Statutory liability

Legal provision

• Section 164, Motor Vehicles Act, 1988: the owner or insurer must pay Rs 5 lakh on death and Rs 2.5 lakh on grievous hurt, without proof of fault (section 164(2)).
• Section 124A, Railways Act, 1989: when an untoward incident occurs in the working of a railway, the railway administration must pay compensation whether or not there was any wrongful act, neglect or default on its part.
• Employees' Compensation Act, 1923: the employer must pay for injury or death from an accident arising out of and in the course of employment.
• Consumer Protection Act, 2019: gives a remedy for defective goods, deficient services and product liability.
• Fatal Accidents Act, 1855: gives the dependants of a person killed by a wrongful act a right to sue for damages.

Meaning and definition

Statutory liability is liability whose source is an Act. The court looks at the words of the Act to decide who is liable, to whom and for how much.

• Statutory compensation. The Act itself gives a right to a stated sum or relief. It does not depend on the common law of torts.
• Breach of statutory duty. The Act puts a duty on a person or body. If breaking it injures someone, the injured person may sue in tort for damages, provided that the Act intended that.

Detailed explanation

Step 1: statutory compensation without fault

Some Acts give compensation as of right. The claimant proves the event and the harm, not the defendant's carelessness. Section 164 of the Motor Vehicles Act is the clearest example. Sections 140 to 144, which earlier gave similar relief, were omitted from 1 April 2022.

Under section 166, a person who accepts compensation under section 164 may not go on with a claim before the Claims Tribunal on the same accident. The fixed sum is therefore a quick, limited route, not an addition.

Step 2: breach of statutory duty

Where an Act imposes a duty, a person injured by its breach may sue for damages only if the Act shows that Parliament meant to give a private right. The common law asks these questions.

1. Does the Act impose a duty on the defendant, and not merely give a power?
2. Was the Act meant to protect a class of persons, and does the claimant belong to that class?
3. Was the injury of the kind the Act aimed to prevent?
4. Did the Act itself provide a remedy, such as a fine or an authority, that shuts out a civil action?
5. Did the breach cause the damage?

Step 3: leading English authority on breach of statutory duty

In Groves v. Wimborne (1898), a boy was injured by unfenced machinery in a factory, in breach of the Factory Act. The Court of Appeal held that he could sue for damages. The duty was meant to protect workers, and the fine in the Act did not exclude a civil claim.

In Cutler v. Wandsworth Stadium (1949), the House of Lords held that a bookmaker could not sue a stadium owner for breach of a duty under the Betting and Lotteries Act. The duty was meant for the public in general, not for a class that included the bookmaker.

Step 4: the Indian position

Indian courts have used breach of statutory duty in several ways. In Municipal Council, Ratlam v. Vardhichand (1980), the Supreme Court held that a municipality cannot plead lack of funds as an excuse for failing a statutory duty to provide drains and sanitation. This is a public law remedy under section 133 of the Code of Criminal Procedure, but it shows how courts enforce statutory duties.

Statutes such as the Motor Vehicles Act, the Railways Act and the Consumer Protection Act create their own remedies. When an Act sets up a complete scheme, the claimant usually has to use the forum and remedy in the Act.

Step 5: defences

• The defendant took all practicable steps to comply, where the Act allows this defence.
• The claimant's own conduct (contributory negligence or consent) caused the harm. It reduces damages.
• The Act, read fairly, gives no private right of action.

Don't confuse: statutory liability, negligence and no-fault statutory compensation

Statutory duty, common law negligence and fixed compensation all arise where a statute is involved, but they work differently.

Common mistakes

• Saying every breach of a statute gives a right to sue. The Act must show an intention to give a private right.
• Forgetting the conditions: duty, protected class, kind of harm, causation.
• Treating statutory liability as the same as negligence. Fault need not be shown for fixed compensation.
• Writing that sections 140 to 144 of the Motor Vehicles Act still apply. They were omitted from 1 April 2022.
• Claiming under section 164 and then also before the Claims Tribunal on the same accident. The second claim lapses.

Apply it

Leading case laws

• Municipal Council, Ratlam v. Vardhichand (1980)

  Facts. Residents of a ward in Ratlam asked a Magistrate to order the municipality to clean open drains and deal with factory effluent.

  Principle. The Supreme Court held that lack of funds is no defence to a statutory duty, and approved a cheaper scheme with a one year deadline.

  Why it matters. An Indian case on enforcing statutory duties.

• Chairman, Railway Board v. Mrs. Chandrima Das (2000)

  Facts. A woman was raped by railway employees at a railway rest house in Howrah.

  Principle. The Supreme Court upheld the award of Rs 10 lakhs and held that the Union is liable. It said the sovereign immunity theory is no longer available in a welfare State.

  Why it matters. It shows the State's liability for harm done in running the Railways, a commercial undertaking, so immunity gives no shelter.

How to write this answer in the exam

Key points to remember

• Statutory liability is liability created by an Act.
• Two forms: fixed statutory compensation, and the action for breach of statutory duty.
• Section 164, Motor Vehicles Act: Rs 5 lakh on death, Rs 2.5 lakh on grievous hurt, no proof of fault.
• Breach of statutory duty needs a duty, a protected class, the kind of harm and causation.
• Groves v. Wimborne allowed the claim. Cutler v. Wandsworth Stadium refused it.
• An Act that sets up a complete scheme may shut out a civil action.

Quick self-test

Related topics

• General Principles of Liability in Torts
• Liability without fault
• Liability of the State for Torts – Defense of Sovereign Immunity
• Liability arising out of accidents -Relevant provisions of the Motor Vehicles Act