Each question consists of legal propositions/ principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true for the purposes of this section. In other words, in answering the following questions, you must not rely on any principles except the principles that are given herein below for every question. Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest towards study of law, research aptitude and problem solving ability even if the 'most reasonable conclusion' arrived at may be unacceptable for any other reason. It is not the object of this section to test your knowledge of law.

PRINCIPLE: Vicarious liability is the liability of the Master or Principal for the tort committed by his servant or agent, provided the tort is committed in the course of employment. The Master or Principal is not liable for private wrongs of the servant/agent.

FACTS: 'X' hands over some cash money at his house to 'Y, who is his (X's) neighbour and is also cashier in a bank, to be deposited in A's account in the bank. Instead of depositing the money, 'Y’ misappropriates it.

Which of the following statements depicts correct legal position in this given situation?

Correct Answer: The bank would not be liable because 'Y' did not do any wrong in the course of his employment

Step-by-Step Explanation:

1. Understanding the Principle:
The principle of vicarious liability states that a Master (or Principal) is held responsible for wrongful acts (torts) committed by their servant (or agent) only if the act is committed in the course of employment. If the servant acts in a personal capacity or commits a private wrong outside the scope of their employment duties, the master cannot be held vicariously liable.

2. Analyzing the Facts:
- 'X' handed over cash money to 'Y' at 'X's house.
- 'Y' happens to be 'X's neighbor as well as a cashier at a bank.
- The money was given to 'Y' privately at home to deposit into 'A's account.
- 'Y' misappropriated the cash instead of depositing it.

3. Applying the Principle to the Facts:
- Accepting cash at one's personal residence from a neighbor is a private transaction outside the official workspace and working hours of the bank.
- Although 'Y' is an employee of the bank, 'Y' was acting in a personal capacity as a neighbor when receiving the money at home, not as a bank cashier carrying out official duties.
- Therefore, the misappropriation committed by 'Y' was a private wrong, not an act done in the course of employment with the bank.

Conclusion:
Since the act was not committed in the course of employment, the bank is not vicariously liable for 'Y's private wrong. Hence, the correct legal position is that the bank would not be liable because 'Y' did not commit the wrong in the course of his employment.