Question:

Certain legal principles and specific factual situations are provided in each of the following questions. Apply the principles to the given facts and select the most appropriate answer.
LEGAL PRINCIPLE :
1. Vicarious liability is when employers are held liable for the torts of their employees that are committed during the course of employment.
2. A servant is a person subject to the command of his master as to the manner in which he shall do his work. The question of whether a person is an employee depends upon the degree of control which the ‘employer’ exercises over the worker.
FACTUAL SITUATION: Raja is a travel agent and possessed certain houses, which had an internal communication throughout, and which were used for the purpose of his business. Ramesh looked after the houses, and lived in them for this purpose, but he was also a clerk in Raja’s pay at a set annual salary. He lived in the houses with his wife, a child, and a servant. The case concerned the payment of the inhabited house duty. There was a statutory exemption for premises which were occupied by a “servant” or person occupying the premises “for protection thereof ”. Raja was claiming the exemption form the liability by claiming that Ramesh was the servant. Decide whether Ramesh was a servant or an independent contractor ?

Updated On: Aug 5, 2024
  • Ramesh is not a servant as the premises was held purely for trade purposes, and as Ramesh’s position was simply that of a caretaker.
  • Ramesh earned a salary per annum in his separate role as a clerk and merely enjoyed residence of the building with his family members. Thus, is an employee of the building owner for tax purposes.
  • Ramesh is a servant as servant is a person subject to the command of his masteras to the manner in which he shall do his work.
  • Ramesh is a servant as Raja can control his work of caretaker of the building as well as his job of clerk
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The Correct Option is C

Solution and Explanation

The correct option is (C): Ramesh is a servant as servant is a person subject to the command of his master as to the manner in which he shall do his work.
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