Published on: October 24, 2023 at 11:42 IST
Court: Supreme Court of India
Citation: Lakshminarayan Ram Gopal V. Govt. of Hyderabad (1955)
Honourable Supreme Court of India has explained the difference between the relations of Master & Servant | Principal & Agent. It is specifically held that an agent is not a servant, but a servant is generally for some purposes his master’s implied agent, the extent of the agency depending upon the duties or position of the servant.
Master-Servant: A servant acts under the direct control and supervision of his master, and is bound to conform to all reasonable orders given to him in the course of his work.
Principal-Agent: A principal has the right to direct what work the agent has to do, however an agent is entirely independent of any control or interference. An agent, though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in its exercise to the direct control or supervision of the principal.
10. The distinction between a servant and an agent is thus indicated in Powell’s Law of Agency:
(a) Generally a master can tell his servant what to do and how to do it.
(b) Generally a principal cannot tell his agent how to carry out his instructions.
(c) A servant is under more complete control than an agent, and also at page 20:
(a) Generally, a servant is a person who not only receives instructions from his master but is subject to his master’s right to control the manner in which he carries out those instructions. An agent receives his principal’s instructions but is generally free to carry out those instructions according to his own discretion.
(b) Generally, a servant, qua servant, has no authority to make contracts on behalf of his master. Generally, the purpose of employing an agent is to authorise him to make contracts on behalf of his principal.
(c) Generally, an agent is paid by commission upon effecting the result which he has been instructed by his principal to achieve. Generally, a servant is paid by wages or salary.
Drafted By Abhijit Mishra