is right that the High Court thought fit to invoke the Master-Servant decision in the context of MCD. However what also needs to be appreciated is the fact that we are not dealing with an ordinary case of vicarious liability as which the tort law deals. The law has come far after the decision of Chandrima Das of 2000 wherein the Supreme Court granted compensation to a victim of rape where the compensation was made payable by the State because the rape was by a railway employee. So the Supreme Court has introduced vicarious liability concept even in criminal law.

In my view the essence seems to be due to the involvement of public element wherein the victim should not be left without an effective remedy. This perhaps explains the reason for exercising power under writ jurisdiction whereas it could also have been relegated to a civil court to try as a case for negligence.

So much so, as we are not permitted to read the mind of the judges except to make out from the words used in the decision. In any case, the law has taken a tidal shift from the earlier restrictive approach of courts on executive action.

Hope that brings the issue in better perspective.

Thanks for the comments though. It serves a reminder that people actually read and appreciate our posts.