Shamsher (DM) 17 October 2014

Advise: vicarious liability

Dear Sir,

Builder has fraudulently collected Rs. 26 lacs from us towards purchase of dwelling unit.

We have filed an APPLICATION UNDER SECTION 156(3) Cr.P.C.

CRIMINAL COMPLAINT UNDER SECTIONS 406, 420, 467, 468, 471, 34, 120-B AND 506 OF INDIAN PENAL CODE.

Against Directors/Officers of XXX Limited. However, we have not made the Company as a party.

The builder does not hold a license to build a group housing complex neither nor does he hold legal title on land. He has signed an unregistered MOU with the owner (Countrywide Promotors Pvt Ltd) of the land to attain development and marketing rights.

Based on the pre summoning evidence recorded in this manner the Ld. Magistrate was pleased to issue a summoning order thereby summoning the Petitioners for offences committee under section 406,420,506,120B,467,468 and 471 IPC.

Aggrieved by the summoning order the Petitioners (builder) have impugned the said summoning order of the Ld. Trial Court by way of revision petition brefore Sessions Court on the ground that the company itself is a juristic person, hence was required to be impleaded as a necessary party.

Request you to kindly suggest if any remedies are available for us.

Thanking you

Simpy Kaur

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4 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 17 October 2014

The general rule is that owners are not vicariously liable for the torts of their independent contractors. But, there are a number of exceptions to this general rule and owners should be aware of these exceptions for three reasons: First, only if the owner understands the nature and extent of liability risk can it mitigate that risk through carefully drafted contract documents, or assign the risk to a third party insurer. Second, having an accurate understanding of the liability risks of the project will assist in assessing the feasibility of the project. Finally, being fully aware of the potential liability for the acts of independent contractors may inform the choice of contractor. The owner may decide to choose a more competent and reliable contractor, rather than the one with the lowest price.

Hardeep (Business) 18 October 2014

The company should have been made a party since the directors act on its behalf. You have paid money to the company.

N.K.Assumi (Advocate) 18 October 2014

Agree with Hardeep responds. Company as a juristic person should have been impleaded. You may pray to the Court to implead the company as a party to the case.