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CS Executive · Jurisprudence, Interpretation and General Laws · Law of Torts

Under the rule of absolute liability as laid down by the Indian Supreme Court, which statement regarding the measure of compensation is correct?

Under absolute liability, compensation is linked to the magnitude and financial capacity of the enterprise, so that larger and more prosperous enterprises pay more and the award serves as a deterrent. Proof of negligence is not necessary.

  1. ACompensation is capped at the actual loss suffered by the victim
  2. BCompensation is correlated to the magnitude and capacity of the enterprise, so that it has a deterrent effectCorrect
  3. CCompensation is fixed equally for all victims irrespective of the enterprise
  4. DCompensation is payable only if the enterprise was negligent in safety measures

Explanation

The Court held that the larger and more prosperous the enterprise, the greater the compensation, so that it deters future harm. A cap at actual loss ignores this deterrent principle, and negligence is not required.

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