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Section 224: Non-liability of employer of agent to do a criminal act

Indian Contract Act • Official Statutory Text & Practice Guide

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Act 1872
Section 223 All 266 Sections of Indian Contract Act Section 225

Legal Commentary & Landmark Judgments: Section 224

Section 224 enacts an absolute statutory bar against any express or implied promise by an employer to indemnify an agent against the consequences of committing a criminal act, codifying the doctrine of ex turpi causa non oritur actio.

  • Absolute Public Policy Prohibition: Agreements to indemnify an agent against criminal penalties, fines, or damages resulting from known criminal offenses are void ab initio under Section 23 and unenforceable under Section 224.
  • Irrelevance of Express Contractual Indemnity: Even if the principal executes a formal indemnity bond covering all risks, it is legally invalid to the extent it purports to indemnify against criminal liability.
  • Knowledge of Criminality as Crucial Test: Applies where the act is manifestly criminal or where the agent knows the undertaking constitutes an offense under the Indian Penal Code, Bharatiya Nyaya Sanhita, or penal statutes.
Key Landmark Precedents:
  • Colburn v. Patmore (1834) 1 CM & R 73: The Court of Exchequer held that a newspaper proprietor convicted of criminal libel cannot maintain an action against the editor for indemnity, as no court will assist a convicted wrongdoer to shift criminal consequences.
  • W.H. Smith & Son v. Clinton (1908) 99 LT 840: An express contract to indemnify a printer against any damages that might arise from publishing an unlawful libel was held contrary to public policy and wholly void.
  • Gopalrao v. Kallappa AIR 1901 Bom 202: The Bombay High Court held that no indemnity or contribution can be recovered between parties engaged in an intentional criminal or tortious conspiracy.
Courtroom Practice & Strategic Litigation Guidance:

In defending a principal against an indemnity claim brought by an agent for fines, bails, or legal defense costs, scrutinize the statutory character of the act; if the act falls within penal or regulatory offenses, move for rejection of the plaint under Order VII Rule 11 CPC on the grounds of the absolute bar in Section 224.

Section 223 All 266 Sections of Indian Contract Act Section 225