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Vicarious Liability
By
Sanam Mansoor, Law Student

The term “vicarious liability” does not indicate a distinct tort, but rather a
process by which one person can be held liable for a recognised tort committed by
another.

An employer is vicariously liable for negligent acts or omissions by his employee

in the course of employment whether or not such act or omission was specifically
authorized by the employer.

The common examples of such a liability are: -

1) Liability of the principal for the tort of his agent.

2) Liability of partners of each others tort.

3) Liability of the master for the tort of his servant.

A master is jointly and severally liable for any tort committed by his servant
while acting in the course of his employment. This is by far the most important of the
various cases in which vicarious responsibility or vicarious liability is recongised by the
law. Vicarious liability means that one person takes or supplies the place of another so
far as liability is concerned. Although the doctrine has its roots in the earliest years of
the common law, it was Sir John Holt (1642-1710) who began the task of adapting
medieval rules to the needs of a modern society, and his work was continued by the
great Victorian-Judges. By the beginning of the twentieth century it was firmly
established that the master’s liability was based, not on the fiction that he had impliedly
commanded his servant to do what he did, but on the safer and simpler ground that it
was done in the scope or course of his employment or authority. Today it has been
developed so far “that it would be a good deal safer to keep lions or other wild animals
in a park than to engage in a business involving the employment of labour”.

Some different theories

It will never be possible, or perhaps even desirable, to expound a theory which

will at once explain and justify all aspect of the doctrine although it has long been
accepted as necessary and beneficial. The combined effect of all the reasons may be

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overwhelming, though one or more in isolation may be unconvincing. The maxim
respondent superior does not explain why the superior should answer; it does not
enshrine a principle, but announces rather a result— namely, that the employer ought
to pay. The maxim qui facit per alium facit per se [He who acts through another acts
himself i.e., the acts of an agent are the acts of the principal], although often cited with
approbation is similarly unhelpful. The truth is that “a mixture of ideas has inspired
many unconvincing judicial efforts to find a common basis for the maxim. What was
once presented as a legal principle has degenerated into a rule of expediency,
imperfectly defined, and changing its shape before our eyes under the impact of
changing social and political conditions. But there is one idea which is to be found in
the judgments from the time of Sir John Holt to the present day, namely, public policy-
As Lord Brougham said: ‘The reason that I am liable is this, that by employing him I set
the whole thing in motion; and what he does, being done for my benefit and under my
direction, I am responsible for the consequences of doing it”. In short, vicarious liability
is based on “social convenience and rough justice”. This is an adequate explanation of
the doctrine, subject to the qualification that the master may be liable even though the
act or default is not for his benefit, and even though he has expressly prohibited it. In all
this there is no doubt that the courts have been much influenced by the fact that the
master is usually more able than the servant to satisfy claims by injured persons and
can pass on the burden of liability by way of insurance. There is also some evidence to
show that the imposition of strict liability on the master results in the prevention of
accidents; the master takes more care than he would otherwise have done.

Vicarious Liability of the State

Or
Tortious Liability of the State

Or

Governmental Liability in Tort

In the past, actions against the State for civil wrongs were concerned with
personal or proprietary interests in the form of damage to property or misappropriate
or loss while in custody. The latter period witnesses actions filed for injuries to a
persons life or liberty. The State being a juristic person acting through its officials and
agents, the question therefore arises whether it can be made liable for the wrongful acts
of its servants and agent. The law relating to tortuous liability of the State in India has
witnesses several phases of development right from the earliest decision in Peninsular
v. Oriental Steam Navigation Co-Reddy Care, AIR 2000 SC 2083, in 2000.

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Introduction

In the post constitutional era, the courts created a new public law remedy which
made the State liable for wrongs inflicted in the course of exercise of its non-sovereign
powers. However, for injuries caused in the exercise of sovereign power, the liability
depend upon the nature of the activity and its relation to the power so exercised. While
some cases, the State was made liable, in other Sovereign Immunity was pleaded as
defence. Consequently, the decisions were conflicting and no single principle for the
liability of the state could be evolved. In this respect, it becomes essential to analyse
whether the distinction between the sovereign and non-sovereign functions has become
obsolete, unrealistic and impracticable.

The advent of the “Welfare State” philosophy led to the all pervading state
intervention, reducing the distinction between Private and Public functions. While, on
the one hand, welfare measures multiplied, on the other hand the potentiality of injury
to individual interests increased. Under these circumstances, the court tried to limit the
concept of State Immunity within a narrow range. The courts confined the immunity of
the State to traditional functions of the State like legislation, administration of justice,
war, making of treaties and repression of crime. Indian Insurance Company Association
Pool v. Radhabar, AIR 1976 MP 164. The law was not only found unsatisfactory by the
courts but also by legal jurists.

The question of State liability for wrongful acts of its employees has assumed
great important today, particularly in the context of the State donning innumerable
functions for promoting welfare of its citizens. Misuse of power by these employees or
their negligence may cause injury to a person or property of a citizen and may even
involve our assault on his fundamental rights. Such a situation calls for an adequate
mechanism for determining the liability of the State and compensating the victim.

It is, however, strange that the State which has extended its tentacles practically
into all spheres of activities has not deemed it fit to enact a statute for determining the
citizen’s claims against the all powerful State. This paper therefore attempts to evaluate
the judicial response for meeting the situation which puts in focus this conflict between
the individual and the State.

Genesis of Government Liability in Torts

As Common Law only a legal person can sue or be sued in the court of law. The
question of suability of the State therefore begs the question whether the State is a
juristic person or a legal entity. There is little controversy amongst the different systems

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of law that a corporation is a legal person. To all intents and purposes, the State is a
corporate aggregate".

English Position

It is an ancient and fundamental principle of the English Constitution that the

King can do no wrong. This maxim means, first, whatever is exceptionable in the
conduct of the Public affairs is not to be imputed to the king, nor is he answerable for it
personally to his people for this doctrine would totally destroy the constitutional
independence of the Crown; and, secondly, that the prerogative of the Crown extends
not to do any injury. “He (The King) is not liable to be sued civilly or criminally for a
supposed wrong. That while the sovereign does personally, the law presumes will not
be wrong; that which the sovereign does by command to his servants, cannot be a
wrong in the sovereign because, if the command is unlawful, it is in law no command,
and the servant is responsible for the unlawful act, the same as if there had been no
command”. So the Crown was not liable in tort at common law for wrongs committed
by its servants in the course of employment not even for wrongs expressly authorized
by it. Even the heads of the department or superior officers could not be sued for torts
committed by their subordinates unless expressly authorized by them; only the actual
wrong doer could be sued in his personal capacity. In practice, the action against the
officer concerned was defended by the Treasury Solicitor and the judgment was
satisfied by the Treasury as a matter of grace. Difficulty was, however, felt when the
wrong doer was not identifiable. The increased activities of the crown have now made it
the largest employer of men and the largest occupier of property. The above system
was, therefore, proving wholly inadequate and the law needed a change which was
brought about by the Crown Proceedings Act, 1947. Nothing in the Act authorises
proceedings in tort against the Crown in its private capacity (S.40), or affects powers or
authorities exercisable by virtue of the prerogative of the Crown or conferred upon me
Crown by Statute [S. 11(1)]. Subject to this, the Act provides that the Crown shall be
subject to all those liabilities in tort to which, if it were a person of full age and capacity,
it would be subject

1) in respect of torts committed by its servants or agents, provided that the act
or omission of the servant or agent would, apart from the Act, have given rise
to a cause of action in tort against that servant or agent his estate.

2) in respect of any breach of those duties which a person owes to his servants
or agents at common law by reason of being their employer.

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3) in respect of any breach of the duties attaching at common law to the
ownership, occupation, possession or control of property. Liability in tort also
extends to breach by the Crown of a statutory duty. It is also no defence for
the Crown that the tort was committed by its servants in the course of
performing or purporting to perform functions extended to them by any rule
of the common law or by Statute. The law is also indemnity and contribution
as between joint tort-feasors shall be enforceable by or against the Crown and
the Law Reform (Contributory Negligence) Act, 1945, binds the Crown.
Although the Crown Proceeding Act., preserves the immunity of the
Sovereign in person and contains savings in respect of the Crown’s
prerogative and statutory powers, the effect of the act in other respects,
speaking generally, is to abolish the immunity of the crown in tort and to
equate the crown with a private citizen in matters of tortuous liability. The
Crown is now vicariously liable for torts committed by its servants in the
course of their employment if committed in the circumstances which would
render a private employer liable. So in Home Office v. Dorset Yacht Co., the
Crown was held liable for the damage caused by runaway borstal trainees
who escaped because of the negligence of the borstal officers in the exercise of
their statutory function to control the trainees.

The English law is likely to develop further because of enforcement of the

Human Rights Act, 1998 from 2nd October, 2000. The Act gives effect to the European
Convention on Human Rights. The Act provides that it is unlawful for any public
authority to act in a way which is incompatible with a convention right and a person
who considers that these rights have been violated can sue the public authority for
damages. Many of the convention rights are also recognised by the Common Law
which also provides remedies for their infringement. A claim under the Act will directly
arrive when the right infringed is recognized by the Act as a convention right but is not
recognized by the Common Law.

Indian Position

The maxim that the King can do no wrong and the resulting rule of the Common
Law that the Crown was not answerable for the torts committed by its servants have
never been applied in India.

In India, the suability of the State as a body corporate dates back from the days of
the East India Company, which was in fact, incorporated by a Royal Charter. This
concept was maintained when the governance of the country was taken over by the
British Crown from the Company, and in the Government of India Act since 1858, it

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was explicitly laid down that the Government of India could sue or be sued in the name
of the Secretary of State in council for India, which was to be treated as a body
corporate.

Legally, the genesis of State liability for torts in India can be tracked back to the
Section 65 of the Government of India Act, 1858, which provided that the Secretary of
State could be sued as it could be done against the East India Company. The section was
re-enacted as the S.32 of the Government of India Act, 1935. In the present constitution
the corresponding Provision is Article 300.

Constitutional Provisions in India

Article 300 of the Constitution Law:-

The law in India with respect to the liability of the State for the tortuous acts of
its servants has become entangled with the nature and character of the role of the East
India Company prior to 1858. It is therefore necessary to trace the course of
development of the law on this subject, as contained in Article 300 of the Constitution.

Clause (1) of Article 300 of the Constitution provides: -

1) that the Government of India may sue or sued by the name of the Union of
India and the Government of a State may sue or be sued by the name of the
state.

2) that the Government of India or the Government of a State may sue or be

sued in relation to their respective affairs in the like cases as the Dominion of
India and the corresponding provinces or the corresponding Indian States
might have sued or be sued, “if the constitution had not been enacted.,

3) that the second mentioned rule shall be subject to any provisions which
may be made by an Act of Parliament or of the legislature of such State,
enacted by virtue of powers conferred by the Constitution.

Even though more than 50 years have elapsed since the commencement of the
constitution, no law has so far been made by Parliament as contemplated by Article 300,
notwithstanding the fact that the legal position emerging from the article has given rise
to a good amount of confusion. Even the judgments of the Supreme Court have not
been uniform and have not helped to remove the confusion on the subject, as would be
evident from what is stated hereinafter.

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Act of 1833

Under the Act of 1833 (3 and 4 William IV Ch. 85), enacted by the British
Parliament, the governance of India was entrusted on the East India Company. The Act
declared that the Company held the territories in trust for His Majesty, his heirs and
successors, when the governance of India was taken over by the British Crown in 1858,
an Act was passed in that year (Act 21 and 22 Vic. Ch. 106), entitled the Government of
India Act, 1858, Section 65 of that Act declared that the Government’s liability in this
behalf shall be the same as that of the Company. It would be appropriate to set out the
section in full: -

“The Secretary of State in Council shall and may sue and be sued as will in
India as in England by the name of the Secretary of State in Council as a body
corporate; and all persons and bodies politic shall and may have and take the
same suits, remedies and proceedings, legal and equitable, against the
Secretary of State in council of India, as they could have done against the said
company; and the property and effect hereby vested in Her Majesty for the
purposes of to Government of India, or acquired for the said purposes, shall
be subject and liable to the same judgments and executions as they would,
while vested in the said Company have been liable to in respect of debts and
liabilities lawfully contracted and incurred by the said Company.”

Act of 1915

This very provision, contained in the Act of 1858, was practically continued by
section 32 of the Government of India Act, 1915 Sub-sections (1) and (2) of that Section
read as follows: -

1) “The Secretary of State in Council may sue and be sued by the name of the
Secretary of State in Council, as a body corporate.

2) Every person shall have the same remedies against the Secretary of State in
Council as he might have had against the East India Company, if the
Government of India Act 1858, and this Act had not been passed."

Act of 1935

Even when the Government of India Act, 1935 was enacted (replacing the Act of
1915), the same legal position was continued by section 176(1) of the Act, which read as
follows:

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“The Federation may sue or be sued by the name of the Federation of India
and a Provincial Government may sue or be sued by the name of the
Province, and, without prejudice to the subsequent provisions of this chapter,
may subject to any provisions which may be made by an Act of the Federal or
a Provincial legislature enacted by virtue of powers conferred on that
legislature by this Act, sue or be sued in relation to their respective affairs in
the like cases as the Secretary of State in Council might have sued or been
sued if this Act had not been passed.”

Resultant Position

Thus, Article 300 of the Constitution practically takes us back to the Act of 1858,
which, in its turn, leads us to a consideration of the nature and extent of the liability of
the East India Company.

Peninsular and Oriental Steam Navigation Co.

Vs.

Secretary of State for India.

The often-quoted authority on the construction of section 65 of the 1858 Act is the
decision of the Supreme Court of Calcutta rendered in 1861 in the case of Peninsular
and Oriental Steam Navigation Co. v. Secretary of State for India. The case was actually
reported as an Appendix to one of the Bombay High Court Reports- 5 B.H.C.R. App. P.
1.

In this case a servant of the plaintiff company was proceeding on a highway in

Calcutta driving a carriage drawn by a pair of horses. Due to the negligence of the
servants of the Government employed in the Government Dockyard at Kidderpore in
carrying a piece of iron funnel needed for repair of a steamer, an accident happened in
which one of the horses driving the plaintiffs carriage was injured. The plaintiff sued
the Secretary of State for India for damages for the damage caused due to the
negligence of the servants of the Government. In holding that for such accident caused
by the negligence of its servants in doing acts not referable to Sovereign Powers the East
India Company would have been liable and so the secretary of State for India was
liable, Peacock, C.J., who delivered the judgment of the Court, drew a distinction
between the acts done by the Public servants in the delegated exercise of sovereign
powers and acts done by them in the conduct of other activities and made the following
pertinent observation:

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“In determining the question whether the East India Company would, under
the circumstances, have been liable to an action under the general principles
applicable to Sovereigns and States, and the reasoning deduced from the
maxim of the English law that the King can do no wrong would have no
force. The East India Company were not Sovereigns and, therefore, could not
claim all the exemptions of a Sovereign; and they were not the public servants
of Government and, therefore, did not fall under the principle of the case with
regard to the liabilities of such persons, but they were a Company to whom
sovereign powers were delegated and who traded on their own account and
for their own benefit, and were engaged in transactions partly for the
purposes of Government, and partly on their own account, which without
any delegation of Sovereign rights might be carried on by Private individuals,
There is a great and clear distinction between acts done in the exercise of
what are usually termed sovereign powers, and acts done in the conduct of
undertakings which might be carried on by private individuals without
having such powers delegated to them.”

The tort in the case of Peninsular and Oriental Steam Navigation Co., was
committed by the servants of the Government in the course of a trading activity and the
case was not directly concerned with acts done in the exercise of sovereign powers. The
Madras High Court in Hari Bhanji case and the Bombay High Court in Rao v. Advani
case, therefore, did not accept the reservation made by Peacock, C.J. that the
Government was not liable if the tort was committed in the exercise of sovereign
powers and the view expressed by these High Courts was that the Government would
also be liable for torts committed in the exercise of sovereign powers except when the
act complained of amounted to an act of State. The Calcutta High Court, however,
followed the view taken by Peacock, C.J.

Nobin Chander Dey Vs. Secretary of State for India.

The doctrine of immunity for acts done in the exercise of “sovereign functions”.,
enunciated in the P and O case, was applied by the Calcutta high Court in Nobin
Chander Dey Vs. Secretary of State, (1873) ILR.1 Cal.1.

In this case, the plaintiff contended that the Government had made a contract
with him for the issue of a licence for the sale of ganja and had committed breach of
contract. The High Court held as under: -

i) On the evidence, no breach of contract had been proved,

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ii) Even if there was a contract, the act was done in exercise of sovereign
power and therefore it was not actionable.

The High Court expressly followed the P and O ruling, and the state was
exempted from the liability.

On the other hand there is another set of authorities according to which the State
is liable for the torts of its servants except when an act done is an “Act of State”. “Act of
State” is a defence which the State cannot have against its own subjects. According to
this view, therefore, the State is liable towards its own subjects, just like an ordinary
employer.

The Secretary of State for India Vs. Hari Bhanji.

One of the authorities for this point of view if the case of the Secretary of State for
India in Council Vs. Hari Bhanji, wherein the Madras High Court held that the State
immunity was confined to acts of State.

The facts of the case briefly were that during the course of transit of salt from
Bombay to Madras Parks, the rate of duty payable on salt was enhanced and the
merchant was called upon to pay the difference at the port of destination. The amount
was paid under protest and a suit was instituted to recover the amount.

The principal question that arose was the jurisdiction of the Court to entertain
such a suit. The Calcutta High Court in one of its earlier cases of Nobin Chander Dey v.
Secretary of State for India, (1932-33) 37 CWN 959 had taken the view that in respect of
acts done in the exercise of sovereign functions by the East India Company, no suit
could be entertained against the Company.

This position was examined by the Madras High Court and two questions
governing the maintainability of the suit were formulated. Firstly what was the
personal status of the defendant i.e. whether the defendant was a sovereign who could
not be sued in its own Courts and secondly what was the character of the act committed
with respect of which the relief was sought. The first question did not pose much of a
difficulty as the immunity enjoyed by English Crown did not extend to the East India
Company, as all the charters had specifically recognised the liability of the Company to
sue or be sued. However with respect to the second question the High Court held that
the immunity of the East India Company extended only to what were called the “acts of
State”, strictly so called and that the distinction between sovereign and non-sovereign
functions was not a well founded one.

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Turner C.J., in coming to this conclusion, pointed out that in P & O case
(Supreme Court Calcutta), Peacock C.J. did not go beyond acts of State, while giving
illustrations of situations where the immunity was available. The position was thus
explained (in the Madras case):

“The act of State, of which the municipal courts of I British India are debarred
from taking cognizance, are acts done in the exercise of sovereign powers,
which do not profess to be justified by municipal law ......................where an
act complained of is professedly done under the sanction of municipal law,
and in exercise of powers conferred by that law, the fact that is done by the
sovereign powers and is not an act which could possibly be done by a private
individual does not oust the jurisdiction of the civil court.”

It should, however, be mentioned that the Madras Judgment in Hari Bhanji also
adds that the Government may not be liable for acts connected with public safety (even
though they are not acts of State).

The Law Commission of India, in its First Report in 1956, has discussed the
whole question and according to its view, “the law was correctly laid down in Hari
Bhanji’s case”.

State of Rajasthan v. Vidyawati.

The point as to how far the State was liable in tort first directly arose before the
Supreme Court in State of Rajasthan Vs. Vidyawati. In that case the claims for damages
was made by dependants of a person who died in an accident caused by the negligence
of the driver of a jeep maintained by the Government for official use of the Collector of
Udaipur, while it was being brought back from the workshop after repairs. The
Rajasthan High Court took view that the State was liable for “the State is in no better
position in so far as it supplies cars and keeps drivers for its civil service”. “The
Supreme Court endorsed the view taken by the High Court; Sinha, C.J., in delivering
the judgment of the Court quoted approvingly the judgment of Peacock, C.J. but he also
from the point of view of first principles" made the following observations:

“The immunity of the Crown in the United Kingdom was based on the old
feudalistic notions of Justice, namely, that the King was incapable of doing a
wrong, and, therefore, of authorising or instigating one, and that he could not
be sued in his courts. In India, ever since the time of the East India Company,
the Sovereign has been held liable to be sued in tort or in contract and the
common law immunity never operated in India. Now that we have, by our

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Constitution, established a Republican form of Government, and one of the
objectives is to establish a socialistic State with its varied industrial and other
activities, employing a large army of servants, there is no justification in
principle or in public interest, that the State should not be held liable
vicariously for the tortuous act of its servant.”

Kasturilal Ralia Ram Jain v. State of U.P.

The question of liability of the State again came up for decision before the
Supreme Court in Kasturilal Ralia Ram Jain V. State of U. P. In this case, a partner of
Kasturilal Ralia Ram, a firm of jewelers of Amritsar, went to Meerut for selling gold and
silver. He was taken into custody at Meerut by Police constables on the suspicion of
possessing stolen property. He was kept in police lock-up and the gold and silver
recovered from him on search were kept in the custody of the police in Police
Malkhana. He was next day released and sometime later silver seized was returned.
The gold could not be returned to him as the Head Constable-in-charge of the
Malkhana misappropriated it and fled to Pakistan. The suit was filed against the State
of U.P. for return of the ornaments or in the alternative for compensation. It was found
that the Police Officers had failed to follow the U.P. Police Regulations in taking care of
the gold. The Supreme Court held the State not liable on the view that the tort was
committed by police officers in the exercise of delegated sovereign powers. The Court
speaking through Gajendragadkar, C.J. fully approved the decision of Peacock, C.J. in
the case of Peninsular and Oriental Steam Navigation Co., stating per incuriam that it
“enumerated a principle which has been consistently followed in all subsequent
decisions: and observed:

“It must be borne in mind that when the State pleads immunity against
claims for damages resulting from injury caused by negligent acts of its
servant, the area of employment referable to sovereign powers must be
strictly determined. Before such a plea is upheld, the Court must always find
that the impugned act was committed in course of an undertaking or
employment which is referable to the exercise of delegated sovereign power”.
In upholding the defence of immunity pleaded by the State of U.P.’
Gajendragadkar, C.J. further said: “The act of negligence was committed by
Police officers while dealing with the property of Raila Ram which they had
seized in the exercise of their statutory powers. Now, the power to arrest a
person, to search him, and to seize property found with him, are powers
conferred on the specified officers by statute and in the last analysis these are
powers which can be properly characterized as sovereign powers, and so,
there is no difficulty in holding that the act which gave rise to the present

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claim for damages has been committed by the employees of the respondent
during the course of their employment; but the employment in question
being of the category which can claim the special characteristic of sovereign
power, the claim cannot be sustained.” It may also be mentioned that
Vidyawati’s case was distinguished as being confined to tortuous liability not
arising from the exercise of sovereign power.

The decision of the Supreme Court in Kasturilal’s case is not satisfactory and has
been critised by a leading constitutional authority of the country. It proceeds upon a
wrong impression that the decision of Peacock, C.J., was uniformly followed by failing
to take notice that it was dissented to by the Madras and Bombay High Court’s, it fails
to appreciate that when in modern times there is no logical or practical basis for the rule
of State immunity which has been abolished even in the country of its origin, more
reasonable view to take in the context of our Constitution was that the State will always
be liable for the torts committed by its servants in the course of employment except
when the act complained of amount to an act of State; and it omits to consider that even
if the statutory power to arrest, search and seize the property recovered may be
described to pertain to the sphere of sovereign powers, the duty to take care for the
protection of the property and the obligation to return the same to the rightful claimant
after the necessity to retain them ceases were more in nature of the duties of a statutory
or a contractual bailee and did not fall within the sphere of sovereign powers.

Although the decision of the Supreme Court in Kasturilal’s case is yet to be

overruled, subsequent decisions of the Court have greatly undermined its authority and
attenuated the sphere of sovereign immunity. As recently observed by a three judge
bench “much of its efficacy as a binding precedent has been eroded”.

State of Gujarat v. Memon Mahomed.

In this case, the custom authorities seized two trucks, a station wagon and goods
belonging to the plaintiff on the grounds that the plaintiff had not paid import duties on
the said trucks, that they were used for smuggling goods, and that some of the goods
were smuggled goods. The custom authorities made false representation to a magistrate
stating these to be unclaimed property and disposed of the same under the orders of the
magistrate. Subsequently, the revenue Tribunal set aside the said order of confiscation
and directed the return of the said vehicles to the plaintiff. The plaintiff claimed back
his vehicles or in the alternative the value of the same amounting about Rs. 30,000. It
was held by the Supreme Court that after the seizure, the position of the Government
was that of a bailee. The order of the Magistrate obtained on false representation did not
affect the right of the owner to demand the return of the property. The Government,

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therefore, had a duty to return the property, and on its failure to do the same, it had a
duty to pay compensation."

In other words, on a suit for the value of the goods against the State, the Supreme
Court held that when the seizure was illegal, there arose a bailment and a statutory
obligation to return the goods and the suit was maintainable.

N. Nagendra Rao and Co. v. the State of Andhara Pradesh.

In this case the appellant carried a business in fertilizers and food grains. Huge
stock of fertilizers and food grains was seized from the appellant’s premises. In
proceedings taken under section 6A of the Essential Commodities Act, 1955, no serious
violation of any control order was found and only nominal portion of the stock seized
was confiscated and the rest was ordered to be released. The appellant, when he went
to take the delivery found that stock had been spoiled both in quantity and quality. The
appellant, therefore, instead of taking delivery of the stock sued for compensation
against the State. The trial court found negligence on the part of the officers and decreed
the suit in part. The High Court did not interfere with the finding of negligence but
dismissed the suit relying upon Kasturilal. In the Supreme Court the appeal was heard
by two judges who could not overrule Kasturilal (which is a decision of a Constitutional
Bench) but they pointed out in an elaborate discussion that it was not correctly decided
and that the doctrine of sovereign immunity has no relevance in the present day
context. Distinguishing Kasturilal the court, overruling the High Court, observed that
maintenance of law and order may be an inalienable sovereign function of the State in
the traditional sense but power of regulating and controlling essential commodities as
conferred by the Essential Commodities Act and the orders made thereunder did not
pertain to that area and the State cannot claim immunity if its officers are negligent in
exercise of those powers.

Rudal Shah V. State of Bihar.

In this case, the petitioner was acquitted by the Court of Sessions on June 3, 1968,
but was released from the jail more than 14 years thereafter, on October 16, 1982. In the
habeas corpus petition, the petitioner not only sought his release but also claimed
ancillary reliefs like rehabilitation, reimbursement of expenses likely on medical
treatment and compensation for unlawful detention. The State could not give any
justifiable cause of detention except pleading that the detention was for medical
treatment of the mental imbalance of the petitioner. The Supreme Court ordered the
payment of compensation of Rs. 30,000 (as an interim measure) in addition to the
payment of Rs.5000/- which had already been made by the State of Bihar. It was also

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stated that the said order of compensation did not preclude the petitioner from bringing
a suit to claim appropriate damages from the State and its erring officials.

Bhim Singh v. The State of J and K.

In this case, the petitioner who was an M.L.A. was wrongfully detained by the
police and thus prevented from attending the assembly session. The Supreme Court
ordered the payment of Rs. 50,000/- by way of compensation to the petitioner.

Conclusion

It is crystal clear from the discussions made in the earlier chapters that the
common law rule of absolute immunity of the Crown based on the maxim. The King
can do no wrong has never been applied in India in toto. Right from the time of the East
India Company, the State has been made liable for the torts of its servants but the
Courts have fixed liability for torts without any difficulty only to those acts committed
by the servants of the State in exercise of non-sovereign powers.

However in case of acts committed in exercise of sovereign powers, there is a

conflict and great confusion. Here it is submitted that the Courts have erringly confused
sovereign powers with acts of State, which though done by the sovereign, is an act
against another sovereign or alien outside the national territory and is not an act for
which the question of compensation arises.

In order to determine whether an act is a sovereign function or not, the Court in

India have often resorted to the test laid down by Chief Justice Peacock in Peninsular &
Oriental Steam Navigation Co. v. Secretary of State for India case. According to him
sovereign powers mean ‘powers which cannot be lawfully exercised except by
sovereign or private individuals delegated by a sovereign to exercise them’. However
the judiciary has not laid down any clear or unambiguous test for determining what
actually these sovereign powers are. The test evolved so far may not be of any help in
most of the situations or in penumbral cases.

The view that a power conferred by a statute is sovereign is also not a sound one.
An activity may be regarded as a sovereign function although it might not have any
statutory basis and conversely it may be a non-sovereign function despite having a
statutory basis. Therefore the Law Commission of India has recommended as early as
1956 for dispensing with the distinction between sovereign and non-sovereign powers.
The judiciary’s attempts to reform the law with interpretation have met with very
limited success.

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The Courts have tried to delimit this liability of the State by treating more and
more acts as non-sovereign functions and confining sovereign immunity to traditional
functions of the State but even this limit is very vague. In a Welfare State, the State
should not hesitate in owning responsibility for the wrongs of its servants. The Law
Commission in its first report rightly observed that there is no convincing reason as to
why the Government should not place itself in the same position as a private employer,
subject to the same rights and duties as imposed by the statute.

The Commission suggested the making of suitable law on this point. In England,
the Crown Proceedings Act, 1947 made the Crown liable for the acts of its servants. This
parity is maintained between the Crown and a private individual in respect of liability
under torts. In the United States of America also the Federal Tort Claims Act, 1946 has
been created to define the immunity of the State for tortuous acts. In India, a bill entitled
the Government (Liability in Tort) Bill drafted on the lines of the Law Commission of
India recommendations was introduced and re-introduced in 1965 and 1967
respectively, with certain modifications suggested in 1969 by the Joint Committee of the
Parliament but it still remains to be enacted as a law.

Under a Republican Constitution particularly in a socialist State, the sovereign

immunity should be confined to the bar essential functions of the State. In all other
cases, the Government should be made liable for the wrongful acts of its servants. It is
submitted that the legislature should come forward with a legislation clearly defining
and demarcating the scope of the immunity and liability of the Government. The
liability should be broad enough to cover all the illegal acts of the Government servants
and the agents of the State committed in the course of their lawful employment. It is
only by such a rule can justice be rendered to the helpless victims against the monolith
institution of the State and its atrocities.

Bibliography

1. The Law of Torts by Ratanlal and Dhirajlal

2. Law of Torts by R.K. Bhangia

3. Salmond and Heuston on the Law of Torts.

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