CLAT Sample Paper CLAT Sample Paper-10

  • question_answer
    Principle A master shall be liable for the fraudulent acts committed by his servant in the course of employment.
    Facts Shaila Devi opened an SBI Account with Oriental Bank of Commerce and a cousin of her by name Mohan, who was a clerk in that bank, helped her to complete the formalities.
    Subsequently, she used to entrust whatever money she was getting to Mohan along with her passbook and Mohan used to return the passbook with relevant entries. One day Shaila Devi discovered that Mohan, instead of crediting the money to her account, had misappropriating he made it and the entries in the passbook without authorization. Shaila Devi seeks compensation from Oriental Bank.

    A)  Oriental Bank shall be liable because Mohan was acting in the course of employment

    B)  Oriental Bank shall not be liable, because Mohan was not acting in the course of employment

    C)  Oriental Bank was not liable, because Shaila Devi was negligent

    D)  None of the above

    Correct Answer: B

    Solution :

    This problem is based on State Bank of India Vs Shyam Devi AIR 1978 SC 1263. Oriental Bank shall not be liable.

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