Question:medium

Principle: Master is liable for the acts of his servant done in the course of his duties.
Facts: X hired an employee Y in his construction business. Y was the property in-charge who received construction material and gave receipts for the material received by him. Z claimed payment for cement supplied to X which was duly received by Y. X denied the payment on the ground that he has only received half of the material and the balance was misutilized by the employee Y.

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Employers are liable for the actions of their employees performed during the course of employment, including cases of misconduct or embezzlement.
Updated On: Jul 15, 2026
  • X is liable for the entire amount
  • X is liable for the part amount only i.e. for payment of the cost of half of the material
  • X is not liable for the misconduct/embezzlement of his employee
  • Z can claim the balance payment only from Y
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The Correct Option is A

Approach Solution - 1

Step 1: Understanding the Concept:
A master is answerable for acts his servant carries out in the course of his duties, even if the servant later misuses what he received while doing that job.

Step 2: Key Formula or Approach:
Check what task the employee was authorised to do. If receiving the goods and giving a receipt was within that authority, the employer is bound by that act, separately from whatever happened to the goods afterward.

Step 3: Detailed Explanation:
Y was X's property in-charge, so receiving material and signing receipts for it was part of his job.
Z supplied the full quantity of cement, and Y accepted delivery of all of it and gave a receipt, acting well within his authorised role.
What Y did with part of the cement afterward is a separate issue between X and Y, it does not undo the fact that X's authorised employee received the full amount on X's behalf.
Since receiving the material was within the scope of Y's duties, X is bound by that act and owes Z payment for the entire quantity supplied.

Step 4: Final Answer:
X is liable for the entire amount, since Y received the full material as X's authorised employee.
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Approach Solution -2

It helps to lay this out as a timeline of two separate events rather than one continuous story: first, Y receives the cement and signs the receipt, and only afterward, at a later point, does Y misuse part of it. Keeping these two moments distinct shows which one actually determines X's liability to Z.

  1. X is liable for the entire amount: The first event on the timeline, Y receiving the full quantity of cement and signing for it, happened entirely within Y's authorised duties as property in-charge. Since that first event is what creates X's obligation to Z, and it covered the complete delivery, X owes the full payment regardless of what the second, later event involved.
  2. X is liable for the part amount only i.e. for payment of the cost of half of the material: This treats the second event, Y's later misuse, as if it could reach backward and shrink what was validly received in the first event. But the receipt and the misuse are separate points in time, and only the first fixes what Z is owed.
  3. X is not liable for the misconduct/embezzlement of his employee: This is true only with respect to the second event, Y's misconduct is indeed a separate matter from X's liability to Z. But it wrongly extends that separation to erase the first event too, when in fact the first event, Y's authorised receipt of the goods, is exactly what binds X to Z.
  4. Z can claim the balance payment only from Y: Z's transaction, the first event, was completed with X through his authorised employee Y. Whatever happened to the goods afterward is a second, internal matter between X and Y, and does not shift Z's original claim away from X.

Separating the timeline into the authorised receipt of goods and Y's later, unrelated misuse shows that only the first event determines X's liability, and that covers the full amount.

Therefore, the correct answer is X is liable for the entire amount.

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