PGP: Format for Course Outline

i. Course title: Business Negligence, Liability and Law

ii. Area to which the course belongs: Business Policy

iii. Term in which the course is to be offered: Term 4

iv. Instructors’ name(s) with number of sessions by each instructor:

M P Ram Mohan ________10______________
______________________ ______________________

v. Course credits: ___.5_______

vi. Course Open for:

Programme PGP* PGP-FABM PGPX FPM Total
# of students Yes [15] Yes [10] No Yes [2] 27
* PGP includes Exchange students on pro-rata basis.

vii. Introduction:
Context:
An act or omission in violation of the legal requirement, either by a company or an
individual acting on behalf of company, may attract severe consequences. These
consequences are results of tort (wrongs) of negligence and liability, and violation of
statutes (legal enactments). Acts and omissions could arise in the course of business and
employment; manufacture and sale of defective goods and products; reputation based on
defamation and privacy etc.
The course will focus on ‘consumer goods’, ‘financial products’ and ‘defamation and
privacy’ viewed through the lens of negligence and liability.
Liability can be both criminal and civil. Criminal liability entails imprisonment and
penalties, and civil liability involves recovery of wrongful gains, fines and compensation.
In addition, the law prescribes other forms of punishment for individuals and companies
like barring holding of positions and participating in business activities, cease & desist
orders etc. The target of criminal liability is primarily individuals and for civil liability it is
both companies as well as individuals.
Overall, the design of the course is based on the following two legal clusters:
a. Tort law application on negligence and liability, and,
b. Statutory liability relating to consumer goods and financial products
viii. Objective:
1. To appreciate the law relating to negligence and imposition of liability on
individuals and business
2. Learn through case studies application of law on negligence and liability on
‘consumer goods and product liability’, ‘financial products and its misleading
claims/advertisements’, and ‘defamation and privacy’
3. Undertake a simulation exercise based on hypothetical case.

viii. Pedagogy:

The course will use literature to understand the concept and theory, and extensively utilise
cases from various courts and tribunals for case studies. Case summaries of the listed
cases will be given prior to the start of the class. We will also use additional cases to
supplement the discussion. Students are also expected to write a research note and make a
presentation on an ongoing case of their choice.

ix. Evaluation Scheme:

The components of evaluation,

 Case Research and Presentation: 25% [A research note and presentation on an
ongoing or decided negligent/liability law case]
 Quiz: 25%
 Class Attendance: 10%
 End term exam: 40%

Note:
i. Weightage for CP should not exceed 20 per cent which includes
weightage for attendance not more than 10 per cent.
ii. The weightage of components related to individual assessment shall not
be less than 50%.
iii. There will be minimum three evaluation components for any core or
elective course having credit of 1 or more.

x. Course Books/Reference Materials:

Included in the session plan itself

xi. Session Plan:

Session 1: Negligence
In this session, we cover elements of negligence and defences to negligence. Negligence in
any business activity is a failure to take reasonable care to avoid causing injury or loss to
another person. The session will discuss in detail the duty of care, breach, loss or damage,
and remoteness. The distinction between civil and criminal negligence under Indian law
and its application will also be discussed. This will provide a foundation towards
understanding the concept of negligence and legal consequences resulting in personal or
company liability.
Cases and Principles
 Donoghue v Stevenson principle [establishing negligence and liability; duty of
care]
 Vohra Sadikbhai Rajakbhai & Ors vs State Of Gujarat & Ors., Supreme Court of
India, Decision dated 10 May, 2016 [Act of God vs. Negligence]
 India Tourism Development ... vs Miss Susan Leigh Beer on 30 May, 2014 [Duty of
care]
Reading:
 The five elements of negligence (Hofstra Law Review, Volume 35, No. 4, 2007)

Session 2: Liability
The session covers foundational aspects of identifying and determining liability on
individuals and enterprises/companies. Liability can be both criminal and civil. Criminal
entails imprisonment and fines, and civil liability involves recovery of wrongful gains,
fines and compensation.
Cases and Principles
 Rylands v Fletcher [Strict liability]
 Union Of India vs Prabhakaran Vijaya Kumar & Ors., SCC 2008 [dismissing the
claim of contributory negligence and enforcing liability]

Reading:
 Getzler (2010): ‘Richard Epstein, Strict Liability, and the History of Torts’
(Journal of Tort Law, Vol. 3 [2010], Iss. 1, Art. 3)

Session 3 & 4: Consumer goods and Product Liability

In India, there is no specific product liability legislation that governs product liability and
its legal consequences. Product liability governing the responsibility and liability are
covered through multiple laws and judicial decisions. The goal of product liability laws are
to help protect consumers/users from defective products, while holding manufacturers,
distributors, and retailers responsible for defective goods. The session will discuss the
following questions.
1. Who bears responsibility of defect and faulty products?
2. When will be the liability be civil/criminal or both for manufactures and sellers of
products/consumer goods?
3. Factors determining the amount of damages paid on account of defective goods and
how courts have decided on the quantum of civil and criminal punishment

Reading:
 The Product Regulation and Liability in India (India Chapter: The Product
Regulation and Liability Review - Edition 4 2017
 Relevant portions of Consumer Protection Act; Sale of Goods law; law of contracts
etc.

Cases:
 Abhaya Kumar Panda v. Bajaj Auto [(1991) [Replacement of vehicle; major
manufacturing defect]
 Smt. Uma Deepak v. Maruti Udyog Ltd Ors (2003) [unfair trade practices; ordering
arrest of Directors as well as the manager of the dealers/agents who sold the said
defective car]

Session 5 & 6: Financial Products and liability

Financial products consisting of insurance, mutual funds, IPOs etc., cover multiple and
varied products and services. Companies and banks extensively advertise and promote
their financial products either through agents by providing hefty commissions or
otherwise. The assertions of products and advertisement of these products can attract legal
consequences if the claims turned to be misleading and false. The sessions will cover
unfair claims and misleading advertisements on financial products; role of regulators
(SEBI, IRDA etc) and courts in adjudicating these cases.
Reading:
 SEBI Regulations on Disclosure and Investor Protection & exclusive advertising
code for mutual funds
 Report of the Committee to recommend measures for curbing mis-selling and
rationalising distribution incentives in financial products (2015)

Cases:
 PGF Ltd. SEBI order of 12.03.2013 [collective investment schemes]
 N. Narayanan v. SEBI order of April 26, 2013. [Director Liability]
 IDBI Federal Life Insurance v. Insurance Ombudsman and another RHC 2011
 [mis-selling of insurance]

Session 7 & 8: Defamation and Privacy

Reputation of companies and individuals matters and remedy of defamation protects
reputation. The law relating to defamation and privacy is on a flux in India. We have seen
many cases where companies file defamation cases against each other and also against
individuals. In this course, the contours of both civil and criminal defamation along with
their implementation will be discussed. The main areas covered will be - injury,
requirements under law, burden of proof, quantification of damages etc.
Reading:
 A Negative Stock Report About Indiabulls Led to an Analyst’s Arrest and a 2,000-
Mile Odyssey, Geeta Anand, Sept. 15, 2015, Wall Street Journal

Cases: [Defamation]
 Pepsi Co., Inc. Vs. Hindustan Coca Cola Ltd. 2003 [Disparagement of
goods/products and defamation]
 Raymond Ltd & Ors v. Rameshwar Das Dwarkadas P. Ltd, 2013 [trademark usage
and defamation]
 Shah Rukh Khan vs State of Rajasthan And Ors., Rajasthan High Court. Decision
dated 20 August, 2007 [Criminal defamation]

Cases: [Privacy]
 Von Hannaover V Germany in EU Human Rights Court 2004 [publication of
photographs as invasion to privacy]

Session 9 & 10: Simulation exercise

The class will be divided into groups and will undertake an exercise based on a
hypothetical problem.

xii. Pre-requisites & Eligibility:

Only for PGP and PGP-FABM

xiii. Relationship to other courses:

I plan to offer this case to ePGP as well.