Conspiracy as a wrong is both tort and crime. When two or more persons without lawful justification, combine for the purpose of willfully causing damage to the plaintiff and actual damage result there from, they commit the tort of conspiracy. (Crofter Hand Woven Horris Tweed Co. Vs. Veitch).
A criminal conspiracy as defined in S. 120-A-IPC is different from conspiracy as a tort. Under criminal law just an agreement between the parties to do an illegal act or an act which is not illegal by illegal means is actionable, while in case of conspiracy as a tort it is essential to prove that plaintiff has suffered actual damages by the act of conspirator. Thus the gist of the cause of action is damage to the plaintiff arising out of the acts done in execution of the agreement per se is not actionable.
If A and B conspires to cause economic loss to C in his business, then C may sue, A and B for causing loss to him. In the words of Salmond, “A combination willfully to do an act causing damage to a man in his trade or other interest is unlawful and if damage in fact is caused is actionable as conspiracy.”
It is notable if the two or more persons combine together to facilitate their own interest and without intention of causing wrongful loss or damage to any other person then they will not be liable even though their collective effort causes damage to the plaintiff. When there is a mixed motive of combination then the liability will depend on ascertaining which one is the predominant object of the combination.
Mogul Steamship Co. Vs Mcgregor, Gow and Co. (1892) A.C.25. In this case certain firms of ship-owners (defendant) combined together and offered less freight for their services i.e. tea carrying services between China and Europe. The plaintiff who was carrying on the same business suffered loss in lieu of combination of defendants. The House of Lords stated that defendants were not liable because their concerted act was to protect their own business interest and they opted lawful means for achieving the same. Court followed the same principle in Sorrel Vs. Smith (1925). In this case court lay down:
1. A combination of two or more persons willfully to injure a man in his act is an unlawful act and if it results in damage to him, it is actionable.
2. If the real purpose of the act is not to injure another, but to forward or defend the trade of those who enter into it, then no wrong is committed and no action will lie even though damage to another ensues.”
In the purpose of the concerted act is to injure the plaintiff rather than the promotion of legitimate interest then the action can be taken against the wrongdoer.