Chapter Xxix Tortious Liability & Compensation

CHAPTER XXIX TORTIOUS LIABILITY & COMPENSATION
MP Jain & SN Jain: Principle of Administrative Law 7th Edition 2013

MP Jain & SN Jain
MP Jain & SN Jain: Principle of Administrative Law 7th Edition 2013 > MP Jain & SN Jain:
Principle of Administrative Law 7th Edition 2013 > Volume 2
1. INTRODUCTORY
The subject-matter of this Chapter is: under what circumstances compensation or monetary damages are payable
by the government to an individual? The focus of this Chapter is on payment of damages compensation. The area
under discussion here is one where public law (Administrative Law) and private law (Law of Torts) interact. The
question of compensation is being mooted here mainly from the perspective of a public lawyer.
The question of compensation is different from that of judicial review. In judicial review, the impugned action of the
Administration is quashed, and, by and large, status quo ante is restored. This aspect of Administrative Law has
been discussed in detail in later Chapters. In case of payment of compensation, the party injured by an action of
the Administration gets monetary damages from the Administration for the injury done to him.
As there is increasing legislative regulation of human activity, a bulk of statutory powers have come to be
conferred on the Administration in modern times. These powers are of various types—regulatory, promotional,
developmental, licensing etc . The exercise of these powers may, and usually does, interfere with private rights. In a
welfare state, citizens often expect individual benefits from the government, such as, grants, housing and so on.
The competent authority may cause a good deal of harm to the citizen by wrongly refusing a grant, or a permission,
or conversely, by failing to duly exercise its power of regulation and control.
In many such cases, the harm may be purely economic. While a public authority may cause damage in the same
way as a private person may do, it can also cause harm in ways no private person can because of the immense
power it enjoys. It is, therefore, necessary to ensure that these powers are exercised by the concerned authorities
in a proper and responsible manner. One of the ways to ensure this may be to make the authorities pay
compensation if some person unduly suffers damage as a result of improper exercise of any such power.
The common-law has not yet developed any general principle to support the award of compensation to a person
who may have suffered loss or injury through administrative action which may ultimately turn out to be unlawful.
At times, the law under which administrative action is being taken may itself provide for payment of compensation
when private rights are disturbed under the law, e.g. , compensation is payable under the law providing for
compulsory acquisition of property by the state for a public purpose. In many other cases, statutes provide for no
compensation. The main question to be considered here is: what are the rights of an individual to be compensated
by the government for the loss caused to him by the exercise of statutory powers?
This question has several facets. It may not be possible to discuss all aspects here. The law in the area is still in
the development stage and has not yet settled down. An effort is made here to indicate some of the main trends of
the law and the complexities of the subject-matter. Basically, resort is had for this purpose to the law of torts, a
branch of private law. The courts are making an endeavour to adjust this law to the needs of public law.
2. GOVERNMENTAL TORTIOUS LIABILITY

(a) Britain
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There is the simple case of a recognised tort being committed—especially negligence —by a public employee in
the course of his employment. The question then arises: can the government be held liable to compensate the
injured person on the principle of vicarious liability?
In Britain, before 1947, the Crown enjoyed immunity from tortious liability under the common law because of the
maxim "King can do no wrong" which implies that the King commits no wrong and that he cannot be guilty of any
personal negligence or misconduct. The maxim also implies that neither any wrong can be imputed to the King nor
could he authorize any wrong and, as such, the King cannot be held responsible for the negligence or misconduct
of his servants.
Another aspect of the doctrine of immunity was that it was regarded as an attribute of sovereignty that the state
could not be sued in its own courts without its consent. However, to mitigate the injustice arising out of the immunity
rule the government would pay compensation in proper cases by settling the matter with the injured person. But this
was as a matter of grace and not as of right. When damages were awarded against a specific civil servant, the
government usually met his liability.
Statutory corporations, however, were held liable for torts.
It came to be realised in course of time that the rule had become outmoded in the context of modern
developments. The position was, accordingly, changed by the Parliament enacting the Crown Proceedings Act,
1947. The Act makes the Crown in principle liable for torts to the same extent as a private person of full age and
capacity subject to such exception, inter alia , as defence of the realm, maintenance of armed forces and postal
services. The Crown thus becomes vicariously liable to a very large extent for the torts committed by its servants.
The Act has revolutionised the law in Britain.
(b) U.S.A.
In the United States of America, the Federal Tort Claims Act, 1946, defines the tortious liability of the central
government. In the case of common law duties, the U.S. Government is liable to the same extent as a private
individual under like circumstances. Intentional torts (such as assault, battery, false imprisonment etc .) are
excluded. The U.S. Government is not liable for any tort committed in the discharge of statutory duties as long as
the duties are performed with due care. The Act exempts the government from liability for torts committed by
officials in the discharge of their discretionary functions conferred on them by statutes, even if the discretion is
abused or there is negligence, so long as it is exercised with due care. Thus, the American statute says that the
state shall not be liable in respect of:
"Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a
statute for regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the
failure to exercise or perform a discretionary function or duty on the part of a federal Agency or an employee of the
government, whether or not the discretion involved be abused."
On the whole, the tortious liability of the U.S. Government is more restricted than that of the British Government.
The Act does not represent the current thinking in the common-law world.
In U.S. v. Muniz , the question arose whether the Unites States was liable for the acts or omissions of its
employees resulting in death of, or personal injuries to, a federal prisoner. A person conferred in a federal prison
suffered injuries because of the negligence of the prison employees in diagnosis and treatment of a benign brain
tumour. In another case, a prisoner was assaulted by other prison inmates. It was alleged that the prison authorities
were negligent in failing to provide enough guards and adequate supervision of prisoners. The Supreme Court
accepted these allegations. The Court emphasized that the Federal Court Claims Act was designed not only to
avoid injustice to those having meritorious claims barred till then by sovereign immunity but it also waived the
sovereign immunity for claims arising out of negligent treatment in government hospitals.
3. POSITION IN INDIA: PRE-CONSTITUTION

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In India, the principle of immunity of the government for the tortious acts of its servants, an archaic principle of the
English law prevalent in the bygone feudalistic days, still survives in some respects. The extent of liability of the
government for torts of its employees is defined by Art. 300 (1) of the Constitution which declares inter alia that the
Government of India, or 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 "been
sued" if the Constitution had not been enacted. This, however, is subject to any law made by Parliament or the
State Legislature. No law has so far been passed as contemplated by Art. 300 (1).
The liability of the Centre or a State is thus co-terminus with that of the Dominion of India or a Province before the
Constitution came into force. Section 176 of the Government of India Act, 1935, stated that the Dominion of India
and the Provincial Government may sue or be sued in relation to their respective affairs in the like cases as the
Secretary of State for India in Council might have sued or been sued if the Government of India Act of 1935 had not
been enacted. Thus, the liability of the Government was made co-extensive with that of the Secretary of State for
India under S. 32 of the Government of India Act, 1915, which in turn made it co-extensive with that of the East
India Company prior to the Government of India Act, 1858. Section 65 of this Act declared that all persons "shall
and may have and take the same suits, remedies and proceedings," against the Secretary of State in Council for
India as they could have done against the East India Company.
This provision thus preserved against the government the same suits and proceedings which were then available
against the East India Company. The Secretary of State for India in Council could be sued in all those cases in
which the East India Company could be sued before 1858. Therefore, to understand the present position as
regards the extent of tortious liability of a government in India, it becomes necessary to know the extent to which
the East India Company was liable before 1858.
(a) Liability of East India Company
The Company, to start with, was purely a mercantile body. Gradually, it acquired territories in India and also
sovereign power to make war and peace and raise armies. By the Charter Act of 1833, the Company came to hold
the Government of India in trust for the British Crown. In 1858, the Crown assumed sovereignty of India to take over
the administration of India from the hands of the Company. Thus, from 1765 to 1858, the Company had a dual
character: it was a trader and also exercised some sovereign powers. As the Company was an autonomous
corporation, having an existence of its own, and bearing no relationship of servant or agent to the British Crown, the
immunity enjoyed by the Crown was never extended to it.
(b) P & O case
The leading case arising under S. 65 of the Government of India Act, 1858, P. &O. Steam Navigation Co. v.
Secretary of State , was decided in 1861 by the Calcutta Supreme Court. The P. &O . made a claim for damages
against the Secretary of State for injury to its horse caused on the highway because of the negligence of some
workmen employed in the Government Kidderpore Dockyard.
The workmen were carrying a piece of iron funnel casing from one part of the dockyard to another to take it on
board a government steamer which they were repairing. To do this, they had to cross a public highway running
through the dockyard area. While they were on the roadway, the plaintiff’s horse-driven carriage encountered the
iron. Due to the negligence of the workmen, one of the horses was injured.
To determine the liability of the government, the court posed the question whether the East India Company would
have been liable in such a situation. After the Charter Act of 1833, the Company was acting in a dual capacity in
India as a merchant, as well as one exercising sovereign powers as a trustee of the Crown in respect of the
territorial possessions acquired by it. The court pointed out that the fact that the Company exercised sovereign
powers as a delegate of the Crown did not make it a sovereign. Therefore, the Crown immunity could not extend to
it. As to the scope of actual liability of the Company, the court stated that where an act was done in the exercise of
‘sovereign powers,’ no action would lie against it.
The court stated the proposition that if the company "were allowed, for the purpose of government, to engage in
undertakings, such as the Bullock Train and the conveyance of goods and passengers for hire, it was only
reasonable that they should do so, subject to the same liabilities as individuals..." In other words, if the company
were carrying on activities which could be carried on by private persons, the company would be liable for torts of its
servants committed during the course of such activities. The court went on to say:
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"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 under-takings which might be carried on by private individuals without having such powers
delegated to them"
No action would lie in the former case. The sovereign powers were defined as: "powers which cannot be lawfully
exercised except by a sovereign, or private individual delegated by a sovereign to exercise them." On the basis of
this reasoning, the court held in the instant case that the company would have been liable for negligence of its
servants in repairing a river steamer or in doing any act in connection with such repairs. Thus, the Secretary of
State was held liable in the instant case.
The P. &O . case thus laid down two propositions:
(1) Apart from any special statutory provision, suits could have been brought against the East India Company
and, consequently, against the Secretary of State as successor to the Company, in respect of acts done in
the conduct of an undertaking which might be carried on by private individuals without sovereign powers.
(2) The Secretary of State was not liable for anything done in the exercise of sovereign powers.
It may however be noted that most of the cases cited in P. &O . as examples of sovereign functions are really
cases pertaining to act of state.
It could also be argued that what the court said in P. &O . to be a ‘clear’ distinction between ‘sovereign’ and ‘non-
sovereign’ functions, it is really not so clear. The distinction between the two types of functions is amorphous and
unfocussed except when the court equals sovereign functions with acts of state.
(1) Hari Bhanji
The P. &O . case was considered by the Madras High Court in Hari Bhanji . The facts of the case, briefly stated,
were that during the course of transit of salt from Bombay to Madras ports, the rate of duty on salt was enhanced
and the merchant was called upon to pay the difference at the port of destination. He paid under protest and
instituted the suit for its recovery. The court ruled that the immunity of the East India Company extended only to
"acts of state," strictly so-called and that the distinction based on sovereign and non-sovereign functions of the
East India Company was not well founded. On this point, the court observed:
"... the decided cases show that in the class of acts which are competent to the government and not to any private person,
a distinction taken is between those which lie outside the province of municipal law and those which fall within that law, and
that it is of the former only that in this country the municipal courts in British India cannot take cognizance."
At another place, the court observed:
"Acts done by the Government in the exercise of the sovereign powers of making peace and war and of concluding treaties
obviously do not fall within the province of municipal law, and although in the administration of domestic affairs the
Government ordinarily exercises powers which are regulated by that law, yet there are cases in which the supreme
necessity of providing for the public safety compels the Government to act which do not pretend to justify themselves by
any canon of municipal law...
Acts thus done in the exercise of sovereign powers but which do not profess to be justified by municipal law are
what we understand to be the acts of State which municipal courts are not authorised to take cognizance."
As regards P. &O. , it was said that it was an authority for the proposition that the government was responsible for
injuries in the course of transactions of a commercial or private character, but that it did not exclude liability in other
respects. In Hari Bhanji , a broader view of government liability, and a narrower view of the P&O ruling, was
adopted. The view propounded was that the government was liable for all acts other than an ‘act of state’ and that
the distinction based on ‘sovereign’ and ‘non-sovereign’ functions was not well founded. The view was taken that
the acts of the government fell either outside, or within, the municipal law and that it was only the former of which
the courts could not take cognizance.
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While the line of reasoning adopted by the court in Hari Bhanji found some support in a few later cases, in effect,
the P. &O . view drawing distinction between sovereign and non-sovereign functions came to be perpetuated in the
case law. Had the view propounded in Hari Bhanji found judicial acceptance in India, the position as regards the
tortious liability of the government would have developed on entirely different lines. But the view that found general
judicial acceptance, and thus became the ruling norm, was that the government was not liable for any tortious
liability arising out of the exercise of a ‘sovereign’ function.
(2) Cockraft
This view was applied by the courts in a number of cases. Thus, in Secretary of State v. Cockraft , the plaintiff was
injured by the negligent leaving of a heap of gravel on a military road maintained by the Public Works Department,
over which he was walking. A suit for damages against the government was held not maintainable by the Madras
High Court because the maintenance of roads, particularly of a military road, was a sovereign, and not a private,
function of the government.
(3) Mcinerny
In McInerny v. Secretary of State , the Calcutta High Court held that the government was not carrying on any
commercial operations in maintaining a public path and, therefore, the government was not liable for damages for
the injury sustained by the plaintiff through coming into contact with a post set up by the government on a public
road.
(4) Gurucharan
The High Court held in Gurucharan Kaur v. Madras Province , where an action for damages was brought against
the government for wrongful confinement of the plaintiff by police officers, that no action could be maintained
against the government for a tort committed by its servants "if in passing the order in the performance of which the
tort was committed the government was discharging its governmental functions as a sovereign."
(5) Etti
In Etti v. Secretary of State , the Madras High Court ruled that in maintaining a hospital for the benefit of the public
at the expense of the public revenues, the Government was discharging a proper governmental function, and,
therefore, the Secretary of State was not liable for torts of his servants employed in the hospital under the P & O
principle.
(6) Mata Prasad
The plaintiff was found guilty and was convicted of the offence of embezzlement by a competent court. Later, it was
established that his conviction was wrong. He suffered imprisonment for over two years. On being released from
the prison, he brought a suit against the Secretary of State for damages. But the suit was dismissed because the
Secretary of State could not be sued in respect of acts done by the government as a sovereign power and one of
the sovereign functions of the government was to take cognizance of offences coming to its knowledge and to order
trial of such persons in accordance with law.
(7) Kessoram
Under the Defence of India Act, 1915, certain classes of goods could be commandeered by the Government of
India, the price of such goods being settled by arbitration. Purchase of munitions for the purposes of war and
commandeering of stores by the government were regarded as sovereign functions. No action could lie if loss
occurred to the supplier when goods commandeered during war were not taken delivery of.
(8) Purnendu
Property taken over by the military for war purposes, such as the making of roads and bridges cannot form the
subject matter of a suit for compensation at the instance of a subject.
(9) Srigobinda
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The Government was held not liable for the loss caused to the plaintiff’s property by mismanagement of manager
appointed by the Court of Wards as the jurisdiction exercised by this court was held to be essentially an exercise of
a sovereign function.
(10) Nobin
The plaintiff deposited money in order to get a licence for ganja shops. He complained that he had not been given
the licence, that his money had not been returned to him, and that he had suffered damages for want of the licence.
The Court held that the giving of licence and taking excise duty was a matter entirely done in the exercise of
sovereign powers, and so no action would lie.
(11) Ramnath
In Secretary of State for India v. Ramnath Bhatia , the government was held not liable for the Deputy Collector
paying by mistake surplus sale proceeds of a taluk to the recorded proprietor instead of the purchaser in execution
of a mortgage decree.
(12) Moment
The government was however held liable for damages in certain situations. In Secretary of State v. Moment , the
Privy Council held that a suit for damages for wrongful interference with the plaintiff’s property could be brought
against the government, as such a suit would have lain against the East India Company under the P.O . ruling.
(13) Sonabai
When the government detained any land, goods and chattels belonging to a subject, the government was held
liable to pay compensation.
It may be of interest to know that in 1949, just on the eve of the inauguration of the present Constitution, the
Bombay High Court debunked the doctrine of sovereign immunity in P.V. Rao v. Khushaldas and adopted the Hari
Bhanji view of the government liability. The Court restricted the observations in P. &O . only to an ‘act of state’
which is taken by the sovereign power outside the ordinary municipal law. In this case, the Bombay Government
had issued an order requisitioning the property of the petitioner under the local requisitioning law. He filed an
application in the High Court seeking certiorari to quash the order. The question, therefore, was whether the High
Court could issue certiorari to quash an order of requisition made by the Government. It was argued on behalf of
the Government on the basis of P. &O . that it was discharging a sovereign function which could not be questioned
in the sovereign’s own courts. Rejecting the government’s plea, TENDOLKAR , J., referring to certain passages in
the P. &O . case observed:
"These passages have been understood to mean that while the East India Company could be sued in respect of its
commercial dealings, it could not be sued in respect of any acts done by it in discharge of rights of sovereignty delegated to
them. While the former proposition is indisputable, the latter is only partially true. In respect of acts of State strictly so called
the Company is no doubt not liable; but the immunity does not extend to acts done under colour of legal title, although they
may be acts in discharge of governmental functions in exercise of the rights of sovereignty delegated to the company. This
has been overlooked in interpreting these passages in the judgment "
Thus, TENDOLKAR , J., ruled that "the acts of the Provincial Government which are purported to be done under
the provisions of any municipal law are liable to be questioned in municipal courts." In the instant case, as the order
of requisition was passed under the municipal law, it was liable to be questioned in the court.
To the same effect substantially were the views expressed by CHAGLA , C.J., another Judge on the Bench.
CHAGLA , C.J., by-passed P. &O . with the following remarks:
"But when that case is clearly understood, it will be seen that although the learned Chief Justice makes a distinction
between the class of acts which a private individual or a trading corporation can perform and those which can be performed
by a sovereign power, what the case actually decides is that the particular case which was before the court fell in the former
category. The learned Chief Justice, with respect, was not called upon to decide that all acts falling in the latter category
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were exempt from the scrutiny of the courts."
When the case reached the Supreme Court (Which had just been started under the new Constitution) in appeal,
only one Judge, MUKHERJEE , J., referred to this question. He agreed with the views of the Judges of the Bombay
High Court as expressed above. He commended the Hari Bhanji ruling and commenting on the P. &O . ruling he
observed:
"Much importance, cannot in my opinion be attached to the observation of Sir B. PEACOCK in P. &O . In that case the only
point for consideration was whether in the case of a tort committed in the conduct of a business the Secretary of State for
India could be sued. The question was answered in the affirmative. Whether he could be sued in cases not connected with
the conduct of a business or commercial undertaking was not really a question for the Court to decide."
Thus, an act of requisition purported to have been done under the sanction of the municipal law, and in exercise of
powers conferred by such law, cannot be regarded as an act of state. "An action on the ground of the powers being
illegally exercised could certainly have been brought against the Secretary of State," if the Government of India Act,
1935, had not been enacted.
This was the state of law in the pre-Constitution India.
4. AFTER THE CONSTITUTION

Even in Republican India after the new Constitution came into force in 1950, the pre-Constitution judicial trend
continued and the courts kept on enforcing the P&O . ruling ignoring the Bombay High Court ruling in Khushaldas .
The courts continued to distinguish between sovereign and non-sovereign functions of the government for purposes
of governmental liability. This becomes clear from the following cases.
(1) Maharaja Bose
The Government was held liable for tortious action of a railway servant committed by him within the course of his
employment as running of railways was held to be not in exercise of sovereign powers. Railways were held to be a
"commercial undertaking, an undertaking which a private individual can equally well undertake, an undertaking not
in exercise of sovereign powers."
(2) Murlidhar
Earth was removed from the respondent’s land and was placed on the railway track under construction. The court
held the Government of India liable to pay damages to the respondent for conversion of his property.
Some goods was sent by railways from Agra to Bikaner. In the process of transportation, the consignment was
damaged and was not delivered to the consignee. The plaintiffs claimed damages from the Central Government.
The High Court ultimately held that it had no jurisdiction to try the cause of action. The court had jurisdiction on any
one "carrying on business" within its territorial jurisdiction. The question was whether the Government of India was
doing any ‘business’ in running railways and the court answered in the negative.
But some of the observations made by the court really cast a doubt whether the government could ever be held
responsible to pay damages to the plaintiff even in respect of its commercial activities although these observations
were made in the context of ascertaining the jurisdiction of the court and not with respect to the question of liability.
For example, the court said that the word ‘business’ denoted "commercial business"—"business carried for the
purpose of making gain or profit." "The dominant, if not the sole, motive for carrying on such business is to make
profits." But the Government of India had set before itself the ideal of a "welfare state" and to achieve this ideal, the
Government did inevitably carry on many undertakings which in the hands of the private agencies would partake of
the character of commerce or trade but which would not necessarily partake of the same character when
undertaken by the government in pursuit of its welfare policies. "Indeed, in regard to the running of the Railway itself
as such, it is possible to take the view that it forms an important part of the governance of the state."
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On the other hand, the Assam High Court held that the Railways were one of the government’s commercial
undertakings.
(3) Sheoramjee
The government was held liable to pay damages when the forest range officer unjustifiably interfered with the right
of the forest purchaser to remove timber because the wrongful acts arose out of the exercise of commercial or
mercantile functions and not sovereign powers.
(4) Krishnamurthy
The driver of a roadroller while driving the roadroller fast and at an unusual speed through a busy locality injured a
boy. The accident was a direct result of the negligence and rash driving of the roller by the driver. Still the
government was held not liable for paying any damages on the ground that the roller belonged to the PWD which
was entrusted with the work of constructing and maintaining highways which was a sovereign function. The court
said: "Making and maintenance of highways is a public purpose and the duty of the government and not a
commercial undertaking."
(5) District Board
In District Board, Bhagalpur v. State of Bihar , the court ruled that by running the treasury, the state "cannot be
said to be engaged in the conduct of a business or commercial undertaking... as though the state is conducting a
sort of business of banking." The state was therefore held not liable for damages for loss caused to the plaintiffs
due to the negligence of the treasury personnel.
(6) Harbans
As a result of rash and negligent act of a driver of a military truck while engaged in military duty in supplying meals
to military personnel on duty, a person was knocked down and run over. The Punjab High Court held in Union of
India v. Harbans Singh , that there was no cause of action against the government for the negligence of its servant
in this situation.
(7) Ankanna
Collecting land revenue was held to be a sovereign function. Even if the function was delegated to certain officers
under a statute, it would not cease to be a sovereign function. If the officers acted illegally in discharging their
functions, it would be a complete defence for the state to say that whatever was done in the exercise of the
sovereign power of the State and, therefore, the State was not liable in damages. In the instant case, it was held
that the State was not liable even if revenue officials acted in a high handed and malicious manner.
(8) Chetti
In pursuance of a certificate issued by the income tax officer to collect arrears of income tax from the plaintiff, the
tehsildar illegally attached some property. The High Court ruled that even though the act was illegal, the
government was not liable for the tort committed by the tehsildar as the act was done in the discharge of sovereign
function.
5. LAW COMMISSION’S REPORT

In 1956, in its very first report, the Law Commission of India expressed the view: "The law was correctly laid down
in Hari Bhanji’s case."
The law regarding state liability for the tortious acts of its servants as inherited by Independent India from its
colonial past was, undoubtedly, outdated, antiquated and a historical anachronism. It was the product of the colonial
era in India. The theory of non-liability of the state for sovereign functions was only another dimension of the theory
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of "act of state." But "act of state" is justifiable only when committed in a foreign land towards a foreign national; it
is extremely anachronistic to apply such a concept to the relationship of the state with its own subjects.
It is nothing less than a fiction in contemporary society to distinguish between sovereign and non-sovereign
functions or governmental and non-governmental functions because the activities of the state have expanded so
much and they make a deep impact on the lives of the people. It is unfortunate that while the capacity of the state
to cause injury to the people has increased tremendously as a result of the extensiveness and pervasiveness of its
functions because of the concept of welfare state, Parliament has not been able to rationalise the law, and the law
still moves in the old groove. The rule of governmental immunity is subject to any law made by the legislature. It is
absolutely necessary that the liability of the state should be made co-extensive with its modern role, and not
confined to the laissez faire era.
In other democratic countries, a wider view of the state liability has been adopted. The law obtaining in India
immediately after Independence did not compare favourably with these foreign enactments. The malady in the law
could be removed by appropriate parliamentary legislation.
The question of the scope of the immunity of the government for the tortious acts of its servants was considered by
the Law Commission of India in its First Report (Liability of State in Tort ), as early as 1956. The Commission
recommended the relaxation of the rule of governmental immunity and doing away with the distinction between
sovereign and non-sovereign functions.
According to the Commission: "In the context of a welfare state it is necessary to establish a just relation between
the rights of the individual and the responsibilities of the state. While the responsibilities of the state have increased,
the increase in its activities has led to greater impact on the citizens."
And, further: "There is no convincing reason why the Government should not place itself in the same position as a
private employer subject to the same rights and duties as are imposed by statute."
The Commission suggested that the old distinction between sovereign and non-sovereign functions or
governmental and non-governmental functions should no longer be invoked to determine the liability of the state.
The Commission, thus recommended that legislative sanction be given to the rule propounded in Hari Bhanji rather
than to that laid down in P & O .
Accordingly, the Commission recommended the enactment of a suitable law to define the position of governmental
tortious liability in the new changed context. Law should progress in favour of the subject in the context of a welfare
state and should not remain stagnant. The Commission was not in favour of leaving it to the courts to develop the
law according to the views of the judges. The Commission argued: "It is necessary that the law should, as far as
possible, be made certain and definite... The citizen must be in a position to know the law definitely."
The Commission realised that it was a difficult task to define the extent to which the state should be made liable for
the tortious acts. "It involves, undoubtedly, a nice balancing of considerations so as not to unduly restrict the sphere
of the activities of the state and at the same time to afford sufficient protection to the citizen."
A bill entitled the Government (Liability in Tort) Bill, drafted on the lines recommended by the Law Commission,
was first introduced in Parliament in 1965, but it could not be enacted into law. A new Bill was reintroduced in 1967,
and certain modifications in the bill were suggested in 1969 by the Joint Select Committee of Parliament, but the bill
was not enacted into law. Looking in retrospect, it turned out to be for the better that no bill was enacted at this time
otherwise the government liability would have been subjected to numerous exceptions.
The Supreme Court has recommended the enactment of a suitable law to define state liability. As early as 1965, in
Kasturi Law, the Court underlined the unsatisfactory state of the law (as it then existed) and pleaded for the
enactment of a law. The law in India had become much more anomalous since the enactment in England of the
Crown Proceedings Act, 1947, changing the old law. The colonial law in India was based on the common law
principles which prevailed in England before 1947 and these principles have now been substantially modified in
England. And, recently again, the Supreme Court in Nagendra Rao has pleaded for the enactment of the law
saying, "necessity to enact a law in keeping with the dignity of the country and to remove the uncertainty and dispel
the misgivings, therefore, cannot be doubted."
It is hightime that Parliament puts the law of government tortious liability on a rational basis in line with. Britain The
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state has gathered so much power and has unlimited capacity to injure the people. A law enunciating clearly the
scope of governmental liability for tortious acts of its servants will not only be a kind of social insurance for anyone
who is hurt by the tortious acts of the officials, but also instill in them a greater sense of responsibility and the civil
servants may take more care in discharging their duties. The country thus stands to benefit all around through the
enactment of such a law, even though such a law may mean that the government may have to pay some money to
meet the claims against it. But India is a socialistic country and its basic creed is justice to all and the proposed law
will only be a step in the fulfilment of this objective for it is only just that a person is compensated when he is injured
unduly by an official acting in the name of the state.
Pending legislation the courts have taken on themselves the task of adjusting the archaic law to the realities of
modern life. The capacity of the government and its servants and authorities to cause injuries to the individual has
increased tremendously because of the extensiveness and pervasiveness of governmental functions. As the
following discussion will show, the courts are doing so by taking an extended view of the state liability for tortious
acts of its servants. To do so, the courts have adopted the expedient of drastically restricting the concept of
‘sovereign’ functions, and holding more and more functions performed by the government as ‘non-sovereign’. Thus,
the courts have been endeavouring to extend state liability. This judicial approach has helped in mitigating
somewhat the harshness of the earlier antiquated law in the absence of any steps being taken by the legislature to
rationalise the law.
6. VIDHYAWATI TO KASTURILAL
(1) Vidhyawati
After the commencement of the Constitution, the question of state liability for the tortious acts of its servants came
to be examined by the Supreme Court in State of Rajasthan v. Vidhyawati .
The driver of a jeep, owned and maintained by the State of Rajasthan for the official use of the collector, drove it
rashly and negligently while taking it back from the workshop after repairs to the residence of the collector and
fatally injured a pedestrian. The State was sued for damages. The State claimed immunity on the ground that the
jeep was being maintained "in exercise of sovereign powers." The Supreme Court held that the State was
vicariously liable for the negligence of the driver.
The Court raised the question: Can it be said that when the jeep was being driven back from the repair shop to the
collector’s place, when the accident took place, it was doing anything in connection with the exercise of sovereign
powers of the State? The Supreme Court ruled that the tortious act had been committed "in circumstances wholly
dissociated from the exercise of sovereign powers," and approved the following observation of the High Court: "...
the State is in no better position insofar as it supplies cars, and keeps drivers for its civil service. It may be clarified
that we are not here considering the case of drivers employed by the State for driving vehicles which are utilized for
military or public service."
Referring to the P. &O . case, the Court derived the proposition that the government would be liable for damages
occasioned by the negligence of its servants if the negligence was "such as would render an ordinary employer
liable." Though not very articulate, the Court seemed to be suggesting that it would not hold the government
immune from the tortious acts of its servants whether committed in the exercise of sovereign or non-sovereign
functions. This seems to emerge from the following statement:
Viewing the case from the point of view of first principles, there should be no difficulty in holding that the State
should be as much liable for tort in respect of a tortious act committed by its servant within the scope of his
employment and functioning as such, as any other employer. 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 own courts... Now that we have, by
our 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 tortious acts
of its servants.
These observations gave the impression that the Court was in favour of the broader view of the state’s liability for
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tortious acts of its servants than what the P. &O . case had laid down. But it is also true to say that the Court did not
specifically overrule the test of sovereign function to determine government’s liability and that there were
observations in the Court’s judgment suggesting that it did recognise the distinction between sovereign and non-
sovereign functions and what the Court in effect did was to give a restrictive significance to the concept of
‘sovereign’ functions. It did not accept the view that the maintenance of a car for the collector, in the discharge of
his official duties, was a sovereign function.
(2) Kasturi Lal
There was a possibility that Vidhyawati might well have been the precursor of a new trend in the area of state
liability, but then the efficacy of the views mentioned therein was whittled down by the Supreme Court in the next
case, Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh . Here the police arrested Ralia Ram, a partner in the
appellant firm, and seized some gold from him on the suspicion that it was stolen property. The gold was kept in the
government malkhana . He was released from police custody but the gold seized from him could not be returned to
him as it was misappropriated by the chief constable in charge of the malkhana who fled to Pakistan. The
authorities thus committed gross negligence in keeping the gold in safe custody. As the gold seized from him could
not be returned to him, he brought an action against the government for the return of the gold, or in the alternative
payment of compensation for the loss caused to him.
The question thus arose whether the State was liable to compensate the appellant for the loss caused to him by
the police officers employed by it.
The appellant argued, on the basis of Vidhyawati , that once negligence of the police officers was established,
there should be no difficulty in decreeing his claim.
On the other hand, the State argued that even if it was found that the police officers had been negligent in
discharging their duties, the State could not be held liable for the loss resulting from such negligence, in as much as
the negligence on the part of the police officers occurred when they were discharging their statutory duties,
relatable to the sovereign functions of the State. This argument was accepted by the Supreme Court.
The Court conceded in Kasturi Lal that there were certain observations in Vidhyawati which supported such an
argument but the Court went back to the P & O . case. It held that the police officers were grossly negligent in
taking care of the seized gold. Nevertheless, the government was held not liable as the activity involved was a
sovereign activity. The Court affirmed the distinction made in the P. &O . case, between sovereign and non-
sovereign functions, in the following terms:
"This case [ P. &O . case] recognises a material distinction between acts committed by the servants employed by the State
where such acts are referable to the exercise of sovereign powers delegated to the public servants, and acts committed by
public servants which are not referable to the delegation of any sovereign powers."
The Supreme Court thus enunciated the principle as follows:
"If a tortious act is committed by a public servant and it gives rise to a claim for damages, the question to ask is: was the
tortious act committed by the public servant in discharge of statutory functions which are referable to, and ultimately based
on, the delegation of sovereign powers of the State to such public servant? If the answer is in the affirmative the action for
damages for loss caused by such tortious act will not lie. On the other hand, if the tortious act has been committed by a
public servant in discharge of duties assigned to him not by virtue of the delegation of sovereign power, an action for
damages would lie. The act of the public servant committed by him during the course of his employment is, in this category
of cases, an act of a servant who might have been employed by a private individual for the same purpose."
On the other hand, if the tortious act has been committed by a public servant in discharge of duties assigned to him
not by virtue of the delegation of any sovereign power, an action for damages would lie. Such an act is equivalent to
an act of a servant who may have employed by a private individual for the same purpose.
The Court maintained that the distinction had been uniformly followed in India by Judicial decisions. The Court
explained away the ruling in the Vidhyawati case by saying that when the government employee was driving the car
from the workshop to the collector’s residence for the collector’s use, he was employed on a task or an undertaking
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not referable to the State’s sovereign power. "In fact," said the Court, "the employment of a driver to drive the jeep
car for the use of a civil servant is itself an activity which is not connected in any manner with the sovereign power
of the State at all." On the other hand, the power to arrest a person, to search him and to seize the property found
with him, was a power conferred upon the officers by statute, and the said power can be properly characterised as
a sovereign power."
In the Kasturi Lal case, the act of negligence giving rise to the claim of damages had been committed by the police
officers while dealing with property which they had seized in the exercise of their statutory powers which could
properly be characterised as falling within the concept of sovereign power and so no claim for damages could be
sustained. The Court however administered a word of caution to the effect that the courts should not unduly extend,
but take a restrictive view of the concept of ‘sovereign functions.’ The Court observed on this point:
"... when the State pleads immunity against claims for damages resulting from injury caused by negligent acts of its
servants, 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 the course of an undertaking or employment which is
referable to the exercise of sovereign power, or to the exercise of delegated sovereign power."
The Court emphasized upon the significance and importance of making such a distinction at the present time
when, in the pursuit of their welfare ideal, the various governments "naturally and legitimately enter into many
commercial and other undertakings and activities which have no relation with the traditional concept of
governmental activities in which the exercise of sovereign power is involved."
The Court further emphasized that it was necessary to limit the area of sovereign powers. So that the tortious acts
committed in relation to "non-governmental or non-sovereign" activities do not go uncompensated, and the citizens
having a cause of action for damages are not precluded from making their claim against the state. "That is the basis
on which the area of state immunity against such claims must be limited, and this is exactly what has been done by
this Court in its decision in the case of State of Rajasthan (Vidhyawati) ."
The Supreme Court did underline however that the law in India regarding the scope of tortious liability of the state
was in a very unsatisfactory condition. The Court pointed out that the Indian law was based on the pre 1947 British
common law but things had changed there since the enactment of the Crown Proceedings Act, 1947.
Referring to the appeal before it the Court said:
"We have ourselves been disturbed by the thought that a citizen whose property was seized by process of law, has to be
told when he seeks a remedy in a court of law on the ground that his property has not been returned to him, that he can
make no claim against the State. That, we think, is not a very satisfactory position in law."
The judiciary has not laid down any clear test to determine the character of a function as sovereign or non-
sovereign. The test evolved so far, whether the activity could have been carried on by a private individual or not,
may not be of much help in a particular factual situation. For instance, can it not be argued that the specific activity
involved in the Kasturi Lal case was that of bailment, i.e . keeping the goods of another safely for a period—an
activity capable of being undertaken by a private individual? On the other hand, it could be argued in the
Vidhyawati case that the vehicle was maintained for the use of a collector, an administrator, who was also a district
magistrate and had police duties to perform—all these activities could legitimately be characterized as ‘sovereign.’
The truth of the matter is that the distinction between ‘sovereign’ and ‘non-sovereign’ functions is extremely flexible,
amorphous and vague.
To distinguish a sovereign from a non-sovereign function, it does not seem relevant whether the power has been
conferred by a statute or not. Although the Supreme Court did say in Kasturi Lal that "the power to arrest a person [
etc .]... are powers conferred on the specific officers by statute," but this is only an obiter dicta . In the instant case,
the function of custody and disposal of seized property was subject to statutory provisions which had not been
observed by the police officers. An activity may be regarded as sovereign even though it has no statutory basis,
and, conversely, it may be regarded as non-sovereign even though it has a statutory basis. An example of the
former may be the power of the government to enter into a treaty with a foreign country, and that of the latter, the
government engaging in a commercial activity under a statute.
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7. DEVELOPMENTS AFTER KASTURILAL

As a result of the Kasturi Lal’s pronouncement, the independent India was saddled with a law relating to state
liability which was antiquated, feudalistic, colonial and irrational as if the law had come to stand still since 1858. The
law was unjust to the people. To say that a person could not claim compensation if he was injured as a result of
exercise of a sovereign function was reminiscent of the days when India was ruled by a company having a dual
capacity—carrying on trade as well as exercising sovereign functions without the company being regarded as
sovereign in itself.
It was unjust to deny compensation to an injured citizen in the name of a sovereign function. It amounted to treating
a citizen as if he was a foreigner and the impugned governmental action was committed not in India but in a foreign
land. In effect, the proposition that the state was exempt from liability for a sovereign act amounted to applying the
doctrine of "act of state" to the relationship between the state and the citizen, although, according to the theory of
English law, there can be no ‘act of state’ between the state and its subjects.
The theory of ‘sovereign function’ was developed by the British judges to help the company build an empire in
India. Bit it would be irrational to draw a distinction between ‘sovereign’ and ‘non-sovereign’ function in modern days
of extended state functioning in a welfare state.
On this reasoning it was necessary to discard the P&O ruling but Parliament did not evince any interest to
ameliorate the law and bring it uptodate consistent with the new status of India. People would have suffered had the
inequitable law continued as it was after Kasturilal . But them the courts rose to the occasion and showed initiative,
creativity and enterprise to mitigate the harshness of the law.
Failure of Parliament to do anything to ameliorate the situation in the area of tortious liability of the government by
suitably amending the law, led the courts to show activism and improve the situation through their pronouncements.
To achieve this purpose, the courts adopted the following three strategies.
(a) While maintaining the distinction between ‘sovereign’ and ‘non-sovereign’ functions for the purposes of
governmental tortious liability, the courts confined the concept of ‘sovereign’ functions within a very narrow and
restrictive compass, holding most of the governmental activities as ‘non-sovereign’. The courts have thus restricted
the scope of the concept of ‘sovereign’ functions, and have held many modern functions performed by the state as
‘non-sovereign’. Over time, due to various judicial pronouncements, the area of ‘sovereign’ functions of the state
has shrunk very much and the area of ‘non-sovereign functions has correspondingly expanded over time.
This judicial approach transformed the law to a great extent. The courts adopted a general test for the purpose, viz
. that a function which can be performed by an ordinary person is ‘non-sovereign’ but a function which can be
performed only by the state and not a private individual is ‘sovereign.’ On this test, most of the governmental
activities fall under the first category thus making the state liable to compensate a person injured by the exercise of
such a function.
In a way, this judicial approach may be traced to the caution administered by the Supreme Court in Kasturi Lal to
restrictively interpret the concept of ‘sovereign’ functions and not to expand it unduly. In the post- Kasturi Lal
period, the courts put this caution into practice by characterising more and more governmental functions as ‘non-
sovereign.’ As the Madhya Pradesh High Court has observed after reviewing the post- Kasturi Lal case-law:
"These cases show that the traditional sovereign functions are the making of laws, the administration of justice, the
maintenance of order, the repression of crime, carrying on of war, the making of treaties of peace and other consequential
functions. Whether this list be exhaustive or not, it is at least clear that the socio-economic and welfare activities undertaken
by a modern state are not included in the traditional sovereign functions."
Recently, the Supreme Court has expressed a restrictive view of the concept of sovereign functions of the state.
The Court has observed in Chairman, Rly. Board v. Chandrima Das :
"The theory of sovereign power which was propounded in Kasturi Lal’s case has yielded to new theories and is no longer
available in a welfare state. It may be pointed out that functions of the Government in a welfare state are manifold, all of
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which cannot be said to be activities relating to exercise of sovereign powers. The functions of the state not only relate to
the defence of the country or the administration of justice, but they extend to many other spheres as, for example,
education, commercial, social, economic, political or even marital. These activities cannot be said to be related to sovereign
power."
In another case, the Supreme Court has observed that sovereign functions essentially are "primary inalienable
functions which only the state could exercise Broadly it is taxation, eminent domain and police power which covers
its field. It may cover its legislative functions, administration of law, eminent domain, maintenance of law and order,
internal and external security, grant of pardon. So the dichotomy between sovereign and non-sovereign function
could be found by finding which of the functions of the State could be undertaken by any private person or body; the
one which could be undertaken cannot be sovereign function". Even when the state has monopoly over a subject, it
does not become a sovereign function. Even when a function is entrusted to a statutory body, it does become an
inalienable function of the state.
In the non-sovereign area, the principle of vicarious liability operates between the government and it servants while
acting within the scope of their employment. This means that the government has to pay damages if a person is
injured by any tortious act of any of its servants. In Chandrama Das , the Supreme Court held the Government of
India liable to pay compensation to a Bangladesh woman who was gang raped by railway employees in yatri niwas.
The employees who are deputed to run the railway and to manage railway stations and yatri niwas are the essential
components of government machinery which carries on the commercial activity. Therefore, "if any of such
employees commits an act of tort, the Union Government, of which they are the employees, can, subject to other
legal requirements being satisfied, be held vicariously liable in damages to the person wronged by those
employees."
As the area of ‘sovereign functions is shrinking, and that of ‘non-sovereign’ functions expanding through judicial
activism, it means that the government is increasingly becoming liable to pay damages if any of its employees
commits a tortious act against a private person.
The present day liberal judicial approach regarding the state liability for the tortious acts of its servants has been
well expounded by the Supreme Court as follows:
"The modern social thinking of progressive societies and the judicial approach is to do away with archaic state protection
and place the state or the government on a par with any other juristic legal entity. Any watertight compartmentalization of
the functions of the state as ‘sovereign’ and "non-sovereign" or "governmental" and "non-governmental" is not sound. It is
contrary to modern judicial thinking. The demarcating line between sovereign and non-sovereign powers for which no
rational basis survives has largely disappeared. Therefore, barring functions such as administration of justice, maintenance
of law and order and repression of crime etc . which are among the primary and inalienable functions of a constitutional
government, the state cannot claim any immunity".
The result of this judicial approach has been to bring the old law in line with the needs of the contemporary
situation without formally amending the same through the legislature. This judicial approach was necessitated to
protect the individual because over time the capacity of the state to cause damage to individuals has increased
exponentially as a result of the extensiveness and pervasiveness of its functions in modern times.
(b) To give the law a human face, the courts developed the strategy to ask the government to make an ex gratia
payment to the injured person on humanitarian grounds even when legalistically the state may not be liable. This
was done by pressing into service the powers conferred on the High Courts by Art. 226 and on the Supreme Court
by Art. 32.
(c) Article 21 of the Constitution runs as follows:
"No person shall be deprived of his life or personal liberty except according to procedure established by law."
Article 21 has played a tremendous role in shaping the law of government’s tortious liability.
The most important innovative step adopted by the Supreme Court is to defend life and personal liberty of persons
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against state lawlessness by holding that where Art. 21 is violated, the state has to pay compensation and the
concept of ‘sovereign’ function does not prevail in this area. Thus, the concept of sovereign function ends when Art.
21 of the Constitution begins. The impact of Art. 21 will be seen at several places in the following pages.
All the above-mentioned three trends in the creative judicial process of adjusting the old, antiquated law to the
demands of the new millieu are amply illustrated by the cases which follow.
(a) Miscellaneous Situations
(1) Ramchandra
The State Government constructed a reservoir for facilitating the supply of drinking water to the residents of a town.
Damage was caused to the adjoining land of the plaintiff by overflow of the reservoir, for a channel to carry the
overflow of water from the reservoir had not been completed by the State. In State of Mysore v. Ramchandra , the
High Court ruled that the State was liable to pay compensation to the plaintiff. The court ruled that the construction
of the reservoir could not be regarded as an act of exercise of ‘sovereign’ power. It was a welfare act for the
betterment of the people of the State and not a sovereign act.
(2) Hindustan Lever
In State of Uttar Pradesh v. Hindustan Lever , the Government of Uttar Pradesh was running a sub-treasury which
received moneys from private individuals for being credited to the account of the departments of the Central
Government. The respondent deposited some money in the treasury to the credit of the central excise, but the
money was embezzled by the treasury officials. Holding the government liable to make good the loss to the
respondent, the High Court stated that the sub-treasury conducted an ordinary banking business which any private
individual could also run. The particular banking activity was not such as might be referable to a government activity
involving exercise of sovereign functions. The liability of the government would therefore be the same as that of any
private individual.
(3) Mukherji
An employee of the State of Bihar was crossing the river Kosi in a boat belonging to the State Kosi Project
Department. He was travelling in the course of his employment. The boat capsized and he was drowned. The father
of the deceased sued the State for damages for death of his son due to the negligent act of the State officers in not
providing the boat with any life-saving device.
The Patna High Court in State of Bihar v. S.K. Mukherji noted that the rules framed under the Bengal Ferries Act
made no specific mention of provision of a life saving device. Nevertheless, the court held the State liable. Kosi
being a turbulent river, crossing the river is dangerous. Therefore, it was obligatory on the part of the State to
provide life saving device on the boat in question and its failure showed lack of reasonable care and precaution.
The liability of the master is not limited to failure to perform statutory obligations so as to make him liable for
negligence but the master owes a duty to his servants to see that reasonable care is taken for the safety of his
employees.
(4) Rameshwar
The State was held liable to pay damages to the respondent for his malicious prosecution by the State employees.
(5) Kumari
A six year old child fell in a ten feet deep sewerage tank and died in the City of Madras. The tank was not covered
with a lid and was left open. It was not clear which of the several respondent authorities was responsible for leaving
the tank uncovered. In the circumstances, the Supreme Court directed the government to pay a sum of Rs. 50,000/-
to the child’s mother as compensation leaving the government free to claim the amount from the authority
responsible for the tragedy.
Because of heavy rains and flood, a culvert gave way and, consequently, a bus carrying passengers plunged into
the river and one person died. The Supreme Court awarded damages against the Highways Department of the
Government whose responsibility it was to maintain the culvert.
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The Court emphasized that the department should make suitable provision for strengthening culverts and bridges
against heavy rains and flood. Merely because the cause of the accident was heavy rains and flood, the Highways
Department cannot on that account alone claim to be absolved from liability unless there is something further to
indicate that necessary preventive measures had been taken anticipating such rains and flood. As no such
anticipatory action was taken by the Department in the instant case, the Court awarded Compensation to the
parents of the deceased.
However, earlier the High Court had rejected the claim for compensation arguing that maintenance and making of
highways was a ‘sovereign’ function and, therefore, there can be no claim for damages for any injury suffered by a
person due to negligence in the maintenance of roads by the State.
(6) Janamohan
In Janamohan Das v. State of Orissa several persons died as a result of consuming some spurious liquor. The
Orissa High Court directed the State Government to pay compensation of Rs. 15,000/- to the kith and kin of each
victim. The court argued that liquor trade was licensed in the State. Therefore, liquor can be sold only in licensed
shops and officials of the State Government were under a legal obligation to ensure that there is no illegal trading in
liquor. Spurious liquor is sold only because of the negligence on the part of State officials. So, the State must be
held responsible for the negligence of its servants. The court observed:
"We hope that the act of calling upon the State Government to pay compensation in such cases would result in greater
vigilance by their officials, which is absolutely necessary in view of what is happening in the country. We think that one of
the ways in which such gruesome tragedies can be prevented is to ‘mulct’ the State Governments."
(b) Transportation
A large number of cases have occurred pertaining to claims of damages against the State by individuals for injuries
caused to them due to the negligence of the drivers of the State transport. As already stated, in Vidhyawati , the
State was held liable for the accident caused by the driver of a jeep owned and maintained by the State for the
official use of the collector.
(1) Annamalai
A person was killed in an accident with a jeep driven by a government employee during the scope and course of
his employment. In Annamalai , government was held liable to pay damages to the widow of the deceased on the
principle of vicarious liability for its servant’s tortious act, as driving a jeep is a non-sovereign function. Any person
can drive a jeep.
(2) Amulya Patnaik
Again, in Amulya Patnaik v. State of Orissa , the State was held liable where a police vehicle carrying police
trainees to a training college met with an accident due to the negligence of the driver resulting in the death of one of
the occupants of the vehicle.
(3) Ram Pratap
In State v. Ram Pratap , The plaintiff was injured by the negligent driving of a truck belonging to the State Public
Works Department. When he claimed damages from the State, it claimed immunity on the ground that the functions
being discharged by the P.W.D. were sovereign functions. Holding the State liable, the High Court rejected the
State’s contention saying that most of the activities carried on by the P.W.D. were such as could be carried on by
private contractors. In that sense, ruled the High Court, the department could not be said to carry on a sovereign
function which could not be carried on by a private individual without delegation of sovereign power.
(4) Shyam Sunder
In Shyam Sunder v. State of Rajasthan , a government employee (N) was travelling in a government truck in
connection with famine relief work undertaken by the government. The truck’s engine caught fire on the way: N
jumped out of the truck, struck his head against a stone lying on the road-side, and died instantaneously. His widow
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sued the government for damages on the ground that the accident occurred because of the truck driver’s
negligence. The State resisted the claim on the ground that it was engaged in performing a function appertaining to
its character as sovereign as the driver was acting in the course of his employment in connection with famine relief.
Upholding the widow’s claim, the Supreme Court ruled that the accident was the result of the driver’s negligence in
putting on the road a truck which was not road-worthy. The Court rejected the government’s argument that the
State was engaged in performing a function appertaining to its character as sovereign as the truck driver was acting
in the course of his employment in connection with famine relief work and so it was not liable to pay damages even
if the driver was negligent. The Court stated that it was not possible to say that famine relief work was a sovereign
function of the State as "it has been traditionally understood." This kind of work can be, and is, undertaken by
private individuals and there is nothing peculiar about it so as to predicate that the State alone can legitimately
undertake the work.
The Court, however, refused to consider the broader question whether the immunity of the State for injuries
committed on citizens in the exercise of the so-called ‘sovereign functions’ has any moral justification to-day or
whether there exists any rational dividing line between the so-called "sovereign" and "proprietary" or "commercial"
functions for determining State liability.
(5) Radhabai
In Indian Insurance Co. Ass. Pool v. Radhabai , a motor vehicle belonging to the State of Madhya Pradesh and
allocated to the primary health centre, was being used for bringing some ailing children from another village to the
centre. On the way, due to the negligence of the driver, there was an accident and one person was killed. The State
argued that, as the accident happened in the execution of a sovereign function of the State, it could not be held
liable. The Court negatived the contention saying that the medical relief work undertaken by the State through the
primary health centre could not be regarded as a "sovereign function in the traditional sense."
(6) Padma Rani
In State of Sau v. K. Padma Rani , a tipper vehicle loaded with jelly was proceeding towards Srisailam Dam site.
On the way, due to the rash and negligent driving of the driver, a person was killed in an accident. Holding the State
liable, the court ruled following Shyam Sunder that the construction of the dam was not an exercise of sovereign
function but was an undertaking in pursuit of its welfare ideal.
A highlight of the case is the view expressed by the court that Parliament by amending S. 110 of the Motor
Vehicles Act in 1956 had, in ‘categorical terms,’ stated that "while driving a motor vehicle (which includes a vehicle
owned by the State Government or by Government of India), the owner of the vehicle is liable to pay compensation
to the persons who are entitled to claim damages." In other words, S. 110 and the rules made thereunder
"expressly make every owner of the vehicle including the Government liable for tortious acts of its servants, while
driving the vehicle." This means that "the distinction of sovereign and non-sovereign acts of the state no longer
exists as all owners of vehicles are brought within the scope of this section."
This appears to be a rational approach. The court has liberally interpreted the Motor Vehicles Act in favour of the
individual even though the statute is not explicit on the point. The antiquated dichotomy between sovereign and
non-sovereign functions in respect of vicarious tort liability of the state will thus come to an end, and the law
become simpler and sensible, at least in one major area if this view is adopted by other High Courts.
(7) Cheru Babu
In State of Kerala v. K. Cheru Babu , the advisor to the Governor went on a private visit in government jeep
escorted by the government driver who knocked down the defendant causing multiple fractures. The state was held
liable as the private visit did not entail performance of any sovereign function.
In this case, the High Court protested in strong terms against the prevailing doctrine of sovereign immunity. There
was no justification for recognising the archaic theory in our republican and democratic form of government. Under
the Constitution, there is no scope for immunity based on any prerogative or arbitrary right. The concept of
sovereignty is not a satisfactory test for deciding questions of immunity. Sovereign exercise of power is not the
dividing line between jurisdiction and immunity. The court opined that apart from constitutional or statutory
provisions granting certain immunities or exemptions or privileges to the state or its instrumentalities, and with the
exception of matters arising from war damage, the state in relation to its citizens, ought to have no immunity from
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liability.
(8) Ray
Transporting a patient to the hospital in a fire service ambulance would not make it a sovereign function as it could
be done as much by a private person as by the state. A government servant, with his father and his family, was
travelling in a government jeep driven by the government driver. Both the government servant and his father
succumbed to their injuries in an accident involving the jeep because of the negligence of the driver. The
government was held vicariously liable to pay compensation to the widow of the deceased father of the government
servant, for her husband’s death. The fact that he was an unauthorized occupant of the jeep was regarded as
immaterial.
(9) Amruta
The Regional Transport Officer (RTO) took a government jeep and went to check the vehicles in the morning,
accompanied by the junior vehicle inspector and enforcement inspector. The jeep was being driven by the official
driver. While returning in the evening, the jeep was being driven not by the authorized official driver of the jeep but
by the enforcement officer having a driving licence. Because of his negligence, the jeep met with an accident and
some of the persons died on the spot. The State disputed its liability to pay any compensation to the families of the
deceased taking the plea that the jeep was discharging a sovereign function.
The High Court rejected the State plea holding the government liable on the principle of vicarious liability. The court
ruled that the principle of sovereign immunity could apply where the powers can be exercised only by a sovereign
or by a person by virtue of delegation of such powers to him. Carrying on a transport operation was more in the
nature of a commercial operation which could not be regarded as a sovereign function. Also, as the accident did not
take place in the course of checking of the vehicles, it could not be said to be in the discharge of ‘sovereign’
functions and the State was held liable to pay compensation.
(10) Satya Narain
Since Independence, the bulk of the road transportation has been taken over by the States. The Supreme Court
ruled in Satya Narain v. District Engineer, P.W.D . that the plying of motorbuses by government by way of
commercial activity would not amount to running it on public service. The mere fact that an activity may be useful to
the public does not necessarily render it public service. In the words of the Court:
"An activity however beneficial to the people and however useful cannot, in our opinion, be reasonably regarded as public
service if it is of a type which may be carried on by private individuals and is carried on by government with a distinct profit
motive."
In a number of cases, damages have been awarded to the plaintiffs for injuries caused to them by the negligence
of the drivers of the buses belonging to the corporations set up by the States for carrying on the function of public
transportation. The corporation is held vicariously liable for payment of compensation for negligent act of its driver.
At times, the courts have commented adversely on the obstructionist, dilatory and unhelpful attitude of these bodies
in the matter of paying compensation to the people injured.
(11) Narain Shankar
For example, in Rajasthan State Road Transport Corporation, Jaipur v. Narain Shankar , KRISHNA IYER J. in the
Supreme Court adversely commented on the social consciousness and sense of responsibility displayed by public
enterprises towards the people whom they feign to serve. A bus of the state transport corporation was involved in
an accident in which many passengers lost their limbs.
A flimsy plea was put forward by the corporation to escape liability for compensation. The accidents tribunal
disbelieved the evidence presented by the corporation and awarded compensation to the victims of the accident.
The corporation went in appeal to the Supreme Court but the Court dismissed the appeal. Commenting on the
conduct of the corporation, the judge observed:
"One should have thought that nationalisation of road transport would have produced a better sense of social responsibility
on the part of the management and the drivers. In fact, one of the major purposes of socialisation of transport is to inject a
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sense of safety, accountability and operational responsibility which may be absent in the case of private undertakings,
whose motivation is profit making regardless of risk to life; but common experience on Indian highways discloses
callousness and blunted consciousness on the part of public corporations which acquire a monopoly under the Motor
Vehicles Act in plying buses."
IYER , J., went on to say further that it was a thousand pities that the state road transport vehicles should become
mobile menaces. He impressed on the nationalised transport the need to have greater reverence for human life
representing, as they do, the value set of the state itself.
In the instant case, the State corporation put forward a false plea to avoid paying compensation to persons injured
in the accident. The Court reminded the corporation that it would have been more humane and just if, instead of
indulging in wasteful litigation, the corporation had hastened compassionately to settle the claims so that goodwill
and public credibility could be improved. It was improper for the corporation to have tenaciously resisted the claim.
He reminded the State that under Art 41 of the Constitution it had a paramount duty, apart from liability for tort, to
make effective provision for disablement in cases of undeserved want. It was improper on the part of the
corporation to have tenaciously resisted the claim for compensation.
The corporation had also contested the quantum of compensation awarded by the tribunal. The Court rejected its
contention saying that the awards were moderate and that the Indian life and limb could not be treated as cheap at
least by State instrumentalities. The corporation should have sympathized with the victims and generously adjusted
the claim within a short time instead of insisting on callous litigation. The Judge hoped that the nationalised
transport service would eventually establish its superiority over the private system and sensitively respond to the
comforts of, and avoid injury to, the travelling public and the pedestrian users of highways. The Court observed:
"What is needed is not callous litigation but greater attention to the efficiency of service, including insistence on competent,
cautions and responsible driving."
(12) Darshana
In Darshana Devi , the husband of the plaintiff had been killed by a State transport bus. He was the family’s only
bread winner. The High Court allowed the widow of the deceased to file claim before the claims tribunal against the
State in forma pauperis . The State appealed to the Supreme Court against the High Court’s decision. Rebuking the
State for appealing against the High Court decision, the Supreme Court said:
"... The Haryana Government, instead of acting on social justice and generously setting the claim, fights like a
cantankerous litigant even by avoiding adjudication through the device of asking for court fee from the pathetic plaintiffs."
The Court also said that the government had forgotten that it was obligated under Art 41 to render public
assistance, without litigation, in cases of disablement and undeserved want. In spite of these exhortations by the
Apex Court to the governments not to be obstructionist, but be benevolent, in settling claims for compensation for
injuries caused by the negligence of their drivers, instances of unnecessary litigation by State transport corporations
to contest their liability to pay on technical and frivolous grounds continue, and the courts keep on exhorting these
corporations to shed their attitude and settle the claims of poor victims with a ‘benevolent’ approach if not with a
‘philanthropic’ or ‘charitable approach.
(13) Shirke
V riding his scooter died as a result of an accident with a jeep belonging to the State of Maharashtra. At the time,
the jeep was being used for bringing office staff from their homes to the office as they were required to work during
the night it being the last day of the financial year (31-3-1980). Thus, the jeep was on official duty at the time of the
accident. However, as the driver of the jeep had consumed liquor so he allowed an office clerk to drive the jeep, It
can, therefore, be said that the person in question (say A) was driving the jeep with the consent and under the
authority of the driver.
The State contested its liability to pay compensation for the death of the deceased not on the ground of sovereign
immunity but that of vicarious liability. The State argued that at the time of the accident, the jeep was being driven
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not by the driver, who alone was entitled to drive, but by some other person, though its employee, but who was
neither authorised nor required to drive the jeep. On this basis, the State argued, it was not vicariously liable to pay
compensation.
The Supreme Court rejected the argument saying that the concerned person was driving the jeep with the consent
and under the authority of the driver. No instruction had been issued to the driver not to hand over the jeep to any
other government employee while on official duty. The Court explained the law of vicarious liability as follows:
"It is the rule that an employer, though guilty of no fault himself, is liable for the damage done by the fault or negligence of
his servant acting in the course of his employment. In some case, it can be found that an employee was doing an
authorised act in an unauthorised but not a prohibited way. The employer shall be liable for such act because such
employee was acting within the scope of his employment and in so acting done something negligent or wrongful. A master
is liable even for acts which he has not authorised provided they are so connected with acts which he has been so
authorised. On the other hand, if the act of the servant is not even remotely connected within the scope of employment and
is an independent act, the master shall not be responsible because the servant is not acting in the course of his
employment but has gone outside."
The Court observed further:
"... different considerations might arise if the servant or some stranger was using the vehicle for purposes other than the
purpose of his master’s business and the accident occurred while the vehicle was being used for that other purpose. But
once it is found and established that vehicle was being used for the business of the employer, then the employer will be
held vicariously liable even for the lapse, omission and negligence of his driver to whom the vehicle had been entrusted for
being driven for the business of the employer."
In the instant case, the jeep was being used in connection with the affairs of the State and for official purpose. It
was being driven by A. under driver’s authority. Thus, an authorised act was being done in an unauthorized
manner. The accident occurred when the act authorised was being performed in a mode which may not be proper
but, nonetheless, was directly connected with ‘in the course of employment.’ Once it is established that negligent
act of the driver (and of A who was driving the jeep) was ‘in the course of employment,’ the State is liable for the
same. The State cannot escape its vicarious liability to pay compensation to the heirs of the deceased.
(c) Railways
(1) Chandrima
Running of railways has been characterised as a commercial activity. Establishing Yatri Niwas at various railway
stations to provide lodging and boarding facilities to passengers on payment of charges is regarded as a part of the
commercial activity of the Government of India. Such an activity cannot be equated with the exercise of sovereign
power.
(d) Military Vehicles
(1) Satyawati
In several cases, the government has been held liable to pay compensation for injuries caused by negligent driving
of military vehicles engaged in doing various odd jobs. The test applied is not that a military vehicle was involved in
the accident, but what was the purpose on which the vehicle was employed. Was the purpose such as could be
characterised as ‘sovereign’? If not, government would become vicariously liable for the torts of its servants. Thus
no ‘sovereign’ function was held to be discharged when a military vehicle was carrying hockey and basket ball
teams to an Indian Air Force station to play matches against the Indian Air Force, and, therefore, when an accident
occurred due to the negligence of the driver, and a person was killed, the state was not entitled to claim immunity
for the tortious act of its employee.
(2) Sugrabai
When a military truck was carrying record sound ranging machine and other equipment from the military workshop
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to the military School of Artillery, and a cyclist was killed because of rash and negligent driving, the Union of India
was held liable to pay compensation. The High Court rejected the plea of the government that the truck was
performing a sovereign function. The court held that it was not necessary to transport the said equipment through a
military truck driven by an employee of the defence department and that the work of transportation could have been
done by a private carrier and so the military vehicle was not performing a sovereign function. According to the High
Court:
"... in deciding whether a particular act was done by a government servant in discharge of a sovereign power delegated to
him, the proper test is whether it was necessary for the State for the proper discharge of its sovereign function to have the
act done through its own agency."
(3) Jasso
In Union of India v. Jasso , a fatal accident was caused by the negligence of a driver of a military truck which was
carrying coal to the Army General Headquarters in Simla . The Government of India was held liable to pay damages
as it was a routine task and carrying coal could not be regarded as something being done in the exercise of
sovereign power.
The Punjab High Court now dissented from its earlier view expressed in the Harbans Singh case.
(4) Neelam
Similarly, government was held liable to pay compensation when an accident occurred when a military truck was
going for bringing vegetables for prisoners of war.
(5) Savita
A military truck was being driven to the railway station to bring jawans to the unit headquarters. Because of rash
and negligent driving by the driver, the truck dashed against a tempo causing injuries to several of its passengers.
Rejecting the argument of the Central Government that the truck was engaged in the discharge of a sovereign
function and so no compensation was payable to the injured, the High Court ruled that the government was liable to
pay compensation to the injured, duty being performed by the driver was not referable to the exercise of any
delegated sovereign power as the jawans could have been transported to the unit headquarters in a private truck.
In the last case, the court said that the jawans could have been transported in a private bus or truck. The act of
their transportation could have been performed in the ultimate analysis by private individuals in their vehicles. Only
such functions could be characterised as ‘sovereign’ as could not be performed by private individuals. In all these
cases, damages were awarded by the courts against the Government of India for injuries caused by negligence of
military vehicle.
(6) Iqbal Kaur
In Iqbal Kaur v. Chief of Army Staff , an accident occurred due to negligent driving by a sepoy of a government
truck who was going to impart training in motor driving to new M.T. recruits. The Union of India was held
responsible for damages as the function was held to be not an exercise of sovereign power. The government was
held liable when the negligent and rash driving by a military driver resulted in the death of a boy while the driver was
bringing back officers from the place of exercise to the college of combat as the function of transportation was not
such as could not be lawfully exercised except by the sovereign or a person by virtue of delegation of sovereign
rights.
(7) Nandram
A head-on collision took place between a private vehicle and a water tanker of the Border Security Force. The
Union of India was held liable in damages as the act of the B.S.F. personnel in driving the tanker negligently was
not referable to any delegation of sovereign powers.
(8) Sadashiv
A military crane belonging to the defence department having developed some trouble was being towed away for
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repairs by a military tractor. Due to the negligence of the driver, a cyclist was fatally knocked down by the tractor.
Rejecting the plea of the Union Government for sovereign immunity on the ground that the tractor was being driven
by defence personnel and was engaged in a military purpose, the High Court awarded damages to the parents of
the deceased against the Union Government. The High Court ruled that the crane could have been towed away for
repairs by any other private agency and, therefore, the function of towing away a crane "cannot be said to bear the
imprint of any sovereign function."
The court even suggested that the government should not plead sovereign immunity in such cases but seek to
defend the suit on merits.
(9) Thangarayan
A discordant note was however struck in this line of cases by Thangarajan v. Union of India A defence personnel
was driving his lorry to transport carbon dioxide gas from the factory to the naval ship INS Jamuna. Because of rash
driving, a boy of ten was injured. His claim for damages was rejected by the court on the ground that since the lorry
was being driven by a military personnel, and was carrying gas for the naval ship, it had to be regarded as engaged
in the performance of a sovereign function.
The court however recognised the unjustness of the rule and recommended that an ex gratia payment of Rs.
10,000/- be made to the boy by the government for the grievous injuries suffered by him. The court remarked
caustically that it would be cruel to tell the injured boy that he was not entitled to any relief as he had the privilege of
being hit by a lorry which was driven in the exercise of the sovereign function of the state.
The situation depicted by Thangarajan seems to be ludicrous. One could very well ask what was sovereign about
driving a truck and carrying gas? This task could be performed as well by a private operator as by a military truck.
The basic activity is transportation which is an ordinary activity and it hardly matters so far as the person injured is
concerned as to what was being carried in the truck—machine, hockey team, gas or any other equipment. There is
really no rational basis to distinguish between "sovereign" and "non-sovereign" function in the modern
administrative age when the range of state activities has expanded so much as to pervade all spheres of life.
(10) Hardeo
A military vehicle collecting tents from the out-door training place and bringing them to regiment fatally knocked
down plaintiff’s father. The accident occurred as a result of rash and negligent driving of the vehicle by the driver. In
an action for compensation, the government denied its liability on the ground that the accident had occurred in the
course of the exercise of the sovereign function. The Bombay High Court rejected the plea and held the
government liable by saying that the particular duty which the driver of the truck was carrying out could have been
very well performed by a private contractor. The court observed: "[G] one are the days when the State can contend
that the King can do no wrong in the matter of tortious acts of their servants."
(11) Pushpinder
A military missile carrier vehicle, while on movement broke down. The driver parked the vehicle on the road. A car
came from behind and dashed into it and the occupants of the car were seriously injured. Awarding compensation
to them against the Union of India, the High Court ruled that the military vehicle was parked in contravention of S.
81, Motor Vehicles Act. The accident occurred solely because of the negligence of the driver of the military vehicle
as he left the vehicle on the road without taking any precautions for the safety of the road users.
(12) Usha
A police truck while fetching arms from the railway station was involved in an accident injuring a motor cyclist. The
Court awarded compensation against the government and made the following critical remarks:
"Before parting with this aspect of the matter, it must be observed that it does not behove the State to seek cover under the
plea of sovereign immunity merely to avoid liability for the consequences of the negligence of its servants. Such a plea is
wholly out of place in a welfare State. In a case like the present where instead of providing for the needy, left so by the acts
of its servants in the course of their employment, the attempt is to look for immunity founded upon the dubious privilege of
the injured or the deceased as the case may be being run over by a vehicle engaged in the discharge of the sovereign
functions of the State."
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(13) Pushpa
A military truck carrying army jawans and rations was involved in an accident because of the negligence of the
driver. The Supreme Court ruled that on the facts and circumstances of the case, the principle of sovereign
immunity of the state could not be applied and the government was liable to pay compensation to the injured
person.
(14) Raya
In M.S. Raya v. Gowrawwa , a person was killed by the negligence of the driver of a military vehicle. The Central
Government opposed the claim for compensation by arguing that the driver had gone "on a frolic of his own" and
had taken passengers in a goods vehicle (a tempo) in violation of departmental instructions and in infringement of
the motor vehicles rules. He was, therefore, not on his master’s duty. The Karnataka High Court after noting that the
current tendency was to attribute a very broad scope to "course of employment" quoted with approval the following
passage from a leading writer on the law of negligence:
For example, an order that a van driver shall not allow any person to travel in his van, notice of which is displayed
on the van, is an order limiting the scope of the servant’s employment, with the result that a breach of the order
involves the master in no liability it is essential to avoid the approach of isolating the wrongful act of the servant
from its surrounding facts, in order to determine whether or not it was done in the course of his employment.
In the instant case there was no notice displayed on the van. Accordingly, the defence of the Union of India was
rejected.
(e) Government Hospitals
(1) Kazi
In Mohd. Shafi Suleman Kazi v. Dr. Villas Dhondu Kavishwar , the question was whether the state would be liable
for acts of negligence committed by hospital employees in course of their employment in the state run hospitals?
In an earlier case, the Bombay High Court had ruled that the running of hospitals was part of the sovereign
functions of the government and so the state could not be held liable for the tortious acts of the hospital employees.
This view was based on the Supreme Court pronouncement in Management of Safdar Jung Hospital, New Delhi v.
Kuldeep Singh Sethi to the effect that a hospital could not be an ‘industry’ under section 2 (j) of the Industrial
Disputes Act, 1947 unless it was run on commercial lines.
This view was overturned by the High Court in the Kazi case where the court ruled that the running of hospitals
was not a sovereign function of the state as it was neither a ‘primary and inalienable’ function of a constitutional
government nor it was such that ‘no private citizen can undertake the same.’ So, the state would be liable for
negligence of the hospital staff. In Kazi , the High Court referred to the Supreme Court decision in the Bangalore
Water Supply case wherein the Safdar Jung Hospital was overruled. The court held in Kazi that "activities
undertaken by the government in pursuit of welfare policies, and in compliance with the directive principles, were
not part of the regal functions of the state, and the state would be liable for the negligence of its employees
committed in the course of their employment in such activities.
(2) Kalawati
In Kalawati , the High Court awarded under Art 226 compensation to the petitioner for the death of her husband
due to the negligence of the staff in a government hospital. This was an interim measure of a palliative nature. She
could take recourse to the ordinary civil suit for determination of the quantum of compensation.
(3) Achutrao
In Achutrao , the Supreme Court has recently ruled definitively that maintenance of government hospitals
constitute a non-sovereign activity of the government. It is neither a ‘primary and inalienable’ function of a
constitutional government nor it is such that ‘no private citizen can undertake the same.
The appellant’s wife (Chandrikabai) was admitted to the civil hospital, Aurangabad, for child delivery and
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sterilisation operation. She died after the operation because of the negligence of the doctors who operated upon
her. The question was whether the State Government which maintained and ran the hospital was vicariously liable
to pay compensation to the husband of the deceased for the negligence of the hospital doctors. After referring to
such decisions as Vidhyawati , Kasturilal , Nagendra Rao and Kanchanmal , the Supreme Court ruled:
"Decisions of this Court now leave no scope for arguing that the State cannot be held to be vicariously liable if it is found
that the death of Chandrikabai was caused due to negligence on the part of its employees."
Repudiating the suggestion that maintaining and running a hospital was an exercise of the State’s sovereign power
and so the State was not liable in tort for tortious acts committed in the hospital, the Supreme Court observed:
"We do not think that this conclusion is correct. Running a hospital is a welfare activity undertaken by the Government but
it is not an exclusive function or activity of the Government so as to be classified as one which could be regarded as being
in exercise of its sovereign power."
The Court pointed out that in Kasturi Lal itself it had noticed that in pursuit of the welfare ideal, Government may
enter into many commercial and other activities having no relation to the traditional concept of governmental activity
in exercise of sovereign power. The Court then went on to observe:
"Just as running of passenger buses for the benefit of general public is not a sovereign function, similarly the running of a
hospital, where the members of the general public can come for treatment, cannot also be regarded as being an activity
having a sovereign character. This being so, the State would be vicariously liable for damages which may become payable
on account of negligence of its doctors or other employees."
After a review of the evidence on record and the law regarding negligence on the part of the doctors, the Court
came to the conclusion that the patient died due to the negligence of the hospital doctors, and, therefore, the State
was held vicariously liable for the acts of the hospital doctors.
There were several doctors involved in the case as the patient was operated twice by different doctors and there
was some controversy as to which of these two operations was done negligently. The Court brushed aside this
controversy with the remark that the claim of the appellant would not be defeated merely because it was not
conclusively proved as to which of the doctors employed by the State in the hospital or other staff acted negligently
which caused the death of the patient. "Once death by negligence in the hospital is established, as in the case here,
the State would be liable to pay the damages.
One depressing aspect of this otherwise laudable decision may be underlined. Chandrika bai died on 24-7-1963
and the Supreme Court finally gave its verdict in 1996 i.e . 33 years after the death of chandrika bai. A sum of Rs.
36000/- as decreed by the Civil Judge was awarded to the heirs of Chandrikabai. The Court did not add any interest
on this amount which remained unpaid to the claimants for all this period.
(4) Vijaya
A woman patient was awarded compensation for negligent transfusion of HIV infected blood in a government
hospital.
(5) Shakuntala
After the husband underwent vasectomy operation in a government hospital, his wife conceived. This happened
because of the negligence of the doctor in the hospital. The Allahabad High Court ruled that, in the circumstances it
was the duty of the state to maintain the child as the said lady never wanted another child. The Court directed the
State Government to deposit Rs. 50,000/- in bank for the purpose.
(6) Santra
To the same effect is State of Haryana v. Santra . A poor lady having a number of children got herself operated at
a government hospital for complete sterilisation. Thereafter, she gave birth to a child. For the negligence of the
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hospital staff, the Supreme Court awarded damages to the lady equal to the cost of bringing up the ‘unwanted’ child
up to the age of 18 years.
(f) Torts against Property
(1) Sat Pal
Goods belonging to the plaintiff were seized by the land customs authorities maliciously and without sufficient
cause. The goods so seized were converted into money and the sale proceeds were lying with the Union of India.
The plaintiff were held entitled to the refund of this amount.
(2) Modern Cultivators
The plaintiff brought a suit for compensation against the State Government for damage caused to his land and
crops due to inundation as a result of breach in the canal maintained by the government under the Northern India
Canal and Drainage Act. The breach had been caused by the negligence of the government employees. There was
nothing in the Act imposing any duty on the government to take care of the canal banks. Nevertheless, on general
principles of law of torts, the government was held liable.
(3) Rooplal
Military jawans took away the wood belonging to the plaintiff for purposes of camp fire. The High Court ruled that
this act was not referable to any delegated power. The jawans did the act in the course of employment. The plaintiff
was thus held entitled to recover the price of the wood.
(4) Dhian Singh
Trucks were given on hire to the government for imparting tuition to the military personnel. The government failed
to pay the hire money as well as failed to deliver the trucks back to the plaintiff. The Supreme Court held the plaintiff
entitled to get the hire money, the value of the trucks as well as the damages for wrongful detention thereof.
(5) Ram Kamal
Troops occupied the fisheries of the plaintiff causing him damage. This occupation was sought to be justified on the
ground of exercise of sovereign power of prosecuting war. Under the Defence of India Act and the Rules made
thereunder there was provision for requisitioning property. But, in the instant case, the property was occupied
without being requisitioned under the law. The High Court upheld the plaintiff’s claim for compensation against the
Government of India. The court stated:
"Where... the situation is such that an act could be done both under the emergency laws and also in the exercise of the
sovereign powers of the state, it should be done in the manner provided by the statute... If Government takes over property
without requisitioning it as provided in the law made by itself, the subject cannot be deprived of his right to claim
compensation..."
(6) Ram Bharosey
The municipal bye-laws prohibited grant of a licence for erecting a flour mill near a residential house. The municipal
board granted a licence to erect a flour mill near the respondent’s house. The house was damaged as a result of
vibrations from the mill. He sued the municipality for compensation for damage to his house. The Allahabad High
Court ruled that the municipality would not be liable because the injury caused to the house was remote; the
damage was not a direct consequence of the grant of the licence.
(7) Memon
In 1947, the customs authorities of the State seized two motor trucks and a station wagon belonging to the
respondent on the ground of non-payment of import duties. In 1952, the revenue tribunal set aside the seizure
order and directed return of the said vehicles to the respondent. In the meantime, the vehicles were left in the open
uncared for with the result that their condition deteriorated and then the vehicles were auctioned off for a paltry sum
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of Rs. 2000/- under a magistrate’s order passed under S. 523 Cr. P.C. The order was obtained on the false
representation that the vehicles were unclaimed property. No Notice of the auction was given to the respondent.
The plaintiff (respondent in appeal) filed a suit (after the order of the Revenue Tribunal) for return of the vehicles or
in the alternative payment of their value amounting to Rs. 31000. The Supreme Court ruled that the vehicles were
seized under the Customs Act, but the power to seize and confiscate depended on a customs offence having been
committed or a suspicion that such an offence had been committed. The decision of the customs officer to seize
and confiscate property was not final as it was subject to an appeal. If the appellant authority found that there was
no good ground for the exercise of the power, the property seized had to be returned to its owner. Therefore, there
was not only a statutory obligation to return but until the order of confiscation became final an implied obligation to
preserve the property intact and for that purpose to take such care of it as a reasonable person in like
circumstances is expected to take. In these circumstances, the position of the government until the order became
final was that of a bailee.
If that is the correct position, once the Revenue Tribunal set aside the order of the customs officer and the
government became liable to return the goods, the owner had the right either to demand the property seized or its
value if, in the meantime the State Government had precluded itself from returning the property either by its own act
or that of its agents or servants. The fact that an order for its disposal was passed by a magistrate would not in any
way interfere or wipe away the owner’s right to demand the return of the property, or the government’s obligation to
return the same.
Even if the government was not a bailee, it was in any case bound to return the said property by reason of its
statutory obligation or to pay its value if it had disabled itself form returning the same either by its own act or of its
agents. The government was fully aware at the time of the auction that the vehicles belonged to the respondent and
could not be regarded as unclaimed property. The fact that the vehicles were disposed of under a magistrate’s
order would not in any way interfere with or wipe away the owner’s right to demand the return of his property of the
obligation of the government to return it. In any case, the magistrate’s order was obtained on a false representation
that it was unclaimed property. The Court therefore rejected the State plea that it was not liable for any tortious act
of its servants in the specific fact situation of this case. The Court ruled that the State was under an obligation either
to return the said vehicles, or in the alternative to pay their value.
(8) Basava Patil
A theft took place in the house of the appellant and a large number of ornaments were stolen. After some time, a
number of these ornaments were recovered from the accused. These ornaments were produced before the judicial
magistrate who directed the concerned police officer to retain them. These ornaments were stolen from the police
station and could not thus be restored to the appellant after the trial of the accused was completed.
In Smt. Basava Kom D. Patil v. State of Mysore , the Supreme Court ruled that the scheme of the various
provisions of the Cr. P.C is that the property which is the subject-matter of an offence and is seized by the police is
not to be retained in the custody of the court or of the police for any time longer than what is absolutely necessary.
As the seizure of the property by the police amounts to a clear entrustment of the property to an government
servant, the property should be returned to the original owner after the necessity to retain it ceases. It may be noted
that the state did not take the plea of sovereign function nor did it refer to the ruling in Kasturi Lal . The state did not
also take the plea that the property was lost in spite of due care and caution having been taken by it or due to the
circumstances beyond its control. The Supreme Court ordered the state to pay to the appellant Rs. 10,000/- being
the value of the ornaments lost.
(9) Sunder Lal
The district magistrate suspended the appellant’s licence to sell firearms. The licence was granted to him under the
Explosives Act, 1884. The reason to suspend the license was that the appellant refused to comply with the district
magistrate’s decision to shift all shops selling crackers to a particular area. The goods of the plaintiff were seized
and the premises sealed and, thus, the plaintiff’s capital amounting to Rs. 15000/- remained blocked for two years.
The High Court ruled that the suspension of the appellant’s licence was invalid as the suspension was on a ground
not covered by the Explosives Act under which a licence can be suspended on the grounds mentioned therein. As
the capital of the appellant was blocked for two years, the High Court awarded interest at the rate of 12% per
annum on the capital to the appellant.
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(10) Hazur Singh
The bus of the plaintiff was attached by the assistant commercial tax officer on the ground of non payment of
certain tax dues. After seizure, the bus was kept in the open exposed to sun, air and rain. Consequently, the bus
suffered damage amounting to more than Rs. 10,000/-. As it turned out later, no tax was outstanding against the
plaintiff.
In Hazur Singh v. M/s Behari Lal , the Rajasthan High Court considered the question whether the State was
immune from payment of damages in the fact situation of the instant case because of the principle of sovereign
immunity. The court ruled that the concerned officer did not act according to law in attaching the bus of the plaintiff
who had no connection whatsoever with any tax dues. The non-compliance of the statutory obligations by the State
instrumentalities was not merely a technical error but was a non-compliance of the rules of law causing substantial
injustice to a person who had no tax to pay. "Where a citizen has been deprived of his belongings otherwise than in
accordance with the procedure prescribed under law, it is no answer to say that the said deprivation was brought
about by the officers of the State while acting and discharging the sovereign functions of the State. Thus, the Court
held the plaintiff entitled to receive from the State Rs. 10,000/- along with interest.
(11) Chettiyar
The forest department of the State of Karnataka purchased logwood from the petitioner but did not make payment
for nine years without any justification. The High Court ruled that the government must pay the petitioner along with
interest. The Court observed that the conduct of the government in not paying the money for the wood supplied by
the petitioner "amounts to detention which is actionable in tort and refusal to part with the amount in spite of
demands, tantamounts to conversion, again being actionable in tort."
(12) Oswal
In Oswal , the concerned mills imported 58 bales of woollen rags. As there arose a dispute about the customs duty
payable on the imported goods, the matter passing through several stages ultimately reached the Supreme Court.
In the meantime, the customs authorities confiscated the goods under S. 111 (d) and (m) of the Customs Act, 1962.
The Supreme Court quashed the confiscation. When the appellants-importers went to take delivery of the imported
goods after the decision of the Supreme Court, they found 19 bales out of 58 bales missing.
The Supreme Court ruled that until the imported goods are cleared by the importer for home consumption, under
the Customs Act, the goods remained in the custody of the customs authorities. The statutory liability to account for
the goods would be that of the authority charged with the responsibility of keeping the goods.
(13) Jaya Laxmi
In Jaya Laxmi , the facts were as under. In 1954, the State of Saurashtra (which later merged in the State of
Gujarat), made a plan to reclaim vast areas of land from saltish sea water by erecting a ‘reclamation bundh (dam)’
so as to prevent sea water flowing in several creeks in the sea side of the bundh flowing further in the reclaimed
site. The bundh was completed in 1955.
In the very first monsoon of 1956, because of the bundh water entered the appellant’s factory which had been
existing since before the construction of the bundh . Even before the construction of the dam, the appellant had
been urging the concerned authorities to change the location of the weirs so as not to face the appellant’s factory.
As usual, his request fell on deaf ears. When there was a heavy downpour and the appellant saw the level of the
river rising, he ran from pillar to post requesting the authorities to lessen the water level and avoid increased flow
near his factory, but noting was done. Consequently, flood water entered his factory and caused extensive damage.
The appellant approached the government for redress but no compensation was paid to him. Ultimately, he filed a
suit against the State for compensation. The State denied its liabilities on the ground that there was no negligence
in constructing the said bundh . The High Court ruled that the planning and construction of the bundh was done in a
negligent manner and the damage caused to the appellant was ascribable to the negligence of the officers
concerned therewith. But, the Court dismissed his case on the ground that it was barred by limitation.
The matter then came before the Supreme Court which overruled the High Court on the question of limitation and
held that the appellant had filed the suit within the limitation period. At one place, the Supreme Court observed:
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" the axis around which the law of negligence revolves is duty, duty to take care, duty to take reasonable care. But concept
of duty, its reasonableness, the standard of care required cannot be put in strait-jacket. It cannot be rigidly fixed. The right
of yesterday is duty of today. The more advanced the society becomes the more sensitive it grows to violation of duties by
private or even public functionaries. Law of torts and particularly the branch of negligence is consistently influenced and
transformed by social, economic and political development."
At another place, the Court observed:
"Where the State undertakes common law duty its actions may give rise to common law tort. Negligence in performance of
duty is only a step to determine if action of Government resulting in loss or injury to common man should not go
uncompensated. If construction of bundh is a common law or public duty then any loss or damage arising out of it gives rise
to tortious liability not in the conservative sense but certainly in the modern and developing sense. A common man, a man
in the street cannot be left high and dry because wrongdoer is State. The basic element of tort is duty. And that comes into
play fully when there is a common laws duty. since construction of bundh was a common law duty any injury suffered by a
common man was public tort liable to be compensated."
The Supreme Court has thus evolved the concept of "public law duty." In the instant case, the Court said that the
damage was caused to the appellant not only because of negligence of officers but also because "it was due to
failure in discharge of public duty and mistake at various stages." Said the Court on this point:
"In the conservative sense it was negligence. But in modern sense and present day context it was not only negligence but
mistake, defective planning, failure to discharge public duty. It was thus tort not in the narrow sense but in the broader
sense to which Article 120 (of the Limitation Act ) applied."
Even otherwise, the Court ruled that the matter could fall even under Article 36 of the Limitation Act as the
limitation of 2 years fixed in that Article would start running from the date his claim for damage was rejected by the
government. "It is the improper performance of duty or arbitrary action of the authorities in not accepting the claim
when damage was found by the official committee to have taken place. The limitation to file suit on facts of this case
arises from the date the Government refused to pay the amount determined by the committee."
In the instant case, since rejection was not communicated nor a copy of the report was supplied despite request,
the suit could not be barred by limitation. As the point of limitation went against the State, and the State had not
appealed against the amount of damage assessed by the official committee (Over Rs. one and a half lac), the Court
directed the State to pay the amount to the appellants along with interest.
(14) Nagireddi
The Indian law does not at present provide any remedy for the loss caused to an individual by an action of the
government which can neither be characterised as illegal nor as negligent. Such a situation arose in K. Nagireddi v.
Government of Sau . A person having an orchard suffered extensive damage due to percolation of water in a canal
constructed by the State Government. His case was that his orchard had been damaged owing to the faulty laying
of the canal and that it was not cemented or lined at the floor and therefore the water escaped through percolation
and seepage in the orchard.
Dismissing his suit for damages, the High Court held: (1) there was no faulty laying of the canal by the State; (2)
there was no negligence in laying the same; (3) there was no legal obligation on the government to cement the floor
of the canal.
The facts of the case show quite clearly that the landholder suffered damage from seepage of water and yet he
could not be compensated because the law of negligence does not cover such a situation. The canal had been
constructed for public good and yet one person is made to suffer loss for no fault of his. It is necessary that
Administrative Law should develop to cover such situations.
(g) Torts against Person

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In this area, Art. 21 of the Constitution plays a very important role. Art. 21 runs as follows:
"No person shall be deprived of his life or personal liberty except according to procedure established by law."
The term "life" in Art. 21 has been given a liberal interpretation. It means not only "animal existence" but a dignified
human existence. Whenever any injury is caused to a person by a government authority, such as, cases of police
lawlessness, custodial deaths, failure of the government to maintain law and order resulting in injury to person and
property of the people. Art 21 comes in to play the expression ‘life’ in.
Article 21 means right to live with human dignity and this includes a guarantee against. Accordingly, the Supreme
Court has asserted:
"The precious right guaranteed by Art. 21 of the Constitution of India cannot be denied to convicts, undertrials, detenus and
other prisoners in custody, except according to procedure established by law by placing such reasonable restrictions as are
permitted by law."
Another very important development has been awarding of damages by the courts under Art. 32 and 226 for
infringement of the right of life. In the following cases, the court has dilated upon the significance of Art. 21.
In Chairman, Railway Board v. Chandrima Das , a Bangladeshi woman was gang raped by several railway
employees in yatri niwas attached to a railway station. The Supreme Court ruled that rape is an offence which is
violative of the Fundamental Right of a person under Art. 21. It violates the most cherished rights of the victim, viz.
right to life which includes right to live with human dignity contained in Art. 21.
The Court also ruled that the protection of Art. 21 extends not only to the citizens of India but even to foreigners
who come to India merely as to wrists or in any other capacity.
The Court awarded compensation to the concerned person.
(h) Law and Order
The function of maintaining law and order has been held to be a sovereign function.
(1) Dattamal
In State v. Dattamal , the High Court refused to award any damages for loss of life or property resulting form police
firing ordered to quell a riot because it was a sovereign function of the State. This would still be so even when it was
in excess of the directions of the authority ordering the same.
(2) Padmalochan
In State of Orissa v. Padmalochan , plaintiff’s claim for damages against the state for injuries sustained by him as
a result of police lathi-charge was dismissed. The police was protecting the office of the S.D.O. where some student
trouble was apprehended. The lathi-charge was unwarranted as it was resorted to without any magisterial order.
The plaintiff was not a member of any unlawful mob. Nevertheless, his claim was rejected on the ground that even if
the lathi-charge was illegal, it was still performed in the exercise of sovereign function and so the state could not be
held liable for damages.
The court rejected the contention that only statutory functions could be regarded as sovereign. A reference to Arts
53, 73 and 162 of the Constitution makes it clear that sovereign executive power can be exercised even when there
is no legislation.
(3) Chironjilal
Similarly, in State of Madhya Pradesh v. Chironjilal , rejecting a claim for damages for loss caused to the
respondent’s property as a result of police lathicharge (resorted to wilfully and without any reasonable cause), the
High Court ruled that the function to regulate processions and to maintain law and order cannot be performed by
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private individuals. These powers can be exercised only by the state or its delegates and, thus, such functions, by
their very nature, are to be regarded as sovereign functions of the State. The State would thus not be liable in
respect of consequences ensuing therefrom.
(4) Nanik Sewa
A practice has grown over the years that when death or injury is caused to persons as a result of police action in
connection with maintenance of law and order, the concerned government pays compensation ex gratia to the
injured persons or the relatives of the dead persons. For instance, as a result of police firing on an agitation held for
protesting against the implementation of Mandal Commission’s recommendations. several persons died. The
Orissa Government announced ex gratia compensation of Rs. one lakh for the death of a student and Rs. 25,000/-
for the death of a non-student. The mother of a non-student who had died in the agitation complained to the High
Court against this differentiation between a student and a non-student. At first, the State took the stand that the
amount was not paid as compensation but was paid on compassionable ground out of the Chief Minister’s relief
fund. Ultimately, however, the government relented and agreed to pay Rs. one lac for the death of every person,
student or non-student alike.
(5) PUDR
As a result of police firing, 21 persons died in Bihar in April, 1986. The State compensated the relations and heirs
of a few of the dead persons to the tune of Rs. 10,000/- each, but the State could not furnish any justification as to
why no compensation had been paid to the relations of the other dead persons. In Peoples’ Union for Democratic
Rights v. State of Bihar , the Supreme Court emphasized that it had become a normal feature in such situations for
the State to give compensation and, ordinarily, in case of death, a sum of Rs. 20,000/- was paid. Accordingly, the
Court directed the State Government to pay Rs. 20,000/- in respect of each person who died, and Rs. 5,000/- in
respect of every injured person.
The Court also stated that this payment was to be without prejudice to any just claim for compensation which the
relations of the deceased or of the injured person could advance in a regular civil suit. The direction was given as a
"working principle and for convenience" and with a view to rehabilitate the dependents of the deceased.
(i) Failure to maintain Law and Order
It appears from the above cases that what started as ex gratia payment for injuries inflicted by police action to
maintain law and order has now been transformed into a sort of legal right of persons injured which the High Courts
and the Supreme Court enforce through their writ jurisdiction. Also, as the Inder and Gandhi cases show, the courts
are also taking the view that maintenance of law and order is the primary responsibility of a government, and if
people are injured because of the failure of the government to discharge this duty properly, it must then
recompense those injured thereby.
This development has become possible because of two significant trends, viz .:
(1) Since 1978, the Supreme Court has given very expansive interpretation to Art 21 ;
(2) The Supreme Court has also interpreted liberally its own power to give relief under Art 32, and,
correspondingly of the High Courts under Art 226 of the Constitution.
(1) Reddy
C. Ramakonda Reddy v. State opens a new vista in State liability, enhances the scope of individual claims for
damages against the State and further downgrades the doctrine of sovereign functions, C, an undertrial prisoner
lodged in a jail under a magistrate’s remand order was killed when some miscreants entered the jail and threw a
bomb at the cell where C was lodged and, consequently, he died. His widow sued the government for
compensation arguing that there was callous negligence on the part of the State and its servants which facilitated
the commission of the crime killing C.
The State denied its liability on several grounds, to wit, that there was no negligence on the part of its employees,
that the incident occurred for reasons beyond its control and that even if there was any negligence on the part of its
employees, it was still not liable as maintenance of jails was a sovereign functions of the State.
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After reviewing the evidence on record, the High Court concluded that the said incident could not have happened
but for the negligence on the part of the policemen guarding the jail. The court accepted that the arrest of C in the
course of investigation of a crime and his detention in jail under a magistrate’s order, was referable to the sovereign
powers of the State. Nevertheless, the High Court ruled that Art. 21 overrides this State immunity. The Court
observed on this point:
"In our opinion, the right to life and liberty guaranteed by Art. 21 is so fundamental and basic that no compromise is
possible with this right. It is ‘non-negotiable.’ This is the minimum requirement which must be guaranteed to enable a citizen
of the enjoyment of this basic right except in accordance with a law which is reasonable, fair and just."
The Government had argued before the High Court that the cases like Rudul Sah, Sebastian etc . were all decided
by the Supreme Court under Art. 32 which clothes the Supreme Court with very wide powers while the instant case
originated as a suit in a lower civil court which could not do what the Supreme Court could do under Art. 32.
Rejecting the argument, the court argued that "the fundamental rights are sacrosanct," "they have been variously
described as basic, inalienable and indefensible" and that "the right guaranteed by Art. 21 is too fundamental and
basic to admit any compromise." The Court awarded a sum of Rs. 1,44,000 to the plaintiff as compensation with the
following remark:
"State power does not confer a licence upon its officials to act contrary to law, or to be grossly negligent in their duties, to
the detriment of life and liberty of the citizens. So long as the officials act fairly and with reasonable care, no action can lie.
Only where they abuse their powers, act with gross negligence, resulting in deprivation of life and liberty of the citizens,
does the State become liable for compensation."
Thus, any violation of Art. 21 on the part of the authorities may give rise to a claim for compensation whether the
proceedings are initiated through proceedings under Art. 32, or Art. 226, or a civil suit. Further, it is the obligation of
the state not only not to violate Art. 21 itself but also to protect the life and personal liberty of the people, failure of
either of these duties makes it liable to pay compensation to the aggrieved party.
On appeal, the Supreme Court affirmed the decision of the High Court. The Court rejected the contention of the
State that it was not liable as the establishment and maintenance of prisons is part of the sovereign functions of the
State. The Court ruled that there was violation of Art. 21 of the Constitution. The Court observed:
"Thus, fundamental rights, which also include basic human rights, continue to be available to a prisoner and those rights
cannot be defeated by pleading the old and archaic defence of immunity in respect of sovereign acts."
The above cases show that the area of sovereign immunity of the state has been very much curtailed over a period
of time by the courts.
(2) Kapoor
In this case, the High Court has observed: "Even when the use of force becomes inevitable, the police must use
only the minimum force that is essential to preserve law and order." In this case, the court came to the conclusion
that there was an excessive use of force by the police. The court accepted that a public interest litigation writ
petition can be filed in the court to raise the question of police firing and violation of human rights by the police. The
court rejected the argument that under Art 226. The court ought not to award any compensation and that for that
purpose a civil suit for tort should be filed.
The court referred to PUDR v. State of Bihar as a precedent.
(3) Inder Puri
Loss of property was caused to the petitioners in a communal riot in Jammu. The Government made an ex gratia
payment of Rs. 25,000 as compensation to the petitioners whereas a government appointed expert committee had
assessed the loss at a much higher figure. Directing the Government to pay adequate compensation to the
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petitioners for the loss suffered by them, the High Court pointed out that the maintenance of law and order is the
duty of a responsible government; it cannot abdicate this function and put the life and liberty of the citizens in
jeopardy.
(4) Gandhi
In similar circumstances, the Madras High Court awarded compensation to those who lost their property in a
communal riot. The court insisted that the right to livelihood is protected by Art 21 of the Constitution, and that Art
300A of the Constitution says that no person shall be deprived of his property save in accordance with law.
Therefore, "to allow his [victim’s] properties to be reduced to ashes by the force of darkness and evil is a clear
deprivation of his right to property guaranteed by the Constitution."
In the instant case, the collector had assessed damage to the riot victims as over 33 lakhs whereas the
government paid to each victim a paltry sum of Rs. 750 only. The High Court characterised the government offer as
most insulting. The Court regretted that, in the first place, the government failed to carry out its elementary function
to maintain law and order, and, in the second place, it treated the victims as beggars. Said the Judge (KADER , J.):
"It is no charity that is expected from the government but legal recompense for the wrong done." It may also be
noted that in this case the petition was filed not by the victims themselves but by a body of lawyers on their behalf
as public interest litigation. The Court directed the Government to pay the amount as assessed by the collector.
(5) Jeet Stores
In State of J&K v. Jeet General Stores , as a result of sudden flare of communal riots in Jammu, a particular
community suffered extensive losses of property. Several petitioners sought from the State compensation for their
loss but the court refused. The court did not follow the Gandhi ruling as that ruling depended on the State being
negligent and careless in protecting the property of the citizens in the aftermath of the riots, but no such plea was
taken by the petitioners in Jeet . The Court said: "(I) t was the duty of the writ petitioners to have specifically alleged
as to how, in what manner and why was the state negligent".
The Court stated the duty of the State as follows:
"If, therefore, the court finds that in a given set of circumstances, the State was found negligent in protecting the property of
its citizens, the court cannot countenance such negligence and has to burden the State with adverse consequences".
This duty of the State arises out of Art. 21 of the Constitution which guarantees the right to life and liberty of the
people.
(6) Ahluwalia
In the wake of the assassination of Smt. Indira Gandhi there was arson and looting and some Sikhs were killed as
a result thereof. In a writ petition being filed the Delhi High Court held that as a result of Art. 21, it is the duty of the
state to protect its citizens. If the state fails in doing so, then it must pay compensation to the family of the person
killed during riots as his life has been extinguished in clear violation of Art. 21 of the Constitution. Accordingly, the
High Court directed payment of Rs. 2 lakhs to each person killed in Delhi.
Later a writ petition was filed in the Supreme Court to extend this benefit to other States. The Court took the
position that it could not do so without looking into the circumstances of each case. But the court directed the
several concerned High Courts to deal with the matter. The writ petition filed in the Supreme Court was to be
treated as a writ petition filed in each of these courts.
(j) Police Lawlessness
The incidents of brutal police behaviour towards persons detained on suspicion is a routine matter. There has been
public outcry from time to time against custodial deaths.
For some time now, a new judicial trend has been manifesting itself in the area of personal liberty. Arrest and
detention could ordinarily be characterized as ‘sovereign’ functions according to the traditional classification. As
such, a person who suffers undue detention or imprisonment at the hands of the government may not be entitled to
any monetary compensation. The courts can only quash the arrest or detention if not according to law.
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The Constitution has Art 21 which guarantees that no person shall be deprived of his life or personal liberty except
in accordance with procedure established by law. The Supreme Court has taken recourse to a dynamic
interpretation of Art 21 and given it a new orientation. The court has characterised police atrocities, intimidation,
harassment, use of third degree methods to extort confessions, the court has outlawed all this under Art. 21 as
being against human dignity. Describing police torture as being "disastrous to our human rights awareness and
humanist constitution order", the Supreme Court has held the state responsible for remedying the situation. Many a
time, the Court has passed strictures against police torture and brutality on prisoners, undertrials and accused
persons. The Court has characterised custodial death as "perhaps one of the worst crimes in a civilised society
governed by the rule of law."
As an off shoot thereof, the Court has also considered the question of giving compensation to one who may have
unduly suffered detention or bodily harm which amounts to an infringement of Art 21. The state claim to sovereign
immunity in the area of maintenance of law and order has been subjected to Art 21. Art 21 has been held to
override state immunity if a citizen is deprived of his life or personal liberty otherwise than in accordance with the
procedure established by law. When a citizen has been deprived of his life or liberty, otherwise than in accordance
with the procedure prescribed by law, it can be no answer to say that the said deprivation was brought about while
the officials were acting in discharge of the sovereign functions of the state.
(1) Khatri
In Khatri v. State of Bihar (the Bhagalpur Blinding case), it was alleged that the police had blinded certain
prisoners and the State was liable to pay compensation to them. Since the matter as to the responsibility of the
police officers was still under investigation, the Supreme Court did not decide the issue. However, it did raise an
extremely significant constitutional question, viz .: If the State deprives a person of his life or personal liberty in
violation of the right guaranteed by Art 21, can the Court grant relief to the person who has suffered such
deprivation? BHAGWATI , J., said: "Why should the Court not be prepared to forge new tools and devise new
remedies for the purpose of vindicating the most precious of the precious Fundamental Right to life and personal
liberty." The question involves the "exploration of a new dimension of the right to life and personal liberty."
An important question considered by the Court in Khatri was: Would the State be liable to pay compensation for
acts of its servants outside the scope of their power and authority affecting life or personal liberty of a person and
thus infringing Art 21 ? The Court answered in the affirmative saying that if it were not so, Art 21 would be reduced
to a nullity, "a mere rope of sand," for, "on this view, if the officer is acting according to law there would be no
breach of Art 21 and if he is acting without the authority of law, the State would be able to contend that it is not
responsible for his action and therefore there is no violation of Art 21 ." In this case, however the Court did not
award any compensation to the victims of police atrocities and postponed the matter for future consideration.
(2) Rudul Shah
In Rudul Shah v. State of Bihar , in a writ petition under Art. 32 the Supreme Court awarded compensation of Rs.
35,000 against the State as an interim measure because the petitioner was kept in jail for 14 years after his
acquittal by a criminal court. He was directed to be released by the Supreme Court in a habeas corpus petition
moved on his behalf. The petitioner was not barred from bringing a suit to recover appropriate damages from the
State and its erring officials. The facts in Rudul Shah revealed "a sordid and disturbing state of affairs" for which the
responsibility squarely lay on the Administration.
The petitioner was acquitted by the court of session, Muzaffarpur, Bihar, in June 1968, but he was released from
jail only on October 16, 1982, i.e . 14 years after his acquittal, when a habeas corpus petition was moved on his
behalf in the Supreme Court. The State authorities failed to place before the Court any satisfactory material for his
continued detention for such a long period. The question before the Supreme Court was whether it could grant
some compensation to the petitioner under Art. 32 for his wrongful detention.
Under the traditional approach, the only remedy open to the petitioner was to file a suit in a civil court to recover
damages from the government, but the difficulties of a suitor filing such a suit are innumerable. The Court (per
CHANDRACHUD , C.J.) felt that if it refused to pass an order of compensation in favour of the petitioner, "it will be
doing merely lip service to the fundamental right to liberty which the State Government has so grossly violated." It
would denude the right to life and liberty under Art. 21 of its significant content if the power of the Supreme Court
were limited merely to passing orders of release from illegal detention. The Court went on to observe:
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"One of the telling ways in which the violation of that right can reasonably be prevented and due compliance with the
mandate of Art. 21 secured, is to mullet the violators in the payment of monetary compensation. Administrative sclerosis
leading to flagrant infringements of fundamental rights cannot be corrected by any other method open to the judiciary to
adopt. The right to compensation is some palliative for the unlawful acts of instrumentalities which act in the name of public
interest and which present for their protection the powers of the state as a shield."
Rudul Sah denotes a bold departure from the hitherto existing legal position. But alarming situations call for new
strategies and methods to solve them. There was gross violation of the petitioner’s personal liberty for as long as 14
years. If legal technicalities had been allowed to stand in the way, it would have amounted to a surrender to state
lawlessness, showing cold indifference to the personal liberty of the individual and his immense sufferings, certainly
not contemplated by the constitution-makers in Independent India. The courts must mould their tools to deal with
such dangerous situations, and not retreat behind the shelter of self-imposed limitations evolved by them for certain
purposes. Rudul Sah has become the basis of subsequent decisions awarding. compensation under Arts. 32 and
226 of the Constitution for contravention of fundamental rights.
(2) Sebastian
In Sebastian M. Hongray v. Union of India , the Supreme Court by a writ of habeas corpus required the
Government of India to produce two persons before it. These two persons had been taken to the military camp by
the jawans of the army. The government failed to produce them expressing its inability to do so as they were not in
its custody and control. It was also stated that in spite of extensive search, these two persons could not be traced.
The government’s explanation was found by the Court to be untenable and incorrect. The truth was that these
persons had met an unnatural death. The Supreme Court, in the circumstances, keeping in view the torture, agony
and mental oppression undergone by the wives of the said persons, instead of imposing a fine on the government
for civil contempt of the court, required that "as a measure of exemplary costs as is permissible in such cases," the
government must pay Rs. one lac to each of the aforesaid two women.
(3) Ovaon
In a judgment delivered on August 12, 1983, in Ovaon v. State of Bihar , the Supreme Court awarded Rs. 15,000
as compensation to an undertrial who was detained in a lunatic asylum for six years after he had been certified as
fit for discharge.
(4) Nilabati Behera
A significant pronouncement in this line of cases is Nilabati Behera v. State of Orissa . A person died in police
custody as a result of injuries inflicted on him by the police. The Supreme Court awarded Rs. 1,50,000 to his widow
as compensation. The Court explained the basis on which liability of the State arises in such cases (custodial death,
police atrocities etc .) for payment of compensation and the distinction between this liability and the liability in
private law for payment of compensation in an action in tort. The award of compensation in a proceeding under Art.
32 or Art. 226 of the Constitution is a remedy available in public law, "based on strict liability for contravention of
fundamental rights to which the principle of sovereign immunity does not apply, even though it may be available as
a defence in private law in an action based on tort."
The decision in Kasturilal upholding the State’s plea of sovereign immunity for tortious acts of its servants,
explained the Court, is confined to the sphere of liability in tort, which is distinct from the State’s liability for
contravention of fundamental rights to which the doctrine of immunity has no application in the constitutional
scheme, and is no defence to the constitutional remedy under Arts. 32 and 226 of the Constitution which enables
award of compensation for contravention of fundamental rights when the only practicable mode of enforcement of
the fundamental rights can be the award of compensation. Rudul Sah and other cases in that line relate to award of
compensation for contravention of fundamental rights, in the constitutional remedy under Art. 32 and 226 of the
Constitution. On the other hand, Kasturilal related to the value of goods seized and not returned to the owner due to
the fault of government servants, the claim being of damages for the tort of conversion under the ordinary process,
and not a claim for violation of fundamental rights. " Kasturilal is, therefore, inapplicable and distinguishable." The
defence of ‘sovereign immunity’ is alien to the concept of guarantee of fundamental rights; a claim for compensation
for contravention of "human rights and fundamental freedoms," the protection of which is guaranteed in the
Constitution, "is a claim in public law."
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The Court observed on this point:
"In this context, it is sufficient to say that the decision of this court in Kasturilal upholding the State’s plea of sovereign
immunity for tortious acts of its servants is confined to the sphere of liability in tort, which is distinct from the State’s liability
for contravention of fundamental rights to which the doctrine of sovereign immunity has no application in the constitutional
scheme and is no defence to the constitutional remedy under Arts. 32 and 226 of the Constitution which enables award of
compensation for contravention of fundamental rights, when the only practicable mode of enforcement of the fundamental
rights can be the award of compensation."
The Court explained this principle underlying award of compensation in a writ petition as follows:
"It may be mentioned straightway that the award of compensation in a proceeding under Art. 32 by this Court or by the
High Court under Art 226 of the Constitutionis a remedy available in public law, based on strict liability for contravention of
fundamental rights to which the principle of sovereign immunity does not apply even though it may be available as a
defence in private law in an action based on tort ."
The Court then went on to observe:
"If the guarantee that deprivation of life and personal liberty cannot be made except in accordance with law, is to be real,
the enforcement of the right in case of every contravention must also be possible in the constitutional scheme, the mode of
redress being that which is appropriate in the facts of each case. This remedy in public law has to be more readily available
when invoked by the have-nots, who are not possessed of the wherewithal for enforcement of their rights in private law,
even though its exercise is to be tempered by judicial restraint to avoid circumvention of private law remedies, where more
appropriate."
Dr. A.S. ANAND , J., in his concurring judgment observed:
"The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal
system which aims to protect their interests and preserve their rights."
(5) Arvinder
In Arvinder , the police tortured a woman and her husband and committed other illegalities e.g . fabrication, illegal
arrest etc . The Court characterised it as a "blatant abuse of law." The Court expressed its anguish on this episode
as follows:
"... We are really pained to note that such things should happen in a country which is still governed by the rule of law. We
cannot but express our strong displeasure and disapproval of the conduct of the police officers involved in this sordid affair."
The Court ordered the State to pay compensation to the persons concerned and also to take immediate steps to
prosecute the police officers involved in this sordid affairs.
(6) D.K. Basu
The question of deaths in police lock-ups, use of third degree in investigations and that of modalities for awarding
compensation to the victims of police torture or their family members in case of custodial death have been
examined in depth by the Supreme Court vis-a-vis Art. 21 of the Constitution in D.K. Basu v. State of West Bengal .
The Court opined that custodial violence strikes a blow at the rule of law and, therefore, it becomes the sacred duty
of the Court, "as the custodian and protector of the fundamental and the basic human rights of the citizens," to deter
violation of human rights through police violence in police lock-ups. In spite of the constitutional and statutory
provisions aimed at safeguarding personal liberty and the life of a person (viz . Arts. 21 and 22 ) "growing incidence
of torture and deaths in police custody has been a disturbing factor."
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The Court asserted, "The precious right guaranteed by Art. 21 of the Constitution of India cannot be denied to
convicts, undertrials, detenus and other prisoners in custody, except according to the procedure established by law
by placing such reasonable restrictions as are permitted by law." While police is entitled to arrest a criminal and
interrogate him during the investigation of an offence, the law does not permit use of third-degree methods or
torture of accused in custody during interrogation and investigation with a view to solve a crime.
Section 330 of the Penal code directly makes torture during investigation and interrogation by the police punishable.
While prosecution of the offender is an obligation of the State, the victim of the crime needs to be compensated
monetarily also. The Court where infringement of the fundamental right is established must give compensatory relief
to the victim, not by way of damage as in a civil action but by way of compensation under the public law jurisdiction
for the wrong done, due to breach of public duty by the State of not protecting the fundamental right to life of the
citizen. "To repair the wrong done and give judicial redress for legal injury is a compulsion of judicial conscience"
Besides the police, there are several other governmental agencies having power to detain persons and interrogate
them in connection with certain types of offences. Some of these agencies are: Directorate of Enforcement (FERA),
Directorate of Revenue Intelligence, Central Reserve Police, Intelligence Bureau, Central Bureau of Investigation
(CBI). There are reports of torture and death in custody of these authorities as well. Accordingly, the Supreme
Court has issued detailed "requirements to be followed in all cases of arrest or detention till legal provisions are
made in that behalf as preventive measures ."
The Court has emphasized that public law proceedings serve a different purpose than the private law proceedings.
The purpose of the former "is not only to civilise public power but also to assure the citizens that they live under a
legal system wherein their rights and interests shall be protected and preserved." On the other hand, civil action for
damages is a long drawn and a cumbersome judicial process. The award of compensation in the public law
jurisdiction is without prejudice to any other action which is lawfully available to the victims or the heirs of the
deceased victims. "The relief to redress the wrong for the established invasion of the fundamental rights of the
citizen, under the public law jurisdiction is, thus, in addition to the traditional remedies and not in derogation of them.
In Manipur, the police took away several persons from a hut and then killed two of them. A writ petition was moved
in the Supreme Court on behalf of their family members questioning police conduct under Art. 21 of the
Constitution. The State sought to justify police action by pleading sovereign immunity on the ground that Manipur
was a disturbed area and the situation there was not normal. The Supreme Court accepted this fact as well as the
fact that to deal with such a situation the police needed to be given a good amount of discretion. But still, ruled the
Court, the present incident could not be justified. The Court observed:
"This type of activity cannot certainly be countenanced by the courts even in case of disturbed areas. If the police had
information that terrorists were gathering at a particular place and if they had surprised them and arrested them, the proper
course for them was to deal with them according to law. ‘Administrative liquidation’ was certainly not a course open to
them."
The Court awarded one lakh rupees (Rs. 100,000/-) to the family of each of the deceased persons. In the case
noted below, the Supreme Court awarded a sum of Rs. 1,50,000/- for a custodial death.
In a number of petitions filed under Art. 32 by victims of police atrocities, the Supreme Court has awarded
compensation to the petitioners. A few such cases may be noted here.
(7) Bhim Singh
In Bhim Singh v. Jammu & Kashmir , illegal detention in police custody of petitioner Bhim Singh was held to be in
gross violation of his constitutional rights under Arts. 21 and 22 of the Constitution. As he was not produced before
the magistrate within 24 hours of his arrest, so the Court ruled that "the constitutional rights of Shri Bhim Singh were
violated with impunity."
Although he had already been released by the time his habeas corpus petition was disposed of by the Court,
nevertheless, the Court directed the State Government to pay him Rs. 50,000 as exemplary costs. Referring to
Rudul Sah and Sebastian , the Court observed that it was now established that "we have the right to award
monetary compensation by way of exemplary costs or otherwise." The Court also observed:
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"When a person comes to us with the complaint that he has been arrested and imprisoned with mischievous or malicious
intent and that his constitutional and legal rights were invaded, the mischief or malice and the invasion may not be washed
away or wished by his being set free. In appropriate cases, we have the jurisdiction to compensate the victim by awarding
suitable monetary compensation."
(8) Saheli
In Saheli , the State Government was held liable to pay compensation to the mother of a child who died in police
custody as a result of beating by the police. The Court observed: "It is well settled now that the State is responsible
for the tortious acts of its employees." The Court awarded Rs. 75,000 as compensation with the following remarks:
"An action for damages lies for bodily harm which includes battery, assault, false imprisonment, physical injuries and
death. In cases of assault, battery and false imprisonment the damages are at large and represent a solatium for the mental
pain, distress, indignity, loss of liberty and death."
(9) Patil
In Patil , the Court directed the State to pay Rs. 10,000 as compensation to the petitioner for violation of his
constitutional right under Art. 21 by the police, because, as an undertrial prisoner, he was handcuffed and taken in a
procession through the streets by the police during the investigation. The respondent was subjected to an
unwarranted humiliation and indignity which cannot be done to any citizen of India.
The Rajasthan High Court awarded an interim compensation as rehabilitation grants to several tribal girls who were
raped by police officials and were victimised by police. It is interesting to note that the High Court judge suo motu
took notice of the incident after seeing a report in a local newspaper.
(10) PUCL
In People’s Union for Civil Liberties v. Union of India , police took away two persons, alleged to be terrorists, and
shot them. In a PIL writ petition filed under Art. 32, the Supreme Court awarded Rs. one lac to the family of each
deceased. The Court rejected the defence of sovereign immunity pleaded by the State. Art. 21 does not recognize
any exception.
(k) Ex gratia Payments
There have been situations where the courts have awarded under Art. 32 or 226ex gratia compensation to
individuals on humanitarian grounds without the government being held legally liable.
One such example is furnished by A.S. Mittal v. State of Uttar Pradesh . At an eye camp organised by a club,
irreversible damage was caused to the eyes of several persons because of some post-operative infection. The
matter was brought before the Supreme Court through a public interest litigation under Art. 32 by two social
activists. The petitioners sought to argue that the government failed to ensure compliance with the prescribed
norms for holding an eye camp. They also argued that the persons holding the camp were acting under
government’s authority and, therefore, "on the doctrine of the state action the activity must be reckoned as that of
the State itself which must accordingly be held vicariously liable."
The Court ruled that in the circumstances the concept of state action could not be invoked, nevertheless, on
humanitarian considerations, the Court directed the State to afford some monetary relief (Rs. 17,500/-) to each
victim.
8. STATUTORY FUNCTIONS OF OFFICIALS

Formerly the principle was followed that the state would not be vicariously liable for acts of its servants performed
by them in pursuance of a power conferred on them by a statute. This was on the basis that the rule embodied in
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the maxim " respondent superior " is subject to the well recognised exception that a master is not liable for the acts
of his servant performed in the discharge of a function conferred on him by law.
Where a function is conferred by law directly on the employee, the employer cannot be said to have legal control
over him in the discharge of that function, and, accordingly, the employer cannot be held liable for the wrongs
committed by the employee during the course of discharging that function. In such a case, the general law of
agency has no application. However, the official himself may be personally liable for the tort he commits.
In a number of cases, the courts did exempt the state from liability on this account. A few such cases are
mentioned below.
(1) Shivabhajan
In Shivabhajan v. Secretary of State , certain bundles of hay were attached by the Chief Constable of Mahim
because he believed them to be stolen property. The person from whom the bundles were attached was prosecuted
but he was acquitted. In the meanwhile, the bundles of hay were lost. The person sued the government for
compensation for the negligence of the chief constable. But the High Court held that the government was not liable
for "the Chief Constable seized the hay, not in obedience to an order of the executive government, but in
performance of a statutory power vested in him by the Legislature," i.e . by the Criminal Procedure Code.
(2) Ross
In Ross v. Secretary of State , the Secretary of State was held not liable for the wrongful acts of the district
magistrate done by him in the exercise of statutory authority.
(3) Srigobinda
In Secretary of State v. Srigobinda Chaudhuri , a suit for damages against the Secretary of State for misfeasance,
wrongs, negligence or omissions of duties of managers appointed by the Court of wards was rejected because
these officers of the government acted in exercise of statutory powers.
(4) Ramnath
The deputy collector by mistake paid some money to a person who was not entitled to it. The Secretary of State
was held not liable for the mistake of the deputy collector as it was committed in exercise of his statutory duties.
(5) Ram Ghulam
The police recovered some stolen property which was kept in the collectorate malkhana from where it was again
stolen. The High Court ruled that the government was not bound to compensate the owner of the stolen property as
the alleged tortious act was performed in discharge of an obligation imposed by law, viz . the Criminal Procedure
Code. The Court stated the principle thus: "A master is not liable for the acts of this servant performed in discharge
of a duty imposed by law." This principle was approved by the Supreme Court in the Kasturi Lal case where it was
stated that tortious acts committed by public servants in the discharge of statutory functions would be referable to,
and ultimately based on, the delegation of sovereign powers of the state to such public servants. The Shivabhajan
case was cited with approval by the court. The difficulty in regarding statutory functions as sovereign functions has
already been mentioned above.
It was doubtful whether ratification by the government of an action of its servants performed under statutory
authority would make the state liable. It was observed in a High Court case that "in case of this class even
ratification by the state would make no difference, because there can be no ratification unless the act is done on
behalf of the principal in the first instance." However, irrespective of ratification, if the state was benefited by the
action of the official, it was liable to make good the loss or return the property.
(6) Rikhabchand
Under the Rajasthan Public Safety Act, the Rajasthan Government conferred power on the commissioner to make
arrests. The commissioner arrested the plaintiff and the State Government approved the same. The order of the
commissioner was found not to have been made in good faith. The plaintiff’s suit for damages against the State
Government was rejected on the ground that the commissioner was exercising statutory power, that the delegation
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did not make him an agent of the Government for he had to exercise his own discretion in the matter; in the
circumstances, the maxim ‘respondent superior’ did not apply. When a government officer purports to act under a
statutory power conferred on him, he cannot be said to be acting as an ordinary agent of the state, and whatever
wrong he does is his own and not that of the employer.
The principle laid down in these cases was not rational. An official of the government always remains its agent
whether he functions under an order of the government or under powers conferred on him by an Act of the
legislature, for the legislature confers powers on him only because he is an agent of the government. Had he not
been a government servant, power would not have been conferred on him. Secondly, the principle mentioned
above boils down to this: If the power was conferred by a statute on the government, and the government directed
an officer to do something in pursuance of this power, the government was liable for the acts of the officer. But if the
power was conferred directly on the officer by a statutory provision, then the government was not liable. In other
words, government would be liable if the officer acted under the direction of the executive but not if he acted under
the direction of the legislature.
The dichotomy between the executive and the legislative branches was irrational as both constitute parts of the
same government. Moreover, the rule was unjust in the modern administrative age when more and more statutory
powers are being conferred directly on government servants through legislation. For an ordinary citizen, it makes
little difference whether the act which injures him has been done by a public servant under the direct authority of a
statute, or under the instructions of the government. Further, it can be argued that legislative authorisation to an
officer to perform a duty only extends to performing the same in good faith and not negligently.
It was, therefore, necessary that the government be made liable, for the acts of its servants, whether statutory or
otherwise, done during the course of their employment.
In Britain, S. 2 (3) of the Crown Proceedings Act, 1947 makes the Crown liable for the tortious acts of government
servants even though the function has been directly conferred by a statute. In India, the Law Commission’s
recommendation on the point was also to the effect that government should be liable in such a case. The
Commission recommended: "The state should be liable if in the discharge of statutory duties imposed upon it or its
employees, the employees act negligently or maliciously, whether or not discretion is involved in the exercise of
such duty." But no action has been taken so far on this suggestion. In course of time, however, the abovementioned
position has undergone a change through judicial decisions.
(7) Nagendra Rao
The most significant of which is N. Nagendra Rao & Co. v. State of A.P . The question raised in this case was: was
the state vicariously liable for negligence of its officers in discharge of their statutory duties? The High Court
answered the question in the negative, but, on appeal, the Supreme Court answered in the affirmative.
The fact situation in the case was as follows: The appellant carried on the business of fertilisers and foodgrains. On
11-8-1975, the police inspector seized from the appellant’s premises huge stocks of fertilizers, foodgrains and even
some non-essential goods. No steps were taken by the authorities to dispose of the foodgrains or fertilizers.
Ultimately, on 29-6-1976, under S. 6A of the Essential Commodities Act, a nominal quantity of fertilizers was
confiscated by the collector because he found no serious infringement of the law by the appellant except that there
was improper maintenance of accounts. The rest of the stock was ordered to be released to the appellant.
When the appellant went to take delivery of the stock from the concerned authorities, he found that the stock had
deteriorated both in quality and quantity. He refused to take delivery of the same and filed a suit to recover from the
State the money value of the stock which was seized from him. The State contested the suit arguing inter alia
sovereign immunity of the State, discharge of statutory duty by the officers in good faith etc . Rejecting the State
arguments, the Supreme Court decreed the suit in favour of the appellant.
Confiscation of an essential commodity is provided for in S. 6A of the Act. An essential commodity can be seized
under S. 3 (2)(j) if any contravention of law is about to be committed. The power is to be exercised if the concerned
officer has "reason to believe" that the law is going to be contravened. The expression ‘reason to believe’ has been
interpreted by the Supreme Court to mean that even though formation of opinion may be subjective, yet it must be
based on material on record. "It cannot be arbitrary, capricious or whimsical. It is, thus, a check on exercise of
power to seize the goods."
Under S. 6A, a report of seizure of the essential commodity is to be made without unreasonable delay to the
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collector of the district who can direct confiscation if he is satisfied that there has been a contravention of a control
order. "The language of the section and its setting indicate that every contravention cannot entail confiscation. That
is why the section uses the word ‘may.’ A trader indulging in black marketing or selling adulterated goods etc .
should not, in absence of any violation, be treated on a par with technical violations such as failure to put up the
price-list etc . or even discrepancies in stock."
Under S.6A (2), the collector has power to make interim arrangement of the seized goods. The purpose of the
provision is to protect the seized goods. If the goods are subject to "speedy and natural decay" or "it is otherwise
expedient in the public interest so to do," the collector ‘may’ order sale of the commodity. The Supreme Court has
interpreted the word ‘may’ as ‘shall’.
Once the collector comes to the conclusion that the goods belong to one of the two categories mentioned in the
provision then "he has no option but to direct their disposal." The reason is that the policy of the Act is to protect the
goods as they are essential for the society. When goods seized are not confiscated, then under S. 6C (2), these
have to be returned to the owner. If it is not possible to return the same, then the price thereof should be paid. "The
section is clear that if only part of the goods are confiscated then the remaining goods ought to be returned," or pay
the market price thereof. "Confiscation of part of the goods thus could not affect the right of the owner to claim
return of the remaining goods." If the goods have deteriorated in quality during the period of seizure and release,
the price thereof has to be paid.
After an elaborate consideration of relevant materials, the Court has overruled the doctrine of sovereign immunity
except to a very limited extent. The Court has observed on this point (per SAHAI , J.):
"In Welfare State, functions of the State are not only defence of the country or administration of justice or maintaining law
and order but extends to regulating and controlling the activities of people in almost every sphere, educational, commercial,
social, economic, political and even marital. The demarcating line between sovereign and non-sovereign powers for which
no rational basis survives has largely disappeared. Therefore, barring functions such as administration of justice,
maintenance of law and order and repression of crime etc . which are among the primary and inalienable functions of a
constitutional government, the State cannot claim any immunity. The determination of vicarious liability of the State being
linked with negligence of its officer, if they can be sued personally for which there is no dearth of authority... there is no
rationale for the proposition that even if the officer is liable the State cannot be sued Since the doctrine (of sovereign
immunity) has become outdated and sovereignty now vests in the people, the State cannot claim any immunity and if a suit
is maintainable against the officer personally, then there is no reason to hold that it would not be maintainable against the
State."
The Court has gone on to observe:
"No civilised system can permit an executive to play with the people of its country and claim that it is entitled to act in any
manner as it is sovereign."
Accordingly, the Court has ruled that the " ratio of Kasturi Lal is available to those rare and limited cases where the
statutory authority acts as a delegate of such function for which it cannot be sued in court of law." Thus:
"A law may be made to carry out the primary or inalienable functions of the State. Criminal Procedure Code is one such
law. A search or seizure effected under such law could be taken to be an exercise of power which may be in domain of
inalienable function. Whether the authority to whom this power is delegated is liable for negligence in discharge of duties
while performing such functions is a different matter Maintenance of law and order or repression of crime may be
inalienable function, for proper exercise of which the State may enact a law and may delegate its functions, the violation of
which may not be useable in torts, unless it trenches into and encroaches on the fundamental rights of life and liberty
guaranteed by the Constitution."
But the same cannot be said about other laws. When similar powers (of seizure or confiscation) are conferred
under other statutes as incidental or ancillary power to carry out the purpose and objective of the Act, then it being
an exercise of such state function which is not primary or inalienable, an officer acting negligently in his actions is
liable personally and the state vicariously. The Essential Commodities Act deals with persons indulging in hoarding
and black marketing. "Any power for regulating and controlling the essential commodities and the delegation of
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power to authorised officers to inspect, search and seize the property for carrying out the object of the State cannot
be a power for negligent exercise of which the state can claim immunity. No constitutional system can, either on
state necessity or public policy, condone negligent functioning of the State or its officers.
The Act itself provides for return of the goods if they are not confiscated for any reason. And if goods cannot be
returned for any reason then the owner is entitled for value of the goods with interest. Referring to State of Gujarat
v. Memon Mahomed Haji Hasan , the Court ruled that where the goods confiscated or seized are required to be
returned either under orders of the court or because of the provisions of the Act, "this Court has not countenanced
the objection that the goods having been lost or destroyed the owner of the goods had no remedy in private law and
the court was not empowered to pass an order or grant decree for payment of the value of the goods."
Nagendra Rao does not formally overrule Kasturi Lal , nor does it finally repudiate the doctrine of ‘sovereign’
function interfering with the relationship between the state and its citizens. What Nagendra Rao does is to
drastically curtail the effect of this doctrine by restricting its scope. The concept of ‘sovereign’ functions does not
apply to powers exercised by the Administration under such statutes as the Customs Act, Essential Commodities
Act and other such special enactment’s. The concept is now confined to powers exercised under the Criminal
Procedure Code in the maintenance of law and order which has still been characterised as a ‘sovereign’ function of
the state. Judicial creativity has reduced the feudalistic element in the law of state liability and brought the law, to a
large extent, in conformity with concept of the welfare state.
In the view of the author even the powers exercised under the Criminal Procedure Code should not be exempt
from the state liability to pay compensation if such powers are misused or abused. There have been innumerable
cases of police lawlessness in relation to life or personal liberty and the harshness of the law has been mitigated by
the courts ordering payment of compensation under Arts 32 and 226. The concept of ‘sovereign function’ has been
excluded from the area covered by Art. 21 of the Constitution in relation to criminal procedure. There is no reason
why the same approach be not adopted with respect to the rest of the criminal procedure if statutory powers
conferred on the concerned authorities are not properly exercised, or are negligently exercised. In some cases
falling in this area, the courts have awarded compensation on an ex gratia basis.
The Supreme Court has again made a plea for the enactment of a law to define the scope of state tortious liability
"in keeping with the dignity of the country" and "to remove the uncertainty and dispel the misgivings" of the people.
As the author has already expressed his view above, it was a good thing that no such law was enacted in 1956.
Had such a law been enacted then it would have been extremely restrictive in nature as, generally speaking, no
government wants to pay compensation to people for the wrongful or negligent acts of its servants. Such a law
would have hampered judicial creativity in the area which became evident after Kasturi Lal . May be, the time has
come now to enact an Act codifying the law as it has come to be as well as taking into account the modern thinking
about state liability in progressive democratic societies.
(8) Pramod Malhotra
The Reserve Bank of India (RBI) permitted Sikkim Banking Ltd. (SBL) to continue operations in Sikkim even after
pointing out several operational deficiencies in its working and asking it to cure the same. RBI even permitted SBL
to open a branch in Delhi. Thereafter, due to siphoning off of funds, the bank collapsed and the depositors were put
to great financial loss.
The depositors filed a writ petition in the Supreme Court claiming damages from the RBI. Their argument was that
the Banking Regulation Act cast a duty on the RBI to properly monitor banking companies and to safeguard the
interests of the depositors. Even when the RBI had found deficiencies in the working of the bank, RBI still allowed
SBL to open a branch in Delhi.
The Supreme Court rejected the claim of the depositors in Pramod Malhotra v. Union of India , following several
English cases, such as, Yuen Kun-yeu v. Alt. Gen. of Hongkong , and Davis v. Radcliffe . The Court ruled that one
may criticize RBI’s decision to grant a licence to SBL to open a branch in Delhi, but still "that will not be sufficient to
foist liability on RBI to repay all depositors. What the petitioners want is to foist one RBI liability for the default of
SBL. Such liability will be rarely imposed. RBI did not have day to day management or control on SBL. Also, the
relationship of RBI with creditors or depositors of SBI is not such that it would be just or reasonable to impose a
liability in negligence on RBI.
The case shows that the present-day law is in a very unsatisfactory state. There is no doubt that the SBI failed to
discharge its statutory functions properly causing loss to depositors. The RBI failed in discharging its statutory
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function to protect the interests of the depositors and yet the law could not impose any liability on RBI for lack of
accountability.
9. WRIT PETITIONS AND COMPENSATION

For long the Supreme Court and the High Courts showed reluctance to entertain claims for compensation through
the petitions under Arts. 32 and 226 respectively. For this purpose, one has to take recourse to the ordinary suit
procedure in civil courts. The primary reason for this judicial attitude was that claims for compensation invariably
raised disputed questions of fact and the courts were reluctant to decide such questions in writ petitions.
(1) Jiwan Mal
This traditional judicial attitude is indicated in Jiwan Mal Kochar v. Union of India . The petitioner claimed damages
against the Union of India, the State of Madhya Pradesh and other officials involved for the loss, humiliation and
indignity suffered by him, as they were responsible for certain remarks passed by the courts in his absence. The
Supreme Court contented itself merely by passing the order that these remarks "shall not be taken into
consideration in any proceeding" against the petitioner. The Court followed the traditional approach in denying the
relief by way of compensation to the petitioner by saying that the relief prayed for "cannot be granted in this
proceeding under Art. 32 of the Constitution ."
(2) Law Commission
In 1983, the Law Commission in a Working Paper, Damages in Applications for Judicial Review proposed
parliamentary legislation to enable an individual to combine a claim for damages along with the claim for any other
relief in a petition to the High Court under Art. 226. The Commission argued that such an enlargement of the power
of the High Court would remedy one defect in the existing procedural set up under which a claimant seeking both
judicial review of the nature contemplated by Art. 226 and damages for the wrong in respect of such review is
claimed must pursue each remedy in a different forum. He must seek the first relief in the High Court and the
second relief in the lower court. However, under the proposed legislation it would be discretionary and not
obligatory for the High Court to award damages even if the illegality of the act complained of was established. The
court could refuse to entertain a claim for compensation if there was undue delay in making the application, or the
grant of such relief would have involved determination of questions which could not be conveniently gone into in
proceeding under Art. 226, or for any other reason it was inappropriate to determine the question of compensation
in such an application.
This proposal of the Law Commission was based on the premise that the High Courts did not enjoy the power to
grant compensation under Art. 226. The Commission’ proposal was confined only to petitions made to the High
Courts under Art. 226. It did not extend to petitions under Art. 32 to the Supreme Court. This was a lacuna in the
proposal made by the Law Commission. No action was taken by Parliament in terms of the Commission’s proposal.
But then the judicial attitude began to undergo a change. The whole judicial scenario has changed since the Law
Commission submitted its above proposal.
Starting in 1981, with Khatri v. State of Bihar , as has already been discussed earlier, the Supreme Court initiated
the trend of giving compensation to petitioners coming before it under Art. 32 and complaining of infringement of
Art. 21 by State employees, especially the police.
In Rudul Shah v. Union of India , the Supreme Court observed:
"However, it cannot be understood as laying a law that in every case of tortious liability recourse must be had to a suit.
When there is negligence on the face of it and infringement of Art. 21 is there it cannot be said that there will be any bar to
proceed under Art. 226 of the Constitution. Right to life is one of the basic human rights guaranteed under Art. 21 of the
Constitution ."
In Nilabati Behera , the Supreme Court has observed:

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"The claim in public law for compensation for unconstitutional deprivation of fundamental right to life and liberty, the
protection of which is guaranteed under the Constitution, is a claim based on strict liability and is in addition to the claim in
private law for damages for tortious acts of public servants".
Since then, there has been a spate of cases in which the Court has awarded compensation on the ground of
violation of Art. 21 to the victims of police atrocities, police torture, custodial death of their relations. Reference may
be made to the several cases, discussed earlier, under the caption "Police Lawlessness."
In some cases of death of persons due to negligence of the concerned government employees, the Court has
awarded interim compensation on humanitarian grounds pending the settlement of the question of negligence in a
regular suit. In cases of riots, police firing etc. , the Court has ordered payment of ex gratia compensation to the
victims.
In D.K. Basu v. State of West Bengal , the Supreme Court awarded damages to the Victims of police torture. In the
instant case, the Supreme Court awarded compensation for the custodial death of a person on a writ petition under
Art. 32 as this infringed the person’s fundamental right under Art. 21. Thus, infringement of Art. 21 of the
Constitution is therefore compensated by awarding damages against the government whenever state employees
indulge in action violating Art. 21, or for its failure to protect the people against violation of their rights guaranteed by
Art. 21.
Compensation has also been awarded for medical negligence. In the instant case, the Supreme Court has ruled
that Art. 21 imposes on the state an obligation to safeguard the life of every person. The state-run hospitals and the
medical officers employed therein are duty bound to extend medical assistance for preserving human life. Violation
of this duty amounts to violation of Art. 21. Adequate compensation can be awarded by the court for such violation
by way of proceedings in a writ petition.
There have been a few cases where the Supreme Court has awarded compensation (or exemplary costs which in
substance is nothing else but compensation) either because the executive has grossly violated the individual rights
or the circumstances were such that the Court thought it to be just to award compensation under Art. 32 rather than
ask the petitioner to take recourse to a civil suit for the purpose. Thus, in Deoki Nandan Prasad v. State of Bihar ,
the Supreme Court awarded exemplary costs of Rs. 25,000 to the petitioner for harassment at the hands of State
officials in computing his pension after retirement from government service. He had to come to the Supreme Court
thrice, and the government disregarded for a period of 12 years the peremptory directions issued by the Court to
the government to pay his pension. In the words of the Court during which abominably long period "the mandamus
of... [the] court has been treated as a scrap of paper."
In Assam Sillimanite Ltd. v. Union of India , mining leases of the petitioner company were terminated prematurely
by the State Government without giving a hearing to the company. The company filed a writ petition in the Supreme
Court in 1973 challenging the government action, but the hearing on the petition kept on being postponed from time
to time and was finally taken up for disposal in 1990. The Court ruled that the government ought to have given a
hearing before terminating its lease. The Court also agreed to award compensation to the company saying after 17
years of the filing of writ petition, it would be unfair to ask the company to file a suit for the purpose. The Court
accordingly appointed an arbitrator to assess the quantum of compensation payable to the company.
What the Supreme Court does under Art. 32, the High Court can do under Art. 226. In fact, the High Courts have a
wider power to award compensation as Art. 226, unlike Art. 32, is not restricted to the enforcement of fundamental
rights. Under Art. 226, a High Court can exercise the power for a non-fundamental rights as well. In a number of
cases, the High Courts have awarded damages against the Government in writ petitions filed under Art. 226. Some
of these cases are given below.
(3) Vijaya
A woman patient was transfused with HIV infected blood in a hospital run by a government corporation because of
the negligence of the hospital staff. She claimed compensation through a writ petition under Art. 226. The Sau High
Court ruled in M. Vijaya v. Chairman and Managing Director, Singrani Collieries Co. Ltd . that the writ petition was
maintainable because Art. 21 of the Constitution which casts an obligation on the state to protect and preserve
human life.
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When a person’s fundamental right is infringed, he has a public law remedy of seeking compensation from the state
. The public law remedy is in addition to the private law remedy of a civil suit for damages. Accordingly, the court
awarded a compensation of Rs. 1 lac to the petitioner as a public law remedy. This was in addition to whatever
compensation a civil court might award to her in a civil suit.
(4) Chandrima
A Bangladeshi lady was gang rapped by a few railway employees at the Sealdah Railway Station. On a PIL writ
petition being filed in the respective High Court under Art. 226, compensation was awarded to the lady. Art. 21 of
the Constitution was pressed into service.
The court observed as regards protection to foreigners under Art. 21 :
"On this principle, even those who are not citizens of this country and come here merely as tourists or in any other capacity
will be entitled to the protection of their lives in accordance with the constitutional provisions. They also have a right to ‘life’
in this country"
(5) Lawyers Union
A child of seven years studying in a Municipal school was crushed to death by a vehicle while crossing road in front
of the school. The child had gone out during school hours to fetch drinking water, as water was not available within
the school premises. The High Court treated this as a matter of negligence to discharge the duty of care by the
school authorities and awarded damages on a writ petition filed under Art. 226. The court stated that the
importance of providing drinking water in the school cannot be over-emphasized. Provision of potable water in the
school is part of right to life enshrined in Art. 21 of the Constitution.
(5) Marri
Damages were awarded against the State Government for death of a prisoner due to the negligence of jail
authorities and jail doctors.
(6) Ghosal
An example of the High Court’s power to award monetary compensation under Art. 226 to an aggrieved person for
a non-fundamental right is furnished by Ghosal . The examination result of Ghosal was not declared by the
University for more than six years. His result was published only after he filed a writ petition under Art. 226 in the
Calcutta High Court. The single Judge in the High Court characterised it as "criminal delay" which occurred
because of the criminal negligence of the university employees. The court awarded Rs. 60,000 to Ghospal for
"mental torture agony and oppression" suffered by him for all these years. His career was also adversely affected.
The High Court asserted that the jurisdiction of a writ court is wide enough to give substantial relief to the aggrieved
petitioner.
But, on appeal, the Division Bench of the High Court set aside the award of damages on the ground that the matter
ought to be agitated in a civil court. On further appeal to the Supreme Court by the candidate, the court upheld the
High Court order.
The Supreme Court observed that the writ court would not award damages against public authorities merely
because they have made some order which turns to be ultra vires , or there has been some inaction in the
performance of the duties unless there is malice or conscious abuse. Before exemplary damages can be awarded it
must be shown that some fundamental right under Art. 21 has been infringed by an arbitrary or capricious action on
the part of the public functionaries and that the sufferer was a helpless victim of that act.
The burden of the Court’s opinion is that grant of compensation in a writ petition should be confined only to cases
of breach of human rights, and fundamental freedoms and should not be extended to every minor infraction of
public duty. A claim in public law for compensation for contravention of human rights and fundamental rights, "the
protection of which is guaranteed in the Constitution", is an acknowledged remedy. But under Arts. 32 and 226, the
court "would not award damages against public authorities merely because they have made some order which
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turns out to be ultra vires , or there has been some inaction in the performance of duties unless there is malice or
conscious abuse." The Court has observed in this regard:
"Before exemplary damages can be awarded it must be shown that some fundamental right under Art. 21 has been
infringed by arbitrary or capricious action on the part of the public functionaries and that the sufferer was a helpless victim
of that act."
It is now conclusively established that the Supreme Court under Art. 32, and the High Courts under Art. 226, do not
lack the power to award compensation in suitable cases. The matter lies entirely within the discretion of the court.
But still it is on a selective basis that the courts use this power. Recourse can be had to the writ jurisdiction if a case
of infringement of Art. 21 arises. The claim in public law for compensation for unconstitutional deprivation of the
fundamental right to life under Art. 21 is based on strict liability. This is in addition to the claim in private law for
compensation for tortious acts of public servants. The remedy in public law serves another purpose as well, viz . to
civilize public power.
If a law on the lines envisaged by the Law Commission, as stated above, is enacted by the Parliament, then the
award of compensation under Art. 226 may become a more general practice than what it is at present. It is
suggested that a similar power ought to be conferred on the Supreme Court with respect to its jurisdiction under Art.
32.
10. NEGLIGENCE OF MUNICIPAL BODIES

Municipal bodies are statutory bodies discharging many functions of public interest. In a number of cases, the
courts have held such bodies liable to pay compensation for the tortious acts of their servants.
(1) Venkatesh
In Venkatesh v. The City Municipal Council , the municipality demolished some buildings belonging to the plaintiff
for the purpose of broadening a road. The municipality did so without first taking any action to acquire the buildings
under the Land Acquisition Act. Accordingly, damages were awarded to the plaintiff to compensate him for the
injury sustained by him for the tortious act of the municipality.
(2) Prabhu Dayal
The decision of the Allahabad High Court in Town Area Committee v. Prabhu Dayal raises a debatable point.
Some unauthorised constructions by the respondent were demolished by the appellant committee in accordance
with statutory provisions. He filed a suit for damages, alleging malice on the part of the chairman and vice-chairman
of the committee. The first appellate court held that the chairman and vice-chairman of the committee had acted
with malicious intention in ordering the demolition of the building and, on this basis, damages were awarded to the
plaintiff. On appeal, the High Court ruled that the plaintiff could get compensation only if he proved to have suffered
injury because of an illegal act of the defendant. This principle is sound. But the court went further to assert that
"Malice does not enter the scene at all." "A legal act, though motivated by malice, will not make the actor liable to
pay damages." In other words, if the power is exercised in accordance with law, motive for its exercise is immaterial
in determining tortious liability.
This proposition may apply as between two private parties, but its application to an administrative agency is
extremely doubtful for it is a very well settled rule that mala fides vitiates an action even if it is otherwise within the
parameters of law. This is such an entrenched principle of Administrative Law that perhaps it may not be necessary
to cite any authority to substantiate the same. It should be applied to a municipal committee as well like any other
administrative authority. However, mere malice not amounting to abuse of discretion may not make an action a tort.
The Prabhu Dayal case can be distinguished from Prem Lal in that in the latter case, the court characterised the
action of the Administration as mala fide , and so it was ultra vires but in the former case, the action was not held to
be mala fide or ultra vires . Another flaw in the procedure adopted by the committee in the instant case was that the
plaintiff was not given any opportunity of being heard before passing the demolition order.
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In Cooper v. Wandsworth Corporation , damages were given against the corporation for demolition of an
unauthorised building without giving hearing to the owner thereof. This point was not raised in the case however.
The courts should now also keep in view the emerging tort of misfeasance in public office.
(3) Shiv Shankar
A picnic party of a municipal school children went out under the supervision of two teachers. One of the children
was drowned in a river near the picnic spot. The two teachers were held liable in negligence and the municipal
corporation, their employer, was held vicariously liable. The court directed that the corporation should pay the whole
decretal amount and not recover the same from the teachers.
(4) Brahmkishore
A cyclist riding a bicycle hit a ditch dug on the road, and injured himself. No caution was given and no
arrangements to fence the ditch were made by the municipality. The municipality was held liable as the accident
was caused solely by its negligence.
(5) Sobhagwati
Damages were awarded against the Delhi Municipal Corporation for death of persons on account of the collapse of
the clock tower in Chandni Chowk because the collapse was due to the negligence of the corporation.
(6) Bhiwandi Municipality
In Bhiwandi Municipality v. K.S. Works , the municipality started some work on a water channel (nallah ) in front of
the respondent’s shop. In doing so, the municipality acted negligently. The result was that during the raining
season, the water instead of passing through the channel flooded the respondent’s property. It was held that the
municipality was liable for damages on that account.
(7) Gopinath
In Mathura Municipality v. Gopinath , the municipality had the statutory right to lay down pipelines in the plaintiff’s
street, but due to negligence of the municipality in not maintaining the pipelines in a proper state of repair, the
property of the plaintiff was damaged. The court held that the municipality was liable.
(8) Sreedharamurthy
A Municipal Council served a notice of distraint warrant on the plaintiff and seized his furniture and books. The
plaintiff was a practising advocate of repute, and was paying income tax and wealth tax. The action of the council
was mala fide and out of ill will as the plaintiff had instituted suits against the Council. The High Court found that the
seizure was not bona fide and awarded substantial damages to the plaintiff.
(9) Bhanu
The respondent owning a house in Quilon complained twice to the municipality that an old coconut tree was posing
danger to his property. The municipality took no action to remove the tree. After some time, the tree fell on the
house causing physical impact to the building as well as mental shock to its occupants. Awarding damages against
the municipality, the High Court emphasized that under the relevant law a duty was cast on the municipality to be
vigilant about a tree likely to fall and, thus, likely to pose a danger to the person or property of an individual.
Negligence in the discharge of this duty was actionable.
(10) Manjuben
A municipality planted trees. One of the trees fell in good weather on a passerby who died instantaneously. The
court ruled that there was prima facie evidence of negligence on the part of the municipality and, accordingly, the
court awarded damages to the heirs of the deceased.
(11) Kumari
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A six year old child fell in an uncovered sewerage tank and died. The Supreme Court directed the State of Tamil
Nadu to pay Rs. 50,000/- as compensation. It could take appropriate action against the responsible authority as
there was some dispute as to which authority was responsible for negligence.
(12) Bishambar Nath
An important case in this series of cases is Lala Bishambar Nath v. The Agra Nagar Mahapalika, Agra . The
appellant was selling wheat flour (atta ) which was unfit for human consumption, but he had put up a signboard
informing the buyers of this fact. Nevertheless, the municipal staff initially stopped him from selling the flour and
then imposed restrictions on its sale so as to effectively preventing its sale thus causing loss to the appellant. He
sued the municipality for damages.
The municipality pleaded that its action was bona fide and in the interest of public safety and health. The Supreme
Court however ruled that the municipality was liable to pay damages to the appellant for the loss suffered by him.
Interpreting the relevant provision (S. 244 of the Municipalities Act) under which the impugned action was taken, the
Court ruled that the implication of the provision was that the municipality could seize or destroy an article of food,
drink, or an animal if "its sale should appear to be intended for human consumption and should it be unfit therefor."
The provision did not "contemplate any subjective satisfaction" of the inspecting officer." The seller should intend to
sell an article of food for human consumption. His intention is an objective fact. There should be present some facts
or circumstances which would incline a reasonable man to believe that the sale of an article of food or drink or an
animal was intended for human consumption." In the instant case, the appellant had already taken steps to inform
the customers that the flour was unfit for human consumption. As he was not selling the flour for human
consumption, the municipal staff could not take action under S. 244. "The orders passed by them under S. 244 are
invalid." Holding the municipality liable to pay damages to the appellant, the Supreme Court observed:
"It is immaterial that the respondents had acted bona fide and in the interests of preservation of public health. Their motive
maybe good but their orders are illegal. They would accordingly be liable for any loss caused to the appellants by their
action."
The Court thus referred the matter to the High Court for quantifying the damages payable by the municipality to the
appellant.
(13) Sushila Devi
A branch of a tree standing by the roadside broke down and fell on the head of the deceased who was going on a
scooter from his office to his home. The Municipal Corporation was held liable to pay compensation on the ground
of negligence. It was the duty of the Horticulture Department of the Corporation to carry out periodical inspection of
the trees and to take safety precautions to make the road safe for its users. This not having been done, the
municipal corporation was negligent in discharging its duty.
(a) Government Companies
The government sets up a number of statutory corporations or bodies incorporated under the Companies Act.
Most of these bodies are engaged in carrying commercial enterprises. Actions for damages against such bodies for
tortious acts of their servants are not covered by Art. 300 of the Constitution, and, therefore, the principles of the
general law of torts are applicable to them to the same extent as to any corporate body. Thus, in National Small
Scale Industries Corpn. v. Bishambhar Nath , the corporation was held liable for the damage caused to the building
of the respondent [of which the corporation was the tenant] due to the negligence of the employees of the
corporation.
11. NEGLIGENCE OF ELECTRIC UNDERTAKINGS

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In a number of cases, the courts have awarded compensation for injuries or death caused to persons because of
negligence of the statutory electricity boards to properly maintain electric installations.
(1) Manoharlal
In Manoharlal v. Madhya Pradesh Electricity Board , A naked copper wire used for conducting high voltage electric
energy snapped two poles. A person came in contact with the wire and died. The High Court ruled that the man had
died because of the negligence of the electricity board. The board had a statutory duty and authority to transmit
electricity. It would therefore be regarded as negligence on the board’s part if it omitted to use all reasonable known
means to keep the electricity harmless as the standard of care required was high due to the dangerous nature of
electricity.
The court also ruled that the burden to prove that there was no negligence on its part was on the board. The court
awarded compensation to the heirs of the deceased. In the instant case, the court spelled out a high standard of
care on the part of electric undertakings in maintaining electric lines in order to protect the people from being
injured.
(2) Shiv Charan Lal
A buffalo died by coming in contact with a live wire. The Rajasthan High Court in PSEB, Jaipur v. Shiv Charan Lal ,
ruled that the accident occurred because of the Board’s negligence and, accordingly, directed the board to pay
compensation to the owner of the buffalo. The court emphasized that the electricity board must maintain all its
installations, including poles and their fixtures, in such a condition that the passers-by, whether humans or animals,
on coming into contact with them "are not hit by any electricity wire on exposition of the electricity." Failure to do so
constitutes negligence on the part of the electricity board.
(3) Suresh Kumar
Rule 77 (3) of the Indian Electricity Rules, 1956, imposes a duty on the electricity board to hold 11 KV overhead
lines at a height of 15 feet above the ground. In the instant case, the line sagged to a height of 9 feet above the
ground. A boy came in contact with the line and sustained serious burns and injuries which affected his physical
and mental capacities. In Kerala State Electricity Board v. Suresh Kumar , the High Court ordered the board to pay
a sum of Rs. 1,02,000/- along with interest from the date of filing the suit by way of compensation to the plaintiff for
the injuries suffered by him.
(4) Angoori Devi
In Angoori Devi v. Municipal Corporation of Delhi , a sum of Rs. one lac was awarded to the widow of a person
who died as a result of an electric shock caused by leakage in electric wiring which the court ruled was due to the
negligence of the Delhi Electric Supply Undertaking.
(5) Thressia
An old agricultural labourer was electrocuted by a snapped wire. The incident took place in October, 1979. The
electricity board while admitting that the deceased’s dependants were entitled to the maximum compensation
prescribed under the rules, actually did nothing to pay the amount. When the matter was brought at last before the
Kerala High Court, and the board received court notice, it paid a paltry sum of Rs. 3000 to the widow in September,
1986. The court ruled that the board was negligent in maintaining the electric lines, that the ex gratia payment was
made by it after an unexplained long delay, and the amount was insufficient to meet the ends of justice.
Accordingly, the court directed the board to pay Rs. 72,000 as compensation to the widow. The court ruled that the
deprivation of livelihood of the petitioner and her children due to the board’s negligence had a direct nexus to Art.
21.
(6) Shakuntala Devi
A live electric cable resting on a pole got snapped and was lying in the rainy and water logged village. Villagers
made several complaints to the officials of the Delhi Electric Supply Undertakings. The police was also informed of
the snapped live wire posing a threat to the lives of the people in the area because of the leakage of electricity. No
action was taken by the undertaking to repair the snapped wire. R while returning home from the place of his
employment and not being aware of the leakage of electricity came in contact with the live wire, got electrocuted
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and died instantaneously on the spot. The Court maintained that although the undertaking was statutorily bound to
maintain electric installation lines in proper condition, it took no action to repair the fault. Pending settlement of the
question of negligence of the officials of the undertaking in a regular suit, the Supreme Court ordered (in a petition
under Art. 32 of the Constitution ) the undertaking to pay ex gratia an amount of Rs. 75,000 to R’s widow.
(7) Padma
A cyclist riding his cycle in the city came in contact with a live electric wire which had been detached from the
electric pole. The Orissa High Court granted compensation to the dependants of the deceased ruling that the victim
died because of the negligence of the electricity board.
(8) Grid Corporation
In Chairman, Grid Corp. v. Sukamani Das , the deceased met his death due to electrocution, because of the
negligence of the Corporation. The Corporation contested the claim. The Court refused to issue a writ under Art.
226 as there were disputed questions of fact involved and, therefore, a writ petition was not a proper remedy as a
writ court does not ordinarily decides questions of fact.
12. NEGLIGENCE OF POST OFFICE

(1) Nazim
Union of India v. Mohd. Nazim disposes of an interesting question pertaining to the liability of the post office. The
Supreme Court has ruled that post office which has been established by a statute is not a common carrier. It is not
an agent of the sender of the postal article for reaching it to the addressee. It is really a branch of the public service
providing postal services subject to the provisions of the Post Office Act and the rules made thereunder.
When an Indian resident sent value payable article to an addressee in Pakistan, and the Pakistan Government
though realised the value of the article, yet did not hand over the money to the Government of India as it had
suspended the V.P. service between the two countries, the Government of India would be absolved of its liability to
pay the price of the article to the sender in view of the proviso to Section 34.
Under the agreement between India and Pakistan, neither of the governments can be described as the agent of the
other. If the Pakistan Government decided to suspend the V.P. service and did not make over the money realised
from the addresses, it cannot be said that the Union of India had received the money but failed to pay. If the
Pakistan Government were a sub-agent of the Government of India, payment to the Pakistan Government would
have been as good as payment to the Government of India. But this is not the case. Under the arrangement
entered into between the two sovereign powers, none of them could be said to be employed by or acting under the
control of the other. The government of India was absolved from the liability under the proviso to S. 34.
13. NEGLIGENCE OF RAILWAYS

Running of railways by the Central Government is not regarded as a ‘sovereign’ act. The Union of India carries on
the business of running of railways. Profit element is not a necessary ingredient of carrying on business though
usually business is carried on for profit. It is to be presumed that the railways are run on a profit though occasionally
they are run at a loss. Art. 298 and Art. 19 (6) of the Constitution clearly indicate that the state can carry on
business. "It is the nature of the activity which defines its character. Running of railways is such an activity which
comes within the expression business."
(1) G.M.S. Rly
The Supreme Court held in State of Kerala v. G.M.S. Rly , that a suit for damages for non-delivery of goods sent
through the railway owned by the Government of India must be brought against the Union of India and not against
the General Manager of the concerned railway. The railway administration is not a separate legal entity having a
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juristic personality capable of being sued as such.
(2) S.S. Works
In Union of India v. S.S. Works , the Supreme Court stated that when consignments are booked at railway risk, the
liability of the railway is that of a bailee. The onus of proving that the railway employees took the necessary amount
of care and that they were not guilty of negligence rests on the railway authorities. In the instant case, damages
were awarded to the respondents.
(3) Krishna Goods
Krishna Goods Carriers (P) Ltd. v. Union of India , raises a question of tortious liability of the railways. The gate at
a level crossing was open. There was no danger signal to warn the public of the danger of any approaching train. A
truck driver crossed the railway line and collided against a goods train running at full speed. As a result of the
collision, the truck was damaged. The truck owner sued the railway for damages on account of negligence.
The Delhi High Court decreed the suit. The court held that the law was well settled. Where a railway line crosses a
highway or a public path, reasonable precautions must be taken to reduce danger to the public to a minimum, the
nature of the precautions depending on the circumstances. When the train is approaching, it is the practice of
railway authorities to keep the gates at a level crossing closed. Any neglect of this customary precaution is
evidence of negligence which may render the authority liable to any person who is hit or hurt. When the gate is
open, the public is reasonably entitled to assume that no train is approaching and that the line may be crossed with
safety.
The court said that the open gates amount to an invitation that the plaintiff could safely pass and if he were injured
he was entitled to recover. In the instant case, the defendant gave an express invitation, and that it was in
consequence of his acting upon it that the plaintiff came to grief.
The court also pointed to a statutory regulation requiring closure of the gate when the train is due to approach.
Railways were in breach of this statutory duty as well apart from the common law duty. The court rejected the
defence of contributory negligence raised by the railways with the following observation:
Railway authorities must take reasonable care to avoid injuring members of the public at a level crossing. If their
servants do something which would lead a reasonable man to believe that it is safe to cross the line and the plaintiff
thereupon attempts to cross and is run into by a train, there is evidence of negligence against the railway
authorities.
(4) Prag Ice
In contrast to the above Delhi High Court judgment, is the judgment of the Allahabad High Court in Prag Ice and Oil
Mills Firm, Aligarh v. Union of India . The driver of the plaintiff’s tractor, while attempting to cross the railway line at
an unmanned level crossing, got his tractor stuck up between the rails and despite efforts of the driver, the tractor
could not be cleared from the railway track before the arrival of the train. As a result, the tractor was thrown off by
the impact of the railway engine, causing damage to the tractor, although the driver of the train stopped the train as
quickly as he could in the circumstances. No effort was made by the tractor driver to give some signal to the train.
The level crossing was away from any town or village. The road was not a busy one. The railway administration had
provided chains to be hung on each side and had also put signboards on each side, warning the public of the
danger of passing trains.
The owner of the damaged truck filed a suit for damages against the Union of India. The High Court held that the
railway administration was not liable, as the damage caused to the tractor was of the plaintiff’s own making. The
court held that while the land beneath the railway crossing is railway property and the public have a right to cross
the railway line at the point where a level crossing is provided, that does not necessarily imply a corresponding
obligation on the railway to close all such level crossings by gates or other devices when a train passes that way.
The public while crossing the railway line must be on the look out for trains coming from either direction. The fact
that a level crossing carried a warning of the danger of coming trains was sufficient and a member of the public who
crosses a railway line does so at his own risk.
The difference between the approaches in the Delhi and Allahabad High Courts appears to arise from the
circumstance that while the Delhi ruling related to a manned crossing, the Allahabad ruling referred to an unmanned
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crossing in a deserted place, and the court’s statement that a person crosses a railway line at his own risk refers to
crossing at an unmanned crossing.
(5) Hanuman Prasad
To the same effect is the ruling of the Calcutta High Court as regards an unmanned level crossing in Union of India
v. Hanuman Prasad . A collision occurred between a truck and a railway engine at an unmanned level crossing
resulting in damages to the vehicle. The plaintiff sued the union of India claiming damage and the defendant denied
that it was negligent. The trial court held the defendant liable holding that the railway administration was negligent is
not providing for manning the level crossing. On appeal, the High Court ruled that there was no negligence on the
part of the railway administration. The railway had put up a warning board cautioning the passers-by. There was
whistling from the engine at the level crossing and there was no obstruction of vision at the site. It was the duty of
the driver of the motor vehicle to look around at the level crossing before crossing the same.
(6) Nathulal
Section 124 of the Railways Act, 1989, is parallel to S. 82A of the Railways Act of 1890. Under this statutory
provision, compensation is payable to a passenger notwithstanding any other provision to the contrary for death or
injury when "in the course of working a railway accident occurs, being either a collision between trains of which one
is a train carrying passengers or the derailment of or other accident to a train or any part of a train carrying
passengers."
The liability of the railways to pay compensation is "whether or not there has been any wrongful act, neglect or
default on the part of the railway administration."
The amount of compensation payable is fixed by the statute. Thus, the provision introduces a ‘no fault’ liability of
the railways. The prescribed compensation is payable by the railways when a passenger train meets with an
accident and a passenger suffers injuries or dies, irrespective of any fault or negligence on the part of the railways.
The claimant is not required to prove negligence or default or wrongful act on the part of the railway or its
employees. "The Railway has been made an insurer in respect of the passenger in case of injury or death caused
to the passenger by any accident to the train in which the passenger was travelling proof of ‘due care’ would thus
be no defence to the Railway where this section applies."
(7) Srinivasa
It has been ruled that under the above provision compensation is payable to a passenger only when the passenger
train meets with an accident and not in other situations. In other cases, compensation is claimable only if
negligence is proved on the part of the railways. Thus, when a railway passenger fell off the bogie when it was
being shunted at a railway station and thereby suffered injuries, it was held that compensation could not be claimed
under the above provision as there was no accident to the train. When a heavy girder, loosely and carelessly fixed
for electrification work, suddenly fell on the train, and the plaintiff who was then boarding the train received grievous
injuries, it was held that the case was covered under the above provision as it fell within the expression ‘other
accidents to a train.’
(8) Imaman
In Imaman v. Union of India , the appellant’s husband was knocked down by a goods train at a railway station and
suffered death. He was a bona fide passenger having a ticket for his destination; he was passing over the railway
track as there was no overbridge provided to reach the platform to catch the train; the goods train was passing the
station at a high speed which was in excess of the permissible limit and neither was any warning given by the
station staff nor any whistle given by the train driver. In these circumstances, the court held the railways liable for
damages on account of negligence.
(9) Ulhasamnan
A woman was alighting from the train at a railway station when the train suddenly started moving without giving a
whistle. As a result of this, the woman fell and died. The Kerala High Court held that the railways had been clearly
negligent. The Court emphasized that the railways are obligated to carry on their activities with reasonable care and
skill so as to prevent accidents. Under the rules made under the Railways Act it was incumbent on drivers to
observe certain precautions while starting or stopping trains.
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A practice has come into vogue of announcing ex gratia payment of compensation to persons injured or dead after
a railway accident.
(10) Narayanan
The wife of the appellant lost her life at the hands of the dacoits while travelling in the first class railway
compartment. It was found that the incident exhibited negligence on the part of the railway employees in the
performance of their duties. In the circumstances, the Supreme Court directed the railways to pay Rs. 2 lacs as
compensation to the appellant for the death of his wife. The Court rested the case on the breach of common law
duty of reasonable care lying on all carriers including the railways. In the instant case, there was "a complete
dereliction of duty which resulted in a precious life been taken away, rendering the guarantee under Art. 21 of the
Constitution illusory."
14. SPECIFIC STATUTORY IMMUNITY

A reference to Art. 300 of the Constitution shows that it is open to Parliament or a State Legislature to enact a law
giving a right of suit in favour of or against the government in a case in which such a right does not exist, or taking
away or restricting an existing right of suit. A number of statutes make provisions immunizing the government or its
employees from any liability.
The usual formula for the purpose is: "No suit, prosecution or other legal proceeding shall lie... for anything in good
faith done or intended to be done under this Act."
However, there is a variation in the statutes as far as the "subject" of protection is concerned. In some cases, it
extends to both the government as well as its officers; in some, to any person for anything done under the statute
(it is doubtful whether any person would include the government also); and in some, to officers of the government
only.
It is difficult to explain why in some cases protection has been extended to the government but not in others. There
may be two possible explanations for exclusion of the government from the scope of immunity. One, the function
involved is a sovereign function and hence protection would already be available to the government as explained
above. Two, since the function has been conferred on a specified official or the authority directly by the statute,
government would not be liable in such a case under the legal position as it stands now. It is, however, doubtful
whether in all cases, these have been the reasons for not giving the benefit of the protection clause to the
government. Also, as the case law has developed in recent years, both of these grounds of exemption of
government from liability have become tenuous.
The number of statutes containing immunity clauses of the types mentioned above is very large. In fact, it is more
or less an established practice to insert some kind of exemption clause in the legislation.
As far as judicial officers including a judge, magistrate, justice of the peace collector or other persons acting
judicially, and also persons bound to execute warrants or orders of such persons are concerned, S. 1 of the Judicial
Officers’ Protection Act, 1850, protects them in two broad categories of acts done or ordered to be done in his
judicial capacity:
(1) acts which are within the limits of his jurisdiction;

(2) acts which may not be within the jurisdiction of the judicial officer, but are, nevertheless, done or ordered to
be done by him, believing in good faith that he had jurisdiction to do them or order them to be done.
In case of the acts in the first category, the protection afforded is absolute, and no enquiry will be entertained as to
whether the act done or ordered to be done was erroneous or even illegal, or was done or ordered without believing
in good faith. In the case of acts in the second category, the protection is available if at the time of doing the act, the
judicial officer acting judicially, in good faith believed himself to have jurisdiction to do the same. Thus, if the judicial
officer is acting in the discharge of his judicial duties, then in order to exclude him from the protection of this statute,
the complainant has to establish that—(1) the judicial officer complained against was acting without any jurisdiction
whatsoever, and (2) he was acting without good faith in believing himself to have jurisdiction.
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In a criminal case, five persons were prosecuted for committing certain offences, of whom two were acquitted and
three convicted by the Supreme Court. The Court directed that the three convicted persons be arrested if they failed
to surrender themselves. This direction was communicated to the committing magistrate, a judicial officer. All that
he was required to do was to issue warrants of arrest against the three connected persons if they did not surrender.
This was a purely ministerial act. The judicial officer’s ahalmad prepared warrants against all five persons and he
negligently signed them. Thus, the two acquitted persons were arrested and lodged in the police lockup till they
were released. The High Court awarded Rs. 500 as damages against the judicial officer. The court ruled that he
was performing a purely ministerial act and was not protected by the Judicial Officers Protection Act. He signed
warrants without looking into the court’s orders. He failed to apply his mind to the facts of the case. "He was
certainly not executing any order in signing warrants for those who had been acquitted."
A protection clause protects act done in good faith. Under the General Clauses Act, 1897, an act is deemed to be
done in good faith if it is done honestly, whether negligently or not. Therefore, by suitable legislation, the protection
may be extended to negligent performance of their duties or exercise of their powers by government employees
under the statutes. It was rightly pointed out by the Law Commission that such protection clauses should not be
made "to extend to negligent acts however honestly done." It therefore suggested that the relevant clauses in the
statutes be examined for this purpose. If the recommendation of the Law Commission were accepted, it would
make it unnecessary to have such protection clauses on the statute book, because no express provision is needed
to protect acts done with reasonable care in the discharge of statutory duties or powers as under the common law
such act do not amount to torts even though these may injure an individual.
A protection clause does not protect the government if the power is exercised in bad faith in the narrow sense of an
exercise of power out of dishonest intent or corrupt motive. In Prem Lal v. U.P. Government , the power of
requisitioning the two motor vehicles of the plaintiff was exercised under the U.P. Requisition of Motor Vehicles
Emergency Powers Act, 1947 not because the government genuinely needed the vehicles but "to teach him a
lesson" because of his certain political sympathies. It was held that the requisitioning order was mala fide and an
abuse of power and the plaintiff was entitled to file a suit for damages.
The Supreme Court in Bhiwandi Municipality v. K.S. Works has also used the term bad faith in a broader sense.
While considering the scope of protection conferred on a municipality by a statutory provision for "anything in good
faith done or intended to be done," the Court made a distinction between reckless disregard of consequences and
negligence, the former amounting to dishonesty or bad faith . Following Jones v. Gordon , the Court stated:
An authority is not acting honestly where an authority has a suspicion that there is something wrong and does not
make further enquiries. Being aware of possible harm to others, and acting in spite thereof, is acting with reckless
disregard of consequences. It is worse than negligence, for negligent action is that, the consequences of which, the
law presumes to be present in the mind of the negligent person, whether actually it was there or not. The legal
presumption is drawn through the well known hypothetical reasonable man. Reckless disregard of consequences
and mala fide s stand equal, where the actual state of the actor is relevant. This is no in the eye of law, even if there
might be variations in the degree of moral reproach deserved by reckless and mala fide s.
Here the protection clause was held as not affording protection to the municipality from liability to pay
compensation for injuries to the property of the respondent, as the action of the municipality was reckless.
In Bhiwandi , the fact situation was that the municipality started some work on a water canal (nallah ) in front of the
respondent’s shop. In doing so, the municipality acted negligently the result was that during the rainy season, the
water instead of passing through the canal flooded the respondent’s property. The municipality was held liable to
pay compensation on that account inspite of the protection clause.
In Mathura Municipality v. Gopinath , the municipality had the statutory right to lay down pipelines in the plaintiff’s
street, but due to negligence of the municipality in not maintaining the pipelines in a proper state of repair, the
property of the plaintiff was damaged. The court held the municipality liable to pay compensation in spite of the
protection clause.
A statutory provision provided that no suit shall lie against the State Government or any of its employees for
anything done or purporting to be done in good faith or in respect of alleged neglect or omission to perform any
duty...except for the loss or the misapplication occasioned by the wilful default or gross negligence of any office of
the State Government. In State of Bihar v. Bishnu Chand , the Supreme Court rejecting a claim for damages
pointed out that there was no ground to hold that either the State Government or any of its officers while performing
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duties under the Act had not acted honestly. As soon as the error was pointed out, steps were taken to rectify the
same. There was no proof of any wilful default or gross negligence on the defendants’ part. There was also no proof
of deliberate abuse of statutory power nor of usurption of a power which the authorities knew that they did not
possess.
Explaining the purport of the expression "no action shall lie for acts done in good faith" in S. 15 of the Essential
Commodities Act, the Supreme Court stated in S.I. Syndicate v. Union of India that "no suits or other legal
proceedings, apart from those specified in the Constitution, can be brought against the Government or its officers
for any action taken by the Government in fixing the price in sugar in good faith." When there was no allegation that
government action was lacking in good faith, no proceeding could be brought in a civil court to claim damages
against the government even if its bona fide action was vitiated by some illegality.
From the above, it is clear that the statutory formula protects a bona fide action even though illegal, but not a mala
fide action, against a claim for damages for injury caused to a person by the official action in question. The
expression mala fide includes a reckless action but not a mere negligent action.
15. ACT OF STATE

The government is not regarded as liable for an "act of state." An act of state, under the English law, is an act of
the executive as a matter of policy performed in the course of its relations with another state or during its relations
with the subject of that state, unless they are temporarily within the allegiance of the Crown. An act of state is an act
of a sovereign against another sovereign or an alien outside its territory. It is a sovereign act which is not grounded
in law. As an act of state derives its authority not from municipal law but from ultra-legal or supra-legal means,
municipal courts have no power to examine the propriety or legality of an act of state. There is immunity from
courts’ interference in respect of an act done by the state against an alien outside its territory.
The above mentioned principle has been applied in India in a number of cases in the pre-Constitution era with
respect to the princely states existing at the time. Some of these cases are noted below.
(1) Nabob of Carnatic
In Nabob of Carnatic v. East India Co. , a suit brought by the Nabab against the Company for an account under a
political treaty between the Company and the Nabab was dismissed as it was a matter between two sovereigns, the
Company having acted throughout in its political capacity. In East India Co. v. Syed Ally , it was held that the
resumption by the Madras Government of a jagir granted by the former Nabab of Carnatic before the date of
cession to the East India Company was an act of sovereign power and so exempt from the jurisdiction of the courts.
(2) Kamachee Boye Sahaba
The most important case on ‘act of state’ is Secretary of State v. Kamachee Boye Sahaba , in which a claim was
made to properties seized by the company as an escheat to the paramount power on the death of Raja of Tanjor
without heirs. The Raja was regarded as a sovereign in treaty relations with the East India Company. The Privy
Council held that as the seizure was made by the British Government, acting as a sovereign power, through its
delegate the East India Company, it was an act of state which was not sought to be justified on grounds of
municipal law. The courts, therefore, had no jurisdiction in the matter, for transactions between independent states
are governed by laws other than those which municipal courts administer.
(3) Raja of Coorg
In Raja of Coorg v. East India Co. , the Company had made war against the Raja of Coorg, annexed his territory,
and taken his property. The Raja filed a suit against the Company but it was held that the Company had acted in its
sovereign capacity and the suit was dismissed.
(4) Forester
There can be no act of state between a state and its subjects, and such an act is not immune from judicial scrutiny.
If the government justifies its act under a municipal law, that act cannot be an act of state. Its legality and validity
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must be tested by the municipal law and in municipal courts. The principle can be illustrated by reference to
Forester v. Secretary of State .
The Government of India on the death of Begum Sumroo resumed property formerly belonging to her. The legality
of this action was questioned by her heirs. It appeared that the Begum had very nearly, but not quite, acquired the
position of a petty Indian sovereign, that she was a British subject at the time of her death and that the seizure in
question was not the seizure, by arbitrary power, of territories which up to that time belonged to another sovereign
state, but was the resumption, under colour of legal title, of lands previously held from the government by a subject
under a particular tenure, on the alleged determination of that tenure. It was held by the Privy Council that Begum
Sumroo was not a sovereign princess and that as the resumption of land here was done under colour of legal title of
land previously held from government by a subject, it could not be regarded as an act of state and the questions
raised by the suit were cognizable by a municipal court.
These principles have been applied in independent India as well.
(5) Memon Haji Ismail
Acquisition of territory by a sovereign state for the first time is an act of state, and it does not matter whether the
acquisition has been brought about by conquest or cession. An inhabitant of the territory can have only such rights
as the new sovereign recognizes and the rights he had under the rule of the predecessors avail him nothing. In
State of Saurashtra v. Memon Haji Ismail , the administration of the princely State of Junagadh was taken over by
the Government of India. The administrator resumed some property which had been gifted by the former Nawab of
Junagadh. A suit was brought against the government claiming the price of the property. The Supreme Court
pointed out that an act of state was an exercise of sovereign power against an alien and neither intended nor
purporting to be legally founded. When the administration of the State was assumed by the Government of India,
Junagadh was a sovereign State, and its people were aliens and not Indian citizens and, therefore, the resumption
of the property was an act of state, for which no action could be brought in a court.
(6) Vora Fiddali
In State of Gujarat v. Vora Fiddali , certain rights created by a princely State in the State forests on the eve of its
merger with the Indian Union was repudiated by the Government of Bombay which took over the administration of
the State on behalf of the Centre. The Supreme Court held that the merger was an act of state; the grantees from
the previous ruler did not carry with them, on a change of sovereignty, as subjects of the succeeding sovereign any
inchoate rights as against the new sovereign but their right in so far as enforceability against the new sovereign was
concerned sprang into existence only on recognition, express or implied, by the duly constituted competent
authorities of the succeeding sovereign.
Since the rights in question were not recognised by the Government of India, the grantees had no remedy. The
government may take time to consider and merely delay in repudiating the grants would not militate against the act
of state, unless there was clear indication that the government had accepted the right either expressly or by
implication. In the present case, the court did not find any evidence of acceptance of the grants by implication.
(7) Bansidhar
The princely State of Bharatpur established a mandi at Bharatpur. To encourage people to purchase plots therein,
the State granted a reduction, to prospective buyers of plots, of 25 per cent in the customs duty on all goods
imported from outside into the mandi and sold for consumption within the State as well as exported from the mandi .
The appellants purchased a plot in the mandi in 1946. The State then merged with the Matsya Union which later
merged with the Rajasthan State which abolished all free mandis . Thereupon, the appellants field a suit for
recovery of the excess amount of customs duty paid to the Rajasthan Government, but in Bansidhar Premsukhdas
v. State of Rajasthan , the Supreme Court rejected the claim of the appellants. The Court ruled that accession of
one State to another is an act of state and the successor State does not automatically inherit the rights and
obligations of the merged State. There is no subrogation—the successor State is not subrogated ipso jure to the
contracts executed by the merged State. A contract of the preceding State terminates with the change of
sovereignty unless the contract is ratified by the succeeding sovereign State. The contractual liability of a former
State is binding on the succeeding sovereign State only if it recognises that contractual liability. The reason is that
the taking over of sovereign powers by a State in respect of the territory which was not till then its part, is an act of
state and the municipal courts recognised by the new sovereign have the power and the jurisdiction to investigate
and ascertain only such rights as the new sovereign has chosen to recognise or acknowledge; and such recognition
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may be express or may be implied from the circumstances.
16. COMMON LAW TORTIOUS LIABILITY OF GOVERNMENT

Common Law Tortious Liability of Government
India is a common law country. In the area under discussion, viz . claims for compensation against government,
English cases are frequently cited in India. It may, therefore, be instructive for Indian administrative lawyers to take
note of the trends in Britain on the question of State Liability.
It may however be emphasized in the very beginning that there are many points of deviance between India and
Britain in the area under discussion because of three main reasons:
(1) India’s colonial history;

(2) India having a written constitution guaranteeing fundamental rights to the people; and
(3) Judicial creativity in India which has liberalised the Indian law of compensation against government over a
period, especially Art. 21 of time.
The legal position at present obtaining in Britain and common law is given below.
The basic principle is that if the Administration commits a tort while exercising its powers, then it should
compensate the person injured. Or, put differently, if a person seeks compensation from the Administration for its
action or inaction, then he has to bring the fact-situation under the rubric of an established tort.
As the Justice-All Souls report puts it:
If what is done by the administration can be made to fit within one of the recognised torts (such as trespass,
nuisance, negligence, breach of statutory duty) then liability can be established; but if the wrongful conduct will not
fit into one of these pigeon-holes there is no liability. The objection to this approach is that it ignores the fact that
wrongful conduct by the administration is capable of inflicting damage in ways in which private persons cannot. The
administration has this capacity both by virtue of the enforceable statutory powers with which it is often clothed and
through the pressure and influence which it applies.
English Law has traditionally taken a narrow approach to the problem of civil liability of the Administration. For this
purpose, the courts take recourse to the familiar tort categories. The approach of the courts has been to apply to
public authorities more or less the same rules of liability as they apply to private persons. Therefore, if what the
Administration has done can be made to fit within a recognized tort, its liability can be established.
(1) Hedley Byrne
For example, there is the tort of negligent misstatement. It emerges out of the decision of the House of Lords in
Hedley Byrne & Co. v. Haller and Partners . The House of Lords held in this case that the law will imply a duty of
care when a party seeking information from a party possessing a special bill trusts him to exercise due care. A
negligent, though honest, misrepresentation in breach of this duty may give rise to an action for damages. In this
case, it was held that in principle there could be liability for financial loss caused through reliance on a negligent
misstatement contained in a banker’s reference. In Sharp Ministry of Housing v. Sharp it has been held that an
individual who relied to his detriment on inaccurate statements made to him by a public official in course of his
duties had a remedy in damages against both the official and his employing authority. This tort can be useful in
cases of misleading official advice—a topic discussed earlier under Promissory Estoppel.
However, if the wrongful conduct would not fit into one of these pigeon-holes, no liability of the Administration
arises. Thus, courts have no power to award damages for many types of wrongful administrative conduct which
cannot be made to fit recognised common law torts. This approach ignores the fact that by its wrongful conduct, the
Administration is capable of inflicting damages on a person in many ways in which a private person cannot do,
because of the fact that administration is armed with vast statutory powers which are not available to private
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persons and, therefore, the range of private action is much smaller than that of the Administration.
(2) Allen
If the loss caused to the individual is the inevitable result of the exercise of the statutory power, then there can be
no claim for damages against the Administration. This principle is illustrated by the decision of the House of Lords in
Allen v. Gulf Oil Refining Ltd . This case was concerned with allegations of nuisance by the plaintiff by smell, noise
and vibrations because of the construction of an oil-refinery nearby. The plaintiff’s action was one of the 53 actions
which were brought by the local residents against an oil company constructing the refinery. Gulf pleaded that its
activities were authorised by an Act of Parliament and so it was immune from liability in nuisance. The relevant Act
in question had empowered Gulf to acquire land and construct works thereon for the purpose of building an oil
refinery. The Court of Appeal held Gulf liable for nuisance. LORD DENNING propounded an entirely new approach
to statutory interpretation to take in the contemporary realities. He suggested that the modern statutes be
interpreted on a new principle rather than on the 19th century principles, viz. , wherever any work is undertaken
under a statutory authority which may cause damage to the people living in the neighbourhood, it should not be
assumed that Parliament intended that damage should be done to innocent people without redress whether or not
the undertakers use due diligence. Statutory authority may enable the undertakers to construct and operate the
undertaking but does not excuse them from paying compensation for injury done to those living in the
neighbourhood. Suppose there is an explosion in the refinery: the undertakers ought to compensate those who are
killed or injured or whose property is damaged.
On appeal, the House of Lords by majority reversed the Court of Appeal. The House of Lords basing itself on
statutory authority ruled: "Where Parliament by express direction or by necessary implication has authorised the
construction and use of an undertaking or works, that carries with it an authority to do what is authorized with
immunity from any action based on nuisance." The Act in question showed that Parliament considered it in the
public interest that a refinery be constructed. However, the refinery would be liable to pay compensation for
negligence and for nuisance over and above that which was inevitable. "To the extent and only to the extent that
the actual nuisance (if any) caused by the actual refinery and its operation exceeds that for which immunity is
conferred, the plaintiff has a remedy." The House of Lords was not however unanimous in its decision and divided
four to one, Lord Keith dissenting. He interpreted the Act in question restrictively and ruled that it had not
specifically authorised the Gulf to construct a refinery on the site in question.
The view adopted by the majority in Allen is the traditional one regarding the absence of negligence. There is
however one ray of hope in the observation of LORD EDMUND-DAVIES on the question of what is to be regarded
as the ‘inevitable result’ of an authorised activity: "It would be for the defendant to establish that any proved
nuisance was wholly unavoidable, and thus quite regardless of the expense which might necessarily be involved in
its avoidance." This view may deprive many statutory undertakers of their defence, "since there are relatively few
nuisances which cannot be cured by the application of unlimited sums."
The sum and substance of the pronouncement by the House of Lords in Allen is that where statutory authority
applies, it operates as a defence to an action for private nuisance. It shows that if the courts are not willing to give
damages in case of nuisance committed by private parties functioning under statutory authority, how difficult will it
be for them to agree to provide any compensation against a public authority in a comparable situation. LORD
DENNING had propounded a valid and worthwhile proposition regarding interpretation of modern statutes, but the
House of Lords did not explore this suggestion any further.
Most of the cases claiming compensation from the Administration are based on the tort of negligence, which is thus
the most commonly invoked tort in public law. The plaintiff claims that he has suffered loss because of the
negligence on the part of an administrator in discharging the statutory functions vested in him. It is accepted that if
power is exercised negligently, Administration may be required to compensate the plaintiff for the damage that may
have been caused to him, but the basic question which arises is whether in the specific fact-situation, the
Administration owes a duty of care to the plaintiff.
For some time, it appeared that the courts were seeking to extend the scope of liability in negligence of public
authorities. Courts were seeking to widen the liability of public authorities when they performed their lawful duties,
or exercised their powers negligently and, thus, caused damage to an individual, but it now appears that the courts
have adopted a cautionary stance as they have come to realise that if the scope of liability is extended too far, it
may act as a clog on the decision-making process, the administrators may be reluctant to take decisions because of
the apprehension that they may be held liable in negligence.
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(2) Dorset
A case depicting the judicial endeavour for expanding the scope of liability of public authorities for negligence in
discharging their functions is Dorset Yacht Co. Ltd . v. Home Office . Youths undergoing borstal training escaped
one night from the custody of the borstal officers, went aboard a yacht and damaged it. A claim based on
negligence of the borstal officers was brought in alleging careless supervision by these officers.
The Court held that the borstal officers owed a duty of care to the plaintiff to exercise proper supervision over the
borstal boys in their charge as it was reasonably foreseeable that damage to the plaintiff’s property was likely to
occur if the officers failed to exercise proper control or supervision. It was also held that there was no ground in
public policy for granting immunity from liability to the Home Office or its officers. In this case, vicarious liability was
imposed on the Home Office for damage caused as a result of borstal officers negligently allowing borstal boys to
escape from custody.
Lord REID observed:
"Where Parliament confers a discretion the position is not the same. Then there may, and almost certainly will, be errors of
judgment in exercising such a discretion and Parliament cannot have intended that members of the public should be
entitled to sue in respect of such errors. But there must come a stage when the discretion is exercised so carelessly or
unreasonably that there has been no real exercise of the discretion which Parliament has conferred. The person purporting
to exercise his discretion has acted in abuse or exercise of his power. Parliament cannot be supposed to have granted
immunity to persons who do that."
(3) Dutton
Another case in the same line is Dutton . The Council’s building inspector had inspected the excavations for a
building’s foundations, and approved them. The foundations were then laid and the building was completed. The
foundations were partly on the site of an old rubbish tip and should not have been passed by the Council’s
inspector. The house was then sold to the plaintiff. It later subsided causing serious damage to the structure. The
Court held that the local authority was liable to the plaintiff, because its inspector, acting under the bye-laws of the
Council, had committed negligence in inspecting the foundations of the house.
Lord DENNING M.R. in his judgment said that a local council entrusted with controlling most facets of building
activities had a duty to exercise its powers carefully. Breach of that duty gave rise to a negligent action. Dutton
evidences an increased judicial willingness to impose civil liability on public authorities and their employees for
exercise of statutory powers. In the instant case, LORD DENNING left open the question whether there will be
liability for failure to act at all. Analytically, the answer ought to be in the affirmative once a positive duty is found
and it is not performed.
(4) Anns
The most outstanding case in this series is the House of Lords decision in Anns . It was observed there:
"The broad general principle of liability for foreseeable damages is so widely applicable that the function of the duty of care
is not so much to identify cases where liability is imposed so as to identify those where it is not..."
According to Wade this ‘epoch-making’ decision denotes "a remarkable extension of the law of official liability" and
"has opened up a whole new area of actionable negligence."
In Anns , the foundations of the building were thirty inches deep whereas the builder’s plans deposited with the
local authority showed 36 inches or deeper. The plaintiffs who were lessees were assured by the authority that the
inspection of the foundations must have been carried out but it was unable to trace any records thereof. The
building developed cracks due to weak foundations. He claimed compensation from the council on the ground that
the council had been negligent in its inspection of foundations. The matter reached the House of Lords on a
preliminary point of law as to the duty of care on the part of local authority.
The main judgment was that of Lord W LBERFORCE who said that Lord DENNING in Dutton "puts the duty too
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high." He made an explicit distinction between "the policy area" and "operational area." More ‘operational’ a power
or duty may be, the easier it is for the courts to impose on it a common law duty of care. Lord WILBERFORCE
observed in Anns :
"Many statues also prescribe or at least presuppose the practical execution of policy decisions: a convenient description of
this is to say that in addition to the area of policy or discretion there is an operational area. Although this distinction between
the policy area and the operational area is convenient, and illuminating, it is probably a distinction of degree. Many
‘operational’ powers or duties have in them some element of ‘discretion’. It can safely be said that the more ‘operational’ a
power or duty may be, the easier it is to superimpose on it a common law duty of care."
The policy decision would comprehend such matters as, depending upon the resources available to the local
authority, how many inspectors, with what expert qualifications, it should recruit, how often inspections are to be
made, what tests are to be carried out." Within the limits of this policy decision, the operational area is concerned
with the manner of carrying out inspection. The authority "would be liable to the plaintiffs for breach of duty if it were
proved that its inspector, having assumed the duty of inspecting the foundations, acting otherwise than in the bona
fide exercise of discretion under the Act, did not exercise reasonable care."
It was held in this case that the local authority owed a duty of care to the eventual owners of houses as to the
manner in which it performed its function under the Public Health Act, 1936, of inspecting the foundations of such
houses. Breach of this duty could be established if either—(a) the Council’s employees had carelessly inspected
the foundations, or (b) the foundations had not been inspected at all and the Council had failed in the exercise of its
statutory discretion to take reasonable care to ensure that the relevant by-laws were complied with.
CRAIG illustrates the distinction drawn in Anns between the ‘policy’ area and the ‘operational’ area thus: "If, as a
matter of policy, the local authority decides that their inspectors can only carry out certain limited tests the costs of
more extensive checks being prohibitive, the individual could not claim compensation simply because a further test
would have revealed the defect... However, if the inspector was simply careless in performing the tests prescribed
liability would ensue. This would be purely operation negligence."
As far as failure to exercise discretion is concerned as WADE says, "It used to be a familiar proposition that mere
failure to exercise a power was not actionable." This is no longer true. Whether an authority is liable in damages for
its failure to act will depend upon whether there was a duty to act or not, and if it was a statutory power, whether it
acted negligently in not acting. To illustrate, in the above situation, if the authority decides that it would not conduct
any inspection at all, the liability would depend on whether in taking the decision the authority acted negligently or
not, or the action was merely ultra vires . Craig says that in such a case the question before the court would be:
"Did the local authority take reasonable care in coming to the conclusion not to inspect at all?... Ultra vires will not
help where there has been negligence... If the action of the authority is deliberately wrongful or malicious, then
there is no doubt that it will be liable in damages."
In Anns , the House of Lords came close to establishing a general principle of fault liability. Anns (along with Dorset
and Dutton ) pointed to a significant tendency to abandon the traditional common-law system of tort liability,
characterised as a system of pigeon-holes, of typical torts, each of them different in structure, a system entailing the
need to find "a peg" on which to have the action. These cases were consistent with Lord MACMILLAN’S aphorism
in Donoghue v. Stevenson that "the categories of negligence are never closed." These cases resulted in the
extension of fault liability to the field of mere economic loss.
The Anns principle has been applied in a few cases. For example, in Dennis , negligence by a local authority in
approving plans for a building without considering the adequacy of the proposed foundations, was held to be
compensable. In Fellowes , Anns principle was summarised as follows:
"Where a plaintiff claims damages for negligence at common law against a public body or official purporting to act in
pursuance of a power conferred by statute or other legislation, he can only succeed if he can show: (1) that the act
complained of was not within the limits of a discretion bone fide exercised under the relevant power; (2) that having regard
to all the circumstances, including the legislation creating the relevant power, there was sufficient proximity to create a duty
of care on the defendant to avoid damage to the plaintiff of the type complained of, and no ground for negativing (or
reducing or limiting) such duty of care; (3) that it was reasonably foreseeable by the defendant, or by those for whom he
was vicariously responsible, that the act complained of was likely to cause damage of the type in fact suffered by the
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plaintiff by reason of such act."
But, then, the courts began to resile from the Anns position imposing liability for pure economic less. While
accepting that categories of relationship which are capable of giving rise to a duty of care are not closed, the courts
are not willing to extend the liability of public authorities on the ground of negligence to economic loss. Two cases
may be mentioned here to illustrate judicial movement away from the Anns ruling.
(5) Peabody Trust
In Peabody Trust plans submitted by the plaintiff’s architects and approved by the local authority provided for the
construction of a flexible drainage system for a housing development project. Instead, the contractors installed a
different, rigid, design. Although the departure from the plan was noticed by the local authority drainage inspector,
he took no action to stop it. the authority had power under the law to stop the unauthorized installation but no action
was taken under this power.
Some time later, the drains were found to be unsatisfactory and had to be reconstructed, thus, causing substantial
financial loss to the plaintiffs. They brought an action for damages against the local authority alleging negligence on
its part in the discharge of its functions. The House of Lords dismissed the plaintiffs’ case saying that it was the
responsibility of the plaintiffs to ensure that the drains conformed to the approved design. The purpose for giving
power to the authority to stop unauthorized work was not to safeguard building developers against economic loss
resulting from their failure to comply with approved plans. Its purpose was to safeguard the occupiers of houses and
also members of the public generally against danger to their health arising from defective installations. Anns
decision was distinguished in Peabosy .
(6) Yuen Kum Yen
In Yuen Kum Yen , the Privy Council hearing an appeal from Hongkong again distinguished Anns . A deposit-
taking company registered under the relevant local law went into liquidation. The plaintiff who lost money filed a
claim against the Commissioner of deposit-taking companies who had regulatory functions over such companies for
not taking reasonable care to know that the company’s affairs were being conducted against the depositors’
interests. It was claimed that the company had been run fraudulently, speculatively and to the detriment of the
depositors and even though the Commissioner had reasons to suspect that the company was being so run, he had
failed to take any action to protect the depositors. It was claimed that the depositors had relied upon the fact of
registration as indicating that the company was a fit and proper body and that the company was under the
supervision of the commissioner. The action was dismissed by the Privy Council saying the Commissioner owed no
duty to take reasonable care to the depositors. In the words of the Privy Council:
"The primary and all-important matter for consideration, then, is whether in all the circumstances of the case there existed
between the commissioner and would be depositors with the company such close and direct relations as to place the
commissioner, in the exercise of his functions under the Ordinance, under a duty of care towards would be depositors."
The legislature had no intention that in considering whether to register or to de-register a company the
commissioner should owe any statutory duty to potential depositors. "It would be strange that a common law duty of
care should be superimposed upon such a statutory framework.
The law placed a duty on the commissioner to supervise deposit taking companies in general public interest, but no
special responsibility towards individual members of the public.
Also, the Privy Council whilst not deciding the point said that there was much force in the argument that if the
regulators had been liable in that case the principles leading to such liability "would surely be equally applicable to a
wide range of regulatory agencies not only in the financial field, but also for example to the factory inspectorate and
social workers to name only a few."
(7) Murphy
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At last, however, in Murphy v. Brentwood DC , the House of Lords overruled Anns . In 1970, the plaintiff
purchased from a construction company one of a pair of semi-detached houses newly constructed on an ill-filled
site on a concrete raft foundation to prevent damage from settlement. The plans and calculations for the raft
foundation were submitted to the local council for building regulation prior approval to the construction of the
houses. The council referred the plans and calculations to consulting engineers for checking and on their
recommendation approved the design under the building regulations and the byelaws. In 1981, serious cracks
developed in the house and the raft foundation was found to be defective.
It was found that differential settlement beneath it had caused it to distort. The plaintiff sold the house with its
defects and received 35000 less than its market value in sound condition. He sued the Council for damages. The
House of Lords ruled that the Council would not be liable in negligence for economic loss, i.e. , cost of remedying a
dangerous defect in the building which resulted from the negligent failure of the authority to ensure that the building
was designed or erected in conformity with the prescribed byelaws but which defects became apparent before the
defect caused physical injury. The damage suffered by the owner or occupier of the building was not material or
physical damage but purely economic loss. To permit the owner or occupier of the building to recover his economic
loss would logically lead to an unacceptably wide category of claims in respect of buildings. The House of Lords
ruled, therefore, that the Council had owed no duty of care to the plaintiff when it approved the plans for a defective
raft foundation for the plaintiff’s house. Dutton and Anns were both overruled.
Lord KEITH stated the applicable principle as follows:
"The duty held to exist may be formulated as one to take reasonable care to avoid putting a future inhabitant owner of a
house in a position in which he is threatened, by reason of a defect in the house, with avoidable physical injury to person or
health and is obliged, in order to continue to occupy the house without suffering such injury, to expend money for the
purpose of rectifying the defect."
In Anns , loss held to be recoverable was pure economic loss, and, thus, "the nature of the duty held by Anns to be
incumbent on the local authority went very much further than a duty to take reasonable care to prevent injury to
safety or health." Murphy has thus finally curtailed any hope of development of governmental liability in the field of
economic loss. Had the Anns proposition been accepted by the House of Lords in later decisions, and negligence
liability extended to the field of economic loss, it would have brought about with it an extension in governmental
liability capable of covering harm caused to citizens by flawed administrative decisions.
(8) Davis
In Davis v. Radcliffe , the plaintiff had deposited some money with a Bank in the Isle of Man. The bank was
licensed for several years under the relevant law. The bank collapsed. The depositor brought an action against the
local Finance Board claiming damages on the ground that the loss was caused to him by the Board’s negligence in
carrying out its duties under the Banking Act. It was claimed that the Board owed a duty towards the depositors to
carry out his statutory functions in relation to licensing and supervision of Bank in such a manner that the
depositors’ funds were safe. The privy council rejected the claim holding that the relationship between the Board
and the depositors was not such that it would be just and reasonable to impose the liability in negligence for the
loss suffered by the depositors. The Board was exercising typical functions of modern government in the general
public interest which included balancing of competing considerations. The Board did not possess sufficient control
over the management of the Bank to warrant imposition of liability. Anns was held in applicable to financial
transactions.
(a) Liability for an ultra vires Act

Under the present-day law, as mentioned above, damages are awarded for tortuous acts of the Administration, to
some extent, as against a private person. This means that to recover damages the person has to bring the wrongful
government action within the scope of one of the established torts, the most significant of which is negligence. But
the question of liability of a public authority to compensate a person for damages caused to him, by it has much
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wider ramifications for the simple reason that a public authority armed with statutory powers is able to cause harm
to a person in many ways in which a private person devoid of those powers cannot cause.
An ultra vires act on the part of the Administration can be set aside by the court. But, in many situations, the
offending act may have caused the affected person pecuniary loss before it is annulled though no specific tort may
have been committed by the concerned authority. For example, the licensing authority cancels a trading license
without giving a hearing to the licensee. This action may be quashed by the court on the ground of failure of natural
justice and his license restored. But for the duration the license remained cancelled, the licensee was unable to
carry on his trade and thus suffered financial loss. What happens to this loss? Who shall make it good? Is the
Administration bound to compensate the licensee for the loss suffered by him for an ultra vires action on the part of
the licensing officer?
A planning authority may impose a restriction in good faith but unlawfully, e.g. , it may be in breach of natural
justice or any other mandatory procedural requirement, or the planning authority may have committed a mistake of
law. The aggrieved person may succeed in setting aside the said condition by the court, but the question is whether
he has any remedy for any financial loss he may have suffered in the meantime. At present, the law is that an
invalid administrative action which causes loss is not enough in itself to give rise to liability for damages unless
independent of invalidity or fact situation some recognised tort is committed. An ultra vires act per se will not give
rise to damages liability.
The present day law is very deficient on the question of recompensing the affected person for the financial loss he
may suffer if the unlawful governmental action cannot be brought within the compass of a recognised tort, such as,
negligence. The fact that an administrative decision may be struck down on grounds of invalidity is not enough in
itself to impose liability on the Administration for any resulting economic loss caused thereby.
There are many hurdles in the way of development of law relating to administrative liability for loss caused by ultra
vires action on the part of the bureaucratic machine. Merely because an administrative action is struck down by the
court as invalid, it is not regarded enough ipso facto to impose liability on the Administration for the economic loss
caused to the plaintiff. Accordingly, in Bourgoin , the Court of Appeal unanimously agreed that a minister who in
good faith made a regulation which subsequently turned out to be ultra vires could not be sued for damages.
(1) Dunlop
Reference may be made in this connection to Dunlop v. Woollahara Municipal Council , a Privy Council decision in
an appeal from Australia. The plaintiff purchased a piece of land which he intended to sell for development and
incurred a bank draft in so doing. Acting on the advice of its solicitor, the Council passed two planning resolutions,
one fixing a building line for the plaintiff’s land and the other imposing a three-storey height restriction. The architect
informed the plaintiff that it would not be financially viable to construct the building in compliance with these
resolutions. The plaintiff sought and obtained from the Supreme Court in Australia, a declaration that the resolution
fixing the building line was invalid because the procedural requirement of giving the plaintiff an opportunity to object
had not been satisfied; and that the resolution regulating the number of storeys was invalid because it was ultra
vires the Council. Thereafter, the plaintiff applied for and was granted planning permission and he later sold the
land.
He then brought an action against the Council alleging that he had suffered loss as a result of the Council acting in
breach of its ‘duty to take care’ because in passing the resolutions it had failed to seek proper legal advice. The
Privy Council held that, even if a duty to take care was owed to the plaintiff, there had been no breach thereof. As
regards the resolution limiting the number of storeys (which was held to be ultra vires ), the Council had acted
reasonably in seeking before acting the advice of qualified solicitors whose competence it had no reason to doubt.
Therefore, the Council discharged any duty of care it may have owed to the plaintiff. LORD DIPLOCK clarified that
the point of law involved was difficult and the solicitors had not been negligent in giving their advice even though it
was later found to be wrong. As regards the resolution fixing the building line (found to be invalid because of failure
of natural justice), the Privy Council ruled that failure by a public authority to give a person an adequate hearing
before deciding to exercise a statutory power in a manner which will affect him or his property cannot in itself
amount to a breach of duty to take care sounding in damages in that the Council’s assumption that natural justice
was inapplicable to the situation in hand was not so unreasonable as to be careless albeit that it was wrong in law.
Lord DIPLOCK said in this connection:
"The effect of the failure (to give an adequate hearing) is to render the exercise of the power void and the person
complaining of the failure is in as good a position as the public authority to know that is so. He can ignore the purported
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exercise of the power. It is incapable of affecting his legal rights."
Thus, for an unlawful act of the Council, the plaintiff got no recompense for the loss suffered by him because the
Privy Council ruled that there was no breach of duty to take care on the part of the concerned Council. "That case
firmly established that the invalidity of an administrative decision cannot by itself give rise to a claim for damages."
The Dunlop decision has been criticised by administrative lawyers. As regards the statement that failure to give a
hearing could not by itself amount to a ‘breach of duty to take care,’ it illustrates the point that in this field courts are
trying to fit the liability of public authorities into private law created tort categories. In private law, it may be right to
say that ‘no duty of care’ is owed to give a fair hearing, but in public law there is a duty to give a hearing, as has
been discussed earlier. It is therefore necessary for a court to award damages if loss actually flows from a breach
of the public law duty.
A question has also been raised as to how a person is to be sure, before a court pronouncement, that the decision
is void and he can ignore it. Moreover, howsoever void a decision may be in practice, it exists having practical effect
as the world is not going to ignore it, and other people would take cognisance of it causing damage to the
concerned person. Lord D IPLOCK retorted that a layman suffering loss from breach of natural justice, should have
known his legal rights and he cannot, therefore, legitimately complain when he suffers the consequences of having
failed to exercise his rights. This statement is criticised by the counter statement that while it may be a reasonable
expectation that a public authority ought to be aware of the effect of exercising a statutory power not in accordance
with certain requirements, Lord DIPLOCK seems to have credited an average layman with a far greater knowledge
of matters legal than in reality he possesses.
(2) Rowling
In the above case, once, it was held that there was no negligence on the part of the Council in passing the invalid
resolutions, the plaintiff was given no compensation for the loss suffered by him because of the Council’s action.
Dunlop firmly established that the invalidity of an administrative decision cannot by itself give rise to a claim for
damages. In Rowling v. Takaro Properties Ltd. , the company bought Crown land for the purpose of developing a
luxury hunting and fishing lodge. To support the project, foreign finance was needed. The Minister of Finance
(Rowling) refused permission for a Japanese company to acquire ordinary preference shares in the plaintiff
company. This ruling led to the collapse of the company. The dominant reason for the Minister’s refusal was that he
wanted to make sure that the land reverted to New Zealand interests.
The Court of Appeal ruled that this was an improper reason for Minister’s refusal. The Minister acted in excess of
the powers conferred on him and so acted unlawfully.
It was then ruled by the Court of Appeal that the Minister would be liable if negligence could be established but that
a claim could not be founded simply on an invalid administrative act causing damage. An invalid exercise of power
by the Minister was not in itself a sufficient foundation for an action for damages. The High Court then ruled that
the Minister had been negligent and awarded damages. The court ruled that the Minister should have taken advice
as to the scope of his powers. He failed to take reasonable care to ascertain the extent of his powers before coming
to a decision. COOKE , J, said: "The duty owed, I think, by the Minister to the company at least included a duty to
take reasonable care to ensure that he acted within his legal powers."
Then the matter came before the Privy Council in appeal. The Privy Council ruled that ‘taking into consideration a
legally irrelevant factor in coming to an administrative decision did not, in the circumstances of the case, amount to
a breach of a duty of care, and so to negligence, on the part of the decision-making authority. The Privy Council
held that irrespective of whether the Minister of Finance had a duty of care to exercise his powers for a proper
purpose, he had not breached that duty because he honestly believed albeit mistakenly, that he was entitled to give
priority to the ‘reversion factor’ (an irrelevant consideration) ahead of all other factors, while making the decision.
In case of an ultra vires action, unless there is malice or negligence, the Administration is not held liable. The basis
of this rule is that the officials should be able to act fearlessly in the discharge of their official functions. Until a case
is decided by the court, it remains uncertain whether the decision-maker has exceeded his power or not. From time
to time public interest calls for action which may later turn out to be founded on a mistake, and if the decision-maker
is made liable for the mistake, it may act as a deterrent on officials to take any action at all.
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(b) Breach of Statutory Duty

When there is a statutory duty, action may lie to enforce due performance thereof e.g . a writ, injunction, etc . In
addition, in common law, damages may be sought against a public authority through a claim for breach of statutory
duty by it, but the precise scope of the tort is still uncertain.
The basic proposition in this area is that in the ordinary case a breach of statutory duty does not, by itself, give rise
to any private law cause of action unless it can be shown, as a matter of construction of the statute, that the
statutory duty was imposed for the protection of a limited class of people and the Parliament intended to confer on
that class a right of action for breach of the duty. Thus, in X (minors), LORD BROWN WILKINSON found that
general social legislation of the type in question, although passed for the protection of those affected by it, was
really enacted for the benefit of the society as a whole and, therefore no action for breach of statutory duty would
lie.
A claim for damages may lie for breach of a statutory duty which is intended to protect a person in the position of
the particular plaintiff.
When the duty is specifically directed for the benefit of a limited class of people and it is shown that the statute
intended to give a right of its enforcement to that class, an action for damages may lie. The idea to give a remedy
by way of an action for damages is to make more effective, for the benefit of the injured plaintiff, his right to the
performance by the defendant of the statutory duty. It is thus an effective sanction. But where a statute, establishes
a regulatory system or a scheme of social welfare for the benefit of the public at large, say, a duty to provide
education, it does not ordinarily give rise to a private right of action for damages for breach of a duty. The reason is
that the very foundation of an action for tort is that the right of a private person is infringed by breach of a certain
duty. No rights are created in favour of a private person in respect of public duties. Claims for damages arise only
when statutory duty is "very limited" and "specific" as opposed to "general administrative functions" imposed on
public bodies and involving exercise of administrative discretions.
(1) Pasmore
Under S. 15 of the Public Health Act, 1875, the local authority is under a duty to make such sewers as may be
necessary for effectually draining the district for the purposes of the Act. In Pasmore , the House of Lords ruled that
this duty could be enforced not by an action for mandamus but through a complaint to the Local Government Board
under S. 299 of the Act. The principle applied by the House of Lords in the instant case was that where a specific
remedy is given by a statute, it thereby deprives the person who insists upon a remedy of any other form of remedy
than that given by the statute.
(2) Read
However, in Read v. Croydon Corporation , the King’s Bench ruled that under the Waterworks Clauses Act, 1847,
S. 35, the defendant corporation was under a duty to supply clean water to the inhabitants of the borough, and that
in case of breach of the statutory duty, the rate payer had a right of action against the corporation. The court also
ruled that although the Act provided a penalty for breach of a statutory duty, that was not an exclusive remedy and
that an action for damages could also be brought in respect of breach of that duty.
The court also ruled that the corporation were guilty of negligence in discharging the function of supplying water as
precautions in the form of continual analysis of water and supervision over the workmen were not taken. In this
case, compensation was awarded to the plaintiff who had fallen ill as a result of supply of unclean water by the
corporation.
(3) De Falco
The Housing (Homeless Persons) Act, 1977, confers valuable rights on a select category of homeless persons and
imposes burdensome duties on local authorities. As Lord DENNING has observed in De Falco :
"This is a statute which is passed for the protection of private persons, in their capacity as private persons. It is not passed
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for the benefit of the public at large."
The Act imposes a duty on the local authorities but does not say anything about remedies. It does not say what is
to be done if the local authority fails to perform any of the duties imposed by the statute. In this context, Lord
DENNING ruled in De Falco that if a public authority fails to perform its statutory duty, the person or persons
concerned can bring a civil action for damages. He could also bring proceedings for judicial review and get a
declaration or injunction. He could get interim relief as well.
(4) Cutler
In Cutler v. Wandsworth Stadium Ltd. , the House of Lords pointed out that: "If a statutory duty is prescribed but no
remedy by way of penalty or otherwise for its breach is imposed, it can be assumed that a right of civil action
accrues to a person who is damnified by the breach." When duties are made to depend upon the subjective
judgment of the concerned authority it is impossible to treat those duties as being more than public law duties.
(5) Geddis
In Geddis , the defendants were authorised to construct and maintain reservoir, the water from which was
discharged, via a new artificial water course, into an old water course, which the defendants were authorised by the
statute to widen and maintain. Water originating from the reservoir flooded from the old water course onto the
plaintiff’s adjoining land. This was due to the failure of the defendants to maintain the old water course adequately.
The liability for failing to remedy the consequence of flood in reasonable time was excluded even if carelessness
was established; the House of Lords held that because the competent authority had the power but was under no
duty to intervene, it could be liable only if it caused fresh additional damage. This shows that the court may interpret
a statutory provision as imposing a duty of a merely directory nature so that there may be no liability even if it is
disregarded. This case illustrates the principle that no claim for damages can be made for mere careless
performance as distinguished from ‘negligence’ in the sense of law of torts of a statutory duty. Mere assertion of
carelessness in exercise of a statutory power or duty is not sufficient unless the plaintiff can show that the
circumstances are such as to raise a duty of care at common law.
(6) Careless Performance of a statutory duty
Ordinarily, there is no cause of action based simply on careless performance of a statutory duty in the absence of
any other common law right of action.
A claim for damages may lie for careless performance of a statutory duty either—(i) when a statutory duty gives
rise to a common law duty of care owed to the plaintiff by the defendant to do or refrain from doing a particular act;
or (ii) when in the course of carrying out a statutory duty the defendant has brought about such a relationship
between himself and the plaintiff as to give rise to duty of care at common law.
Thus, a common law duty of care may arise in the performance of statutory functions. If a discretionary decision is
so unreasonable as to fall outside the ambit of the discretion conferred, then a common law liability may arise. But
"a common law duty of care cannot be imposed on a statutory duty if the observance of such common law duty of
care would be inconsistent with, or have a tendency to discourage, the due performance by the local authority of its
statutory duties."
If however the complaint is that there has been negligence in the practical manner in which the act has been
performed then damages may be awarded.
(c) Proposal for Damages for Administrative Wrong Doing

The question of compensating a person for damages suffered by him because of administrative maladministration,
misfeasance or nonfeasance is an important one. There are many ways in which the Administration can cause
damage to a person. For instance, the Administration may act unlawfully, or it may give wrong advice and the
concerned person may act on it to his detriment, or the Administration may unduly delay in coming to a decision
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and the individual may be adversely affected by a delayed decision, or the Administration may fail to exercise a
statutory power or perform a statutory duty.
At present, a mere invalid action by the Administration is incapable by itself of supporting a civil law claim for
damage. For example, in Dunlop , although the plaintiff obtained a declaration that the municipal resolution
restricting the height and alignment of the flats which the plaintiff wished to construct, was void, yet he could get no
compensation for the loss suffered by him on account of his inability to sell the property at its true market value, the
interest he paid on loan, the fees paid by him to the architect, rates and taxes paid by him on the property. And, yet,
there is no doubt that all these losses could directly be attributed to the invalid municipal resolution. The Privy
Council rejected any claim for damages by ruling that there was no negligence on the part of the municipality while
framing the resolution. Such a law, to say the least, seems to be inequitable.
In U.K., a remedy available is to take the matter to the Ombudsman who may recommend some ex gratia payment
when in his opinion an act of maladministration has caused injustice to the complainant, but this is not a
satisfactory solution as the payment is as a matter of grace and not as a matter of right to the injured person. Lord
Wilberforce referred to this defect in English Law when he pointed out in Hoffman La Roche that in the law there
was an unwillingness on the part of the courts "to accept that a subject should be indemnified for loss sustained by
invalid administrative action. And he went on to remark:
"...When the court says that an act of administration is voidable or void but not void ab initio this is simply a reflection of a
conclusion, already reached on unexpressed grounds, that the court is not willing in casu to give compensation or other
redress to the person who establishes the nullity. Underlying the use of the phrase in the present case, and I suspect
underlying most of the reasoning in the Court of Appeal, is an unwillingness to accept that a subject should be indemnified
for loss sustained by invalid administrative action. It is this which requires examination rather than some supposed visible
quality of the order itself. In more developed legal systems this particular difficulty does not arise. Such systems give
indemnity to persons injured by illegal acts of the administration. Consequently, where the prospective loss which may be
caused by an order is pecuniary, there is no need to suspend the impugned administrative act; it can take effect (in our
language an injunction can be given) and at the end of the day the subject can, if necessary be compensated. On the other
hand, if the prospective loss is not pecuniary (in our language, "irreparable") the act may be suspended pending decision in
our language, interim enforcement may be refused. There is clearly an important principle here which has not been
elucidated by English law, or even brought into the open."
It is being realised that the position in English law needs to be changed to improve the remedial aspect of
Administrative Law. A line of thinking now developing is that a general remedy by way of damages should be
introduced as a remedy or loss occasioned by unlawful administrative action or maladministration. The view is that
if a statutory power is exercised unlawfully causing economic loss, compensation ought to be payable.
What is being suggested is "a statutorily based remedy in damages for losses suffered as a result of unlawful
administrative acts or decisions," or "a direct remedy in damages for public law error." It is argued that the
Administration acts in the name of public good and the community as a whole benefits from its actions. Then why
should the individual alone suffer the loss from unlawful administrative acts or decisions? Why should not the cost
of these mistakes be shared by the community as a whole in whose name they are made? Surely it is preferable
that the community as a whole, rather than individuals who happen to be affected, should bear the losses sustained
directly as a result of invalid administrative acts.
Any such remedy, if provided, would result in multiple benefits. It will, in the first place, compensate the person
concerned for the loss suffered by him by the unlawful administrative action. Secondly, it will ensure that standards
of administration improve. Thirdly, it would lend strength to the system of judicial review. An action in damages
would provide an indirect way of challenging administrative action.
The lack of such a general remedy has been adversely criticised by several leading administrative lawyers. For
example, Schwartz says:
"A system of administrative law which fails to provide the citizen with an action in damages to make him whole... is actually
but a skeletorised system. If individuals are to be protected adequately, an action for damages is the necessary
complement of the action of review, which results only in the setting aside of improper administrative action."
Page 67 of 68
Another scholar observes:
"Without remedy of this nature being also available a formal pronouncement by a court that an administrative act is illegal
or otherwise invalid frequently represents no more than a mere Pyrrhic victory for an aggrieved person."
In fact, as early as 1967, the British Law Commission had posed the problem: "How far should remedies controlling
administrative acts or omissions include the right to damages?" But there are many types of administrative conduct
which, although wrongful, do not fall within the categories of wrongs for which damages can be awarded against a
private person and where there is no right to award damages for breach of a statutory duty; in such cases, the
courts have at present no power to award damages. Unfortunately, it has not been possible for the Commission to
study this question. The need for such a remedy has become intensified over time because there has been an
exponential increase in administrative power and, as a consequence, thereof individuals frequently suffer
irrecoverable financial losses because of wrongful exercise of administrative power.
In this connection, reference may be made to the position obtaining in the French Droit Administrative , an
advanced system of law to which LORD DIPLOCK makes reference in Hoffman (see the above quotation). The
position in France is that there the law regarding governmental liability for damages is very much developed. There
is general liability of the Administration for injury caused by the malfunctioning of the public service. In reality, the
French Law goes much farther than that. There the basis of governmental liability is not ‘fault’ but ‘risk.’ Law
provides a remedy in damages to the individuals affected by state action carried out in public interest whether the
state is at fault or not. In France, the conseil d’Etat has built a general principle of liability without fault based on the
theory of risk.
A fundamental principle of the French public law is to distribute equally among the citizenry the costs of
government in the absence of a legislative disposition to the contrary. If a particular citizen is damaged by the
operation of an administrative service even if there is no fault on the part of the Administration, the principle of
equality is violated. It is not correct for a public activity, even though it be legal, to cause certain individuals damage
that they alone must bear; that will force them to carry more than their share of the costs of the state. All public
activity benefits the community as a whole, and so it must be paid for by the entire community. The principle of
equality as applied to the sharing of public burdens has been succinctly explained by Duguit as follows:
"The activity of the state is carried on in the interest of the entire community, the burdens that it entails should not weigh
more heavily on some than on others. If then state action results in individual damage to particular citizens, the state should
make redress, whether or not there by a fault committed by the public officers concerned. The state is, in some way, an
insurer of what is often called social risk" (risque social)."
In fact, LORD WILBERFORCE referred to this aspect of the matter when he pointed out in Hoffman La Roche ,
that in English law there was an unwillingness "to accept that a subject should be indemnified for loss sustained by
invalid administrative action’ and that "in more developed legal systems this particular difficulty does not arise’ as
‘such systems give indemnity to persons injured by illegal acts of administration’.
It needs to be pointed out that a sound law of torts can play a meaningful role in instilling more accountability in
statutory bodies to make them discharge their statutory functions properly and effectively.
(d) Exemplary Damages

Usually, the court awards compensatory damages but/in some situations, it can also award exemplary damages,
which are punitive in nature.
Lord DEVLIN in the House of Lords in Rookes v. Bernard spoke of the valuable purpose which is served by the
award of exemplary damages in restraining arbitrary and outrageous use of executive power and vindicating the
strength of law. He laid down the following as one of the two categories where such damages may be awarded by
the court, viz .:" oppressive, arbitrary or unconstitutional action by the servants of the government."
In a later case, Cassell & Co. Ltd. v. Broome , several Law Lords put an expansionary gloss on this formulation, i.e
Page 68 of 68
. the expression ‘government servants’ would include police personnel as well as local and other officials. As Lord
DIPLOCK clarified the position:
"It would embrace all persons purporting to exercise powers of government, central or local, conferred on them by statute
or at common law by virtue of the official status or employment which they held."
In AB and Others v. South West Water Services Ltd. , the court was called upon to decide whether in the specific
fact situation, exemplary damages were payable by the defendant to the plaintiffs. The defendant, a statutory
corporation, charged with the duty of supplying drinking water to a town, supplied contaminated waster from its
water system. The system became polluted when a huge quantity of aluminum sulphate was accidentally
introduced into the system at its water treatment works. As a consequence thereof, the plaintiffs who had consumed
this water suffered from ill-effects. They claimed exemplary damages from the defendant corporation.
The defendant admitted that it was liable for breach of statutory duty in failing to supply wholesome water and
admitted its liability to pay compensatory damages but demurred to its liability to pay exemplary damages. The
court refused to award exemplary damages saying that this was not a case in which exemplary damages could be
awarded, "it being essentially an action for damages for personal injuries caused by the breach of statutory duty
and negligence." The court reasoned that although a serious mishap had occurred in the course of the defendant’s
commercial operations, and their reaction to it was open to serious criticism, but its "conduct was not an exercise of
executive power derived from government, central or local, and no amount of rhetoric describing it as arbitrary,
oppressive, unconstitutional, arrogant or high-handed makes it so."
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Chapter Xxix Tortious Liability & Compensation

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CHAPTER XXIX TORTIOUS LIABILITY & COMPENSATION

MP Jain & SN Jain: Principle of Administrative Law 7th Edition 2013

CHAPTER XXIX TORTIOUS LIABILITY & COMPENSATION

2. GOVERNMENTAL TORTIOUS LIABILITY

Statutory corporations, however, were held liable for torts.

3. POSITION IN INDIA: PRE-CONSTITUTION

(a) Liability of East India Company

(b) P & O case

The P. &O . case thus laid down two propositions:

(1) Hari Bhanji

At another place, the court observed:

(6) Mata Prasad

were exempt from the scrutiny of the courts."

This was the state of law in the pre-Constitution India.

4. AFTER THE CONSTITUTION

(1) Maharaja Bose

(5) District Board

5. LAW COMMISSION’S REPORT

(2) Kasturi Lal

The Supreme Court thus enunciated the principle as follows:

Referring to the appeal before it the Court said:

7. DEVELOPMENTS AFTER KASTURILAL

(c) Article 21 of the Constitution runs as follows:

(a) Miscellaneous Situations

(2) Hindustan Lever

(2) Amulya Patnaik

(3) Ram Pratap

(4) Shyam Sunder

(6) Padma Rani

(7) Cheru Babu

(10) Satya Narain

(11) Narain Shankar

The Court observed further:

(d) Military Vehicles

(6) Iqbal Kaur

(e) Government Hospitals

(f) Torts against Property

(1) Sat Pal

(2) Modern Cultivators

(4) Dhian Singh

(5) Ram Kamal

(6) Ram Bharosey

(8) Basava Patil

(9) Sunder Lal

(10) Hazur Singh

(13) Jaya Laxmi

At another place, the Court observed:

(g) Torts against Person

The Court awarded compensation to the concerned person.

(h) Law and Order

(4) Nanik Sewa

(i) Failure to maintain Law and Order

The court referred to PUDR v. State of Bihar as a precedent.

(3) Inder Puri

(5) Jeet Stores

The Court stated the duty of the State as follows:

(j) Police Lawlessness