Facts of the Case
An employee of a company published a libellous statement concerning a third party while acting in the course of employment. The publication caused harm to the reputation of the aggrieved person. As a result, the aggrieved party initiated two parallel legal proceedings:
- A civil suit for damages claiming compensation for defamation, and
- A criminal complaint alleging the offence of defamation under the Indian Penal Code.
Both proceedings were instituted against the company, alleging that the employee acted during employment and for the company’s business purposes. The central question is whether the company can be held legally responsible for the defamatory act of its employee.
Issues in the Case
The key legal issues arising for determination are:
- Whether a company can be held civilly liable for libel committed by its employee.
- Whether a company can be held criminally liable for the offence of defamation.
- Whether the doctrine of vicarious liability applies to acts involving defamation.
- Whether absence of personal intent or mens rea absolves the company of liability.
Legal Principles Covered to Support Case Proceedings and Judgements
A. Civil Liability of the Company
Under Indian law, a company can be held vicariously liable for civil wrongs committed by its employees if the act is done:
- In the course of employment, and
- In furtherance of the company’s business.
Defamation is a civil wrong (tort), and courts consistently apply the doctrine of respondeat superior. If the defamatory publication was made during employment, the company is liable to pay damages, even if it did not expressly authorize the act.
B. Criminal Liability of the Company
Defamation is punishable under Sections 499 and 500 of the Indian Penal Code. Indian jurisprudence recognizes that a company, though an artificial person, can be prosecuted for criminal offences, including defamation, provided:
- The offence does not require physical punishment alone, and
- The act was committed by a responsible employee acting within official capacity.
Modern Indian courts accept that mens rea can be attributed to a company through its directing minds and employees.
C. Vicarious Criminal Liability
While criminal law generally does not favor vicarious liability, exceptions exist where:
- The offence arises from corporate functioning, and
- The employee represents the company’s actions.
Hence, criminal proceedings against the company are legally maintainable.
Possible Judgement
The court is likely to hold that:
- Civil Liability – The company is liable to compensate the aggrieved person for libel, as the employee acted in the course of employment.
- Criminal Liability – The company can be prosecuted for criminal defamation, as Indian law recognizes corporate criminal liability.
- The employee will also remain personally liable for both civil and criminal consequences.
Thus, both proceedings against the company are legally sustainable.
About Lawgnan
Understanding corporate liability under Indian law requires precise legal interpretation and expert guidance. Whether you are a business owner, legal professional, or affected individual, navigating issues of defamation, vicarious liability, and corporate criminal responsibility demands updated legal insight. At lawgana.in, we simplify complex legal principles into practical knowledge tailored for Indian jurisprudence. Explore expert legal articles, case analyses, and professional guidance designed to empower informed legal decisions. Stay legally aware, protect your rights, and understand your liabilities clearly. Visit lawgana.in today and strengthen your legal understanding with clarity and confidence.
