Kathuria Supreme Court On Criminal Law B

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Kathuria: Supreme Court on Criminal Law/B/BA/BAIL 2 of 2
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( xcvi) There is a need to indicate in the order, reasons for prima facie concluding why bail was being
granted particularly where an accused was charted of having committed a serious offence. It is
necessary for the Courts dealing with application for bail to consider among other circumstances,
the following factors also before granting bail, they are :
( cxxxvii)The custody referred to in S. 167(2) Cr. P.C. means the Police custody in a particular
case for investigation and not judicial custody in another case. This notional surrender can
not be treated as Police custody so as to count 90 days from that notional surrender. A
notorious criminal may have number of cases pending in various police stations in city or
outside city, a notional surrender in pending case for another FIR outside city or of
another police station in same city, if the notional surrender is counted then the police will
not get the opportunity to get custodial investigation.
State of West Bengal vs Dinesh Dalmia 2007 Cri LJ 2757 (2762): 2007 AIR(SC) 1801:
2007(5) SCR 561: 2007(5) SCC 773: 2007(6) JT 309: 2007(4) Supreme 136: 2007(4)
SLT 721: 2007(7) SRJ 29: 2007(3) SCC(Cr) 19: 2007(2) JCC 1441: 2007(6) SCALE
80(2).
( cxxxviii)Since release on bail under the proviso to S. 167(2), Cr.P.Code is deemed to be release
on bail under the provisions of Chap. XXXIII, an order for release under the proviso to S.
167(2) is also subject to the provisions of Ss. 437(5) and 439(2), Cr.P.Code and may be
extinguished by an order under either of these provisions.
Raghubir Singh vs State of Bihar AIR 1987 SC 149: 1986 SCC (Cr) 511: (1986) 4 SCC
481: 1987 Cr LJ 157: (1986) 3 SCR 802: 1986 Cr LR (SC) 491: JT (1986) SC 481.
( cxxxix)S. 441, Cr.P.Code provides for the execution of bonds, with or without sureties, by
persons ordered to be released on bail. One of the provisions relating to bonds is S. 445,
Cr.P.Code which enables the Court to accept the deposit of a sum of money in lieu of
execution of a bond by the person required to execute it with or without sureties. If the
bond is executed (or the deposit of cash is accepted), the Court admitting an accused
person to bail is required by S. 442(1), Cr.P.Code to issue an order of release to the
officer-incharge of the Jail in which such accused person is incarcerated. Ss. 441 and442,
to borrow the language of the Civil Procedure Code, are in the nature of provisions for the
execution of orders for the release on bail of accused persons. What is of importance is
that there is no limit of time within which the bond may be executed after the order for
release on bail is made. Very often accused person find it difficult to furnish bail soon
after the making of an order for release on bail. This frequently happens because of the
poverty of the accused persons. It also happens frequently that for various reasons the
sureties produced on behalf of accused persons may not be acceptable to the Court, and
fresh sureties will have to be produced in such an event. The accused persons are not to be
deprived of the benefit of the order for release on bail in their favour because of their
inability to furnish bail straightway. Orders for release on bail are effective until an order
is made under S. 437(5) orS. 439(2), Cr.P.Code. These two provisions enable the
Magistrate who has released an accused on bail or the Court of Sessions or the High Court
to direct the arrest of the person released on bail and to commit him to custody. The two
provisions deal with what is known in ordinary parlance is cancellation of bail.
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( cxl) The effect of the new proviso is to entitle an accused person to be released on bail if the
investigating agency fails to complete the investigation within 60 days. A person released
on bail under the proviso to S. 167(2), Cr.P.Code for the default of the investigating
agency, is statutorily deemed to be released under the provisions of Chap. XXXIII of the
Cr.P.Code for the purposes of that Chapter.
( cxli) In dowry deaths, the High Court should not grant anticipatory bail in disregard of the
magnitude and seriousness of the matter. The matter regarding the unnatural death of the
daughter-in-law at the house of her father-in-law was still under investigation, and the
appropriate course to adopt was to allow the concerned Magistrate to deal with the same
on the basis of the material before the Court at the point of time of their arrest in case they
were arrested.
Held: It was neither prudent nor proper for the High Court to have granted anticipatory
bail which order was very likely to occasion prejudice by its very nature and timing.
Note: The Hon'ble Supreme Court recorded a serious note of caution for future.
Samunder Singh vs State of Rajasthan AIR 1987 SC 737: 1987 SCC (Cr) 189: (1987) 1
SCC 466: 1987 Cr LJ 705: JT (1987) SC 14(1): 1987 Cr App R (SC) 132 (1): 1987 Cr LR
(SC) 169: (1987) 1 Crimes 256.
( cxlii) While exercising the jurisdiction under Art. 226 orArt. 32 of the Constitution, the Courts
do not have jurisdiction to release a detenu on bail or parole.
Poonam Lata vs M.L. Wadhawan AIR 1987 SC 1383: 1987 SCC (Cr) 506: (1987) 3 SCC
347: 1987 Cr LJ 1130: 1987 Cr LR (SC) 410: JT (1987) 3 SC 204.
( cxliii)The order granting or refusing bail need not be a speaking order.
Jivaji Jedeja vs State of Maharashtra AIR 1987 SC 1491: 1987 SCC (Cr) 171: 1986
(Supp) SCC 556: 1987 Cr LJ 1850: 1987 Cr LR (SC) 285: JT (1986) SC 684 (1).
( cxliv) The occurrence took place in the broad day light in a busy market place, and there are a
number of eye-witnesses to support the case against the respondent, who was named as an
assailant in the first information report. Immediately after the occurrence he could not be
traced (it was alleged that he had absconded) for more than a month, attempts were made
on his behalf to tamper with evidence. In view of these facts and circumstances, the
respondent No. 1 was not entitled to bail.
Shahzad Hasan Khan vs Ishtiaq Hasan Khan AIR 1987 SC 1613: 1987 SCC (Cr) 415:
(1987) 2 SCC 684: 1987 Cr LJ 1872: 1987 Cr App R (SC) 216: 1987 Cr LR (SC) 430: JT
(1987) 3 SC 323: (1987) 2 Crimes 438.
( cxlv) Daylight murder of two persons. Two accused already granted bail. Accused applicant a
student in jail for more than one year also granted bail.
Ramesh Chander Singh vs High Court of Allahabad (2007) 4 SCC 247: (2007) 2 SCC
(Cri) 266.
( cxlvi) One of the salutary principles in granting bail is that the Court should be satisfied that the
accused being enlarged on bail will not be in a position to tamper with the evidence.
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When allegations of tampering of evidence are made, it is the duty of the Court to satisfy
itself whether those allegations have basis (they can seldom be proved by concrete
evidence), and if the allegations are not found to be concocted it would not be a proper
exercise of jurisdiction in enlarging the accused on bail. In the instant case, there were
serious allegations but the learned Judge did not either consider or test the same.
Held: Order granting bail by the High Court was set aside.
(1987) 3 SC 323: (1987) 2 Crimes 438.
( cxlvii)Normally, the Supreme Court does not interfere with bail matters and the orders of the
High Court are generally accepted to be final relating to grant or rejection of bail.
Note: In this case the Hon'ble Judges found disturbing features, so they chose to interfere
with the order of the High Court. The facts are that accused moved three applications on
different dates and were rejected by Justice Kamleshwar Nath.
The respondent No. 1 made another application on June 3, 1986 before Justice D.S.
Bajpai, Vacation Judge for grant of bail. The learned Judge directed that the application
be placed before Justice Kamleshwar Nath who was sitting as a Vacation Judge with
effect from 23rd June, 1986. Two days later, another application was made on behalf of
respondent No. 1 before Justice D.S. Bajpai for recalling his order dated June 3, 1986, the
application was directed to be placed before the Court on June 6, 1986. On June 6, 1986
when the application was taken up the Assistant Government Advocate appearing for the
prosecution and the complainant's Advocate both appeared and filed their appearance.
Justice D.S. Bajpai directed the application to be listed on June 7, 1986. On that date the
complainant's Counsel filed application raising objections against the hearing of the bail
application on a number of grounds and he further sought three days time to file detailed
counter-affidavit in reply to the allegations made in bail application. Justice D.S. Bajpai
did not grant time. Instead he heard the arguments, he recalled his order dated June 3,
1986 for placing the matter before Kamleshwar Nath and enlarged the respondent No.1 on
bail.
Held: Long standing convention and judicial discipline required that respondent's bail
application should have been placed before Justice Kamleshwar Nath who had passed
earlier orders and who was available as Vacation Judge.
Since Justice Kamleshwar Nath was sitting in Court on June 23, 1986, the respondent's
bail application should have been placed before him for orders. Justice D.S. Bajpai should
have respected his own order dated June 3, 1986 and that order ought not to have been
recalled, without the confidence of the parties in the judicial process being rudely shaken.
(1987) 3 SC 323: (1987) 2 Crimes 438.
( cxlviii)The Judge made observations that the trial should be concluded expeditiously and if
necessary the Court should hold day-to-day trial to conclude the same at an early date.
The trial could not be commenced or completed as directed by the Judge.
On the perusal of the same it is evident that the accused persons obtained adjournment
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after adjournment on one pretext or the other and they did not allow the Court to proceed
with the trial.
Held: Bail was wrongly granted by the High Court.
(1987) 3 SC 323: (1987) 2 Crimes 438.
( cxlix) The objective underlying preventive detention cannot be achieved or fulfilled if the detenu
is granted parole and brought out of detention. Even if any conditions are imposed with a
view to restrict the movements of the detenu while on parole, the observance of these
conditions can never lead to an equation of the period of parole with the period of
detention.
The period of parole has to be excluded in reckoning the period of detention under sub-S.
(1) of S. 3 of the Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974.
Pushpadevi M. Jatia vs M.L. Wadhavan, Addl. Secretary, Government of India AIR 1987
SC 1748: 1987 SCC (Cr) 526: (1987) 3 SCC 367: 1987 Cr LJ 1888: 1987 Cr LR (SC)
447: JT (1987) 3 SC 296: (1987) 2 Crimes 705.
( cl) The accused should move the bail application first to the High Court.
Held: It would not be proper for the Supreme Court to entertain a direct application for
bail.
Note: The Special leave petition was dismissed.
Ram Autar Shastri Tantrik vs State of Uttar Pradesh 1988 SCC (Cr) 49: 1987 (Supp)
SCC 185: 1988 Cr LR (SC) 96: (1988) 1 UJ (SC) 386.
( cli) There is complete lack of judicial approach on the part of the State Government as well as
the Designated Court in opposing the grant of bail on the earlier two occasions on the
ground that the petitioners were "Sikhs" and resident of Punjab. There can be no
differential treatment between citizens in the matter of grant of bail. Surprisingly enough
on the third occasion the application for bail was not considered on the pretext that the
similar applications were dismissed on the earlier two occasions. There is complete
miscarriage of justice.
Note: Bail application was sent back with direction to the Designated Court to apply its
mind and, if necessary, after hearing the Public Prosecutor, pass an order as to whether
bail should be granted or not according to law.
Jaswant Singh vs State of Uttar Pradesh 1988 SCC (Cr) 913: 1988 (Supp) SCC 567:
1988 Cr LR (SC) 735.
( clii) The application of the co-accused as well as the statement made in the bail application
filed on behalf of the detenus alleging that they had been falsely implicated in the same
and the Police report thereon were not produced before the detaining authority before
passing of the detention order.
Held: Detention was rightly held by the High Court to be bad. The non-production of
relevant materials, i.e., the statement of the under-trial prisoners in their application in the
Court that the detenus had been falsely implicated in the Crime Case No. 450 of 1985
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under S. 307/34, I.P.Code and also the statement to that effect in the bail petition and the
Police report thereon, before the detaining authority for his consideration before passing
the order of detention renders the order of detention invalid and illegal.
State of Uttar Pradesh vs Kamal Kishore Saini AIR 1988 SC 208: 1988 SCC (Cr) 107
(2): (1988) 1 SCC 287: 1988 Cr LJ 405: 1988 Cr LR (SC) 40: JT (1987) 5 SC 285: 1988
Cr App R (SC) 5.
( cliii) Every citizen in this country has the right to have recourse to law. He has the right to
move the Court for bail when he is arrested under the ordinary law of the land. If the State
thinks that he does not deserve bail the State could oppose the grant of bail. He cannot,
however, be interdicted from moving the Court for bail by clamping an order of detention.
The detention order appears to have been made merely on the ground that the detenu is
trying to come out on bail and there is enough possibility of his being bailed out.
Held: The detention could not be justified only on that basis.
Shashi Aggarwal vs State of Uttar Pradesh AIR 1988 SC 596: JT (1988) 1 SC 83: 1988
Cr LR (SC) 184.
( cliv) S. 3 of the National Security Act does not preclude the authority from making an order of
detention against a person while he is in custody or in Jail, but the relevant facts in
connection with the making of the order would make all the difference in every case. The
validity of the order of detention has to be judged in every individual case on its own
facts. There must be material apparently disclosed to the detaining authority in each case,
that the person against whom an order of preventive detention is being made is already
under custody and yet for compelling reasons, his preventive detention is necessary.
The possibility of the Court granting bail may not be sufficient. Nor a bald statement that
the person would repeat his criminal activities would be enough. There must also be
credible information or cogent reasons apparent on the record that the detenu, if enlarged
on bail, would act prejudicially to the interest of public order.
Note: In Alijan Main vs District Magistrate, Dhanbad AIR 1983 SC 1130: (1983) 3 SCR
939, the conclusion of the Court was on the basis of material placed before the detaining
authority.
Shashi Aggarwal vs State of Uttar Pradesh AIR 1988 SC 596: JT (1988) 1 SC 83: 1988
Cr LR (SC) 184.
( clv) The Terrorist and Disruptive Activities (Prevention) Act being a special Act must prevail
in respect of the jurisdiction and power of the High Court to entertain an application for
bail under S. 439 of the Cr.P.Code, or by recourse to its inherent powers under S. 482,
Cr.P.Code. Under the scheme of the Act, there is complete exclusion of the jurisdiction of
the High Court in any case involving the arrest of any person on an accusation of having
committed an offence punishable under the Act or any rule made thereunder.
The Legislature by enacting the law has treated terrorism as a special criminal problem
and created a special Court called a Designated Court to deal with the special problem and
provided for a special procedure for the trial of such offences.
The use of ordinary Courts does not necessarily imply the use of standard procedures. Just
as the Legislature can create a special Court to deal with a special problem, it can also
create new procedures within the existing system. Parliament in its wisdom has adopted
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the frame-work of the Criminal Procedure Code but the Criminal Procedure Code is not
applicable. The TADA Act is a special Act and creates a new class of offences called
terrorist acts and disruptive activities as defined in Ss. 3(1) and 4(2) of the said Act and
provides for a special procedure for the trial of such offences. Under S. 9(1), the Central
Government or a State Government may by notification, published in the Official Gazette,
constitute one or more Designated Court for the trial of offences under the Act for such
area or areas, or for such case or group of cases as may be specified in the notification.
The jurisdiction and power of Designated Courts is derived from the Act, and it is the Act
that one must primarily look to in deciding the question before us. Under S. 14(1), a
Designated Court has exclusive jurisdiction for the trial of offences under the Act, and by
virtue of S. 12(1) it may also try any other offence with which the accused may, under the
Criminal Procedure Code, be charged at the same trial if the offence is connected with
such other offence. Where an enactment provides for a special procedure for the trial of
certain offences, it is that procedure that must be followed and not the one prescribed by
the Criminal Procedure Code.
It cannot be doubted that a Designated Court is "a Court other than the High Court or the
Court of Sessions" within the meaning of S. 437 of the Cr.P.Code. The exercise of the
power to grant bail by a Designated Court is not only subject to the limitations contained
therein, but is also subject to the limitations placed by S. 20(8) of the Act.
It is quite obvious that power under which person under detention cannot be released on
bail is not S. 20(8) of the Act but it only places limitations on such powers. This is
implicit by S. 20(9) which in terms provides that the limitations on granting of bail
specified in sub-S. (8) are in addition to the limitations under the Criminal Procedure
Code or any other law for the time being in force on granting of bail. It, therefore, follows
that the power derived by a Designated Court to grant bail to a person accused of an
offence under the Act, if in custody, is derived from the Criminal Procedure Code and not
from S. 20(8) of the Act.
Since before granting bail, the Court is called upon to satisfy itself that there are
reasonable grounds for believing that the accused is innocent of the offence, and that he is
not likely to commit any offence while on bail, the allegations of fact, the Police report
alongwith the statements in the case diary and other available material should be closely
examined. A prayer for bail ought not to be rejected in mechanical manner.
Normally, such cases have to be dealt with under the ordinary procedure prescribed by the
Criminal Procedure Code, unless offences under Ss. 3 and4 of the Act are made out. The
Designated Courts were under a duty to examine the circumstance closely from this angle.
That has not been done. It is, therefore, desirable to set aside the orders passed by the
various Designated Courts and remit the cases for fresh consideration.
Note: The Supreme Court set aside the impugned order of refusal of bail and directed the
Designated Courts to consider each particular case on merits as to whether it falls within
the purview of Ss. 3 and/or4 of the Terrorist and Disruptive Activities (Prevention) Act,
1987; and if so, whether the accused in the facts and circumstances of the case were
entitled to bail while keeping in view the limitations on their powers under S. 20(8) of the
Act. Where the Designated Courts find that the acts alleged in the Police report or
complaint of facts under S. 14(1) do not fall within the purview of Ss. 3 and/or4 of the
Act, they shall in exercise of the powers under S. 18 of the Act transfer the cases for trial
to the ordinary criminal Courts.
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Usmanbhai Dawoodbhai Memon vs State of Gujarat AIR 1988 SC 922: 1988 Cr LR (SC)
234.
( clvi) Under the Terrorist and Disruptive Activities (Prevention) Act, 1987 there is total
exclusion of the jurisdiction of the High Courts, and therefore, it cannot entertain an
application for grant of bail under S. 439 of the Cr.P.Code or by recourse to its inherent
power under S. 482, Cr.P.Code. The TADA Act by S. 16(1) confers the right of appeal
both on facts as well as on law to the Supreme Court. Further, while it is true that Chap.
XXXIII of the Cr.P.Code is still preserved as otherwise the Designated Courts would have
no power to grant bail, still the source of power to grant bail, is not S. 439 of the
Cr.P.Code but S. 437, thereof, being a Court other than the High Court or the Court of
Session. Any other view would lead to an anomalous situation. If it were to be held that
the power of a Designated Court to grant bail was relatable to S. 439, Cr.P.Code it would
imply that not only the High Court but also the Court of Session would be entitled to grant
bail on such terms as they deem fit. The power to grant bail under S. 439, Cr.P.Code is
unfettered by any conditions and limitations like S. 437. It would run counter to the
express prohibition contained in S. 20(8) of the Act which enjoins that notwithstanding
anything in the Criminal Procedure Code, no person accused of an offence punishable
under the Act or any rule made thereunder shall, if in custody, be released on bail unless
the conditions set forth in Cls. ( a) and ( b) are satisfied.
Usmanbhai Dawoodbhai Memon vs State of Gujarat AIR 1988 SC 922: 1988 Cr LR (SC)
234.
( clvii) It is true that the order could not have been passed for the purpose of circumventing the
expected bail order. The object of detention has to be prevention of a detenu from
indulging in activities prejudicial to the conservation of foreign exchange resources, and
not to facilitate his trial in a criminal case nor as a punitive measure.
Bal Chand Bansal vs Union of India AIR 1988 SC 1175: JT (1988) 2 SC 65.
( clviii)Police seeking remand while accused praying for bail, no separate notice is required in the
bail application.
K.K. Girdhar vs M.S. Kathuria (1988) 1 Rec CR 492.

( clix) The detaining authority was aware of the bail granted to the detenu of December 16,
1987. Ground No. 3 specifically refers to this event. Apart from that, the order of
detention is not rested only on alleged offence in respect of which the bail was granted to
the petitioner. There are other more serious allegations set out in the grounds of detention.
Swaran Singh vs State of Jammu & Kashmir AIR 1989 SC 188: 1988 SCC (Cr) 191:
1989 Cr LJ 792: 1989 Cr LR (SC) 33: JT (1988) 4 SC 429: (1989) 1 Crimes 68.
( clx) It is true that if the only ground or justification for the detention is the apprehension that
the detenu was likely to be enlarged on bail, the detention might be rendered infirm.
Ayya alias Ayub vs State of Uttar Pradesh AIR 1989 SC 364: 1989 SCC (Cr) 153: (1989)
1 SCC 374: 1989 Cr LJ 991: JT (1988) 4 SC 489: (1989) 1 Crimes 8.
( clxi) The order varying the condition of bail was not a relevant document and failure to
produce the document before arriving at his subjective satisfaction had not vitiated the
order.
Haridas Amarchand Shah of Bombay vs K.L. Verma AIR 1989 SC 497: 1989 SCC (Cr)
111: (1989) 1 SCC 250: 1989 Cr LJ 983: JT (1988) 4 SC 632: 1989 Cr LR (SC) 136.
( clxii) It is not correct to say that there is no material for the apprehension that if released on
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bail, the detenu will indulge in such criminal acts affecting public order. Really, the
detaining authority had taken into consideration all the circumstances including the grave
and serious situation that emerged as a result of the incident.
Bimla Rani vs Union of India 1989 CC (Cr) 756: (1989) 4 SCC 509: 1989 Cr LR (SC)
770: 1989 Cr App R (SC) 286: JT (1989) 3 SC 737: (1989) 3 Crimes 578.
( clxiii)Under the criminal laws of India, a person accused of offences which are non bailable is
liable to be detained in custody during the pendency of trial unless he is enlarged on bail
in accordance with law. Such detention cannot be questioned as being violative of Art. 21
since the same is authorized by law. But even persons accused of non bailable offences
are entitled for bail if the Court concerned comes to the conclusion that the prosecution
has failed to establish a prima facie case against him and/or if the Court is satisfied for
reasons to be recorded that in spite of the existence of prima facie case there is a need to
release such persons on bail where fact situations require it to do so. In that process a
person whose application for enlargement on bail is once rejected is not precluded from
filing a subsequent application for grant of bail if there is a change in the fact situation. In
such cases if the circumstances then prevailing requires that such persons to be released
on bail, in spite of his earlier applications being rejected, the Courts can do so.
Kalyan Chandra Sarkar vs Rajesh Ranjan 2005 Cri LJ 944 (950): AIR 2005 SC 921:
(2005) 2 SCC 42: (2005) 1 Crimes 202.
( clxiv) The decisions given by a superior forum, undoubtedly, is binding on the subordinate fora
on the same issue even in bail matters unless of course, there is a material change in the
fact situation calling for a different view being taken. Therefore, even though there is
room for filing a subsequent bail application in cases where earlier applications have been
rejected, the same can be done if there is a change in the fact situation or in law which
requires the earlier view being interfered with or where the earlier finding has become
obsolete. This is the limited area in which an accused who has been denied bail earlier,
can move a subsequent application. Therefore, it cannot be said that in view the guaranty
conferred on a person under Art 21 of the Constitution of India, it is open to the aggrieved
person to make successive bail applications even on a ground already rejected by Courts
earlier including the Apex Court of the country.
Kalyan Chandra Sarkar vs Rajesh Ranjan 2005 Cri LJ 944 (950): AIR 2005 SC 921:
(2005) 2 SCC 42: (2005) 1 Crimes 202.
( clxv) After rejection of successive bail applications, fresh bail application without any sustantial
changes of facts or situation is not maintainable.
Thus, the High Court's order granting the bail after its rejection two days prior to it by
another Judge, was set aside.
State of Maharashtra vs Buddhikota Subha Rao AIR 1989 SC 2292: 1990 SCC (Cr) 126:
1990 Cr LR (SC) 50: 1990 Cr App R (SC) 12: JT (1989) 4 SC 1: (1990) 1 UJ (SC) 192:
(1989) 3 Crimes 495.
( clxvi) An order for release on bail under proviso ( a) to S. 167(2), Cr.P.Code may appropriately
be termed as an order on-default. Indeed, it is a release on bail on the default of the
prosecution in filing charge-sheet within the prescribed period. The right to bail under S.
167(2), proviso ( a) thereto is absolute. It is a legislative command and not Court's
discretion. If the investigating agency fails to file charge-sheet before the expiry of 90/60
days, as the case may be, the accused in custody should be released on bail. But at that
stage, merits of the case are not to be examined. In fact, the Magistrate has no power to
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remand a person beyond the stipulated period of 90/60 days. He must pass an order of bail
and communicate the same to the accused to furnish the requisite bail bonds.
Rajnikant Jivanlal Patel vs Intelligence Officer, Narcotic Control Bureau, New Delhi
AIR 1990 SC 71: 1989 SCC (Cr) 612: (1989) 3 SCC 532: 1990 Cr LJ 62: JT (1989) 3 SC
67: 1989 Cr LR (SC) 525.
( clxvii)In the case of a person in custody, a detention order can validly be passed ( 1) if the
authority passing the order is aware of the fact that he is actually in custody; ( 2) if he has
reason to believe on the basis of reliable material placed before him ( a) that there is a real
possibility of his being released on bail, and ( b) that on being so released he would in all
probability indulge in prejudicial activity and ( 3) if it is felt essential to detain him to
prevent him from so doing. If the authority passes an order after recording his satisfaction
in this behalf, such an order cannot be struck down on the ground that the proper course
for the authority was to oppose the bail and if bail is granted notwithstanding such
opposition, to question it before a higher Court.
Kamarunnissa vs Union of India AIR 1991 SC 1640: 1991 SCC (Cr) 88: (1991) 1 SCC
128: 1991 Cr LJ 2058: JT (1991) 4 SC 7.
( clxviii)The investigation has to go a long way and hence sufficient time will be required for the
investiging agencies to complete the investigations. Further, having regard to the
seriousness of the allegations levelled against the petitioner, as pointed out by the
Designated Court, the release of the petitioner on bail at this crucial stage may frustrate
the effort of the investigating agencies in collecting evidence. Hence, his bail application
is dismissed at this stage.
Mool Chand vs State through the Director CBI AIR 1992 SC 1618: 1991 SCC (Cr) 1001:
1992 Cr LJ 2330: 1991 Cr LR (SC) 552: (1991) 2 UJ (SC) 449: 1991 Cr App R (SC) 223:
JT (1991) 3 SC 30: (1991) 2 Crimes 847.
( clxix) There cannot be any detention in the Police custody after the expiry of first fifteen days
even in a case where some more offences either serious or otherwise committed by him in
the same transaction come to light at a later stage. But this bar does not apply if the same
arrested accused is involved in a different case arising out of a different transaction. Even
if he is in judicial custody in connection with the investigation of the earlier case, he can
formally be arrested regarding his involvement in the different case and associate him
with the investigation of that other case and the Magistrate can act as provided under S.
167(2), proviso, Cr.P.Code, 1973 and can remand him to such custody as mentioned
therein during the first period of fifteen days and thereafter in accordance with the proviso
as discussed above. If the investigation is not complete within the period of ninety days or
sixty days then the accused has to be released on bail as provided under the proviso to S.
167(2). The period of ninety days or sixty days has to be computed from the date of
detention as per the orders of the Magistrate and not from the date of arrest by the Police.
Consequently, the first period of fifteen days mentioned in S. 167(2) has to be computed
from the date of such detention and after the expiry of the period of first fifteen days it
should be only judicial custody.
Central Bureau of Investigation, Special Investigation Cell-I, New Delhi vs Anupam J.

Kulkarni AIR 1992 SC 1768: 1992 SCC (Cr) 554: (1992) 3 SCC 141: JT (1992) 3 SC
366: 1992 Cr App R (SC) 197: 1992 Cr LR (SC) 553: (1992) 2 Crimes 310.
( clxx) The purpose of the proviso to S. 167(2) read with Chap. XXXIII of the Cr.P.Code is to
impress upon the need for expeditious completion of the investigation by the Police
Officer within the prescribed limitation and to prevent laxity in this behalf. On its default,
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the Magistrate shall release the accused on bail if the accused is ready and does furnish
the bail.
Aslam Babalal Desai vs State of Maharashtra AIR 1993 SC 1: 1992 SCC (Cr) 870:
(1992) 4 SCC 272: 1992 Cr LJ 3712: 1992 Cr LR (SC) 811: JT (1992) 6 SC 21: (1992) 3
Crimes 597.
( clxxi) The delay in completion of the investigation can be on pain of the accused being released
on bail. The prosecution cannot be allowed to trifle with individual liberty if it does not
take its task seriously and does not complete it within the time allowed by law. It would
also result in avoidable difficulty to the accused if the latter is asked to secure a surety and
a few days later be placed behind the bars at the sweet will of the prosecution on
production of a charge-sheet.
Held: That unless there are strong grounds for cancellation of the bail, the bail once
granted cannot be cancelled on mere production of the charge-sheet.
Aslam Babalal Desai vs State of Maharashtra AIR 1993 SC 1: 1992 SCC (Cr) 870:
(1992) 4 SCC 272: 1992 Cr LJ 3712: 1992 Cr LR (SC) 811: JT (1992) 6 SC 21: (1992) 3
Crimes 597.
( clxxii)The framers of the Criminal Procedure Code have vested powers in the Magistrate under
S. 190(1)( b) to take cognizance of any offence upon a Police report. If Magistrate can
take cognizance of an offence on the basis of a Police report submitted under S. 173(2) of
the Cr.P.Code, how such Police report can be held to be irrelevant while considering an
application for bail under sub-S. (8) of S. 20 of the Terrorist and Disruptrive Activities
(Prevention) Act as to whether there are reasonable grounds for believing that the accused
in question is not guilty of such offence and as such he should be directed to be released.
The conditions for grant of bail specified under sub-S. (8) of S. 20 of the Terrorist and
Disruptive Activities (Prevention) Act are in addition to those under the Criminal
Procedure Code.
Held: The Designated Court should have perused the charge-sheet/Police report submitted
after the conclusion of the investigation before passing the impugned order. Accordingly,
the order dated 24-1-1992 directing the release of the respondent on bail is set aside and it
is directed that the Designated Court before which the charge-sheet/Police report has been
filed would hear the application for bail filed on behalf of the respondent afresh and to
peruse the Police report alongwith the documents and statements recorded, which have
been forwarded under sub-S. (5) of S. 173 of the Cr.P.Code and to pass an order in
accordance with law.
Facts: In the instant case, after conclusion of the investigation, charge-sheet which shall
be deemed to be a Police report within the meaning of sub-S. (2) of S. 173 of the
Cr.P.Code, was forwarded to the Designated Court at Jammu, whereas the application for
bail filed on behalf of the respondent was heard and disposed of by the Designated Court
at Srinagar without perusing the Police report so submitted. This fact is not in dispute.
Union of India vs Mohd. Sadiq Rather AIR 1993 SC 379: 1993 SCC (Cr) 8: 1993 Cr LJ
72: JT (1992) Supp SC 662: 1993 Cr App R (SC) 26: (1992) 3 Crimes 1072.
( clxxiii)The detaining authority was aware that a bail application had already been filed by the
petitioner and the same was to come up for hearing on 7-12-1990 and in these
circumstances the detaining authority was justified in recording the satisfaction of
compelling necessity of issuing the detention order as it could not have been predicted
Page 11
with certainty that the petitioner would not be released on bail.
Birendra Kumar Rai vs Union of India AIR 1993 SC 962: 1993 SCC (Cr) 324: (1993) 1
SCC 272: 1993 Cr LJ 158: JT (1992) 5 SC 264: 1992 Cr App R (SC) 381: (1992) 3
Crimes 398.
( clxxiv)The detention order itself was passed when the detenu was in Jail and the detaining
authority noted this fact and being satisfied that there was every possibility of his being
released on bail, passed the detention order. If subsequently the detenu is released on bail
even subject to certain conditions that does not bring about any material change. On the
other hand, release on bail is a stronger ground showing that the detenu who is not in
custody is likely to indulge in the prejudicial activities again.
Noor Salman Makani vs Union of India AIR 1994 SC 575: 1994 SCC (Cr) 521: (1994) 1
SCC 381: 1994 Cr LJ 602: JT (1993) 6 SC 491: (1993) 2 UJ (SC) 788: 1994 Cr LR (SC)
10: 1994 Cr App R (SC) 55: (1993) 2 Crimes 1108.
( clxxv)Mere imminence of a likely arrest on a reasonable belief on an accusation of having
committed a non-bailable offence, will be sufficient to invoke the provision of
anticipatory bail.
Director of Enforcement vs Deepak Mahajan AIR 1994 SC 1775: 1994 SCC (Cr) 785:
(1994) 3 SCC 440: 1994 Cr LJ 2269: 1994 Cr LR (SC) 201: 1994 Cr App R (SC) 78:
(1994) 1 Crimes 892.
( clxxvi)The "indefeasible right" of the accused to be released on bail in accordance with S. 20(4)(
bb) of the TADA Act read with S. 167(2) of the Code of Criminal Procedure in default of
completion of the investigation and filing of the challan within the time allowed, as held
in Hitendra Vishnu ThakurAIR 1994 SC 2623: 1994 SCC (Cr) 1087: (1994) 4 SCC 602:
1995 Cr LJ 517, is a right which enures to, and is enforceable by the accused only from
the time of default till the filing of the challan and it does not survive or remain
enforceable on the challan being filed. If the accused applies for bail under this provision
on expiry of the period of 180 days or the extended period, as the case may be, then he
has to be released on bail forthwith. The accused, so released on bail may be arrested and
committed to custody according to the provisions of the Code of Criminal Procedure. The
right of the accused to be released on bail after filing of the challan, notwithstanding the
default in filing it within the time allowed, is governed from the time of filing of the
challan only by the provisions relating to the grant of bail applicable at that stage.
Sanjay Dutt vs State through C.B.I., Bombay (1994) 4 SCC 410: 1995 Cr LJ 477.
( clxxvii)In matters arising out of the Narcotics Drugs and Psychotropic Substance Act grant of
bail is controlled by Section 37 of the Act and it is mandatory for the Court to hear the
public prosecutor and come to the prima facie conclusion that there is no material to come
to the conclusion that the accused could be held guilty of the charges leveled against him.
Where such a conclusion is not recorded by the High Court and is not supported the
reasons impugned order granting bail cannot be sustained.
Union of India vs Abdulla 2005 Cri LJ 3115 (3116): (2004) 13 SCC 504.
( clxxviii)The limitations on granting of bail specified in Cl. ( b) of sub-S. (1) of S. 37, NDPS Act
come in only when the question of granting bail arises on merits. By its very nature the
provision is not attracted when the grant of bail is automatic on account of the default in
filing the complaint within the maximum period of custody permitted during investigation
by virtue of sub-S. (2) of S. 167, Cr.P.Code. The only fact material to attract the proviso
to sub-S. (2) of S. 167 is the default in filing the complaint within the maximum period
Page 12
specified therein 10 permit custody during investigation and not the merits of the case
which till the filing of the complaint are not before the Court to determine the existence of
reasonable grounds for forming the belief about the guilt of the accused. It cannot be said
that this belief can be formed during investigation by reference to the contents of the case
diary even before the charge-sheet has been filed. This is fallacious. Till the complaint is
filed the accused is supplied no material from which he can discharge the burden placed
on him by S. 37(1)( b) of the NDPS Act.
The limitation on the power to release on bail in S. 437, Cr.P.Code is in the nature of a
restriction on that power, if reasonable grounds exist for the belief that the accused is
guilty. On the other hand, the limitation on this power in S. 37 of the NDPS Act is in the
nature of a condition precedent for the exercise of that power, so that, the accused shall
not be released on bail unless the Court is satisfied that there are reasonable grounds to
believe that he is not guilty. Under S. 437, Cr.P.Code it is for the prosecution to show the
existence of reasonable grounds to support the belief in the guilt of the accused to attract
the restriction on the power to grant bail; but under S. 37, NDPS Act it is the accused who
must show the existence of grounds for the belief that he is not guilty, to satisfy the
condition precedent and lift the embargo on the power to grant bail. This appears to be the
distinction between the two provisions which makes S. 37 of the NDPS Act more
stringent.
Provision in S. 37 to the extent it is inconsistent with S. 437 of the Cr.P.Code supersedes

the corresponding provision in the Code and imposes limitations on granting of bail in
addition to the limitations under the Code of Criminal Procedure as expressly provided in
sub-S. (2) of S. 37. These limitations on granting of bail specified in sub-S. (1) of S. 37
are in addition to the limitations under S. 437 of the Cr.P.Code and were enacted only for
this purpose; and they do not have the effect of excluding the applicability of the proviso
to sub-S. (2) of S. 167, Cr.P.Code which operates in a different field relating to the total
period of custody of the accused permissible during investigation.
Note: Narcotics Control Bureau vs Kishan Lal AIR 1991 SC 558: 1991 SCC (Cr) 265:
(1991) 1 SCC 705, distinguished.
Union of India vs Thamisharasi 1995 SCC (Cr) 665: (1995) 4 SCC 190.
( clxxix)Cl. ( b) of S. 306(4), Cr.P.Code casts a duty on the Court to keep the approver under
detention till the termination of the trial. The provisions are based on statutory principles
of public policy and public interest, violation of which could not be tolerated. Release of
an approver on bail may be illegal which can be set aside by a superior Court, but such a
release would not have any effect on the validity of the pardon once validly granted to an
approver. In these circumstances even though the approver was not granted any bail by
the committal Magistrate or by the trial Judge yet his release by the High Court would not
in any way affect the validity of the pardon granted to the approver Ram Sagar.
Suresh Chandra Bahri vs State of Bihar AIR 1994 SC 2420: 1995 SCC (Cr) 60: (1995) 1
(Supp) SCC 80: 1994 Cr LJ 3271: JT (1994) 4 SC 309: 1994 Cr LR (SC) 725: (1994) 2
Crimes 1027.
( clxxx)Petition filed under Arts. 226 and227 of the Constitution seeking writ of certiorari for
quashing proceedings under the Terrorist and Disruptive Activities (Prevention) Act and
also quashing order of Designated Court regarding refusal of bail.
Interim order passed by the High Court granting bail without recording reasons for taking
Page 13
the contrary view.
Held: In absence of reasons, the High Court was directed to dispose of either the main
writ petition by which the proceedings under the Terrorist and Disruptive Activities
(Prevention) Act had been challenged or the ancillary relief for bail sought for after
hearing the parties on questions of law and fact so as to enable the Supreme Court to
understand and examine the reasonings of the High Court.
Notes:
( a) The case was sent back to the High Court.
( b) Legal question regarding High Court's jurisdiction to entertain bail application in
offence under the Terrorist and Disruptive Activities (Prevention) Act need not be
examined at the interlocutory stage.
State of Maharashtra vs Abdul Hamid Haji Mohd. 1994 SCC (Cr) 723: (1994) 1 (Supp)
SCC 579.
( clxxxi)Anticipatory bail cannot be granted as a matter of right. It is essentially a statutory right
conferred long after the coming into force of the Constitution. It cannot be considered as
an essential ingredient of Art. 21 of the Constitution. And its non-application to a certain
special category of offences cannot be considered as violative of Art. 21.
State of Madhya Pradesh vs Ram Kishna Balothia AIR 1995 SC 1198: 1995 SCC (Cr)
439: (1995) 3 SCC 221.
( clxxxii)Bail practice of High Court to grant bail with effect from a future date ranging between
six months to one year deprecated. Matter remitted back to the High Court for individual
consideration on merits of each case.
Dasharath Pandey vs State of Bihar 1995 SCC (Cr) 991: (1995) 3 (Supp) SCC 551.
( clxxxiii)The charge-sheet was filed against the appellant and also other accused persons for an
offence under S. 6 of the Terrorist and Disruptive Activities (Prevention) Act, 1987 read
with Ss. 286,120-B and34 of I.P.Code read with S. 9(B) of the Indian Explosives Act,
1884 on 19th December, 1991. The appellant is a priest. He is now in Jail for more than
four years and eight months continuously except for a short period of 2½ months when he
was on parole on medical grounds. The minimum sentence under S. 6 of the TADA Act is
only five years.
Held: That in the facts of this case, the appellant should be released on bail.
Giani Pratap Singh vs State of Rajasthan AIR 1996 SC 74.

( clxxxiv)Whereby the first respondent was released on bail in terms of S. 167, Cr.P.Code, in as
much as the prosecution failed to submit Police report (challan) within the period
prescribed. It transpires that the prosecution submitted the Police report on 23-12-1992,
when the period of one year assigned for the purpose stood expired. It is noteworthy that
when claim for bail by the respondent was being examined, the Police report indeed stood
filed. Yet the Designated Court granted bail to the respondent on the mere fact that the
Police report had been filed belatedly. It apparently considered the right to the respondent
to bail indefeasible on the expiry of the period of one year.
Patently, the Designated Court was in error. A five member Bench of this Court in Sanjay
Dutt vs State through C.B.I., Bombay (1994) 5 SCC 410 has stated at page 442 as follows:
"The indefeasible right accruing to the accused in such a situation is enforceable only
Page 14
prior to the filing of the challan and it does not survive or remain enforceable on the
challan being filed, if already not availed of. Once the challan has been filed, the question
of grant of bail has to be considered and decided only with reference to the merits of the
case under the provisions relating to grant of bail to an accused after the filing of the
challan. The custody of the accused after the challan has been filed is not governed by S.
167 but different provisions of the Code of Criminal Procedure. If that right had accrued
to the accused but it remained unenforced till the filling of the challan, then there is no
question of its enforcement thereafter since it is extinguished the moment challan is filed
because S. 167, Cr.P.Code ceases to apply."
Note: Central Bureau of Investigation, Special Investigation Cell-I, New Delhi vs Anupam
J. Kulkarni AIR 1992 SC 1768: 1992 SCC (Cr) 554: (1992) 3 SCC 141, referred.
State through CBI vs Mohd. Ashraft Bhat 1996 SCC (Cr) 117: (1996) 1 SCC 432.
( clxxxv)When any person has reason to believe that he may be arrested on an accusation of having
committed a non-bailable offence, the High Court or the Court of Sessions may, if it
thinks fit, direct that in the event of such arrest, he shall be released on bail and in passing
that order, it may include such conditions having regard to the facts of the particular case,
as it may deem appropriate. Anticipatory bail is granted in anticipation of arrest in
nonbailable cases but that does not mean that the regular Court, which is to try the
offender is sought to be by-passed and that is the reason why the High Court very rightly
fixed the outer date for the continuance of the bail and on the date of its expiry directed
the petitioner to move the regular Court for bail.
Salauddin Abdulsamad Shaikh vs State of Maharashtra AIR 1996 SC 1042.

( clxxxvi)Anticipatory bail orders should be of a limited duration only and ordinarily on the expiry
of that duration or extended duration the Court granting anticipatory bail should leave it to
the regular Court to deal with the matter on an appreciation of evidence placed before it
after the investigation has made progress or the charge-sheet is submitted. It should be
realised that an order of anticipatory bail could even be obtained in cases of serious nature
as for example murder and, therefore, it is essential that the duration of that order should
be limited and, ordinarily, the Court granting anticipatory bail should not substitute itself
for the original Court which is expected to deal with the offence. It is that Court which has
then to consider whether, having regard to the material placed before it, the accused
person is entitled to bail.
Salauddin Abdulsamad Shaikh vs State of Maharashtra AIR 1996 SC 1042.

( clxxxvii)After the expiry of periods which have been specified in S. 20(4)( b) andS. 20(4)( bb),
Terrorist and Disruptive Activities (Prevention) Act, 1987 the accused for an offence
under TADA Act acquires the right to be released on bail, in terms of proviso ( a) to S.
167(2) of the Cr.P.Code. It need not be pointed out or impressed that in view of series of
judgments of this Court, this right cannot be defeated by any Court, if the accused
concerned is prepared and does furnish bail bonds to the satisfaction of the Court
concerned. Any accused released on bail under proviso ( a) to S. 167(2) of the Cr.P.Code
read with S. 20(2)( b) orS. 20(4)( bb) of the TADA Act, because of the default on the part
of the investigation agency to conclude the investigation, within the period prescribed, in
view of proviso ( a) to S. 167(2) itself, shall be deemed to have been so released under the
provisions of Chap. XXXIII of the Cr.P.Code. It cannot be held that an accused charged
of any offence, including offences under Terrorist and Disruptive Activities (Prevention)
Act, 1987, if released on bail because of the default in completion of the investigation,
then no sooner the charge-sheet is filed, the order granting bail to such accused is to be
Page 15
cancelled. The bail of such accused who has been released, because of the default on the
part of the Investigating Officer to complete the investigation, can be cancelled, but not
only on the ground that after the release, charge-sheet has been submitted against such
accused for an offence under Terrorist and Disruptive Activities (Prevention) Act, 1987.
For cancelling the bail, the well-settled principles in respect of cancellation of bail have to
be made out.
Mohd. Iqbal Madav Sheikh vs State of Maharashtra 1996 SCC (Cr) 202: (1996) 1 SCC
722.
( clxxxviii)Persons facing trial for kidnapping, theft, cheating, under Arms Act, counterfeiting,
under Customs Act, under S. 326, I.P.Code, under S. 324, I.P.Code, riots and under S.
354, I.P.Code who are in Jail for a period of more than one year, shall be released on bail
forthwith to the satisfaction of the Trial Courts concerned. There may be cases where the
under-trial persons may not be in a position to furnish sureties, etc. In those cases, the
Trial Courts may consider--keeping in view the facts of each case especially the period
spent in Jail--releasing them on bail by furnishing personal bonds.
It shall not be necessary for any of the under-trials to move application for bail. The
Courts shall suo motu on the authority of this Court's order, consider the bail cases. This
shall be done by all the Courts concerned within two weeks of the receipt of this order.
R. D. Upadhyay vs State of Andhra Pradesh 1996 SCC (Cr) 202: (1996) 3 SCC 422:
(1996) 1 Crimes 189.
( clxxxix)The very pendency of criminal proceedings for long periods by itself operates as an
engine of oppression. Quite often, the private complainants institute these proceedings out
of oblique motives. Even in case of offences punishable for seven years or less with or
without fine--the prosecutions are kept pending for years and years together in criminal
Courts. It appears essential to issue appropriate directions to protect and effectuate the
right to life and liberty of the citizens guaranteed by Art. 21 of the Constitution. It is also
necessary to ensure that these criminal prosecutions do not operate as engines of
oppression. The Court issued the following directions:--
( 1)
( a) Where the offences under the Indian Penal Code or any other law for the
time being in force for which the accused are charged before any criminal
Court are punishable with imprisonment for exceeding three years with or
without fine and if trials for such offences are pending for one year or more
and the concerned accused have not been released on bail but are in Jail for
a period of six months or more, the concerned criminal Court shall release
the accused on bail or on personal bond to be executed by the accused and
subject to such conditions, if any, as may be found necessary, in the light
of S. 437 of the Cr.P.Code.
( b) Where the offences under the Indian Penal Code or any other law for the
Court are punishable with imprisonment not exceeding five years, with or
without fine, and if the trials for such offences are pending for two years or
more and the concerned accused have not been released on bail but are in
Jail for a period of six months or more, the concerned criminal Court shall
release the accused on bail or on personal bond to be executed by the
accused and subject to the imposing of suitable conditions, if any, in the
light of S. 437, Cr.P.Code.
Page 16
( c) Where the offences under the Indian Penal Code or any other law for the
Court are punishable with seven years or less, with or without fine, and if
the trials for such offences are pending for two years or more and the
concerned accused have not been released on bail but are in Jail for a
period of one year or more, the concerned criminal Court shall release the
accused on bail or on personal bond to be executed by the accused and
subject to imposing of suitable conditions, if any, in the light of S. 437,
Cr.P.Code.
( 2)
( a) Where criminal proceedings are pending regarding traffic offences in any
criminal Court for more than two years on account of non serving
summons to the accused or for any other reason whatsoever, the Court
may, discharge the accused and close the cases.
( b) Where the cases pending in criminal Courts for more than two years under
the Indian Penal Code or any other law for the time being in force are
compoundable with permission of the Court and if in such cases trials have
still not commenced, the criminal Court shall, after hearing the Public
Prosecutor and other parties represented before it or their Advocates;
discharge or acquit the accused, as the case may be, and close such cases.
( c) Where the cases pending in criminal Courts under the Indian Penal Code or
any other law for the time being in force pertain to offences which are
non-cognizable and bailable and if such pendency is for more than two
years and if in such cases trials have still not commenced, the criminal
Court shall discharge or acquit the accused, as the case may be, and close
such cases.
( d) Where the cases pending in criminal Courts under the Indian Penal Code or
any other law for the time being in force are pending in connection with
offences which are punishable with fine only and are not of recurring
nature, and if such pendency is for more than one year and if in such cases
trials have still not commenced, the criminal Court shall discharge or
acquit the accused, as the case may be, and close such cases.
( e) Where the cases pending in criminal Courts under the Indian Penal Code or
any other law for the time being in force are punishable with imprisonment
upto one year, with or without fine, and if such pendency is for more than
one year and if in such cases trials have still not commenced, the criminal
Court shall discharge or acquit the accused, as the case may be, and close
such cases.
( f) Where the cases pending in criminal Courts under the Indian Penal Code or
any other law for the time being in force are punishable with imprisonment
upto three years, with or without fine, and if such pendency is for more
than two years and if in such cases trials have still not commenced, the
criminal Court shall discharge or acquit the accused, as the case may be,
and close such cases.
( 3) For the purpose of directions contained in Cls. (1) and (2) above, the period of
pendency of criminal cases shall be calculated from the date the accused are
summoned to appear in the Court.
( 4) Directions (1) and (2) made hereinabove shall not apply to cases of offences
Page 17
involving ( a) corruption, misappropriation of public funds, cheating, whether

under the Indian Penal Code. Prevention of Corruption Act or any other statute, (
b) smuggling, foreign exchange violation and offences under the Narcotics Drugs
and Psychotropic Substances Act, ( c) Essential Commodities Act, Food
Adulteration Act, Acts dealing with Environment or any other economic offences,
( d) offences under Arms Act, Explosive Substances Act, Terrorists and Disruptive
Activities (Prevention) Act, ( e) offences relating to the Army, Navy and Air
Force, ( f) offences against public tranquility; ( g) offences relating to public
servants, ( h) offences relating to coins and Government stamp, ( i) offences
relating to elections, ( j) offences relating to giving false evidence and offences
against public justice, ( k) any other type of offences against the State, ( l) offences
under the Taxing enactments, and ( m) offences of defamation as defined in S.
499, I.P.Code.
( 5) The criminal Courts shall try the offences mentioned in Para. (4) above on a
priority basis. These directions are applicable not only to the cases pending on this
day but also to cases which may be instituted hereafter. As and when, a particular
case gets covered by one or the other direction mentioned in directions (1) and (2)
read with direction (4) above, appropriate orders shall be passed by the concerned
Court without any delay.
Kirtikant D. Vadodaria vs State of Gujarat 1996 SCC (Cr) 762.
( cxc) His decision not to press for bail would be indicative of the fact that the Court was
disinclined to grant bail or, he did not see sufficient grounds to press the bail application.
Kashmira Singh vs Duman Singh AIR 1996 SC 2176: 1996 SCC (Cr) 844: (1996) 4 SCC
693.
( cxci) On 16-2-1995, some officials in Bihar stopped and inspected an Ambassador car and
detected 97 kgs. of "non-duty paid ganja" hidden in a false chamber built inside the
vehicle. The driver and two passengers of the car were arrested and were later remanded
to judicial custody. About 3 months thereafter those three persons moved for bail and the
application came up before the appellant who was Sessions Judge-cum-Special Judge,
Purnea. He passed orders on 29-7-1995 rejecting bail for the driver and granting bail for
the other two persons subject to certain conditions. This order was challenged by the
Collector of Customs, Patna before the High Court of Patna. The Single Judge passed the
order cancelling the bail granted to the aforesaid two persons and in that order made the
following observations. "Before I part with this order, I would like to observe that the
learned Special Judge, who happens to be a seniormost Sessions Judge could not have
passed the order impugned in a leisurely manner completely ignoring the provisions of S.
37 of the NDPS Act".
Held: A Division Bench of the Patna High Court in Kamlesh Kumar vs State of Bihar
(1994) 2 Pat LJR 600, in which it has been held that "when an accused is charged with
offence under S. 20( b)( i) of the NDPS Act, the power under S. 37(1)( b) is not to be
attracted." The Division Bench in that decision has made a reference to the decision of the
Supreme Court in Kishan Lal's case [AIR 1991 SC 558]. When learned Single Judge
castigated the appellant for being "ignorant of the law and was not aware of the latest
rulings", it would have been desirable that learned Single Judge had reminded himself of
the legal position laid down by the same High Court on the very same subject. If the
position of law which is binding on the subordinate judiciary in Bihar was the above (as
Page 18
laid down by the Division Bench in Kamlesh Kumar vs State of Bihar) there was no
justification at all for the learned Single Judge of the same High Court to observe that the
appellant-Special Judge had exceeded his jurisdiction in granting bail. We have no
hesitation in holding that the Sessions Judge was well within the jurisdiction when he
passed the order granting bail to the two persons, though it is a different matter whether
the discretion was well exercised by him.
Braj Kishore Thakur vs Union of India AIR 1997 SC 1157: (1997) 4 SCC 65: JT (1997)
3 SC 26: 1997 Cr LR (SC) 386: (1997) 1 Crimes 199.
( cxcii) The complaint relates to an offence alleged to have been committed by the appellants
nearly 16 years ago. Not much progress has taken place in the conduct of the proceedings
but the examination-in-chief and a part of the cross-examination of the complainant, the
main witness, has been completed. The appellants have been in custody since 2-5-1996.
The only reason put forth by the trial Court, as well as the High Court, for not releasing
the appellants on bail is that there is an apprehension that they are likely to influence the
witnesses or tamper with the evidence. The main witness in the present case is the
complainant himself, who has been zealously pursuing this case since 1987. It is his
perseverance throughout these long years that has made it possible for the case to reach
the stage at which it presently stands. His commitment to see the prosecution reach its
logical end is strong and he is not likely to be influenced by the accused.
Held:S. 437(1), Cr.P.Code provides that when any person accused of, or suspected of, the
Commission of any non-bailable offence is brought before a Court, he may be released on
bail unless his case falls in Cl. ( i) or Cl. ( ii) thereof. The present case is not covered by
the said two clauses. Therefore, ordinarily, a person who is suspected of having
committed an offence under S. 120-B read with S. 420, I.P.Code would be entitled to bail;
of course, the paramount consideration would always be to ensure that the enlargement of
such persons on bail will not jeopardise the prosecution case.
Chandraswami vs Central Bureau of Investigation AIR 1997 SC 2575: (1996) 6 SCC

751: 1997 Cr LJ 3124: 1997 Cr LR (SC) 188: (1996) 4 Crimes 159.
( cxciii)It is trite that among other considerations which the Court has to take into account in
deciding whether bail should be granted in a non-bailable offence is the nature and gravity
of the offence.
State of Maharashtra vs Ramesh Taurani AIR 1998 SC 586: (1998) 1 SCC 41: JT (1997)
9 SC 304: 1998 Cr LJ 855.
( cxciv)In view of the long incarceration of the accused for about 2 years and finding that the trial
was likely to consume some time, the accused was held entitled to the grant of bail
pending trial.
Sunil K. Sinha vs State of Bihar AIR 1999 SC 1533: 1998 SCC (Cr) 1366: (1998) 5 SCC
607.
( cxcv) By order dated March 19, 1996, the Supreme Court had given certain directions to the
Delhi Administration in the matter of grant of bail in respect of under-trial prisoners who
are undergoing imprisonment in respect of various offences. Nearly two years have
elapsed since the passing of the said order. This period would have given an idea to the
authorities regarding the impact of the order on the general law and order situation.
Therefore, the Commissioner of Police, Delhi was directed to submit a report in the form
of an affidavit indicating the impact of the directions contained in the said order of the
Supreme Court on the general law and order situation in the National Capital Region of
Page 19
Delhi. While submitting the said report, the Commissioner will also indicate as to whether
any of the persons who has been released in pursuance of this direction has repeated the
offence after his release.
R. D. Upadhyay vs State of Andhra Pradesh AIR 1999 SC 2183: 1998 SCC (Cr) 1380:
(1998) 5 SCC 696: 1999 Cr LJ 3499: JT (1998) 6 SC 486.
( cxcvi)The petitioner was involved in a murder case and was taken into custody on 21-2-1988.
The petitioner continues to be in custody even though the investigating agency has laid
the final report.
The High Court rejected his bail application without giving reasons.
In special leave petition, the petitioner adhered certain grounds to release him on bail.
Held: It was not known whether he urged such grounds before the High Court, as the
impugned order is silent about it. In such a situation, a more feasible course is to permit
the petitioner to move the High Court again.
Dhruv K. Jaiswal vs State of Bihar AIR 2000 SC 209: (2000) 10 SCC 84.
( cxcvii)Order was passed by the Metropolitan Magistrate imposing the onerous condition that an
accused at the FIR stage should pay a huge sum of Rs. 2 lacs to be set at liberty. If he had
paid, it is a different matter. But the fact that he was not able to pay that amount and in
default thereof he is to languish in jail for more than 10 months now, is sufficient
indication that he was unable to make up the amount. Accused cannot be detained in
custody endlessly for his inability to pay the amount in the range of Rs. 2 lacs.
His failure to do so then cannot now be used as a bar for preventing him from
approaching the Court with a prayer to release him from bail. He cannot be detained in
custody for long without conviction in a case of this nature.
Held: The appellant to be released on bail on his executing a bond in a sum of Rs. 25,000,
with two solvent sureties.
Sandeep Jain vs N.C.T. of Delhi AIR 2000 SC 714: 2000 SCC (Cr) 316: (2000) 2 SCC
66: 2000 Cr LJ 807: JT (2000) 1 SC 166: 2000 Cr LR (SC) 178: 2000 Cr App R (SC) 605.
( cxcviii)Bail and parole have different connotations in law. Bail is well understood in criminal
jurisprudence and Chap. XXXIII of the Cr.P.Code contains elaborate provisions relating
to grant of bail. Bail is granted to a person who has been arrested in a non-bailable offence
or has been convicted of an offence after trial. The effect of granting bail is to release the
accused from internment though the Court would still retain constructive control over him
through the sureties. In case the accused is released on his own bond, such constructive
control could still be exercised through the conditions of the bond secured from him. The
literal meaning of the word 'Bail' is surety.
Sunil Fulchand Shah vs Union of India AIR 2000 SC 1023: 2000 SCC (Cr) 659: (2000) 3
SCC 409: 2000 Cr LJ 1444: JT (2000) 2 SC 230: 2000 Cr LR (SC) 28: 2000 Cr App R
(SC) 374.
( cxcix)A convicted prisoner undergoing sentence of imprisonment cannot claim that he is
entitled to remission of the period during which he was on bail under orders of the Court.
State of Haryana vs Nauratta Singh AIR 2000 SC 1179: 2000 SCC (Cr) 711: (2000) 3
SCC 514: 2000 Cr LJ 1710.
Page 20
( cc) It is already 5 years passed since appellant has been taken into custody in connection with
this case.
Held: The Court cannot permit the appellant to continue in inacarceration for a further
period without the adjudication being finalized
Satya Brat Gain vs State of Bihar AIR 2000 SC 1925: (2000) 9 SCC 398: 2000 Cr LJ
2296: JT (2000) 2 SC 35.
( cci) They are facing charges under Ss. 406/420/34, I.P.Code and are in custody for more than
nine months by now. The allegation is that the appellants misappropriated to the tune of
Rs. 75,000 for giving employment.
Held: Having examined the manner in which the trial is proceeding and taking into
account the fact that the appellants are already in custody for more than nine months, a
case for grant of bail has been made out.
Ram Narayan Singh vs State of Bihar AIR 2000 SC 1945: 2000 SCC (Cr) 1157: (2000) 9
SCC 55: JT (2000) 1 SC 185.
( ccii) S. 389 of Cr.P.Code empowers Appellate Court to suspend sentence pending appeal and
release accused on bail. S. 32-A of NDPS Act in so far as it completely debars the
Appellate Court from the power to suspend the sentence awarded to a convict under the
Act does not stand the test of constitutionality. Not providing at least one right of appeal,
would negate the due process of law in the matter of dispensation of criminal justice.
There is no doubt that the right of appeal is the creature of a statute and when conferred, a
substantive right. Providing a right of appeal but totally disarming the Court from granting
interim relief in the form of suspension of sentence would be unjust, unfair and violative
of Art. 21 of the Constitution particularly when no mechanism is provided for early
disposal of the appeal. The pendency of criminal litigation and the experience in dealing
with pending matters indicate no possibility of early hearing of the appeal and its disposal
on merits at least in many High Courts. As the present is not the occasion to dilate on the
causes for such delay, we restrain ourselves from that exercise. In this view of the matter,
the appellate powers of the Court cannot be denuded by executive or judicial process.
Petitioner was convicted under NDPS Act and the bail application filed by him alongwith
appeal presented in the High Court was dismissed as not pressed in view of the judgment
of the Supreme Court in Maktool Singh vs State of Punjab JT (1999) 2 SC 176.
Held:S. 32-A of the NDPS Act is unconstitutional to the extent it takes away the right of
the Court to suspend the sentence of a convict under the Act. Nevertheless, a sentence
awarded under the Act can be suspended by the Appellate Court only and strictly subject
to the conditions spelt out in S. 37 of the Act as dealt with in this judgment and the
petitioner is at liberty to move the High Court for suspension of sentence awarded to him
under the Act. As and when any such application is filed, the same shall be disposed of in
accordance with law and keeping in view the limitations prescribed under S. 37 of the Act
and the law laid down by the Supreme Court.
Dadu vs State of Maharashtra AIR 2000 SC 3203: 2000 SCC (Cr) 1528: (2000) 8 SCC
437: 2000 Cr App R (SC) 554.
( cciii) S. 37 of the NDPS Act is mandatory in nature and the Court must bear in mind the said
provisions before deciding an application of bail in case an accused is facing a trial under
Page 21
the provisions of the NDPS Act.
Union of India vs Ikram Khan AIR 2000 SC 3397: 2000 SCC (Cr) 1493: (2000) 9 SCC
221: JT (2000) 2 SC 280.
( cciv) In the present case the bride had committed suicide within two years of her marriage.
Anticipatory bail petition was rejected by the High Court. Special Leave Petition was filed
before the Supreme Court.
While the complaint against the appellants was that they were not satisfied with the dowry
given at the time of wedding and were harassing the deceased continuously, consequent to
which she developed depression and even though the parents of the deceased tried to
assure the appellants that they would try to meet their demand of he dowry, the deceased
was being treated cruelty at her matrimonial home and her husband and no love and
affection to her because of which she developed depression.
It had also come on record that the deceased had tried to commit suicide at the residence
of her parents sometime in July, 2002 i.e. about a year earlier than the actual date of her
death.
One thing was obvious that there had been an attempt on the part of both the sides to
create documents either to establish the criminal case against the appellants or on the part
of the appellants to create evidence to defend themselves from such criminal charges.
Correctness or genuineness of this document can only be gone into in a full fledged trial
and it will not be safe to place reliance on any one of these documents at this stage.
Therefore the Supreme Court refrained from commenting on the genuineness of these
documents at this stage. Suffice it was to say that this was a matter to be considered at the
trial.
Looking to the background and the facts of the case, the appellants were granted
anticipatory bail.
M.P. Lohia vs State of West Bengal 2005 Cri LJ 1416 (1417): AIR 2005 SC 790: (2005)
2 SCC 686: (2005) 1 Crimes 283.
( ccv) The appellant-applicant has been sentenced to 7 years' rigorous imprisonment under S.
304-B and two years' rigorous imprisonment under S. 498-A, I.P.Code.
Taking into account the fact that the appellant-applicant is in custody for more than three
years and there is no likelihood of the appeal being heard early, the appellant-applicant be
released on bail to the satisfaction of the Additional Sessions Judge, New Delhi.
Shailendra Kumar vs State of Delhi AIR 2000 SC 3404(2): 2000 SCC (Cr) 795: (2000) 4
SCC 178: 2000 Cr LJ 2452: JT (2000) 1 SC 184.
( ccvi) The appellant is in Jail from 4-4-1998 in connection with offences under Ss. 394 and395
read with S. 149 of the I.P.Code. It is quite a long period that he has been in custody
without commencing the trial. There is no need to detain him further in custody.
Lapses on the part of the Counsel should not in this case be allowed to prejudice the
appellant who is languishing in Jail.
Held: The appellant be released on bail.
Vivek Kumar vs State of U.P. AIR 2000 SC 3406(2): (2000) 9 SCC 443: 2000 Cr LJ
Page 22
2774: JT (2000) 1 SC 552.

( ccvii) The appellant is being prosecuted for an offence under the provisions of Terrorist and
Disruptive Activities (Prevention) Act, 1987. He has been lingering in Jail since May,
1992. His co-accused Jasbir Singh was released on bail by the learned Designated Judge
on 16-8-1992. The appellant moved the Supreme Court earlier for being released on bail
and by order dated 6-11-1997 the Supreme Court has dismissed the prayer with the
observation that if the trial is not concluded within a reasonable time, it will be open to the
appellant to apply again to the Designated Court for releaseding him on bail. As the trial
was not concluded till May 1998, the appellant is entitled to bail.
Paramjit Singh vs State (N.C.T. of Delhi) AIR 2000 SC 3473(2).

( ccviii)The High Court was totally in error in granting bail without even focussing its attention to
the mandatory provision of S. 37 of the NDPS Act.
Union of India through C.B.N.C. vs Aharwa Deen AIR 2000 SC 3512(2).

( ccix) The Court rejected his prayer for bail. But, unfortunately in the order-sheet of the
proceeding, it was indicated that the accused has been released on bail and pursuant to
that order, in fact, the accused was released on bail.
When the Court recalled the earlier order dated 21-7-1998, admittedly the accused was
not heard.
Held: The Court has always the power to rectify any mistake committed by it. But since
the accused has already been released pursuant to an earlier order incorporated in the
order-sheet, the accused ought to have been heard before making any alteration/correction
in the order in question.
Note: The order rectifying the mistake without hearing the accused was quashed.
Rajendra Prasad Arya vs State of Bihar AIR 2000 SC 3536: (2000) 9 SCC 514: JT
(2000) 7 SC 338.
( ccx) The offence now alleged against the appellant is under Ss. 120-B,420,468,471 and506 of
the I.P.Code. He is alleged to have cheated a Japanese national in a whopping sum
exceeding Rs. 65 lacs. These are, of course, prima facie circumstances not entitling him to
be released on bail. But on the other side we noticed that he was in custody from 5-7-1999
to 10-12-1999 and, therefore, to continue to detain him during the pre-trial stage may not
be in the interest of justice.
Ashok Dhingra vs N.C.T. of Delhi AIR 2000 SC 3537(1): (2000) 9 SCC 533: JT (2000) 7
SC 350.
( ccxi) In a case of double murder, one of the six assailants is still absconding and, hence, the
trial proceeded against the remaining five accused. Four were acquitted and first
respondent was found guilty of the offence under S. 302 of the I.P.Code. The accused was
convicted under S. 302, I.P.Code. He filed an appeal before the Allahabad High Court and
at the first instance itself he was granted bail as per order dated 14-9-1999 passed by a
learned Single Judge of the High Court.
Held: Absolutely no reason is shown by the learned Single Judge for adopting this
exceptional course in a case where an accused was found guilty by the Trial Court under
S. 302 of the I.P.Code. The normal practice in such cases is not to suspend the sentence
and it is only in exceptional cases that the benefit of suspension of sentence can be
Page 23
granted.
Note: Supreme Court said "we refrain from considering the merits of the rival contentions,
for, it is open to the first respondent to move the High Court and satisfy the High Court
that his case would fall within the exception wherein there is justification for suspending
the sentence."
Ramji Prasad vs Rattan Kumar Jaiswal AIR 2000 SC 3564: JT (2000) 7 SC 477.
( ccxii) In the light of S. 37 of the NDPS Act, no accused can be released on bail when the
application is opposed by the public prosecutor unless the Court is satisfied that there are
reasonable grounds for believing that he is not guilty of such offences and that he is not
likely to commit any offence while on bail. Adopting the exceptional course of granting
bail to an accused involved in the offence under NDPS Act on ground that there was
prima facie violation of S. 52 and there was prima facie non-compliance with S. 57 of the
Act, was not proper. Compliance of Ss. 52 and57 is matter which could be established
only at the trial and could not be prejudged at the stage of consideration for bail.
Recording a finding in terms of S. 37 of the Act is sine qua non for granting bail to an
accused involved in the offence under the Act.
Superintendent, Narcotics Central Bureau, Chennai vs. R. Paulsamy AIR 2000 SC 3661:
(2000) 9 SCC 549.
( ccxiii)There must be cogent materials before the officer passing the detention order that the
detenu is likely to be released on bail. The inference must be drawn from the available
material on record and must not be the ipse dixit of the officer passing the order of
detention. Likelihood of detenu's moving an application for bail is not a cogent material
and detention order based on such material is liable to be quashed. The reasoning that
there is "likelihood to be released on bail" is different from "likelihood of his moving an
application for bail".
Amritlal vs Union Government through Secretary, Ministry of Finance AIR 2000 SC

3675: 2001 SCC (Cr) 147: (2001) 1 SCC 341: 2001 Cr LJ 474.
( ccxiv)When a detenue has been arrested already and in custody under NDPS Act, mere
likelihood of his moving application cannot be ground to pass detention order under S.
3(1) of PITNDPS Act, for "likelihood of moving an application for bail" cannot be
equated with "likelihood to be released".
Note: The order of detention was quashed.
Amritlal vs Union Government through Secretary, Ministry of Finance AIR 2000 SC

3675: 2001 SCC (Cr) 147: (2001) 1 SCC 341: 2001 Cr LJ 474.
( ccxv) A convicted person being kept in Jail pending appeal for such a long period is not a
desirable course, but it is only one side of the picture. As the petitioner is found guilty by
a Trial Court of the offence under S. 302, I.P.Code the Appellate Court can normally
presume that he is prima facie guilty of the offence as for suspending the sentence despite
the pendency of the appeal. Of course, it is open to the Appellate Court, even at that stage
to consider whether it is a fit case for suspending sentence despite such presumption. This
is the other side of the picture.
Akhilesh Kumar Sinha vs State of Bihar (2000) 6 SCC 461: 2000 SCC (Cr) 1126.
( ccxvi)The role attributed to this appellant is that he gave a blow with a lathi on the head, but the
Page 24
death of deceased was not due to that injury. Death of the deceased occurred several days
after the date of incident. Another accused arraigned alongwith him (P. Kumara) has been
released on bail by the impugned order on the premise that he has no specific role in the
occurrence.
Held: He can be released on bail now.
Kumar vs State of Karnataka JT (2000) 4 SC 353: (2000) 4 Crimes 31.

( ccxvii)The scheme of S. 37 reveals that the exercise of the power to grant bail by the Special
Judge is not only subject to the limitations contained under S. 439 of the Cr.P.Code, but is
also subject to the limitation placed by S. 37 which commences with non-obstante clause.
The operative part of the said section is in negative in prescribing the enlargement of bail
of any person accused of commission of an offence under the Act unless two conditions
are satisfied. The first condition is that prosecution must be given an opportunity to
oppose the application and the second is that the Court must be satisfied that there are
reasonable grounds for believing that he is no guilty of such offence. If either of these two
conditions is not satisfied, the ban for granting bail operates. As per the mandate of S. 37,
no person accused of an offence punishable for a term of imprisonment of 5 years or more
under the Act can be released on bail unless the conditions mentioned in sub-Cls. ( i) and (
ii) of Cl. ( b) are satisfied.
Held: Consequently, the impugned order passed by the High Court releasing the
respondent on bail, is set aside.
Intelligence Officer, Narcotics C. Bureau vs Sambhu Sonkar AIR 2001 SC 830: 2001
SCC (Cr) 346: (2001) 2 SCC 562: 2001 Cr App R (SC) 199: 2001 Cr LR (SC) 160:
(2001) 1 Crimes 258.
( ccxviii)In view of S. 37(1)( b) of NDPS Act, unless there are reasonable grounds for believing
that the accused is not guilty of such offence and that he is not likely to commit any
offence while on bail alone will entitle him to a bail. In the present case, the petitioner
attempted to secure bail on various grounds but failed. But those reasons would be
insignificant if we bear in mind the scope of S. 37(1)( b) of the NDPS Act. At this stage of
the case all that could be seen is whether the statements made on behalf of the prosecution
witnesses, if believable, would result in conviction of the petitioner or not. At this
juncture, we cannot say that the accused is not guilty of the offence if the allegations
made in the charge are established. Nor can we say that the evidence having not been
completely adduced before the Court that there are no grounds to hold that he is not guilty
of such offence. The other aspect to be borne in mind is that the liberty of a citizen has got
to be balanced with the interest of the society. In cases where narcotic drugs and
psychotropic substances are involved, the accused would indulge in activities which are
lethal to the society. Therefore, it would certainly be in the interest of the society to keep
such persons behind bars during the pendency of the proceedings before the Court, and
the validity of S. 37(1)( b), NDPS Act having been upheld, we cannot take any other
view.
Babua vs State of Orissa AIR 2001 SC 1052: 2001 SCC (Cr) 351: (2001) 2 SCC 566: JT
(2000) 2 SC 552: 2001 Cr LR (SC) 195: 2001 Cr App R (SC) 189.
( ccxix)For releasing the respondent on bail, the High Court has ventured to refer to the merits of
the case and pre-maturily held that there was no material on record to show that the
respondent was guilty of conspiracy, in execution of which, Shubhangi, once his beloved,
was murdered.
Page 25
Once the final charge-sheet has been filed in the Trial Court, the High Court, under the
normal circumstances, should have permitted the respondent to get a verdict of his
innocence or involvement from that Court under Chap. XVIII of the Cr.P.Code. No
exceptional ground has been made out, in the instant case, to depart from such a usual
established procedure.
Held: The order of the granting bail is contrary to law. The same is set aside.
Note: The bail for offences under Ss. 302,109,364,397,201/120-B, I.P.Code read with S.
3(1)(xi) of the Schedule Caste and Schedule Tribe (Prevention of Atrocities) Act was
granted by High Court.
State of Maharashtra vs Ritesh AIR 2001 SC 1310: 2001 SCC (Cr) 671: (2001) 4 SCC
224: 2001 Cr LJ 1695: 2001 Cr App R (SC) 315: 2001 Cr LR (SC) 329: (2001) 2 Crimes
30.
( ccxx) In case where the offence is punishable with death or imprisonment for life which is
triable exclusively by a Court of Sessions, the Magistrate may, in his wisdom, refrain the
exercise of powers of granting the bail and refer the accused to approach the higher Court,
unless he is fully satisfied that there is no reasonable ground for believing that the accused
has been guilty of an offence punishable with death or imprisonment for life.
Prahlad Singh Bhati vs N.C.T., Delhi AIR 2001 SC 1444: 2001 SCC (Cr) 674: (2001) 4
SCC 280: JT (2001) 4 SC 116: 2001 Cr LJ 1730: (2001) 2 Crimes 87.
( ccxxi)Respondent No. 2, who is alleged to have murdered his wife and against whom FIR No.
566/92 was registered in the Police Station Lajpat Nagar under S. 302 of the I.P.Code,
was released on bail by the Metropolitan Magistrate, New Delhi on 22nd August, 2000.
The revision filed against the aforesaid order has been dismissed by a learned Single
Judge of the High Court by passing a telegraphic order to the effect "having considered
the case before me I am of the opinion that no ground has been made for cancellation of
bail".
The case was registered under Ss. 306 and408-A, I.P.Code. The accusedrespondent
moved an application for grant of anticipatory bail in terms of S. 438 of the Cr.P.Code. As
the bail application was not seriously opposed by the investigating agency, the Additional
Sessions Judge, New Delhi granted interim bail on 16-6-1999. On 1-7-2000, a
charge-sheet was filed against the accused under Ss. 302,406 and498-A, I.P.Code by the
investigating agency and he was directed to appear before the Metropolitan Magistrate,
New Delhi on 8-8-2000.
Held: The mere initial grant of anticipatory bail for lesser offence, did not entitle the
respondent to insist for regular bail even if he was subsequently found to be involved in
the case of murder. Neither S. 437(5) nor S. 439(1) of the Cr.P.Code was attracted. There
was no question of cancellation of bail earlier granted to the accused for an offence
punishable under 498-A,306 and406, I.P.Code.
(SC) 274: (2001) 2 Crimes 87.
( ccxxii)While granting bail, the Court has to keep in mind--
( a) the nature of accusations,
( b) the nature of evidence in support,
Page 26
( c) the severity of the punishment which conviction will entail,

( d) the character, behaviour, means and standing of the accused,
( e) circumstances which are peculiar to the accused,
( f) reasonable posibility of securing the presence of the accused at the trial,
( g) reasonable apprehension of the witnesses being tampered with,
( h) the larger interests of the public or State and similar other considerations.
It has also to be kept in mind that for the purposes of granting the bail, the
Legislature has used the words "reasonable grounds for believing" instead of "the
evidence" which means the Court dealing with the grant of bail can only satisfy it
as to whether there is a genuine case against the accused and that the prosecution
will be able to produce prima facie evidence in support of the charge. It is not
expected at this stage, to have the evidence establishing the guilt of the accused
beyond reasonable doubt.
(SC) 274: (2001) 2 Crimes 87.
( ccxxiii)The son of the appellant and co-accused with her, has died while giving birth to a male
child, who under the compulsion of circumstances was also kept in Jail to be looked after
by the appellant till he attained the age of three years. Now the said child has been sent
out as the Jail authorities did not permit the child to remain with the appellant after
attaining the age of three years. Keeping the appellant further in Jail is likely to deprive
the said child of the parental love, affection and care which he needs at this stage. There is
no law by which such a child can also be directed to be kept with the appellant in Jail.
Depriving the appellant from looking after the child would not only be against the
interests of the child but against the interests of the society as well.
Held: The order of conviction and sentence passed against her shall be kept in abeyance
and she be released on bail on furnishing personal bond with two sureties in the amount
and to the satisfaction of the Trial Court.
Akhtari Bi vs State of M.P. AIR 2001 SC 1528: 2001 SCC (Cr) 714: (2001) 4 SCC 355:
JT (2001) 4 SC 40: 2001 Cr LR (SC) 357: 2001 Cr App R (SC) 213: (2001) 2 Crimes 65.
( ccxxiv)To have speedy justice is a fundamental right which flows from Art. 21 of the
Constitution. Prolonged delay in disposal of the trials and thereafter appeals in criminal
cases, for no fault of the accused, confers a right upon him to apply for bail.
Appeal being a statutory right, the Trial Court's verdict does not attain finality during
pendency of the appeal and for that purpose his trial is deemed to be continuing despite
conviction.
If an appeal is not disposed of within the period of 5 years, for no fault of the convicts,
such convicts may be released on bail on such conditions as may be deemed fit and proper
by the Court. In computing the period of 5 years, the delay for any period, which is
requisite in preparation of the record and the delay attributable to the convict or his
counsel can be deducted. There may be cases where even after the lapse of 5 years the
convicts may, under the special circumstances of the case, be held not entitled to bail
pending the disposal of the appeals filed by them.
Held: Keeping in view the allegations made against the appellant coupled with the fact
that she is old and infirm, it is appropriate to direct her release on bail by keeping the
Page 27
sentence awarded to her in suspension.
Akhtari Bi vs State of M.P. AIR 2001 SC 1528: 2001 SCC (Cr) 714: (2001) 4 SCC 355:
JT (2001) 4 SC 40: 2001 Cr LR (SC) 357: 2001 Cr App R (SC) 213: (2001) 2 Crimes 65.
( ccxxv)By the time application is filed for grant of bail as per provision of S. 167(2), Cr.P.Code,
charge-sheet/challan is filed, the accused is entitled to bail.
Facts: The accused after surrendering himself in the Court was remanded to judicial
custody by order of the Magistrate on 17-6-2000. A case has been instituted against him
under Ss. 406 and420 of the I.P.Code read with Maharashtra Protection of Interest of
Depositors (Financial Establishment) Act, 1999. The period of 60 days for filing of charge
sheet was completed on 16-8-2000. On the next day, i.e., 17-8-2000, an application for
being released on bail was filed before the Magistrate alleging that non-filing of challan
within 60 days entitled the accused to be released on bail under proviso to S. 167(2) of the
Cr.P.Code. The Magistrate rejected the prayer on the same day on a conclusion that the
provisions of S. 167(2), Cr.P.Code has no application to cases pertaining to MPID Act.
The Division Bench of Bombay High Court, on examination of the relevant provisions of
the MPID Act, more particularly, Ss. 13 and14 thereof, and relying upon the judgment of
the Supreme Court in Union of India vs Thamisharasi AIR 1957 SC 199, Hitendra
Vishnu Thakur vs State of Maharashtra (1994) 4 SCC 602 as well as the Constitution
Bench decision in Sanjay Dutt vs State through C.B.I. Bombay (II) (1994) 5 SCC 410,
came to hold that there is no interdiction in the Maharashtra Act of 1999 against the
applicability of S. 167(2), proviso of the Cr.P.Code and, therefore, an accused arrested for
commission of an offence under S. 3 of the MPID Act is entitled to claim release on bail
on expiry of total period specified in S. 167 if the challan is not filed within that period.
Having held so, on the entertainability of the claim of the accused invoking provisions of
S. 167 of the Cr.P.Code, the High Court ultimately refused to grant relief on the ground
that by the time the application for bail before the Division Bench came to be considered
on 31st August, 2000, a charge-sheet had been filed before the Magistrate on 30th August,
2000 and, therefore, the so called enforceable right did not survive or remain enforceable.
Held: In the case in hand, it has to be held that the accused availed of his right on 17th
August, 2000 by filing an application for being released on bail and offering therein to
furnish the bail in question. This being the position, the High Court was in error in
refusing that right of the accused for being released on bail. The accused should be
released on bail on such terms and conditions to the satisfaction of the learned Magistrate,
and further the Magistrate would be entitled to deal with the accused in accordance with
law and observations made in this judgment, since the charge-sheet has already been filed.
Note: However, the expression "availed of" does not mean mere filing of the application
for bail expressing thereunder willingness to furnish bail bond, but the stage for actual
furnishing of bail bond must reach. If challan is filed before that, then there is no question
of enforcing the right, howsoever valuable or indefeasible it may be, after filing of the
challan because thereafter the right under default clause cannot be exercised.
Uday Mohanlal Acharya vs State of Maharashtra AIR 2001 SC 1910: 2001 SCC (Cr)
760: 2001 Cr LJ 1832: JT (2001) 4 SC 262: 2001 Cr LR (SC) 472.
( ccxxvi)The marriage of the deceased and the accused took place on 9.5.2005. Within five months
of marriage, the deceased was found dead on 1.10.2005. On the FIR lodged by the
appellant father a case under Ss. 498A,304B was registered against the accused husband,
Page 28
father-in-law, mother-in-law and brother-in-law of the deceased. The High Court granted
bail by a laconic order. The order was a non-speaking order, did not disclose reasons for
granting bail. As the order did not disclose the reasons for granting bail, the order granting
bail was set aside.
Gajanand Agarwal vs State of Orissa 2006 Cri LJ 4618 (4622): AIR 2006 SC 3248:
(2006) 12 SCC 131: (2006) 4 Crimes 268.
( ccxxvii)Giving reasons for granting bail is different from discussing merits or demerits.
At the stage of granting bail a detailed examination of evidence and elaborate

documentation of the merits of the case has not to be undertaken. What the Additional
Sessions Judge had done, in the order dated 11th September, 2000 was to discuss the
merits and de-merits of the evidence. That was what was deprecated. That did not mean
that whilst granting bail some reasons for prima facie concluding why bail was being
granted did not have to be indicated.
Puran vs Rambilas AIR 2001 SC 2023: 2001 SCC (Cr) 1124: (2001) 6 SCC 338: 2001
Cr App R (SC) 357: 2001 Cr LJ 2566: JT (2001) 5 SC 226.
( ccxxviii)Though rejected by Sessions Judge High Court allowed bail application on the ground
that chemical examination report and postmortem report ruled out homicide. The High
Court virtually wrote order of acquittal which is impermissible. Order of the High Court
granting bail for offence under Ss. 304 B,302 and498A IPC was set aside.
Gajanand Agarwal vs State of Orissa 2007 Cri LJ 2752 (2756): 2006 AIR(SC) 3248:
2006(Supp-6) SCR 349: 2006(12) SCC 131: 2006(12) JT 55: 2006(8) Supreme 276:
2006(10) SRJ 239: 2006 CrLJ 4618: 2007(1) SCC(Cr) 568: 2006(4) Crimes 268 (SC):
2006(3) JCC 1823: 2006(4) RecentCR 311: 2006(9) SCALE 378.
( ccxxix)From the relevant part of S. 167(2), Cr.P.Code and S. 386, I.P.Code, it is apparent that
pending investigation relating to an offence punishable with imprisonment for a term "not
less than 10 years", the Magistrate is empowered to authorise the detention of the accused
in custody for not more than 90 days. For rest of the offences, period prescribed is 60
days. Hence, in case, where offence is punishable with imprisonment for 10 years or
more, accused could be detained up to a period of 90 days. In this context, the expression
"not less than" would mean imprisonment should be 10 years or more and would cover
only those offences for which punishment could be imprisonment for a clear period of 10
years or more. Under S. 386, punishment provided is imprisonment of either description
for a term which may extend to 10 years and also fine. That means, imprisonment can be
for a clear period of 10 years or less. Hence, it could not be said that minimum sentence
would be 10 years or more. Further, in context also if we consider Cl. ( i) of proviso ( a)
to S. 167(2), it would be applicable in case where investigation relates to an offence
punishable
( 1) with death;
( 2) imprisonment for life; and
( 3) imprisonment for a term of not less than ten years. It would not cover the offence for
which punishment could be imprisonment for less than 10 years. Under S. 386 of the
I.P.Code, imprisonment can vary from minimum to maximum of 10 years and it cannot be
said that imprisonment prescribed is not less than 10 years.
Rajeev Chaudhary vs State (NCT) of Delhi AIR 2001 SC 2369: 2001 SCC (Cr) 819: (2001) 5
SCC 34: 2001 Cr App R (SC) 463: 2001 Cr LR (SC) 452.
( ccxxx)The appellant was arrested alongwith two other accused persons by the Police of Police Station,
Sadar Karnal on 7-5-1999 at the check-post alleging that when a maruti car was checked, a dead
Page 29
body was in the back seat. FIR was registered at that Police Station and on being given on Police
remand, they were brought to Delhi where they pointed out a house as the place of occurrence
and a FIR was also registered in Delhi. Since 90 days were over and charge-sheet had not been
filed, a petition was filed under S. 167(2), Cr.P.Code in the Court of ACJM, Karnal, for releasing
on bail. He was ordered to be released on bail on 6-8-1999. On 7-8-1999, instead of releasing the
appellant and other co-accused from Karnal Jail, they were handed over to Delhi Police. He was
produced before the Magistrate, New Delhi and was sent to Judicial custody. His petition for
grant of bail under S. 167(2), Cr.P.Code was rejected by the Magistrate as well as by the Sessions
Judge and the High Court.
Held: The petition filed for release of the appellant on bail under S. 167(2) of the Cr.P.Code was
rejected by the learned Magistrate and the learned Additional Sessions Judge at New Delhi. The
High Court was also not satisfied that there was any merit in the application. In the meantime,
chargesheet has been filed and the case has been committed to the Court of Sessions. In the
circumstances, we are not inclined to order release of the appellant on bail in exercise of our
jurisdiction under Art. 136 of the Constitution of India.
Sukhjinder vs State (NCT) of Delhi AIR 2001 SC 2941: 2002 SCC (Cr) 11: (2001) 8 SCC 630:
2001 Cr LR (SC) 763.
( ccxxxi)Acting upon a definite information, received by the Police Station, force was deployed and the
respondent-accused was apprehended. After compliance of the mandatory provisions of S. 50 of
the Narcotic Drugs and Psychotropic Substances Act, 1985, opium weighing 7 Kgs. was seized
from the accused which he had kept in his bag. In the instant case, the Single Judge of the High
Court granted the bail on his own sense of observation regarding the course of conduct adopted
by the accused at the time of his interception and arrest. Merely because the accused was found to
be continuing to hold bag containing opium during the period, the raiding party searched him in
accordance with the provisions of the Act, the learned Judge was not justified to conclude "it is
by itself unnatural". How the learned Judge concluded that the conduct of the accused or raiding
party were unnatural is not discernible from the impugned order. A person, apprehended by a
raiding party, who is sought to be searched is supposed to hold the goods in his possession unless
he opts to flee from the place of occurrence or advised to throw the container in which the
offending substance is contained.
Note: Bail was cancelled.
State of Madhya Pradesh vs Kajad AIR 2001 SC 3317.

( ccxxxii)A person who has been previously convicted of an offence punishable with life imprisonment
shall not be released on bail unless there is no reasonable ground for believing that the person has
committed the offence and/or there are special reasons to do so. In this case, it is to be seen that
the co-accused is still absconding. Two witnesses have already retracted their statements. There
are still eye-witnesses, who have directly connected the 2nd respondent and assigned a specific
role to the 2nd respondent in the murder of the deceased. Thus, at this stage it could not be said
that there is reasonable ground for believing that 2nd respondent has not committed the offence.
No special reasons for granting bail have been indicated by the High Court. The alleged ailment
of the 2nd respondent is also not such as required for releasing him on bail. The 2nd respondent
can always apply to the Jail authorities to see that he gets the required medical treatment.
Ram Prakash Pandey vs State of Uttar Pradesh AIR 2001 SC 3592.

( ccxxxiii)Bail in murder cases should not be granted merely on the ground of delay in recovery of the
weapons.
Page 30
State, CBI/SPE, New Delhi vs Pal Singh 2001 SCC (Cr) 131: (2001) 1 SCC 247: 2001 Cr LJ
744: 2001 Cr App R (SC) 33.
( ccxxxiv)In a murder case, there was inordinate delay in trial. Offence committed in 1992. Not even case
committed to Sessions Court even after lapse of 8 years, bail granted by High Court. Sessions
Court directed to impose conditions while releasing accused on bail.
744: 2001 Cr App R (SC) 33.
( ccxxxv)On 13-3-2000, the Registrar of the Allahabad High Court reported to the Supreme Court that
learned Single Judge of the High Court heard arguments in the writ petitions on 5-2-1998, but
judgment was not yet pronounced.
On 31-3-2000, we gave expression to our distress that on account of the delay in pronouncing
judgment in the writ petitions after granting stay of further proceedings, the accused who were in
jail had to continue to languish during pre-conviction period.
744: 2001 Cr App R (SC) 33.
( ccxxxvi)In an offence under Ss. 409 and420, I.P.Code, the Court is certainly not going to recover the
alleged amount as a condition of grant of bail.
Held: It would be open for the accused to furnish corporate guarantee.
M. Sreenivasulu Reddy vs State of Tamil Nadu (2001) 2 Crimes 230 (SC).

( ccxxxvii)The respondent who was the erstwhile Chairman of the Haryana Public Service Commission, a
retired IAS Officer, is required for custodial interrogation.
Held: Respondent is directed to surrender before the Vigilance Officer, Police Station, Rohtak, at
8 a.m. on 7-2-2001 and on such surrender he shall be arrested by the Investigating Officer and
interrogation shall be held till 9 p.m., if necessary, and then release him on bail on his executing
bail bond (with or without sureties) to the satisfaction of the Investigating Officer. If further
interrogation is found necessary, the Investigating Officer shall inform him of the time and venue
at which respondent shall be present for continuing such interrogation and respondent is bound to
attend at such place and time.
State of Haryana vs L.D. Kataria (2001) 3 Crimes 130 (SC).

( ccxxxviii)A lock up murder case in which the Sub-Inspector is alleged to have beaten a prisoner to death
for the purpose of extracting a confession.
Appellant contended that even if the entire allegations could be taken as proved, the offence
cannot go beyond S. 304, Part I of the I.P.Code in view of the Exception No. 3 contained under S.
300 of the I.P.Code.
Note: Bail was granted.
Laxman Mahadeo Sariputra vs State of Maharashtra (2001) 3 Crimes 183 (SC).

( ccxxxix)Persons who are enlarged on bail cannot claim the benefit of the period during which they were
on bail for the purpose of counting the period of sentence already undergone to apply the
remission given by the Government of Punjab by issuing notifications between the period from
13-7-1988 to 29-7-1998.
Joginder Singh vs State of Punjab 2001 SCC (Cr) 1541: (2001) 8 SCC 306: 2002 Cr LJ 86.
Page 31
( ccxl) Respondent was arrested on 1-4-2001 for the offences under Ss. 489-A,489-B,489-C and120-B of
the I.P.Code. She was produced before the Metropolitan Magistrate on 2-4-2001 and he
remanded the respondent to Police custody first and later to judicial custody. During the
investigation Police discovered that organised crimes under the Maharashtra Control of
Organised Crimes Act, 1999 (its acronym is MCOC) had also been committed and the respondent
was one of the links connected with foreign collaborators in pumping such counterfeit currency
notes into India. The investigating agency sought sanction of the authorities under the MCOC Act
for conducting investigation under the said Act. Such sanction was granted on 21-4-2001 and
thenceforth investigation was conducted into the offences under the MCOC Act also. Finally, the
charge-sheet was laid on 12-7-2001. As a charge-sheet was not laid within 90 days thereof, she
applied for being released on bail as per the proviso to S. 167(2) of the Cr.P.Code. The main
contention of the State is that the period of 90 days envisaged in S. 167(2) of the Cr.P.Code
should be reckoned from the date when the Police started investigation into the offences under
MCOC Act.
Held: For the application of the proviso to S. 167(2) of the Cr.P.Code, there is no necessity to
consider when the investigation could legally have commenced. That proviso is intended only for
keeping an arrested person under detention for the purpose of investigation and the Legislature
has provided a maximum period for such detention. On the expiry of the said period, the further
custody becomes unauthorised and, hence, it is mandated that the arrested person shall be
released on bail if he is prepared to and does furnish bail. It may be a different position if the
same accused was found to have involved in some other offence disconnected from the offence
for which he was arrested. In such an eventuality, the officer investigating such second offence
can exercise the power of arresting him in connection with the second case. But if the
investigation into the offence for which he was arrested initially had revealed other ramifications
associated therewith, any further investigation would continue to relate to the same arrest and,
hence, the period envisaged in the proviso to S. 167(2) would remain unextendable. We are,
therefore, unable to agree with the contention of the learned counsel for the State of Maharashtra
that a new period of 90 days would commence from the date when approval was accorded under
S. 23 of the MCOC Act for initiating investigation for any offence under the said Act. In the
present case, accused would be entitled to bail, not on the merits of the case, but on account of the
default of the investigating agency to complete the investigation within 90 days from the date of
the first remand of the respondent.
State of Maharashtra vs Bharati Chandmal Varma AIR 2002 SC 285: (2002) 2 SCC 121: 2002
Cr LJ 575: (2002) 1 Crimes 218.
( ccxli) The role attributed to the appellant is that he made an oral exhortation. Accused continuing in Jail
for past one year. The appellant to be released on bail provided he will abide by the conditions
imposed.
Dharmendra Chandulal Patel vs State of Gujarat AIR 2002 SC 395: 2002 Cr LJ 943.
( ccxlii)In a criminal case known as Bofors case, three Hinduja brothers are chargesheeted for the
offences punishable under Ss. 120-B and420 of the I.P.Code and Ss. 5(2) read with S. 5(1)(d) of
the Prevention of Corruption Act, 1947. The Special Judge, as well as the High Court, has passed
the orders releasing the appellants on bail. However, a condition, not to go abroad, has been
imposed. Two of the appellants sought permission to leave abroad. Considering the facts and
circumstances, for the time being as an interim measure, the appellants, are permitted to go
abroad on the following conditions: Both the appellants would execute a bond for a sum of Rs. 15
crores (rupees fifteen crores) each with a bank guarantee for the like amount to the satisfaction of
the Special Judge; on their behalf Counsel well remain present on the date of posting of the
Page 32
matter and would not ask for adjournment on the ground that the appellants are not present in
India. The appellants will remain present before the Special Judge as and when their presence is
needed in the case. If there is any violation of the aforesaid conditions, it would be open to the
Special Judge to pass appropriate orders for cancellation of bail of the appellants.
Srichand P. Hinduja vs State through CBI New Delhi AIR 2002 SC 401.
( ccxliii)Accused was charged for offences under A.P. Control of Organized Crime Act (42 of 2001), Ss.
21(4), 18(1).Allegations were that the accused had given her car to other accused for carrying a
kidnapped boy. The said car was seized from her residence. It was doubtful whether her
confessional statement alleged to be recorded under S. 18 of the Act was admissible in evidence
or not. It was difficult to reach conclusion that the accused appellant in all probability would be
convicted of the offence. The material on the record did not justify the conviction at this stage
that the accused appellant would indulge in similar offence of an organized crime, if she was
released on bail. Accused appellant enlarged on bail.
Vasanthi vs State of Andhra Pradesh 2005 Cri LJ 3075 (3077): AIR 2005 SC 2643: (2005) 5
SCC 132(2005) 2 Crimes 210.
( ccxliv)Appellant is remaining in custody from 18-1-2000 onwards. The offences alleged against him
include Ss. 463,467,461,419 read withS. 120 of the I.P.Code. Investigation is completed and the
charge-sheet has been laid. What remains is only the trial. We do not know how long the trial will
take, particularly, seeing the condition of the Trial Courts in Maharashtra.
Note: Bail was granted but conditions were imposed.
Mehmood Mohammed Sayeed vs State of Maharashtra AIR 2002 SC 482: 2001 Cr LJ 3353.
( ccxlv)Appellants are involved in a case for which there is a cross-case (or countercase as it can be
called). The case against the appellants is based on the FIR lodged by the complainant Ram
Narain Singh. The counter-case was build up on the strength of the FIR lodged by the 2nd
appellant. Both the cases were investigated but only in one case final report has been laid.
Whatever be the position, this is a case where appellants can be let on bail during the trial period.
Bashishth Singh vs State of Bihar AIR 2002 SC 487.

( ccxlvi)Even a cursory perusal the High Court's order shows complete nonapplication of mind. Though
detailed examination of the evidence and elaborate documentation of the merits of the case is to
be avoided by the Court while passing orders on bail applications, yet a Court dealing with the
bail application should be satisfied as to whether there is a prima facie case, but exhaustive
exploration of the merits of the case is not necessary. The Court dealing with the application for
bail is required to exercise its discretion in a judicious manner and not as a matter of course.
Suman Pandey vs State of Uttar Pradesh 2007 Cri LJ 1789 (1791): 2007(12) SCC 364: 2007(2)
SCR 577: 2007(3) JT 348: 2007(2) Supreme 269: 2007(2) SLT 572: 2007(4) SRJ 321: 2007 CrLJ
1789: 2007(2) Crimes 155 (SC): 2007(1) JCC 752: 2007(3) SCALE 170.
( ccxlvii)Having considered the matter in the light of the roles attributed to the appellants in the
charge-sheet, we are of the view that the allegations, briefly enumerated above, may not per se be
sufficient to bring home an offence falling within the ambit of S. 3(2) of Maharashtra Control of
Organized Crime Act. Therefore, bearing in mind the fact that maximum punishment provided
under S. 24 of MCOCA is three years rigorous imprisonment and the appellants have already
been in judicial custody for over two years, in our view it is a fit case for grant of bail to both the
appellants. Both the appellants were enlarged on bail.
Dattatray Krihnaji Ghule vs State of Maharashtra 2007 Cri LJ 1455 (1457) (SC).
Page 33
( ccxlviii)In the instant case a First Information Report was lodged on or about 4.4.2003 for commission
of an alleged offence under Ss 120(B),121,121(A),122 and123 of the Indian Penal Code, and Ss.
25(1)(b), 25(1)(c), 27 and 29 of the Arms Act. In the evidence it was alleged that one of the
accused appellants had gone to Pakistan for training in terrorist acts, and another had provided
money and he had been in possession of a large quantity of arms. One of the accused appellants
hailed from a different State, and it would be difficult to secure his presence if he was released on
bail. The security of the State was involved. The order of the High Court rejecting bail of the
appellants accused was upheld.
Afzal Khan vs State of Gujarat 2007 Cri LJ 3223 (3227) (SC).

( ccxlix)In the case in hand, the accused respondents could apply for bail afresh after the offence had been
converted into one under S. 304 IPC. They deliberately did not do so and filed a petition under S.
482 Cr. P.C. in order to circumvent the procedure whereunder they would have been required to
surrender as the bail application could be entertained and heard only if the accused were is
custody. It is important to note that no order adverse to the accused respondents had been passed
by any Court nor there was any miscarriage of justice or any illegality. In such circumstances, the
High Court committed manifest error of law in entertaining a petition under S. 482 Cr. P.C. and
issuing a direction to the subordinate Court to accept the sureties and bail bonds for the offence
under S. 304 IPC. The effect of the order passed by the High Court is that the accused after
getting bail in an offence under Ss. 324,352 and506 IPC on the very day on which they were
taken into custody, got an order of bail in their favour even after the injured has succumbed to his
injuries and the case had been converted into one under S. 304 IPC without any Court examining
the case on merits, as it stood after conversion of the offence. The procedure laid down for grant
of bail under S. 439 Cr. P.C. though available to the accused respondents was not availed of. The
order passed by the High Court in exercise of powers under S. 482 Cr. P.C. was set aside.
Hamida vs Rashid 2007 Cri LJ 3422 (3425): 2007(5) SCR 937: 2008(1) SCC 474: 2007(6) JT
392: 2007(4) Supreme 113: 2007(6) SLT 1: 2007(6) SRJ 414: 2007 CrLJ 3422: 2007(3) Crimes
138 (SC): 2007(6) SCALE 517.
( ccl) Prevention of Terrorism Act, 2002, S. 34
The Supreme Court allowed the accused to apply for bail in the second case. The Supreme Court
held-
"A perusal of the documents on record shows that Criminal Appeal No. 1288 of 2004 related to
POTA Case No. 12 of 2003. Whether any relief can be granted by the concerned Court in that
POTA case was not considered. The confusion arose before the High Court relating to the case
numbers. There is no dispute that Criminal Appeal No. 1288 of 2004 before the High Court
permitted the appellant to take a proper proceeding seeking his release on bail so far as POTA
Case No. 12 of 2003 is concerned. The High court apparently failed to notice that Criminal
Appeal No. 1288 of 2004 related to POTA Case No. 12 of 2003. In the circumstances we set
aside the impugned order and remit the matter relating to Criminal Appeal No. 288 of 2004 to the
High Court to consider the mater afresh in accordance with law."
Idrishan Yakubkhan vs State of Gujarat 2007 Cri LJ 4688 (4688, 4689) (SC).
( ccli) The accused respondent Inspector of Police was arrested during the Investigation of the crime
registered in the Bund Garden Police Station, Pune relating to the organized crime that has come
to be known as the 'stamp scam'. The respondent was accused No. 55. He was arrested on
18.10.2003 and though the Special Court declined his prayer for bail, in appeal, the High Court
granted bail. The ground on which the High Court granted bail was that the evidence gathered by
the CBI is to taken as gathered belatedly. The investigation of the case was entrusted to CBI late
Page 34
as the performance of the State Police was found unsatisfactory. The approach of the High Court
in granting bail was not approved by the Supreme Court, thought the Court did not interfere with
the order granting bail.
State of Maharashtra vs Vashishtha Rambhau Andhale 2007 Cri LJ 4303 (4304, 4305): 2007(9)
SCR 27: 2007(7) SCC 341: 2007(10) JT 260: 2007(5) Supreme 892: 2007(8) SLT 127: 2007
CrLJ 4303: 2007(3) SCC(Cr) 359: 2007(3) Crimes 344 (SC): 2007(10) SCALE 57.
( cclii) An application under S. 482 Cr. P.C. cannot be converted into application for bail.
Savitri Goenka vs Kusum Lata Damani 2008 Cri LJ 441 (442) (SC).
Merely because on the death of the appellants father, there is none to look after the case is no
ground to enlarge the accused on bail when the charges are serious.
Rajesh Ranjan Yadav vs C.B.I. 2008 Cri LJ 1033 (1034) (SC).

( ccliii)Where the accused has taken frequent adjournments for defence evidence and himself has
contributed to the delay in the trial, the accused would not be entitled to bail on account of delay
in trial.

( ccliv) Where all the medical facilities are been made available to the accused by jail authorities, the
accused cannot be released on bail on medical grounds

( cclv) Remand under Ss. 167 (2) and 309 (2) Cr. P.C. Bail under default clause under S. 167 (2),
Proviso discussed.
Dinesh Dalmia vs C.B.I. (2008) 1 SCC (Cri) 36.

( cclvi) Accused in custody for more than six months. No ground for grant of bail to accused charged
under the provisions of NDPS Act.
Narcotic Control Bureau vs Raju (2006) 3 SCC (Cri) 372: (2006) 9 SCC 712.
( cclvii)Where a defendant is on bond, even a brief and evidently inadvertent absence may constitute a
waiver, since it is his duty to wait upon the Court and to be present at all times when he may
anticipate that proceedings might take place.
State vs McCrary 365 MO 799: 287 SW 2d 785 (21 Am Jur 2d Ed 285).

( cclviii)A statute requiring the personal presence of the accused has been held not to preclude such a
waiver, at least where the absence was brief and could not have been prejudicial.
Note: In this case accused was absent for short time while one of his own witnesses was giving
testimony in his favour.
State vs Smith 183 Wash 136: 48 P 2d 581 (21 Am Jur 2nd Ed 285).
( cclix) Such conduct, in a capital case, has been held to constitute waiver under a statute authorizing the
accused to waive his right to be present at the discretion of the Court.
Thomas vs State 117 Miss 532: 78 SO 147 (21 Am Jur 2nd Ed 285).
( cclx) The right of the defendant (accused) facing trial and who is at liberty on bail bond, to be present
proceeds on the presumption that he is in custody.
Prince vs State 36 Mi 55 (21 Am Juris 2nd Ed 284).

Page 35
( cclxi) An absence is not voluntary if it was merely negligent and was not purposeful, deliberate or
under circumstances from which an intention can be presumed.
Derden vs State 56 Tex Crime 396: 120 SW 485 (21 Am Juris 2nd Ed 285).
Note: See also "ANTICIPATORY BAIL" and "CANCELLATION OF BAIL".
M P Jain Principles of Administrative Law/Volume 2/CHAPTER XXIX TORTIOUS LIABILITY &

COMPENSATION
M P Jain and S N Jain Administrative Law
2007 2007
6 Edition 2007 2 A TREATISE ON ADMINISTRATIVE LAW 9788180382666
Copyright 2007 LexisNexis Butterworths Wadhwa Nagpur
JainJain
CHAPTER XXIX
TORTIOUS LIABILITY & COMPENSATION
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.1 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 quoante is restored. This aspect of Administrative Law has been
discussed in detail in later Chapters.2 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,3 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.
Page 36
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
There is the simple case of a recognised tort being committed--especially negligence4--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? 5
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.6
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.7
(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
Page 37
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.8
In U.S. v. Muniz,9 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 Cort 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
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. S. 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. S. 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 1858.10 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
Page 38
power to make war and peace and raise armies.11 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,12 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 1833,13 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 . . ."14 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 :15
"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.16
Page 39
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.17
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.18 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,"19 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."20
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."21
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.
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.22 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,23 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.
Page 40
(3) McInerny
In McInerny v. Secretary of State,24 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,25 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,26 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.27
(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.28
(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.29
(9) Srigobinda
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.30
(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.31
Page 41
(11) Ramnath
In Secretary of State for India v. Ramnath Bhatia,32 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,33 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.34
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. Khushaldas35 and adopted the Hari Bhanji
view of the government liability. The Court restricted the observations in P.&O. only to an 'act of state'36 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 :37
"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 :38
"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 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,39 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 :40
"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
Page 42
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."41
(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.42
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."43
On the other hand, the Assam High Court held that the Railways were one of the government's commercial
undertakings.44
(3) Sheoramjee
Page 43
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.45
(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."46
(5) District Board
In District Board, Bhagalpur v. State of Bihar,47 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,48 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,49 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.50
5. LAW COMMISSION 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."51
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 cononial era in
India. The theory of non-liability of the state for sovereign functions was only another dimension of the theory of "act of
state."52 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.
Page 44
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.53 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 anable 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."54
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."55
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."56
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.57
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
Page 45
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
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.58
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."59
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 :60
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
Page 46
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
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.61 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
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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."62
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 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."63 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, 1947.64
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.
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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,65i.e. keeping the goods of another safely for a period--an activity capable of
being undertaken by a private individual?66 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.
7. DEVELOPMENTS AFTER KASTURI LAL
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.
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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.67 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 :68
"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 :69
"The theory of sovereign power which was propounded in Kasturi Lal'scase 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 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,70 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,71 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
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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 im-unity".
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. 32.72
(c) Art. 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."
Art. 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
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.73 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,74 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,75 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.
Page 51
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. Mukherji76 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.77
(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.78
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.
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.79
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.80
(6) Janamohan
In Janamohan Das v. State of Orissa81 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."82
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(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.83
(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.84
(2) Amulya Patnaik
Again, in Amulya Patnaik v. State of Orissa,85 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,86 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.87
(4) Shyam Sunder
In Shyam Sunder v. State of Rajasthan,88 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
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
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In Indian Insurance Co. Ass. Pool v. Radhabai,89 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."90
(6) Padma Rani
In State of Sau v. K. Padma Rani,91 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 Sunder92 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
Act93 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,94 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 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.95 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.96
(9) Amruta
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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.97
(10) Satya Narain
Since Independence, the bulk of the road transportation has been taken over by the States.98 The Supreme Court ruled in
Satya Narain v. District Engineer, P.W.D.99 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,1 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,2KRISHNA 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 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.
Page 55
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,3 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
appealling 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.4
(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 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
dompensation.
Page 56
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.5 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 :6
"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 :7
". . . 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.8
(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.9
(2) Sugrabai
Page 57
When a military truck was carrying record sound ranging machine and other equipment from the military workshop 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 :10
". . . 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."11
(3) Jasso
In Union of India v. Jasso,12 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.13
(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.14
(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 referale to the exercise of any delegated sovereign power as the
jawans could have been transported to the unit headquarters in a private truck.15
In the last case, the court said that the jawanscould 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,16an 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
Page 58
any delegation of sovereign powers.17
(8) Sadashiv
A military crane belonging to the defence department having developed some trouble was being towed away for 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.18 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 India19 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 gratiapayment 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 Thangarajanseems 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.20 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.21
Page 59
(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 :22
"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."
(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.23
(14) Raya
In M.S. Raya v. Gowrawwa,24 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,25 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,26 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
Sethi27 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 Kazicase 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 Supplycase28 wherein the
Safdar Jung Hospitalwas overruled. The court held in Kazithat "activities undertaken by the government in pursuit of
Page 60
welfare policies, and in compliance with the directive principles, were not part of the regal functions of the state,29 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,30 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 quartum of compensation.
(3) Achutrao
In Achutrao,31 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 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,32Kasturilal,33Nagendra Rao34and Kanchanmal,35 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."36
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 :37
"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 Lalitself 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."38
After a review of the evidence on record and the law regarding negligence on the part of the doctors,39 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.40
Page 61
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.41
(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.42
(6) Santra
To the same effect is State of Haryana v. Santra.43 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 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.44
(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.45
(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.46
(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.47
Page 62
(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 :48
"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.49
(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.50 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 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
Page 63
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.51
(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 diveted 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,52the 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 suspand 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.53
(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,54the 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.55 Thus, the Court held the plaintiff entitled to
receive from the State Rs. 10,000/- along with interest.56
(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
Page 64
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."57
(12) Oswal
In Oswal,58 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,59 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 bundhflowing 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 bundhwas 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.60
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 :61
" . . . 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 :62
"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."
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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."63 Said the Court on this point :64
"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."65
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.66 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.67A 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
In this area, Art. 21 of the Constitution plays a very important role. Art. 21 runs as follows :
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,68 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.
Art 21 means right to live with human dignity and this includes a guarantee against. Accordingly, the Supreme Court
has asserted :
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"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."69
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,70 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 viotative 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.71
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,72 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,73 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.74 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.75
(3) Chironjilal
Similarly, in State of Madhya Pradesh v. Chironjilal,76 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 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.77
(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
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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 gratiacompensation 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.78
(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,79 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 gratiapayment 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 Gandhicases 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;80
(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.81
(1) Reddy
C. Ramakonda Reddy v. State82 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 prosoner 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.
After reviewing the evidence on record, the High Court concluded that the said incident could not have happened but
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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
:83
"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, Sebastianetc. 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 :84
"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.85 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."86
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,87 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.88 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.89
(3) Inder Puri

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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 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.90
(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 2191 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.92 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."93
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,94 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.95
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(j) Police Lawlessness
The incidents of brutal police behaviour towards persons detained on suspicion is a routine matter. There has been
public aurtery from time to time against custodial deaths.
For some time now, a new judiciant 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.
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.1 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.2 The Court has characterised custodial death as
"perhaps one of the worst crimes in a civilised society governed by the rule of law."3
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 Bihar4 (the Bhagalpur Blindingcase), 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."5 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."6 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,7 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
Page 71
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 corpuspetition 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 :8
"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 mulet 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.9Rudul 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,10the Supreme Court by a writ of habeas corpusrequired 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,11 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.
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(4) Nilabati Behera
A significant pronouncement in this line of cases is Nilabati Behera v. State of Orissa.12 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 Constitution13 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."
The Court observed on this point :14
"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 :15
"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 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 Court then went on to observe :16
"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."
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(5) Arvinder
In Arvinder,17 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 :18
". . . 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 death19 have been examined
in depth by the Supreme Court vis-a-visArt. 21 of the Constitution in D.K. Basu v. State of West Bengal.20 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."
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."21 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.
S. 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"22
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),23
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.24 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.25
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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.26 In the case noted
below,27 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,28 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 corpuspetition wasdisposed of by the Court, nevertheless,
the Court directed the State Government to pay him Rs. 50,000 as exemplary costs. Referring to Rudul Sah29 and
Sebastian,30 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 :
"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,31 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 :32
"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,33 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
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raped by police officials and were victimised by police. It is interesting to note that the High Court judge suo motutook
notice of the incident after seeing a report in a local newspaper.34
(10) PUCL
In People's Union for Civil Liberties v. Union of India,35 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 gratiaPayments
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.36At 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 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.37
In a number of cases, the courts did exempt the state from liability on this account.38 A few such cases are mentioned
below.
(1) Shivabhajan
In Shivabhajan v. Secretary of State,39 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.40
(2) Ross
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In Ross v. Secretary of State,41 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,42 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.43
(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.44 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 case45 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.46 The Shivabhajan case47 was cited with approval by the court. The difficulty in
regarding statutory functions as sovereign functions has already been mentioned above.48
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."49 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.50
(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 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.51
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
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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.52 In India, the Law Commission's
recommendation on the point was also to the effect that government should be liable in such a case.53 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 Sau.54 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.55 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."56
Under S. 6A, a report of seizure of the essential commodity is to be made without unreasonable delay to the 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
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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."57
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'.58
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.) :59
"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."60
Accordingly, the Court has ruled that the " ratio of Kasturi Lal61 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."62
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 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
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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,63 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 226.64 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.65
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,66 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.67
(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,68 following several
English cases, such as, Yuen Kun-yeu v. Alt. Gen. of HongKong,69 and Davis v. Radcliffe.70 The Court ruled that one
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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 function
to protect the interests of the depositors and yet the law could not impose any liability on RBI for lack of
accountability.71
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.72 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.73
(1) Jiwan Mal
This traditional judicial attitude is indicated in Jiwan Mal Kochar v. Union of India.74 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 ramarks "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.75 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.
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Starting in 1981, with Khatri v. State of Bihar,76 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,77 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,78 the Supreme Court has observed :
"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."79
In some cases of death of persons due to negligence of the concerned government employees, the Court has awarded
interimcompensation on humanitarian grounds pending the settlement of the question of negligence in a regular suit.80
In cases of riots, police firing etc., the Court has ordered payment of ex gratia compensation to the victims.81
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. 21.82
Compensation has also been awarded for medical negligence. In the instant case,83 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,84 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,85 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
Page 82
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.86 Under Art. 226, a High Court can exercise the power for a non-fundamental rights as well.87 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.88that the writ petition was
maintainable because Art. 21 of the Constitution which casts an obligation on the state to protect and preserve human
life.
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.89Art. 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. 226.90 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.91
(6) Ghosal
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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.92 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 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."93
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.94 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
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In Venkatesh v. The City Municipal Council,95 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 Dayal96 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.97 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 Lal98 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.
In Cooper v. Wandsworth Corporation,1 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.2
(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.3
(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.4
(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.5
(6) Bhiwandi Municipality

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In Bhiwandi Municipality v. K.S. Works,6 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,7 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.8
(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.9
(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.10
(11) Kumari
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.11
(12) Bishambar Nath
An important case in this series of cases is Lala Bishambar Nath v. The Agra Nagar Mahapalika, Agra.12 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."
Page 86
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 :13
"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.14
(a) Government Companies
The government sets up a number of statutory corporations or bodies incorporated under the Companies Act.15 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,16 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,17 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.18
11. NEGLIGENCE OF ELECTRIC UNDERTAKINGS
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,19 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

Page 87
A buffalo died by coming in contact with a live wire. The Rajasthan High Court in PSEB, Jaipur v. Shiv Charan Lal,20
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,21 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,22 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.23
(5) Thressia
An old agricultural labourer was electroculated 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.24 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 electroculated 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.25
(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.26
(8) Grid Corporation

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In Chairman, Grid Corp. v. Sukamani Das,27 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.28
12. NEGLIGENCE OF POST OFFICE
(1) Nazim
Union of India v. Mohd. Nazim29 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 statute30 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.31
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. 34.32
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." 33
(1) G.M.S. Rly
The Supreme Court held in State ofKerala v. G.M.S. Rly,34 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 juristic
personality capable of being sued as such.
(2) S.S. Works
In Union ofIndia v. S.S. Works,35 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.
Page 89
(3) Krishna Goods
Krishna Goods Carriers (P) Ltd. v. Union of India,36 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.37
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.38
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 :39
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.40 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 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

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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.41 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."42
(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.43 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.'44
(8) Imaman
In Imaman v. Union of India,45 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
Page 91
certain precautions while starting or stopping trains.46
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."47
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.48 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;49 in some, to any person for anything done under the statute50 (it is
doubtful whether any person would include the government also); and in some, to officers of the government only.51
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.52 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
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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.53
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."54
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."55 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.56 In Prem Lal v. U.P. Government,57 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. Works58 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,59 the Court stated :60
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 fides 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 fides.
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,61 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
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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
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,62 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 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 India63 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.64
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.,65 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,66 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

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The most important case on 'act of state' is Secretary of State v. Kamachee Boye Sahaba,67 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.,68 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 must be
tested by the municipal law and in municipal courts.69 The principle can be illustrated by reference to Forester v.
Secretary of State.70
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.71 In State of
Saurashtra v. Memon Haji Ismail,72 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,73 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
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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,74 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 may be express or may be implied from the circumstances.75
16. 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 :76
If what is done by the administration can be made to fit within one of the recognised torts (such as trespass, nuisance,
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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.77 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. Sharp78 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.79 This tort can be useful in cases of misleading official advice--a
topic discussed earlier under Promissory Estoppel.80
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 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.81 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 dilligence.
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.82 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
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from any action based on nuisance."83 The Act in question showed that Parliament considered it in the public interest
that a refinery be constructed. However, the refunery 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."84
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.85
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.
(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.86 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 plantiff 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 :87

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"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.88 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.89
(4) Anns
The most outstanding case in this series is the House of Lords decision in Anns.90 It was observed there :91
"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."92
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 WLBERFORCE who said that Lord DENNING in Dutton "puts the duty too
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.93 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."94
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
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are to be carried out."95 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.1
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."2
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."3 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 . . .4 If the action of the authority is deliberately wrongful or malicious, then there is no doubt that it
will be liable in damages."5
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,6 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,7Anns 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 plaintiff by reason of such act."8
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

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In Peabody Trust9 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,10 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.11
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."12
(7) Murphy
At last, however, in Murphy v. Brentwood DC,13 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
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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 :14
"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.15
(8) Davis
In Davis v. Radcliffe,16 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 awared 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,17 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 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
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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.18
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,19 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,20 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
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was not so unreasonable as to be careless albeit that it was wrong in law. Lord DIPLOCK said in this connection :21
"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 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."22
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.23 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 DIPLOCK 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.24
(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.25 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.26 The High Court then ruled27 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
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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.28
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.
(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.29 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),30 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,31 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.32 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.33
(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,34 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,35 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
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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 :36
"This is a statute which is passed for the protection of private persons, in their capacity as private persons. It is not passed 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.37
(4) Cutler
In Cutler v. Wandsworth Stadium Ltd.,38 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,39 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.40
(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.41
A claim for damages may lie for careless performance of a statutory duty either--(i) when a statutory duty gives rise to a
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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 descretion 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."42
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.43
(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 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,44 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,45 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 Roche46 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 initiothis is simply a reflection of a
conclusion, already reached on unexpressed grounds, that the court is not willing in casuto 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
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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."47 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?48 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.49
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.50
The lack of such a general remedy has been adversely criticised by several leading administrative lawyers. For example,
Schwartz says :51
"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."
Another scholar observes :52
"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?"53 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.54 In
France, the conseil d'Etathas built a general principle of liability without faultbased on the theory of risk.55
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
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a whole, and so it must be paid for by the entire community.56 The principle of equality as applied to the sharing of
public burdens has been succinctly explained by Duguit as follows :57
"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,58 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. Bernard59 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,60 several Law Lords put an expansionary gloss on this formulation, i.e.
the expression 'government servants' would include police personnel as well as local and other officials. As Lord
DIPLOCK clarified the position :61
"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.,62 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."
Page 109
1 HARLOW, Compensation and Government Torts, (1982).
2 See, infra, Chapter, XXXI et. seq.
3 JAIN, Treatise, I, Chapter I.
4 For further discussion on tort of negligence and its application to administration, see, infra.
5 For discussion on the principle of vicarious liability, see, infra.
6 Tamlin v. Hannaford, (1951) 1 KB 18.
7 For comments on the Act see : GLANVILLE WILLIAMS, Crown Proceedings (1947); STREET, Governmental Liability, (1953); HOGG,
The Liability of the Crown, (1971).
8 See, infra.
9 (1963) 10 Led 2d 805.
10 By 3 & 4 Will IV, C. 85, the East India Co. was made a trustee for the Crown in respect of all the property which it possessed in India.
The Act of 1858 transferred the Indian Territories to the Crown. As the Queen could not be sued in her own courts under the common law
prevailing at the time, the Act provided that the Secretary of State as a body corporate would have the same rights of suit as the Company
had and would be subject to the same liability of being sued as previously attached to the East India Company.
11 See M.P. JAIN, Outlines of Indian Legal History.
12 5 Bom HCR App. 1; see, JAIN.
14 5 Bom HCR App; at 13.
16 For comments on this case, see : ALICE JACOB, Vicarious Liability of government in Torts 7 JILI 247 (1965); BLACKSHIELD,
Tortious Liability of Government : A Jurisprudential Case Note, 8 JILI 643 (1966).
17 For discussion on 'Act of State,' see, infra, this Chapter.
18 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273.
19 Infra.
20 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273, 279.
21 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273, 279, emphasis supplied.
22 Forrester v. Secretary of State for India, IA, Suppl. Vol. 55, see, infra.
23 AIR 1915 Mad 993.
24 (1911) 38 ILR Cal 797.
25 AIR 1942 Mad 539.
26 AIR 1939 Mad 663.
27 Mata Prasad v. Secretary of State, AIR 1931 Oudh 29.
28 Kessoram Poddar & Co v. Secretary of State, (1927) 54 ILR 909.
29 Purnendu Deb. v. Union of India, AIR 1956 Cal 66.
30 Secretary of State v. Srigobinda Chaudhari, AIR 1932 Cal 834.
31 Nobin Chunder Dey v. Secretary of State for India, ILR 1 Cal 11 (1875).
Page 110
32 37 CWN 957. Also see, Udey Chand Mahtab v. Province of Bengal, ILR (1947) 2 Cal 141.
33 40 IA 48.
34 State of Bihar v. Sonabati, AIR 1954 Pat 513; Uday Chand v. Province of Bengal, 51 CWN 537; Union of India v. Ram Kamal, AIR
1953 Ass 116.
35 AIR 1949 Bom 277 : 51 Bom LR 342.
36 See, infra.
37 P.V. Rao v. Khusaldas, AIR 1949 Bom 277 : 51 Bom LR 342.
39 Province of Bombay v. Khushaldas, AIR 1950 SC 222 : 1950 SCR 621.
40 Province of Bombay v. Khusaldas, AIR 1950 SC 222 : 1950 SCR 621.
41 Maharaja Bose v. Governor-General in Council, AIR 1952 Cal 242.
42 Union of India v. Murlidhar, AIR 1952 Ass 141.
43 Bata Shoe Co. v. Union of India, AIR 1954 Bom 129. This judgment was delivered by GAJENDRAGADKAR, J. who later delivered the
judgment in the Supreme Court in Kasturilal Rallia Ram and rigidified the law in the are. See, infra. The Calcutta High Court also agreed
with this view in Calcutta Motor Cycle v. Union of India, AIR 1953 Cal 1 and K.G. Kalwani v. Union of India, AIR 1960 Ass 85.
44 Pratap Chandra Biswas v. Union of India, AIR 1956 Ass 85.
45 Secretary of State v. Sheoramjee Hanumantrao, AIR 1952 Nag 213.
46 K. Krishnamurthy v. State of Andhra Pradesh, AIR 1961 AP 283.
47 AIR 1954 Pat 259.
48 AIR 1959 Punj 39.
49 State of Andhra Pradesh v. Pini Setti Ankanna, AIR 1967 AP 41.
50 J. Kuppanna Chetti Ambuti Ramayya Chetty & Co. v. Collector of Anantpur, AIR 1965 AP 457.
51 First Report, 8 (1956). Also see, infra. For extracts from this report see, JAIN, Cases, IV, Chapter XXVIII.
52 See, infra,
53 This is what was decided in Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273. See also, FRIEDMANN, Law and Social Change,
273.
54 Law Commission of India, First Report (Liability of the State in Tort) 36 (1956).
55 Law Commission of India, First Report (Liability of State in Tort), 37.
57 Commenting on the 1965 Bill, the Bombay High Court observed in President, Union of India v. Sadashiv, AIR 1985 Bom 345 : "An
abortive attempt was made by the Government to introduce a bill on the subject sometime in 1965. Numerous exceptions carved out to the
liability of the State for torts committed by its servants decinated the bill to such an extent that no tears need be shed that the bill already
bleeding copiously by these exceptions, was allowed to die its natural death."
58 AIR 1962 SC 933 : 1962 Supp (2) SCR 989. For comments on Vidhyawati, see, C.P. GUPTA, A Comment on State of Rajasthan v.
Vidhyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989 : 4 JILI 279, 287 (1962).
59 State of Rajasthan v. Vidyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989.
60 State of Rajasthan v. Vidyawati, AIR 1962 SC 933: 1962 Supp (2) SCR 989.
61 AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1966 (2) LLJ 583. For comments on the case see, ALICE JACOB, Vicarious Liability of
Government in Torts, 7 JILI 247 (1965).
Page 111
62 Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh, AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1966 (2) LLJ 583.
64 For The Crown Proceedings Act, see, supra, this chapter.
65 See, State of Gujarat v. Menon Mahomed Haji Hasan, AIR 1967 SC 1885, 1889 : 1967 (3) SCR 938, infra.
66 See BLACKSHIELD, Tortious Liability of Government: A Jurisprudential Case Note 8 JILI 658 (1966); JACOB, Vicarious Liability of
67 In this connection, GAJENDRAGADKAR, C.J., observed as follows :
67 "It is not difficult to realize the significance and importance of making such a distinction (sovereign v. non-sovereign functions)
particularly at the present time when, in pursuit of their welfare ideal, the Government of the States as well as the Government of India
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. It is necessary to limit the area of these affairs of
the State in relation to the exercise of sovereign power, so that if acts are committed by Government employees in relation to other activities
which may be conveniently described as non-governmental or non-sovereign, citizens who have a cause of action for damages should not be
precluded from making their claim against the State. That is the basis on which the area of the 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."
68 Association Pool v. Radhabai, AIR 1976 MP 164.
69 AIR 2000 SC 988 : (2000) 2 SCC 465 : 2000 CrLJ 1473. Also see, N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC
205 : AIR 1994 SC 2663 : 1994 (3) Scale 977; see, infra. Also see, infra, under "Statutory Functions" for discussion on this case.
70 Agricultural Produce Market Committee v. Ashok Haribuni, (2000) 8 SCC 61 at 80-81 : 2000 (2) LLJ 1382 : AIR 2000 SC 3116.
71 Chairman Railway Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465 : 2000 (2) Mad LJ 26.
72 For a full fledged discussion on Arts 32 and 226 of the Constitution, see, infra, under Judicial Control of Administrative Action.
73 See, Chairman, Railway Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465. For full discussion on this
constitutional provision, reference may be made to M.P. JAIN, Indian Constitutional Law, Chapter XXVI.
74 AIR 1972 Bom 93.
75 AIR 1972 All 486.
76 AIR 1976 Pat 24.
77 State v. Rameshwar Prasad, AIR 1980 Pat 267.
78 Kumari v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : JT 1992 (2) SC 16.
79 V. Srinivas v. Machines and Machine tools P. Ltd. SS. Vendantacharya v. Highways Dept. of South Arcot,. Vendantacharya v. Highways
Dept. of South Arcot, (1987) 3 SCC 400 : 1987 (2) ACJ 783.
80 Collector of South Arcot v. Vendanthachariar, AIR 1972 Mad 148.
81 AIR 1993 Ori at 168. Also see, JAIN, Cases, III.
82 AIR 1993 Ori at 170.
83 State of Rajasthan v. Vidhyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989.
84 Annamalai v. Abithakujambal, AIR 1979 Mad 276.
85 AIR 1967 Ori 116.
86 AIR 1972 MP 219.
87 Also see, on the same point, State v. Dole Ram, AIR 1981 HP 87.
88 AIR 1974 SC 890 : (1974) 1 SCC 690 : 1974 LIC 598.
89 AIR 1976 MP 164.

Page 112
90 Also see, State of Madhya Pradesh v. Prema Bai, AIR 1979 MP 85.
91 AIR 1976 AP 122.
92 Shyam Sunder v. State of Rajasthan, AIR 1974 SC 890 : (1974) 1 SCC 690 : 1974 LIC 598.
93 S. 110(1) empowered the State Government to constitute accident claims tribunals for the purpose of adjudicating upon claims for
compensation in respect of accidents involving death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to
any property of a third party so arising or both.
93 S. 110B provided, inter alia, that the claims tribunal shall hold an inquiry into the claim and may make an award determining the amount
of compensation which appears to be just. The parallel provision in the newly enacted Motor Vehicles Act are ss. 165-176. For discussions
on Claims Tribunals, see, JAIN Treatise, I, Chapter XIII; JAIN, Cases, II, 1095-1104.
94 AIR 1978 Ker 43.
95 State of Tamil Nadu v. M.N. Shamsudeen, (1981) 1 MLJ 17.
96 State of Orissa v. Madhuwilata Ray, AIR 1981 NOC 104. Also, Union of India v. Marcia E. Dutta, AIR 1982 Gau 4; Mariyam Jusab v.
Hamatlal Ratilal, AIR 1982 Guj 23.
97 Amruta Dei v. State, AIR 1982 Ori 12. On appeal, State of Orissa v. Amruta Dei, AIR 1987 Ori 217.
98 See, infra, under Public Sector Undertakings.
99 AIR 1962 SC 1161 : 1962 Supp (3) SCR 105.
1 Shubhakar Sridhar Shastry v. Mysore State Road Transport Corporation, AIR 1975 Knt 73; Madhya Pradesh State Road Transport
Corp. v. Sudhakar, AIR 1968 MP 47; C.S.T. Corp. v. Kamal Prakash, AIR 1976 Cal 2; Rehana v. Ahmedabad Municipal Transport
Service, AIR 1976 Guj 37; Agya Kaur v. General Manager, Pepsu Road Transport Corp., AIR 1980 P&H 183; Sushma Mitra v. M.P. State
R.T. Corp., AIR 1974 MP 68; Gujarat S.R.T., Ahmedabad v. Keshavlal, AIR 1981 Guj 205; Gen. Man., Karnataka S.R.T. Corp. v.
Peerappa Parasappa, AIR 1979 Knt 154; Karnataka S.R.T. Corp. v. Krishnan, AIR 1981 Knt 11; Delhi Transport Corp. v. Lalita, AIR
1982 Del 558; O.S.C.T. Corp. v. Dhumali Bewa, AIR 1982 Ori 70; Himachal Road Transport Corporation v. Miss Neena, AIR 1987 HP
32; Himachal Road Transport Corpn. v. Kaushalya Devi, AIR 1986 HP 21; Gujarat State Road Transport Corpn. v. Haribhai Vallabhbhai
Darji, AIR 1983 Guj 210; State of Punjab v. Rajrani, AIR 1986 P&H 414; Sampath Reddy v. G.M.S. Venkatamma, AIR 1989 AP 337.
2 AIR 1980 SC 695 : (1980) 2 SCC 180 : 1980 ACJ 411.
3 State of Haryana v. Darshana Devi, AIR 1979 SC 855 : (1979) 2 SCC 236 : 1979 ACJ 205. Also see, JAIN, Treatise, I, Chapter XIII;
JAIN, Cases, II, 1097.
4 The unhelpful attitude of the government in the matter of paying compensation even in the most deserving case is vividly illustrated by
Asstt. Engineer, P.W.D. (B. & R.) Jaipur v. Dhappo, (1980) Lab & Ind CASES 1202 (Raj). Also see, State of Gujarat v. Dushyantbhai, AIR
1981 NOC 214 (Guj); R.S.R.T. Corporation v. Jhami Bhai, AIR 1987 Raj 68.
5 State of Maharashtra v. Kanchanmal Vijaysing Shirke, (1995) 5 SCC 659, 661 : AIR 1995 SC 2499 : (1996) 85 Comp Cas 542.
6 State of Maharashtra v. Kanchanmal Vijyasing Shirke, (1995) 5 SCC 659, 661 : AIR 1995 SC 2499 : (1996) 85 Comp Cas 542.
8 Chairman, Rly. Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : JT 2000 (1) SC 426.
9 Satya Wati v. Union of India, AIR 1967 Del 98. Also see, Union of India v. P.S. Mahal, AIR 1976 J&K 80.
10 Union of India v. Sugrabhai, AIR 1969 Bom 13.
11 Union of India v. Sugrabhai, AIR 1969 Bom 13 : 1968 Mah LJ 468 : 70 Bom LR 212.
12 AIR 1962 Punj 315.
13 Union of India v. Harban Singh, AIR 1959 Punj 39 : 61 Punj LR 30.
14 Union of India v. Neelam Dayaram, 1979 MPLJ 732.
15 Union of India v. Savita Sharma, AIR 1979 J&K 6.
16 AIR 1978 All 417.

Page 113
17 Nandram Heeralal v. Union of India, AIR 1978 MP 209.
18 President, Union of India, New Delhi v. Sadashiv, AIR 1985 Bom 345.
19 AIR 1975 Mad 32.
20 Union of India v. Hardeo Dutta, AIR 1986 Bom 350.
21 Pushpinder Kaur v. Corporal Sharma, AIR 1985 P&H 81.
22 Usha Aggarwal v. Union of India, AIR 1985 P&H 279, 281.
23 Pushpa Thakur v. Union of India, AIR 1986 SC 1199 : 1985 (1) ACC 76.
24 AIR 1987 Kant 107.
25 AIR 1982 Bom 27.
26 State of Maharashtra v. A.H. Khodwe, ILR (1980) Bom 660. Also see, Etli v. Secretary of State, AIR 1939 Mad 663 : 1939 (1) Mad LJ
784 : 49 Mad LW 679.
27 AIR 1970 SC 1407 : 1970 (2) LLJ 266 : (1970) 1 SCC 735.
28 Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548 : (1978) 2 SCC 213 : 1978 (1) LLJ 349.
29 Also see, State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610 : 1960 (1) LLJ 251 : 1960 (2) SCR 866, where a government
hospital was held to be an 'industry'. The question was whether the Industrial Disputes Act, 1947, applied to government hospitals and
whether they were "industry" within the meaning of that Act. The Court said : "It is the character of the activity which decides the question
as to whether the activity in question attracts the provision of s. 2(j); who conducts the activity and whether it is conducted for profit or not
do not make a material difference." The activities carried on by the state to comply with the directive principles or in pursuit of its welfare
policies cannot be regarded as regal activities as they cannot be said to be "primary and inalienable functions of a constitutional government"
and they are not such that "no private citizen can undertake the same."
30 Kalawati v. State of Himachal Pradesh, AIR 1989 HP 5. Also see, Pinnamaneni Narasimha Rao v. Gundavarapu Jayaprakasu, AIR
1990 AP 207. In this case was cited the following observation of Lord DENNING in Cassidy v. Minister of Health, (1951) 1 KB 343 on the
question of vicarious liability of the government for negligence of the doctors in a hospital maintained by it :
30 " . . . authorities who run a hospital, be they local authorities, government boards or any other corporation, are in law under the self same
duty as the humblest doctor; whenever they accept a patient for treatment, they must use reasonable care and skill to cure him of his ailment.
The hospital authorities cannot, of course, do it by themselves; they have no ears to listen through the stethoscope, and no hands to hold the
surgeon's knife. They must do it by the staff which they employ, and if their staff are negligent in giving the treatment, they are just as liable
for that negligence as is anyone else who employs others to do his duties for him. What possible difference in law, I ask can there be
between hospital authorities who accept a patient for treatment and railway or shipping authorities who accept a passenger for carriage?
None whatever. Once they undertake the task they come under a duty to use care in the doing of it, and that is so whether they do it for
reward or not. It is no answer for them to say that their staff are professional men and women who do not tolerate any interference by their
lay masters in the way they do their work. The reason why the employers are liable in such CASES is not because they can control the way
in which the work is done they often have not sufficient knowledge to do so but because they employ the staff and have chosen them for the
task and have in their hands the ultimate sanction for good conducts, the power of dismissal."
31 Achutrao Haribhau Khodwa v. State of Maharashtra, (1996)2 SCC 634 : AIR 1996 SC 2377.
34 N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 : AIR 1994 SC 2663 : JT 1994 (5) SC 572; Infra.
35 State of Maharashtra v. Kanchanmal Vijaysingh Shirke, (1995) 5 SCC 659 : AIR 1995 SC 2499 : (1996) 85 Comp Cas 542; supra,
36 Achutrao Haribhau Khodwa v. State of Maharashtra, (1996) 2 SCC 634 : AIR 1996 SC 2377.
38 Achutrao Haribhau Khodwa v. State of Mahrashtra, (1996) 2 SCC 634 : AIR 1996 SC 2377.
39 The Court has discussed at length the question as to what constitutes negligence on the part of the doctor, See, Achutrao Haribhau
Khodwa v. State of Mahrashtra, (1996) 2 SCC 634 : AIR 1996 SC 2377.
Page 114
41 M. Vijaya v. Chairman and Managing Director, Singrani Collieries Co. Ltd., AIR 2001 AP 502. See, infra, for details of the case.
42 Shakuntala Sharma v. State of Uttar Pradesh, AIR 2000 All 219.
43 (2000) 5 SCC 182 : AIR 2000 SC 1888 : 2000 (3) Mad LJ 98. Also see, Legal Aid Committee v. State of Bihar, (1991) 3 SCC 482;
Jocob George (Dr.) v. State of Kerala, (1994) 3 SCC 430 : 1994 CrLJ 3851 : 1994 (2) Crimes 100; Paschim Banga Khet Mazdoor Samity v.
State of West Bengal, AIR 1996 SC 2426 : (1996) 4 SCC 37 : JT 1996 (6) SC 43.
44 Union of India v. Sat Pal, AIR 1969 J&K 128.
45 State of Punjab v. Modern Cultivators, AIR 1965 SC 17 : 1964 (8) SCR 273.
46 Rooplal v. Union of India, AIR 1972 J&K 23.
47 Dhian Singh Sobha Singh v. Union of India, AIR 1958 SC 274 : 1958 SCR 781.
48 Union of India v. Ram Kamal, AIR 1953 Ass. 116.
49 Municipal Board, Khari v. Ram Bharosey, AIR 1961 All 430.
50 On Seizure and Confiscation, see, JAIN, Treatise, I, Chapter XVI, Chapter XVI; JAIN, Cases, III, Chapter XVIII.
51 State of Gujarat v. Memon Mahomed Haji Hasan, AIR 1967 SC 1885 : 1967 (3) SCR 938.
52 AIR 1977 SC 1749 : (1977) 4 SCC 358 : 1977 CrLJ 1141.
53 Sunder Lal v. District Magistrate, Sagar, (1988) 21 Reports (MP) 587; I.L.I., Annual Survey of India Law, XXIV, 1,2 (1988).
54 AIR 1993 Raj 51.
55 Hazur Singh v. Behari Lal, AIR 1993 Raj 51 : 1993 (1) Civ LJ 95 : 1992 (2) Raj LW 49.
56 Also see, N. Nagendra Rao & Co. v. State of Andhra Pradesh, (1994) 6 SCC 205, 211 : AIR 1994 SC 2663 : JT 1994 (5) SC 572; infra.
57 M.S. Chokkalingam Chettiyar v. State, AIR 1991 Knt 116, 118.
58 Oswal Spinning and Weaving Mills Ltd. v. Collector of Customs, (1988) 3 SCC 310 : JT (1988) 2 SC 135 : (1988) 35 ELT 244.
59 Jay Laxmi Salt Works (P.) Ltd. v. State of Gujarat, (1994) 4 SCC 5 : JT 1994 (3) SC 492.
60 The High Court took the view by majority that the case fell under Article 36 of the Limitation Act and, thus, the case ought to have been
filed within two years of the cause of action arising. The court held that Article 120 permitting a limitation period of six years was not
applicable to the fact situation.
61 Jay Laxmi Salt Work (P.) Ltd. v. State of Gujarat, (1994) 4 SCC 5 : JT 1994 (3) SC 492 : 1994 (3) Cur CC 8 (per SAHAI, J.).
62 Jay Laxmi Salt Work (P.) Ltd. v. State of Gujarat, (1994) 4 SCC 5 : JT 1994 (3) SC 492 : 1994 (3) Cur CC 8.
67 AIR 1982 AP 118.
68 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248; Olga Tellis v. Bombay Municipal Corp., AIR 1986 SC 180 :
(1985) 3 SCC 545; JAIN, Indian Constitution Law, Chapter XXVI.
69 D.K. Basu v. State of West Bengal, AIR 1997 SC 610, at 617 : 1997 CrLJ 743 : (1997) 1 SCC 416.
70 AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465.
71 For more case on Art. 21, see, infra.

Page 115
72 AIR 1967 MP 246.
73 AIR 1975 Ori 41.
74 This infringed Ss. 127-130 of the Criminal Procedure Code.
75 JAIN, Treatise, I, Chapter VII.
76 AIR 1981 MP 65.
77 Also see, State of Madhya Pradesh v. Premabai, AIR 1979 MP 85; Roop Lal v. Union of India, AIR 1972 J&K 22.
78 Nanik Sewa v. State of Orissa, AIR 1996 Ori 131.
79 AIR 1987 SC 355 : 1987 CrLJ 528 : (1987) 1 SCC 265.
80 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248.
81 See, infra, under 'Police Lawlessness'.
82 AIR 1989 AP 238.
83 C. Ramakonda Reddy v. State, AIR 1989 AP 235 : 1989 (2) Andh LT 1 (per JEEVAN REDDY, J.).
84 C. Ramakonda Reddy v. State, AIR 1989 AP 235 : 1989 (2) Andh LT 1.
85 State of Andhra Pradesh v. Challa Ramakrishna Reddy, AIR 2000 SC 2083 : (2000) 5 SCC 712 : JT 2000 (6) SC 334.
86 State of Andhra Pradesh v. Challa Ramkrishana Reddy, AIR 2000 SC 2083, 2090 : (2000) 5 SCC 712 : 2000 (3) Cur CC 19.
87 Also see, P.V. Kapoor v. Delhi Administration, 1992 Cri LJ 128 (Del).
88 On Public Interest Litigation, see, infra.
89 Peoples's Union of Democratic Rights v. State of Bihar, AIR 1987 SC 355 : (1987) 1 SCC 265 : 1987 CrLJ 528.
90 Inder Puri General Store v. Union of India, AIR 1992 J&K 11.
91 See, JAIN, Indian Constitutional Law,
92 JAIN, Indian Constitutional Law, Ch. XXXII.
93 R. Gandhi v. Union of India, AIR 1989 Mad 205.
94 AIR 1996 J&K 51.
95 S.S. Ahluwalia v. Union of India, AIR 2001 SC 1309 : (2001) 4 SCC 452 : JT 2001 (3) SC 523.
1 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248. See, JAIN, Indian Constitutional Law, Chapter XXVI; JAIN,
Cases, I, 522.
2 See, Raghubir Singh v. State of Haryana, AIR 1980 SC 1087, at 1088 : 1980 CrLJ 801 : (1980) 3 SCC 70.
3 D.K. Basu v. State of West Bengal, AIR 1997 SC 610, at 617 : 1997 CrLJ 743 : 1996 (4) Crimes 233.
4 AIR 1981 SC 928 : 1981 CrLJ 470 : (1981) 1 SCC 627.
5 AIR 1981 SC 928 : 1981 CrLJ 470.
6 Khatri v. State of Bihar, AIR 1981 SC 1068, 1074 : 1981 CrLJ 597 : (1981) 2 SCC 493.
7 AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141. For comments on this case, see S.N. JAIN, Money Compensation for
Administrative Wrongs through Art 32, (1983) 25 JILI 118.
8 AIR 1983 SC 1086 at 1089 : 1983 CrLJ 1644 : 1983 (2) Scale 103,
9 On 'Moulding of Relief', see, infra.
10 AIR 1984 SC 1026 : 1984 (2) Crimes 22 : 1984 CrLJ 830 : (1984) 3 SCC 82.
Page 116
11 AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141.
12 AIR 1993 SC 1960 : (1993) 2 SCC 746 : 1993 CrLJ 2899.
13 For discussion on Arts. 32 and 226, see, infra, under Judicial Review of Administrative Action.
14 AIR 1993 SC 1960 at 1967 : JT 1993 (2) SC 503 (2) : 1993 (2) Scale 309.
15 AIR 1993 SC 1960 at 1966 : 1993 (2) CCR 107. Emphasis has been added by the author.
16 AIR 1993 SC 1960 at 1969-70 : (1993) 2 SCC 746 : 1993 CrLJ 2899.
17 Arvinder Singh Bagga v. State of U.P. (1994) 6 SCC 565 : AIR 1995 SC 117 : 1994 (3) Crimes 694.
18 Arvinder Singh Bagga v. State of U.P., (1994) 6 SCC 565 : AIR 1995 SC 117 : 1994 (3) Crimes 694.
19 There has been a spate of CASES in this area where the High Courts and the Supreme Court have award compensation under Art 226 or
32 to the victims or their heirs in case of custodial violence or death. See, for example : Arvinder Singh Bagga v. State of U.P., (1994) 6
SCC 565 : JT 1994 (6) SC 478 : 1994 (4) Scale 466; Lalitha v. Director General of Police, Madras, (1989) Cr LJ 1732; Civil Liberties v.
Kukrety Assam Rifles, (1989) 1 Crimes 748 (Gau); Rajasthan Kisan Sangthan v. State, AIR 1989 Raj 10; Luithkula v. Risheang Keishing,
AIR 1989 NOC 182 (Gau); Joginder Kumar v. State of Uttar Pradesh, (1994) 4 SCC 260 : AIR 1994 SC 1349 : 1994 CrLJ 1981. In Punjab
& Haryana Bar Association v. State of Punjab, (1996) 4 SCC 742, 745 : 1966 (4) Scale 416, the Supreme Court awarded a sum of ten lacs to
the parents of Kulwan Singh, an advocate, who was allegedly abducted and killed by the police.
20 AIR 1997 SC 610 : 1997 CrLJ 743 : 1997 SCC (Cri) 92.
21 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : (1997) 1 SCC 416 : 1997 CrLJ 743.
22 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : 1996 (4) Crimes 233 : JT 1997 (1) SC 1.
23 See, JAIN, Treatise, I. Also, JAIN, Cases, II, 1033-1035, 1159, 1163, 1295, 1301, 1419-1422, 1537-1543.
24 See, for example, Re Death of Sawinder Singh Grover, (1995) Supp (4) SCC 450 : 1992 (3) Scale 34 (2), who died in the custody of
Directorate of Enforcement, The Supreme Court awarded a sum of Rs. two lacs as compensation to his widow.
25 (1997) 1 SCC 416 at 443 : AIR 1997 SC 610 : 1996 (4) Crimes 233.
26 People's Union for Civil Liberties v. Union of India, AIR 1997 SC 1203, 1205 : (1997) 3 SCC 433 : 1997 (1) Crimes 190.
27 State of Maharashtra v. Christian Community Welfare Council of India, (2003) 8 SCC 546 : AIR 2004 SC 7 : 2004 CrLJ 14 : 2003 (4)
Crimes 367.
28 AIR 1986 SC 494 : (1985) 4 SCC 677 : 1986 CrLJ 192.
29 Rudul Shah v. State of Bihar, AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141; JAIN, Cases, IV.
30 Sebastian M. Hongray v. Union of India, AIR 1984 SC 1026 : (1984) 3 SCC 82 : 1984 CrLJ 830.
31 Saheli, A Woman's Resources Centre v. Commissioner of Police, Delhi Police Head Quarters, AIR 1990 SC 513 : (1990) 1 SCC 422.
32 Saheli, A Woman's Resources Centre v. Commr. of Police, Delhi Police Head Quarters, AIR 1990 SC 513 : (1990) 1 SCC 422 : JT 1989
(4) SC 553.
33 State of Maharashtra v. Ravikant S. Patil, (1991) 2 SCC 373 : (1991) (1) Crimes 810 : JT 1991 (5) SC 442.
34 See, ILI, Annual Survey of Indian Law, 6-7 (1988).
35 AIR 1997 SC 1203 : (1997) 3 SCC 433 : 1977 (1) Crimes 190.
36 AIR 1989 SC 1570 : (1989) 3 SCC 223 : JT 1989 (2) SC 419.
37 See, Street, Governmental Liability, 33-34 (1953). Also, VTobin v. The Queen, 143 ER 1148; V. Srinivas v. Machines and Machine
tools P. Ltd. 1901 AC 561; Stanbury v. Exeter Corporation, (1905) 2 KB 839.
38 See, Mohammad Murad v. Govt. of U.P., AIR 1956 All 75. The Allahabad High Court observed in this case : "This exemption of the
State from liability to pay damages for the tortious acts of its servants, where a government servant is carrying out or purporting to carry out
duties imposed by the law, has also been justified on the ground that in such CASES the government servant purports to carry out duties
imposed by the letter of the law and is controlled by the law and not by the State Government. This as already pointed out, still leaves the
Page 117
individual liability of the government servant committing the tortious act intact unless he is otherwise protected."
39 (1904) 28 ILR Bom 314.
40 Shivabhajan v. Secretary of State, (1904) 28 ILR Bom 314.
41 AIR 1915 Mad 434.
42 AIR 1932 Cal 834.
43 Secretary of State v. Ramnath, AIR 1934 Cal 128.
44 Ram Ghulam v. U.P. Government, AIR 1950 All 206. Other Cases to the same effect are : Ram Shanker v. Secretary of State, AIR 1932
All 575; Uday Chand v. Province of Bengal, (1946) 51 CWN 537; State of Bihar v. Sonabati, AIR 1954 Pat 513; Union of India v. Dhansa
Coal Co., AIR 1959 Pat 347; State of Uttar Pradesh v. Chhotey Lal, AIR 1967 All 327; State v. Tulsi Ram, AIR 1971 All 162.
45 Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1965 (1) SCR 375.
46 GAJENDRAGADKAR, C.J., observed on this point in Kasturilal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (1) SCR 375
: 1966 (2) LLJ 583.
46 "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 the
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 delegation of any sovereign power, an action for damages would lie."
48 Supra,
49 Abdul Kadir v. State of Saurashtra, AIR 1956 Sau 62, 65.
50 Abdul Kadir v. State of Saurashtra, AIR 1956 Sau 62, 65 : 8 Sau LR 437. Also, Uday Chand v. Province of Bengal, (1949) 51 CWN
537.
51 State of Rajasthan v. Rikhabchand, AIR 1961 Raj 64.
52 S. 2(3) of this Act reads :
52 "Where any functions are conferred or imposed upon an officer of the Crown as such either by any rule of the common law or by statute,
and that officer commits a tort while performing or purporting to perform those functions, the liabilities of the Crown in respect of the tort
shall be such as they would have been if those functions had been conferred or imposed solely by instructions lawfully given by the Crown."
54 (1994) 6 SCC 205 : AIR 1994 SC 2663 : JT 1994 (5) SC 572.
55 The Essential Commodities Act, 1955. For this provision, see, JAIN, Treatise, I, Chapter XVI; JAIN, Cases, III, 2772-2781, 2802 et seq.
56 N. Nagendra Rao & Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 : AIR 1994 SC 2663 : 1994 (3) Cur CC 87.
58 See, supra, Chapter XX.
60 N. Nagendra Rao & Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 : JT 1994 (5) SC 575 : 1994 (3) Scale 977.
61 Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (1) SCR 375.
63 AIR 1967 SC 1885 : 1967 (3) SCR 938.
64 Supra, this chapter.

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67 Reference is to providing compensation for injury caused to an individual by administrative action taken in public interest without any
fault on the part of the Administration, see, infra. Anns decision, see, infra, under "Position in Britain" also needs to be considered in this
respect.
67 There also remains the question of ultra vires administrative action without negligence which may cause economic loss to the individual.
These questions are referred to in the Section under 'Position in Britain'.
68 (2004) 3 SCC 415 : AIR 2004 SC 3338 : (2004) 120 Comp Cas 137.
69 (1987) 2 All ER 705; see, infra.
70 (1990) 2 All ER 536.
71 See, infra, for comments, on this aspect.
72 For discussion on these constitutional provisions, see, infra, under Writ Jurisdiction.
73 See, infra.
74 AIR 1983 SC 1102, 1107 : (1983) 4 SCC 148.
75 The reason given by the Law Commission to exclude Art. 32 from the scope of its recommendation was : "The remedy guaranteed by
article 32 to move the Supreme Court, though of basic importance in our constitutional scheme, is not so frequently resorted to." This is not a
correct assessment as a large number of CASES complaining violations of fundamental rights come before the Supreme Court under Art. 32.
For discussion on Article 32, see, infra.
76 AIR 1981 SC 928 : (1981) 1 SCC 627 : 1981 CrLJ 470.
77 AIR 1983 SC 1086 : 1983 CrLJ 1644 : 1983 (2) Scale 103.
78 Nilabati Bahera v. State of Orissa, AIR 1993 SC 1960 : (1993) 2 SCC 746 : 1993 CrLJ 2899.
79 Nilabati Behera v. State of Orissa, AIR 1993 SC 1960 : JT 1993 (2) SC 503 (2) : 1993 (2) Scale 309; Rudul Shah v. State of Bihar, AIR
1983 SC 1086 : (1983) 4 SCC 141 : 1983 CrLJ 1644; D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : 1997 CrLJ 743 : 1997 SCC
(Cri) 92; Kumari (Smt.) v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : JT 1992 (2) SC 16; Chairman, Rly. Board v.
Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465; People's Union for Civil Liberties v. Union of India, AIR 1997
SC 1203 : (1997) 3 SCC 433 : 1997 CrLJ 190.
80 Shankuntala Devi v. Delhi Electricity Supply Undertaking, (1995) 2 SCC 369 : 1995 (1) Cur CC 302 : JT 1995 (1) SC 547.
81 Supra.
82 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : JT 1997 (1) SC 1 : 1996 (8) Supreme 581.
83 Jacob George (Dr.) v. State of Kerala, (1994) 3 SCC 430 : 1994 CrLJ 3851 : 1994 (2) Crimes 100. Also, Paschim Banga Khet Mazdoor
Samity v. State of West Bengal, AIR 1996 SC 2426 : (1996) 4 SCC 37.
84 AIR 1983 SC 1134 : (1983) 4 SCC 20; for final decision in the case, see, AIR 1984 SC 1560 : 1984 (2) LLJ 318 : 1984 Supp SCC 410.
Also, JAIN, Treatise, I, Chapter XIX. The mandamus was issued in 1971 : For full history of the case, see, JAIN, Cases, III,
85 AIR 1990 SC 1417 : (1990) 3 SCC 182.
86 See, for example, R. Gandhi v. Union of India, AIR 1989 Med. 205, where the Madras High Court ordered payment of ex gratia
compensation to the Sikh victims of a communal riot.
87 Also see, infra.
88 AIR 2001 AP 502. Also see, State of Andhra Pradesh v. Challa Ramkrishna Reddy, AIR 2000 SC 2083 : (2000) 5 SCC 712 : JT 2000 (6)
JT SC 334.
89 Chairman, Rly. Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465. On PIL writ petitions, see, infra.
90 All India Lawyers Union v. Union of India, AIR 1999 Del 120. For further discussion on this matter see, infra.
Page 119
91 Marri Yadamma v. State of Andhra Pradesh, AIR 2002 AP 164.
92 Rabindra Nath Ghosal v. University of Calcutta, AIR 1992 Cal 208.
93 Rabindra Nath Ghoshal v. Unversity of Calcutta, (2002) 7 SCC 478 : AIR 2002 SC 3560.
94 For a full-fledged discussion on writs, see, infra, Chapters XXXIII to XXXVI.
95 AIR 1975 Knt 62.
96 AIR 1975 All 132.
97 See, JAIN, Treatise, I, Chapter XIX; JAIN, Cases, III, Chapter XVI.
98 Prem Lal v. State of U.P. Government, AIR 1962 All 233; see, infra.
1 11 WR 646; YARDLEY, A Source Book of Administrative Law, 116 (1970) supra.
2 See, infra, next Chapter.
3 Shri Shivkor Mota Singh v. Ram Naresh Muni Singh, AIR 1978 Guj 115.
4 Municipal Board, Jaunpur v. Brahmkishore, AIR 1978 All 168.
5 Municipal Corp., Delhi v. Sobhagwati, AIR 1960 Punj 300.
6 AIR 1975 SC 529 : (1974) 2 SCC 596. Also see, supra.
7 AIR 1962 All 211.
8 G. Sreedharamurthy v. Bellary Municipal Council, AIR 1982 Knt 287.
9 Municipal Commissioner v. David J. Bhanu, (1988) 1 KLT 675.
10 Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum, (1991) 1 GLR 650.
11 Kumari v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : 1993 (1) ACC 80.
12 AIR 1973 SC 1289 : (1973) 1 SCC 788.
13 Lala Bishambar Nath v. The Agra Nagar Mahapalika, Agra, AIR 1973 SC 1289 : (1973) 1 SCC 788.
14 Municipal Corp. of Delhi v. Sushila Devi, AIR 1999 SC 1929 : (1999) 4 SCC 317.
15 See, infra.
16 For this Article, see, supra.
17 AIR 1979 All 35.
18 See, supra, for CASES for compensation brought against State Transport Corporations. Also see, R.N. Ghosal v. Univ. of Calcutta, AIR
1992 Cal 207 : 1992 (1) Cal HN 134 : (2002) 7 SCC 478 : AIR 2002 SC 3560; also see for CASES against electricity undertakings which
are statutory bodies : infra.
19 AIR 1976 MP 38.
20 AIR 1986 Raj 176. Also See, K.S.E. Board v. Kamalakshy Amma, AIR 1987 Ker 253.
21 AIR 1986 Ker 72.
22 II Ind. Jud. Reports 426.
23 Also see, Asa Ram v. M.C.D., AIR 1995 Del 168.
24 Thressia v. Kerala State Electricity Board, AIR 1988 Ker 206.
25 Shakuntala Devi v. Delhi Electric Supply Undertaking, (1995) 2 SCC 369 : JT 1995 (1) SC 547.
26 Padma Beharilal v. Orissa Electricity Board, AIR 1992 Ori 68.

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27 AIR 1999 SC 3412 : (1999) 7 SCC 298 : JT 1999 (7) SC 109. Also see, Tamil Nadu Electricity Board v. Sunathi, AIR 2000 SC 1603 :
(2000) 4 SCC 543 : 2000 (3) Mad LJ 124.
28 On Writs, see, infra.
29 AIR 1980 SC 431 : (1980) 1 SCC 284.
30 The Post Office Act, 1898.
31 Triafus & Co. Ltd., v. Post Office, (1957) 2 QB 352; Cf. C.I.T. v. P.M. Rathod & Co., AIR 1959 SC 1394 : 1960 (1) SCR 401; Union of
India v. Amar Singh, AIR 1960 SC 233 : 1960 (2) SCR 75.
32 S. 191 of the Indian Contract Act, 1872.
33 Union of India v. Ladulal Jain, AIR 1963 SC 1681 : 1964 (3) SCR 628. Also see, Union of India v. Murlidhar, AIR 1952 Ass 141.
34 AIR 1976 SC 2538 : (1976) 4 SCC 265.
35 AIR 1976 SC 1414 : (1976) 3 SCC 32.
36 AIR 1980 Del 92.
37 Commissioners for Railways v. Mc Dermott, (1967) AC 169.
38 Under an S/R issued under the Railway Act and, as such, having the force of law, it is made obligatory that the gates at railway level
crossing must be kept closed when the train is due to pass. In Union of India v. Hindustan Lever, AIR 1975 P&H 259, the accident occurred
because the gates were left open at the time of the passing of the train. The Court characterised this as 'statutory negligence' on the part of the
railway employees and, on the principle of vicarious liability, the Union of India was held liable to pay damages to the plaintiff due to the
aforesaid negligence.
39 CHARLESWORTH, On Negligence, 825 (11th ed.).
40 AIR 1980 All 168.
41 AIR 1989 Cal 207.
42 Nathulal Jain v. State, AIR 1993 Raj at 155.
43 Union of India v. Sunil Kumar, AIR 1984 SC 1737 : (1984) 4 SCC 246; Ratnakar Tanbaje Itankar v. Union of India, AIR 1994 Bom
133; see, JAIN, Treatise, I, Chapter XIII.
44 D. Srinivasa v. Union India, AIR 1995 Knt 223. Also see, Ratnakar Tanbaji Itankar v. Union of India, AIR 1994 Bom 132; JAIN,
Treatise, I, Chapter XIII; JAIN, Cases, II, 1077-1084.
45 AIR 1976 All 85.
46 Ulhasamnan v. Union of India, (1992) ACJ 151.
47 P.A. Narayanan v. Union of India, AIR 1998 SC 1659 : (1998) 3 SCC 67 : 1998 (2) Mad LJ 121.
48 Supra.
49 For instance, S. 54 of the Banking Companies Act, 1949; S. 15 of the Essential Commodities Act, 1955.
50 For instance, S. 117 of the Factories Act, 1948; S. 155 of the Customs Act, 1962.
51 For instance, S. 19 of the Prize Competition Act, 1955; V. Srinivas v. Machines and Machine tools P. Ltd. S. 293 of the Income Tax Act,
1961.
53 R. Subha Rao v. Advocate-General, A.P., AIR 1981 SC 755 at 757 : (1981) 2 SCC 577.
54 State v. Tulsi Ram, AIR 1971 All 162.
55 Law Commision of India, First Report (Liability of the State in Tort), 39 (1956).
56 See, infra, Chapter XXX under Misfeasance in Public office. For discussion on mala fide action on the part of the government, see, JAIN,
Page 121
Treatise, I, Chapter XIX.
57 AIR 1962 All 233.
58 AIR 1975 SC 529: (1974) 2 SCC 596 See, infra.
59 (1877) 2 AC 616.
60 AIR 1975 SC 529 at 531: (1974) 2 SCC 596.
61 AIR 1975 SC 529: (1974) 2 SCC 596.
62 AIR 1985 SC 285, 293: (1985) 1 SCC 449.
63 AIR 1975 SC 460: (1974) 2 SCC 630.
64 Eshugbayi Eleko v. Govt. of Nigeria, (1931) AC 692; WADE AND BRADLEY, Constitutional Law, 267 (1970).
65 30 ER 391 and 521 (1793).
66 7 MIA 555 (1827).
67 7 MIA 476 (1859). This case is also known as the Rajah of Tanjore case. Also see, JAIN, Cases, IV, Chapter XXVIII for the text of this
case.
68 54 ER 642 (1860). Other old Cases on the act of state are : Raja Saligram v. Secy. of State, (1872) IA Suppl Vol. p. 119; Sirdar
Bhagwan Singh v. Secy. of State, (1872) 2 IA 38; Secy. of State v. Rustam Khan, (1941) 68 IA 109; Vaje Singhji Joravar Singhji v. Secy. of
State, 51 IA 357.
69 P.V. Rao v. Khushaldas, AIR 1949 Bom 277, 278.
70 (1872) IA Supp Vol., p. 10.
71 Promod v. State of Orissa, AIR 1962 SC 1288: 1962 Supp (1) SCR 405; Virendra Singh v. State of Uttar Pradesh, AIR 1954 SC 417:
1955 (1) SCR 415; State of Madras v. Rajagopalan, AIR 1965 SC 817: 1955 (2) SCR 541; Dalmia Dadri Cement Co. v. Commr.,
Income-tax., AIR 1958 SC 816: 1959 SCR 729.
72 AIR 1959 SC 1383: 1960 (1) SCR 537. Also, Dalmia Dadri Cement Co. v. CIT, AIR 1958 SC 816 : 1959 SCR 729: (1958) 34 ITR 514.
73 AIR 1964 SC 1043: 1964 (6) SCR 461.
74 AIR 1967 SC 40: 1966 Supp SCR 81.
75 This principle has been applied by the Supreme Court in several earlier Cases, see, for example, Dalmia Dadri Cement Co. Ltd. v.
Commissioner of Income tax, AIR 1958 SC 816, 818: (1958) 34 ITR 54; Maharaja Shree Umaid Mills Ltd. v. Union of India, AIR 1963 SC
953: (1963) 48 ITR 186; State of Gujarat v. Vohra Fiddali Badruddess Mithi barwala, AIR 1964 SC 1043: 1964 (6) SCR 461.
76 Administrative Justice : Some Necessary Reforms, para 11.2 (1988).
77 (1964) AC 465.
78 (1970) 2 QB 223.
79 Also see, Meates v. Attorney General, (1983) NZLR 308; Clifford Metal Industries Ltd. v. Export Credit Guarantee Dept., (1981) The
Times 25 March; WADE, Administrative Law, 774-775 (1995).
80 Supra.
81 (1980) QB 156.
82 (1981) 2 WLR 188.
83 Per Lord WILBERFORCE.
84 See the comment by JOHN MURDOCH NATES, STATUTORY AUTHORITY AND NUISANCE, 97 LQR 205 (1981).
85 For comments on Allen, see, P.P. CRAIG, Administrative Law. Also, Manchester Corporation v. Farnworth, (1930) AC 171; Tate &
Lyle Industries Ltd. v. Greater London Council, (1983) 2 WLR 649.
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86 (1970) AC 1004.
87 Dorset Yacht Co. Ltd. v. Home Office, (1970) AC 1004 at 1031.
88 Dutton v. Bognor Regis Urban District Council, (1972) 1 QB 373.
89 See, infra, under Breach of Statutory Duty.
90 Anns v. Merton London Borough Council, (1977) 2 All ER 492.
92 WADE, Administrative Law, 658-9 (1982).
93 WADE, Administrative Law, 500 (1982).
1 Justice--All Souls, Report, 337.
2 Negligence in the Exercise of a Statutory Power. 94 LQR 428, 440 (1978). Also, CRAIG, Adm. Law, 539 (1983).
4 P.P. CRAIG, Administrative Law, (1994).
5 See GOULD, Damages as Remedy in Administrative Law, (1972) 5 NZULR 105. Apart from the material referred to in the earlier pages,
supra, on damages for administrative wrongs, reference may also be made to the following materials : GANZ, Compensation for Negligent
Administrative Action, 1973 Pub Law 84; GANZ, Public Law and the Duty of Care, 1977 Pub Law 306; HENRY MOLOT, Administrative
Discretion and Current Judicial Activism, 11 Ottawa L.R. 337, 353 (1978); MICHAEL G. BRIDGE, Governmental Liability, The Tort of
Negligence, 24 McGill LJ 277 (1978); New Zealand Law Reform Committee, Damages in Administrative Law, (1980); DE SMITH, Judicial
Review of Administrative Action, 321-24, 337-39 (1980).
6 Dennis v. Charnwood Borough Council, (1983) QB 409.
7 Fellowes v. Rowther District Council, (1983) 1 All ER 513 at 522.
8 In Stovin v. Wise, (1994) 3 All ER 467, the Highway Authority was held in breach of the common law duty of care. In Lewis v. Kant
LCC, (1992) 90 LGR 416, the Highway Authority was held liable for non-feasance, i.e., failure to exercise its statutory power to erect
warning signs resulting in physical injury to a motor cyclist.
9 Peabody Trust v. Sir Lindsay Parkinson Ltd., (1985) 1 AC 210.
10 Yuen Kum Yen v. Att. Gen. of Hongkong, (1988) AC 175.
11 Other Cases in the series are : Investors in Industry Commercial Properties Ltd. v. South Bedfordshire District Council, (1986) 1 All ER
787; Jones v. Dept. of Employment, (1988), All ER 725; Hill v. Chief Constable of West Yorkshire, (1989) AC 59; Davis v. Redcliffe,
(1990) 1 WLR 821.
12 (1988) AC 175 at 198.
13 (1990) 2 All ER 908.
14 Murphy v. Brentwood DC, (1990) 2 All ER 908 at 921.
15 For comments on Murphy see : (1991) CJ 58; 54 MLR 561; (1991) 107 LQR 228: (1992) 55 MLJ 619.
16 (1990) 2 All ER 536.
17 See, Cooper v. Wandsworth Board of Works, JAIN, Treatise, I,
18 X (Minors), (1995) 2 AC 633, at 730.
19 Bourgoin S.A. v. Ministry of Agriculture, (1985) 3 All ER 585, at 618, 632. Also see, infra, under Misfeasance in Public office.
20 (1981) 1 All ER 1202.

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21 Dunlop v. Woollahara Municipal Council, (1981) 1 All ER 1202 at 1209.
22 Also see, infra, on this point.
23 JAIN, Tratise, I, Chapter IX; JAIN, Cases, I, Chapter VIII, 466-640.
24 See, for comments on Dunlop : JUSTICE-ALL SOULS, Administrative Justice, 346 (1988).
25 Rowling v. Takaro Properties, (1975) 2 NZLR 62.
26 Takaro Properties v. Rowling, (1978) 2 NZLR 314.
28 See, (1988) AC 473, (1988) 1 All ER 163 (PC); infra, under Misfeasance in office.
29 Supra.
30 See the judgment of Lord BROWNE WILKINSON in X (minors) v. Bedfordshire CC, (1995) 3 All ER 360, where he has lucidly
explained the law in this area. In this case, the House of Lords discussed the issue whether the careless performance by a local authority of
its statutory duties relating to education and welfare of children could found an action for negligence by children adversely affected by the
local authority's action.
31 See, Yuen Kun Yeu v. Att. Gen. of Hong Kong, (1988) AC 175.
32 Street, Law of Torts, 270-71 (1963); GRIFFITH AND STREET, Principles of Administrative Law, 250-52 (1973). See Lord WRIGHT in
London Passenger Transport Board v. Upson, (1949) AC 155, 168.
33 Also see, Barrett v. Enfield LBC, (2001) 2 AC 550; O Rourke v. Camden LBC, (1998) AC 188; Phelps v. Hillingdon LBC, (2001) 2 AC
619.
34 Pasmore v. The Oswald Twistle Urban District Council, (1898) HL 387.
35 (1938) 4 All ER 631.
36 De Falco v. Crawley BC, (1980) QB 460.
37 See, Meade v. London Borough of Haringey, (1979) 2 All ER 1016, 033-1024; Thornton v. Kirklees Metropolitan Borough Council,
(1979) 2 All ER 349.
38 (1949) 1 All ER 544. Also see Lonrho v. Shell, (1981) 2 All ER 456.
39 Geddis v. Proprietors of Bann Reservoir, (1878) 3 AC 430.
40 Lord BROWNE WILKINSON, X (Minors) v. Bedfordshire CC, (1995) 3 All ER 360 at 367.
41 X (Minors) v. Bedfordshihe CC, (1995) AC 633, at 732-733.
42 X (Minors) v. Bedfordshire CC, (1995) 3 All ER 360 at 371.
43 Caparo, (1990) 1 All ER 568.
44 Dunlop v. Woollahara Municipal Council, (1981) 1 All ER 1202.
45 Even the Australian Ombudsman has recognised the need for ex gratia payments. In his annual Report 1987-1988, the Commonwealth
Ombudsman has observed at p. 23 : " . . .on occasions, the only remedy that will adequately compensate a person for defective
administration is an act of grace [ex gratia] payment. A person affected by defective action will not have a legal claim but the unfairness
from the departmental conduct over which the person affected had no control should be recognised and remedied as far as possible." For
discussion on the institution of Ombudsman, see, infra.
46 Hoffman La Roche and Co. v. Secretary of State for Trade and Industry, (1983) 1 All ER 513 at 522. See, JAIN, Treatise, I, Chapter XII.
47 H. Robertson SC, Remedies, Present and Future, (1995) Admin Review, No. 44; L. ROOTS, Damages for Wrongful Administrative
Action : A Future Remedy Needed Now, (1995) 2 AJ Admin L, 129; DE SMITH WOOLF AND JOWELL, Judicial Review of Adm.
Action, 760 (1995); J.S. READ, Damages in Administrative Law, (1988) Commonwealth Law Bulletin, 428.
48 Public and Administrative Law Reform Committee, Report on Damages in Administrative Law, 2, (New Zealand, 1980, Minority view).
The majority favoured the evolution of any such remedy by the courts and piece-meal legislation by Parliament in specific Cases for
Page 124
payment of damages, instead of enacting a general law. Also see, CRAIG, Compensation in Public Law, (1980) 96 LQR 413; MC BRIDGE,
Damages as Remedy for Unlawful Administrative Action, (1979) 38 CLJ 323; CRAIG, Administrative Law, 613-651 (1994); WOOLF,
HARRY, SIR, Protection of the Public--A New Challenge, 56-62 (1990); J.S. READ, Damages in Administrative Law, (1988) 14
Commonwealth Law Bulletin, 428; JUSTICE-ALL SOULS, Report on Administrative Justice, 361-362 (1989).
49 READ, Damages in Administrative Law, (1988), 440.
50 JUSTICE, Administration Under Law, 31 (1971); JUSTICE, Review of Adm. Law in U.K. 78 (1981); HARLOW, Compensation and
Government Torts, 89-101. For the present, as stated above, the gap in law is being filled in by awarding ex gratia payments to the suffering
individuals. The reports of the Ombudsman in Britain are replete with instances of ex gratia payments to concerned persons for acts of
administrative maladministration. See, HARLOW, Compensation and Government Torts, 117-143. For discussion on Ombudsman, see,
infra.
51 B. SCHWARTZ, Introduction to Americal Administrative Law, 207 (1958).
52 E.J. HAUGHEY, The Liability of Administrative Authorities, (1975).
53 See, supra.
54 BROWN & BELL, French Administrative Law, 174-183 (1993).
55 BROWN & BELL, French Administrative Law, 184-188.
56 Traite de Droit Constitutional, (3 ed.) 469.
57 Working Paper No. 13, repeated in Law Comm. No. 20 (1969).
58 F. Hoffman La Roche & Co. AG v. Secretary of State for Trade and Industry, (1975) AC 295; JAIN, Cases, I, 396.
59 (1964) 1 All ER 367.
60 (1972) 1 All ER 801.
61 Cassell & Co. Ltd. v. Broome, (1972) 1 All ER 801, at 875. See, JAIN, Cases, IV.
62 (1993) 1 All ER 609.
Kathuria: Supreme Court on Criminal Law/E/EX/EXPLOSIVES/EXPLOSIVES ACT (4 of 1884)
EXPLOSIVES/EXPLOSIVES ACT (4 of 1884)
( i) There is no finding or evidence that the four minors were engaged to manufacture or were taking part in the
manufacture of fire-works.
Held: No offence under S. 5(3) of the Explosives Act is made out.
Mohd. Usman vs State of Bihar AIR 1968 SC 1273: 1968 Cr LJ 1475.
( ii) The plea relating to sanction is based on confusion between two statutes i.e. The Act and the Explosive Substance
Act, 1908 (in short the 'Explosive Substances Act'). Prior sanction for prosecuting any person is provided under the
Explosive Substances Act,1908 and there is no corresponding provision in the Explosive Act, 1884 Act. Therefore, the
trial Court and the High Court were justified in rejecting the plea.
Lopchand Naruji Jat vs State of Gujarat 2004 Cri LJ 4241 (4242): AIR 2004 SC 4645: (2004) 7 SCC 566: (2004) 4
Crimes 18.
( iii) Accused were found in possession of 180 denonators. The value thereof has been fixed by the prosecution as
Page 125
Rs.900/-. The quantity seized clearly disproves the plea that the seized articles were intended to be used for digging
wells. The detonators were found to be of a company at Rourkela in Orissa, and were seized far away at Surat. The fact
that the accused persons tried to run away when police wanted to apprehend them is a significant factor.
Lopchand Naruji Jat vs State of Gujarat 2004 Cri LJ 4241 (4243) (SC).
( iv) The plea relating to sanction is based on confusion between two statutes, i.e., the Explosives Act, 1884 and the
Explosive Substances Act, 1908. Prior sanction for prosecuting any person is provided under the Explosive Substances
Act and there is no corresponding provision in the Explosives Act, 1884.
Lopchand Naruji Jat vs State of Gujarat (2004) 7 SCC 566: JT (2004) 8 SC 226: 2004 GLJ 4241: (2004) 4 Crimes 18.
( v) The evidence of IO -- Police officer was found reliable. Conviction on his solitary evidence was found sustainable.
Lopchand Naruji Jat vs State of Gujarat 2004 Cri LJ 4241 (4243) (SC).
Kathuria: Supreme Court on Criminal Law/E/EX/EXPLOSIVE SUBSTANCE/EXPLOSIVE SUBSTANCE ACT, 1908
EXPLOSIVE SUBSTANCE/EXPLOSIVE SUBSTANCE ACT, 1908
( i) The knowledge whether a particular substance is an explosive substance depends on different circumstances and
varies from person to person. An ignorant man or a child coming across an explosive substance may pick it up out of
curiosity and not knowing that it is an explosive substance. A person of experience may immediately know that it is an
explosive substance. In the instant case, the appellants had been dealing with the substances in question for a long time.
They certainly knew or at least they shall be presumed to have known what these substances were and for what purpose
they were used. In fact, when PW-4, Basanna asked for half k.g. of blasting powder, appellant's servant accused
Chandrakant, immediately supplied the requisite powder to PW-4 from the shop. This evidence clearly establishes that
the appellants did know the nature and character of the substance. In other words, they knew that the substances in
question were explosive substances. The Courts below, therefore, were right in holding that an offence under S. 5 of the
Explosive Substances Act was committed.
Mohamad Usman Mohammad Hussain Maniyar vs State of Maharashtra AIR 1981 SC 1062: 1981 SCC (Cr) 477:
(1981) 2 SCC 443: 1981 Cr LJ 588: 1981 Cr LR (SC) 238: 1981 Cr App R (SC) 196.
( ii) Extradition of the appellant was also allowed for trial of offences punishable under the Explosive Substances Act,
1908.
D.S. Lahoriya vs State of Rajasthan 2008 Cri LJ 702 (704).
See also Suman Sood vs State of Rajasthan 2007 Cri LJ 4080: 2007 AIR(SC) 2774: 2007(6) SCR 499: 2007(5) SCC
634: 2007(7) JT 101: 2007(9) JT 453: 2007(5) SLT 522: 2007 CrLJ 4080: 2007(2) SCC(Cr) 637: 2007(7) SCALE 312.
( iii) For the purposes of an offence under S. 4 of the Explosive Substance Act, 1883, the Crown had to prove that the
defendant knew that what he was making or had in his possession or under his control was an explosive substance in
that it was a piece of apparatus intended to be used for causing an explosion. Accordingly, the Judge should have
identified mens rea as a specific ingredient of the offence which the Crown had to prove and his failure to do so was a
material misdirection.
Under S. 4 of the 1883 Act, the burden was on the defendant to establish that he had made the explosive substance for a
lawful object and since supplying the timers to the Syrian Government was a lawful object, whatever their subsequent
Page 126
use might be, it was incumbent on the Judge to direct the jury that if they found that the appellant had so acted that was
a good defence.
R vs Berry (1994) 2 All ER 913.
( iv) The plea relating to sanction is based on confusion between two statutes i.e. The Act and the Explosive Substance
Act, 1908 (in short the 'Explosive Substances Act'). Prior sanction for prosecuting any person is provided under the
Explosive Substances Act,1908 and there is no corresponding provision in the Explosive Act, 1884 Act. Therefore, the
trial Court and the High Court were justified in rejecting the plea.
Lopchand Naruji Jat vs State of Gujarat 2004 Cri LJ 4241 (4242): (2004) 7 SCC 566: (2004) 8 JT 226.
S M Dugar : Guide to Competition Law/Guide to Competition Law/APPENDICES/APPENDIX 39APPENDIX 36THE

RAILWAYS ACT, 1989(24 of 1989)
GCL.050.LN2
[3rd June, 1989][3rd June, 1989]
An Act to consolidate and amend the law relating to Railways.
BE it enacted by Parliament in the Fortieth year of the Republic of India as follows:--
CHAPTER I
PRELIMINARY
S. 1.
Short title and commencement.--
(1) This Act may be called THE RAILWAYS ACT, 1989.
(2) It shall come into force on such date 1 as the Central Government may, by notification in the Official
Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act, and any reference in
any such provision to the commencement of this Act shall be construed as a reference to the coming into force
of that provision.
S. 2.
Definitions.--
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In this Act, unless the context otherwise requires,--
(1) "authorised" means authorised by a railway administration; 1a [(1A) "Authority" means the Rail Land
Development Authority constituted under section 4 A].
(2) "carriage" means the carriage of passengers or goods by a railway administration;
(3) "Claims Tribunal" means the Railway Claims Tribunal established under section 3 of the Railways
Claims Tribunal Act , 1987;
(4) "classification" means the classification of commodities made under section 31 for the purpose of
determining the rates to be charged for carriage of such commodities;
(5) "class rates" means the rate fixed for a class of commodity in the classification;
(6) "Commissioner" means the Chief Commissioner of Railway Safety or the Commissioner of Railway
Safety appointed under section 5;
(7) "commodity" means a specific item of goods;

1b [(7A) "competent authority" means any person authorised by the Central Government, by notification,
to perform the functions of the competent authority for such area as may be specified in the notificaton].
(8) "consignee" means the person named as consignee in a railway receipt;
(9) "consignment" means goods entrusted to a railway administration for carriage;
(10) "consignor" means the person, named in a railway receipt as consignor, by whom or on whose behalf
goods covered by the railway receipt are entrusted to a railway administration for carriage;
(11) "demurrage" means the charge levied for the detention of any rolling stock after the expiry of free
time, if any, allowed for such detention;
(12) "endorsee" means the person in whose favour an endorsement is made, and in the case of successive
endorsements, the person in whose favour the last endorsement is made;
(13) "endorsement" means the signing by the consignee or the endorsee after adding a direction on a
railway receipt to pass the property in the goods mentioned in such receipt to a specified person;
(14) "fare" means the charge levied for the carriage of passengers;
(15) "ferry" includes a bridge of boats, pontoons or rafts, a swing bridge, a fly-bridge and a temporary
bridge and the approaches to, and landing places of, a ferry;
(16) "forwarding note" means the document executed under section 64;
(17) "freight" means the charge levied for the carriage of goods including transhipment charges, if any;
(18) "General Manager" means the General Manager of a Zonal Railway appointed under section 4;
(19) "goods" includes--
(i) containers, pallets or similar articles of transport used to consolidate goods; and
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(ii) animals;
(20) "Government railway" means a railway owned by the Central Government;
(21) "in transit", in relation to the carriage of goods by railway, means the period between the
commencement and the termination of transit of such goods, and unless otherwise previously determined--
(a) transit commences as soon as the railway receipt is issued or the consignment is loaded,
whichever is earlier;
(b) transit terminates on the expiry of the free time allowed for unloading of consignment from any
rolling stock and where such unloading has been completed within such free time, transit
terminates on the expiry of the free time allowed, for the removal of the goods from the railway
premises;
(22) "level crossing" means an inter-section of a road with lines of rails at the same level;
(23) "luggage" means the goods of a passenger either carried by him in his charge or entrusted to a railway
administration for carriage;
(24) "lump sum rate" means the rate mutually agreed upon between a railway administration and a
consignor for the carriage of goods and for any service in relation to such carriage;
(25) "non-Government railway" means a railway other than a Government railway;
(26) "notification" means a notification published in the Official Gazette;

2 [(26-A) "officer authorised" means an officer authorised by the Central Government under subsection (2)
of section 179;]
(27) "parcel" means goods entrusted to a railway administration for carriage by a passenger or a parcel
train;
(28) "pass" means an authority given by the Central Government or a railway administration to a person
allowing him to travel as a passenger, but does not include a ticket;
(29) "passenger" means a person travelling with a valid pass or ticket;

2a [(29A) "person interested" includes,--
(i) all persons claiming an interest in compensation to be made on account of the acquisition of land
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under this Act;
(ii) tribals and other traditional forest dwellers, who have lost any traditional rights recognised under
the scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act,
2006 (2 of 2007);
(iii) a person interested in an easement affecting the land; and
(iv) persons having tenancy rights under the relevant State laws;].
(30) "prescribed" means prescribed by rules made under this Act;
(31) "railway" means a railway, or any portion of a railway, for the public carriage of passengers or goods,
and includes--
(a) all lands within the fences or other boundary marks indicating the limits of the land appurtenant
to a railway;
(b) all lines of rails, sidings, or yards, or branches used for the purposes of, or in connection with, a
railway;
(c) all electric traction equipments, power supply and distribution installations used for the purposes
of, or in connection with, a railway;
(d) all rolling stock, stations, offices, warehouses, wharves, workshops, manufactories, fixed plant
and machinery, roads and streets, running rooms, rest houses, institutes, hospitals, water works
and water supply installations, staff dwellings and any other works constructed for the purpose of,
or in connection with, railway;
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(e) all vehicles which are used on any road for the purposes of traffic of a railway and owned, hired
or worked by a railway; and
(f) all ferries, ships, boats and rafts which are used on any canal, river, lake or other navigable
inland waters for the purposes of the traffic of a railway and owned, hired or worked by a railway
administration,
but does not include--
(i) a tramway wholly within a municipal area; and
( ii ) lines of rails built in any exhibition ground, fair, park, or any other place solely for the purpose
of recreation;
(32) "railway administration", in relation to--
(a) a Government railway, means the General Manager of a Zonal Railway; and
(b) a non-Government railway, means the person who is the owner or lessee of the railway or the
person working in the railway under an agreement;
2b [(32A) "railways land" means any land in which a Government railway has any right, title or interst].
(33) "railway receipt" means the receipt issued under section 65;
(34) "railway servant" means any person employed by the Central Government or by a railway
administration in connection with the service of a railway 3 [including member of the Railway Protection Force
appointed under clause (c) of sub-section (1) o 2 of the Railway Protection Force Act, 1957 (23 of 1957)];
(35) "rate" includes any fare, freight or any other charge for the carriage of any passenger or goods;
(36) "regulations" means the regulations made by the Railway Rates Tribunal under this Act;
(37) "rolling stock" includes locomotives, lenders, carriages, wagons, rail-cars, containers, trucks, trolleys
and vehicles of all kinds moving on rails;
(38) "station to station rate" means a special reduced rate applicable to a specific commodity booked
between specified stations;
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3a [(37A) "special railway project" means a project, notified as such by the Central Government from time
to time, for providing national infrastructure for a public purpose in a specified time-frame, covering one or
more States or the Union territories].
(39) "traffic" includes rolling stock of every description, as well as passengers and goods;
(40) "Tribunal" means the Railway Rates Tribunal constituted under section 33;
(41) "wharfage" means the charge levied on goods for not removing them from the railway after the expiry
of the free time for such removal;
(42) "Zonal Railway" means a Zonal Railway constituted under section 3.
CHAPTER II
RAILWAY ADMINISTRATIONS
S. 3.
Zonal Railways.--
(1) The Central Government may, for the purpose of the efficient administration of the Government
railways, by notification, constitute such railways into as many Zonal Railways as it may deem fit and specify in
such notification the names and headquarters of such Zonal Railways and the areas in respect of which they shall
exercise jurisdiction.
(2) The Zonal Railways existing immediately before the commencement of this Act shall be deemed to be
Zonal Railways constituted under sub-section (1).
(3) The Central Government may, by notification, declare any unit of the railways engaged in research,
development, designing, construction or production of rolling stock, its parts or other equipment used on a
railway, to be a Zonal Railway.
(4) The Central Government may, by notification, abolish any Zonal Railway or constitute any new Zonal
Railway out of any existing Zonal Railway or Zonal Railways, change the name or headquarters of any Zonal
Railway or determine the areas in respect of which a Zonal Railway shall exercise jurisdiction.
S. 4.
Appointment of General Manager.--
(1) The Central Government shall, by notification, appoint a person to be the General Manager of a Zonal
Railway.
(2) The general superintendence and control of a Zonal Railway shall vest in the General Manager.
3b3b. Ins. by Act 47 of 2005, s. 3 (w.e.f. 30-8-2006).[CHAPTER IIA
RAIL LAND DEVELOPMENT AUTHORITY

Page 132
S. 4A.
Establishment of Railway Land Development Authority.--
The Central Government may, by notification, establish an authority to be called the Rail Land
Development Authority to exercise the powers and discharge the functions conferred on it by or under this Act.
S. 4B.
Composition of Authority.--
(1) The Authority shall consist of a Chairman, Vice-Chairman and not more than four other members.
(2) The Member Engineering, Railway Board shall be the Chairman, ex officio , of the Authority.
(3) The Vice-Chairman and three other members shall be appointed by the Central Government from
amongst persons who are or have been working in the Civil Engineering, Finance and Traffic disciplines of any
railway administration and having adequate experience in the relevant discipline as the Central Government may
consider necessary.
(4) The Central Government shall also appoint a member who shall be a person from outside the railway
administration and having adequate experience in such field as it may consider necessary.
S. 4C.
Terms and conditions of appointment of Vice-Chairman and other Members.--
The terms and conditions of appointment of the Vice-Chairman and the other Members of the Authority,
other than the Chairman, and the manner of filling casual vacancies among them shall be such as may be
prescribed.
S. 4D.
Functions of Authority.--
(1) The Authority shall discharge such functions and exercise such powers of the Central Government in
relation to the development of railway land and as are specifically assigned to it by the Central Government.
(2) In particular, and without prejudice to the generality of the foregoing power, the Central Government
may assign to the Authority all or any of the following functions, namely:--
(i) to prepare scheme or schemes for use of railway land in conformity with the provisions of this
Act;
Page 133
(ii) to develop railway land for commercial use as may be entrusted by the Central Government for
the purpose of generating revenue by non-tariff measures;
(iii) to develop and provide consultancy, construction or management services and undertake
operation in India in relation to the development of land and property;
(iv) to carry out any other work or function as may be entrusted to it by the Central Government, by
order in writing.
S. 4E.
Powers of Authority to enter into agreements and execute contracts.--
Subject to such directions as may be given to it by the Central Government, the Authority shall be
empowered to enter into agreements on behalf of the Central Government and execute contracts.
S. 4F.
Procedure of transaction of business of Authority.--
The Authority shall have power to regulate, by means of regulations made by it, its own procedure
(including quorum at its meetings) and the conduct of all business to be transacted by it, the constitution of
Committees and Sub-Committees of Members and the delegation to them any of the powers (excluding the
power to make regulations under this Chapter) and to perform duties of the Authority.
S. 4G.
Appointment of officers and other employees of Authority.--
(1) For the purpose of enabling it efficiently to discharge its functions under this Act, the Central
Government shall provide the Authority with such officers and other employees, and the Authority shall, subject
to the rules as may be made by the Central Government in this behalf, appoint, whether on deputation or
otherwise, such number of officers and other employees as it may deem necessary.
(2) The salaries and allowances payable to, and the other terms and conditions of service of, the officers
and other employees appointed for the purpose of the Authority, shall be such as may be prescribed.
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S. 4H.
Salaries, allowances, etc., to be defrayed out of Consolidated Fund of India.--
The salaries and allowances payable to the Vice-Chairman and other Members of the Authority and the
administrative expenses including the salaries, allowances and pensions payable to the officers and other
employees of the Authority shall be defrayed out of the Consolidated Fund of India.
S. 4-I.
Power of Authority to make regulations.--
(1) The Authority may, with the previous approval of the Central Government, make regulations, consistent
with this Act and the rules made thereunder, for carrying out the provisions of this Chapter.
(2) Every regulation made by the Authority under this Chapter shall be laid, as soon as may be after it is
made, before each House of Parliament, while it is in session for a total period of thirty days which may be
comprised in one session or in two or more successive sessions, and if before the expiry of the session
immediately following the session or the successive sessions aforesaid, both Houses agree in making any
modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the validity of anything previously done under that
regulation"].
CHAPTER III
COMMISSIONERS OF RAILWAY SAFETY
S. 5.
Appointment of Chief Commissioner of Railway Safety and Commissioners of Railway Safety.--
The Central Government may appoint a person to be the Chief Commissioner of Railway Safety and such
other persons as it may consider necessary to be the Commissioners of Railway Safety.
S. 6.
Duties of Commissioner.--
The Commissioner shall--
(a) inspect any railway with a view to determine whether it is fit to be opened for the public carriage
of passengers and report thereon to the Central Government as required by or under this Act;
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(b) make such periodical or other inspections of any railway or of any rolling stock used thereon as
the Central Government may direct;
(c) make an inquiry under this Act into the cause of any accident on a railway; and
(d) discharge such other duties as are conferred on him by or under this Act.
S. 7.
Powers of Commissioner.--
Subject to the control of the Central Government, the Commissioner, whenever it is necessary so to do for
any of the purposes of this Act, may--
(a) enter upon and inspect any railway or any rolling stock used thereon;
(b) by order in writing addressed to a railway administration, require the attendance before him of
any railway servant and to require answers or returns to such inquiries as he thinks fit to make
from such railway servant or from the railway administration; and
(c) require the production of any book, document or material object belonging to or in the
possession or control of any railway administration which appears to him to be necessary to
inspect.
S. 8.
Commissioner to be public servant.--
The Commissioner shall be deemed to be a public servant within the meaning of section 21 of the Indian
Page 136
Penal Code (45 of 1860).
S. 9.
Facilities to be afforded to Commissioners.--
A railway administration shall afford to the Commissioner all reasonable facilities for the discharge of the
duties or for the exercise of the powers imposed or conferred on him by or under this Act.
S. 10.
Annual report of Commissioners.--
The Chief Commissioner of Railway Safety shall prepare in each financial year an annual report giving a
full account of the activities of the Commissioners during the financial year immediately preceding the financial
year in which such report is prepared and forward, before such date as may be specified by the Central
Government, copies thereof to the Central Government, and that Government shall cause that report to be laid,
as soon as may be, after its receipt before each House of Parliament.
CHAPTER IV
CONSTRUCTION AND MAINTENANCE OF WORKS
S. 11.
Power of railway administrations to execute all necessary works.--
Notwithstanding anything contained in any other law for the time being in force, but subject to the
provisions of this Act and the provisions of any law for the acquisition of land for a public purpose or for
companies, and subject also, in the case of a non-Government railway, to the provisions of any contract between
the non-Government railway and the Central Government, a railway administration may, for the purposes of
constructing or maintaining a railway--
(a) make or construct in or upon, across, under or over any lands, or any streets, hills, valleys, roads,
railways, tramways, or any rivers, canals, brooks, streams or other waters, or any drains,
water-pipes, gas-pipes, oil-pipes, sewers, electric supply lines, or telegraph lines, such temporary
or permanent inclined-planes, bridges, tunnels, culverts, embankments, aquaducts, roads, lines of
railways, passages, conduits, drains, piers, cuttings and fences, in-take wells, tube wells, dams,
river training and protection works as it thinks proper;
(b) alter the course of any rivers, brooks, streams or other water courses, for the purpose of
Page 137
constructing and maintaining tunnels, bridges, passages or other works over or under them and
divert or alter either temporarily or permanently, the course of any rivers, brooks, streams or
other water courses or any roads, streets or ways, or raise or sink the level thereof, in order to
carry them more conveniently over or under or by the side of the railway;
(c) make drains or conduits into, through or under any lands adjoining the railway for the purpose of
conveying water from or to the railway;
(d) erect and construct such houses, warehouses, offices and other buildings, and such yards,
stations, wharves, engines, machinery apparatus and other works and conveniences as the railway
administration thinks proper;
3c [( da ) developing any railway land for commercial use;]
(e) alter, repair or discontinue such buildings, works and conveniences as aforesaid or any of them
and substitute others in their stead;
(f) erect, operate, maintain or repair any telegraph and telephone lines in connection with the
working of the railway;
(g) erect, operate, maintain or repair any electric traction equipment, power supply and distribution
installation in connection with the working of the railway; and
(h) do all other acts necessary for making, maintaining, altering or repairing and using the railway.
S. 12.
Power to alter the position of pipe, electric supply line, drain or sewer, etc.--
(1) A railway administration may, for the purpose of exercising the powers conferred on it by this Act, alter
the position of any pipe for the supply of gas, water, oil or compressed air, or the position of any electric supply
line, drain or sewer:
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Provided that before altering the position of any such pipe, electric supply line, drain or sewer, the railway
administration shall give a notice indicating the time at which the work of such alteration shall commence, to the
local authority or other person having control over the pipe, electric supply line, drain or sewer.
(2) The railway administration shall execute the work referred to in sub-section (1) to the reasonable
satisfaction of the local authority or the person receiving the notice under the proviso to sub-section (1).
S. 13.
Protection for Government property.--
Nothing in sections 11 and 12 shall authorise--
(a) a railway administration of the Government railway to do anything on or to any works, lands or
buildings vested in, or in the possession of, a State Government without the consent of that
Government; and
(b) a railway administration of a non-Government railway to do anything on or to any works, lands

or buildings vested in, or in the possession of, the Central Government or a State Government,
without the consent of the Government concerned.
S. 14.
Temporary entry upon land to remove obstruction, to repair or to prevent accident.--
(1) Where in the opinion of a railway administration--
(a) there is imminent danger that any tree, post or structure may fall on the railway so as to obstruct
the movement of rolling stock; or
(b) any tree, post, structure or light obstructs the view of any signal provided for movement of
rolling stock; or
(c) any tree, post or structure obstructs any telephone or telegraph line maintained by it,
Page 139
it may take such steps as may be necessary to avert such danger or remove such obstruction and submit a
report thereof to the Central Government in such manner and within such time as may be prescribed.
(2) Where in the opinion of a railway administration--
(a) a slip or accident has occurred; or
(b) there is apprehension of any slip or accident to any cutting, embankment or other work on a
railway,
it may enter upon any lands adjoining the railway and do all such works as may be necessary for the
purpose of repairing or preventing such slip or accident and submit a report thereof to the Central Government in
such manner and within such time as may be prescribed.
(3) The Central Government may, after considering the report under sub-section (1) or sub-section (1), in
the interest of public safety, by order, direct the railway administration that further action under subsection (1) or
sub-section (1) shall be stopped or the same shall be subject to such conditions as may be specified in that order.
S. 15.
Payment of amount for damage or loss.--
(1) No suit shall lie against a railway administration to recover any amount for any damage or loss caused
in the exercise of the powers conferred by any of the foregoing provisions of this Chapter.
(2) A railway administration shall pay or tender payment for any damage or loss caused in the exercise of
the powers conferred by any of the foregoing provisions of this Chapter, and in case of a dispute as to the
sufficiency of any amount so paid or tendered or as to the persons entitled to receive the amount, it shall
immediately refer the dispute for the decision of the District Judge of the district and his decision thereon shall
be final:
Provided that where the railway administration fails to make a reference within sixty days from the date of
commencement of the dispute, the District Judge may, on an application made to him by the person concerned,
direct the railway administration to refer the dispute for his decision.
(3) The reference under sub-section (1) shall be treated as an appeal under section 96 of the Code of Civil
Procedure, 1908 (5 of 1908) and shall be disposed of accordingly.
(4) Where any amount has been paid as required by sub-section (1), the railway administration shall,
notwithstanding anything in any other law for the time being in force, be discharged from all liabilities to any
person whatsoever in respect of any amount so paid.
S. 16.
Accommodation works.--
Page 140
(1) A railway administration shall make and maintain the following works for the accommodation of the
owners and occupiers of lands adjoining the railway, namely:--
(a) such crossings, bridges, culverts and passages over, under or by the sides of, or leading to or
from, the railway as may, in the opinion of the State Government, be necessary for the purpose of
making good any interruptions caused by the railway to the use of the lands through which the
railway is made; and
(b) all necessary bridges, tunnels, culverts, drains, water sources or other passages, over, under or by
the sides of the railway, of such dimensions as will, in the opinion of the State Government, be
sufficient at all times to convey water as freely from or to the lands lying near or affected by the
railway as it was before the making of the railway or as nearly as possible.
(2) Subject to the other provisions of this Act, the works specified in sub-section (1) shall be made at the
cost of the railway administration during or immediately after the laying out or formation of the railway over the
lands traversed and in such a manner as to cause as little damage or inconvenience as possible to persons
interested in the lands or affected by the works:
Provided that--
(a) a railway administration shall not be required to make any accommodation works in such a
manner as would prevent or obstruct the working or using of the railway, or to make any
accommodation works with respect to which the owners or occupiers of the lands have been paid
compensation in consideration of their not requiring the said works to be made;
(b) save as hereinafter, in this Chapter, provided, no railway administration shall be liable to execute
any further or additional accommodation works for the use of the owners or occupiers of the
lands after the expiration of ten years from the date on which the railway passing through the
lands was first opened for public traffic;
(c) where a railway administration has provided suitable accommodation work for the crossing of a
road or stream and the road or stream is afterwards diverted by the act or neglect of the person
having the control thereof, the railway administration shall not be compelled to provide any other
accommodation work for the crossing of such road or stream.
Page 141
(3) The State Government may specify a date for the commencement of any work to be executed under
sub-section (1) and, if within three months next after that date, the railway administration fails to commence the
work or having commenced it, fails to proceed diligently to execute it, the Central Government shall, on such
failure being brought to its notice by the State Government, issue such directions to the railway administration as
it thinks fit.
Explanation .--For the purposes of this section, the expression "lands" shall include public roads.
S. 17.
Power of owner, occupier, State Government or local authority to cause additional accommodation
works to be made.--
(1) If an owner or occupier of any land affected by a railway considers the works made under section 16 to
be insufficient for the use of the land, or if the State Government or a local authority desires to construct a public
road or other work across, under or over a railway, such owner or occupier, or, as the case may be, the State
Government or the local authority, may, at any time, require the railway administration to make at the expense
of the owner or occupier or of the State Government or the local authority, as the case may be, such further
accommodation works as are considered necessary and are agreed to by the railway administration.
(2) The accommodation works made under sub-section (1) shall be maintained at the cost of the owner or
occupier of the land, the State Government or the local authority, at whose request the works were made.
(3) In the case of any difference of opinion between the railway administration and the owner or occupier,
the State Government or the local authority, as the case may be, in relation to--
(i) the necessity of such further accommodation works; or
( ii ) the expenses to be incurred on the construction of such further accommodation works; or
( iii ) the quantum of expenses on the maintenance of such further accommodation works, it shall be
referred to the Central Government whose decision thereon shall be final.
S. 18.
Fences, gates and bars.--
The Central Government may, within such time as may be specified by it or within such further time, as it
may grant, require that--
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(a) boundary marks or fences be provided or renewed by a railway administration for a railway or
any part thereof and for roads constructed in connection therewith;
(b) suitable gates, chains, bars, stiles or hand-rails be erected or renewed by a railway administration
at level crossings;
(c) persons be employed by a railway administration to open and shut gates, chains or bars.
S. 19.
Over-bridges and under-bridges.--
(1) Where a railway administration has constructed lines of rails across a public road at the same level, the
State Government or the local authority maintaining the road, may, at any time, in the interest of public safety,
require the railway administration to take the road either under or over the railway by means of a bridge or arch
with convenient ascents and descents and other convenient approaches, instead of crossing the road on the level,
or to execute such other works as may, in the circumstances of the case, appear to the State Government or the
local authority maintaining the road to be best adapted for removing or diminishing the danger arising from the
level crossing.
(2) The railway administration may require the State Government or the local authority, as the case may be,
as a condition of executing any work under sub-section (1), to undertake to pay the whole of the cost of the work
and the expense of maintaining the work, to the railway administration or such proportion of the cost and
expenses as the Central Government considers just and reasonable.
(3) In the case of any difference of opinion between the railway administration and the State Government
or the local authority, as the case may be, over any of the matters mentioned in sub-section (1), it shall be
referred to the Central Government, whose decision thereon shall be final.
S. 20.
Power of Central Government to give directions for safety.--
Notwithstanding anything contained in any other law, the Central Government may, if it is of the opinion
that any work undertaken or may be undertaken, is likely to alter or impede the natural course of water flow or
cause an increase in the volume of such flow endangering any cutting, embankment or other work on a railway,
issue directions in writing to any person, officer or authority responsible for such work to close, regulate or
prohibit that work.
3d3d. Ins. by Act, 11 of 2008, s. 3 (w.e.f. 31-1-2008).[CHAPTER IV-A

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LAND ACQUISITION FOR A SPECIAL RAILWAY PROJECT
S. 20-A.
Power to acquire land, etc.--
(1) Where the Central Government is satisfied that for a public purpose any land is required for execution
of a special railway project, it may, by notification, declare its intention to acquire such land.
(2) Every notification under sub-section (1), shall give a brief description of the land and of the special
railway project for which the land is intended to be acquired.
(3) The State Government or the Union territory, as the case may be, shall for the purposes of this section,
provide the details of the land records to the competent authority, whenever required.
(4) The competent authority shall cause the substance of the notification to be published in two local
newspapers, one of which shall be in a vernacular language.
S. 20B.
Power to enter for survey, etc.--
On the issue of a notification under sub-section (1) of section 20A, it shall be lawful for any person,
authorised by the competent authority in this behalf, to--
(a) make any inspection, survey, measurement, valuation or enquiry;
(b) take levels;
(c) dig or bore into sub-soil;
(d) set out boundaries and intended lines of work;
(e) mark such levels, boundaries and lines placing marks and cutting trenches; or
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(f) do such other acts or things as may be considered necessary by the competent authority.
S. 20C.
Evaluation of damages during survey, measurement, etc.--
The damages caused while carrying out works on land such as survey, digging or boring sub-soil, marking
boundaries or cutting trenches or clearing away any standing crop, fence or forest or doing such other acts or
things which may cause damages while acting under section 20B particularly relating to land which is excluded
from acquisition proceeding, shall be evaluated and compensation shall be paid to the persons having interest in
that land, within six months from the completion of the said works.
S. 20D.
Hearing of objections, etc.--
(1) Any person interested in the land may, within a period of thirty days from the date of publication of the
notification under sub-section (1) of section 20A, object to the acquisition of land for the purpose mentioned in
that sub-section.
(2) Every objection under sub-section (1), shall be made to the competent authority in writing, and shall set
out the grounds thereof and the competent authority shall give the objector an opportunity of being heard, either
in person or by a legal practitioner, and may, after hearing all such objections and after making such further
enquiry, if any, as the competent authority thinks necessary, by order, either allow or disallow the objections.
Explanation .--For the purposes of this sub-section, "legal practitioner" has the same meaning as in clause
(i) of sub-section (1) ofsection 2 of the Advocates Act, 1961.
(3) Any order made by the competent authority under sub-section (1) shall be final.
S. 20E.
Declaration of acquisition.--
(1) Where no objection under sub-section (1) of section 20D has been made to the competent authority
within the period specified therein or where the competent authority has disallowed the objections under
sub-section (1) of that section, the competent authority shall, as soon as may be, submit a report accordingly to
the Central Government and on receipt of such report, the Central Government shall declare, by notification, that
the land should be acquired for the purpose mentioned in sub-section (1) of section 20A.
(2) On the publication of the declaration under sub-section (1), the land shall vest absolutely in the Central
Government free from all encumbrances.
(3) Where in respect of any land, a notification has been published under sub-section (1) of section 20A for
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its acquisition, but no declaration under sub-section (1) of this section has been published within a period of one
year from the date of publication of that notification, the said notification shall cease to have any effect:
Provided that in computing the said period of one year, the period during which any action or proceedings
to be taken in pursuance of the notification issued under sub-section (1) of section 20A is stayed by an order of
a court shall be excluded.
(4) A declaration made by the Central Government under sub-section (1) shall not be called in question in
any court or by any other authority.
S. 20F.
Determination of amount payable as compensation.--
(1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined by
an order of the competent authority.
(2) The competent authority shall make an award under this section within a period of one year from the
date of the publication of the declaration and if no award is made within that period, the entire proceedings for
the acquisition of the land shall lapse:
Provided that the competent authority may, after the expiry of the period of limitation, if he is satisfied
that the delay has been caused due to unavoidable circumstances, and for the reasons to be recorded in writing,
he may make the award within an extended period of six months:
Provided further that where an award is made within the extended period, the entitled person shall, in the
interest of justice, be paid an additional compensation for the delay in making of the award, every month for the
period so extended, at the rate of not less than five per cent. of the value of the award, for each month of such
delay.
(3) Where the right of user or any right in the nature of an easement on, any land is acquired under this Act,
there shall be paid an amount to the owner and any other person whose right of enjoyment in that land has been
affected in any manner whatsoever by reason of such acquisition, an amount calculated at ten per cent. of the
amount determined under sub-section (1), for that land.
(4) Before proceeding to determine the amount under sub-section (1) or sub-section (1), as the case may be,
the competent authority shall give a public notice published in two local newspapers, one of which shall be in a
vernacular language inviting claims from all persons interested in the land to be acquired.
(5) Such notice shall state the particulars of the land and shall require all persons interested in such land to
appear in person or by an agent or by a legal practitioner referred to in sub-section (1) of section20D, before the
competent authority, at a time and place and to state the nature of their respective interest in such land.
(6) If the amount determined by the competent authority under sub-section (1) or as the case may be,
sub-section (1) is not acceptable to either of the parties, the amount shall, on an application by either of the
parties, be determined by the arbitrator to be appointed by the Central Government in such manner as may be
prescribed.
(7) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996, (26
of 1996) shall apply to every arbitration under this Act, 26 of 1996.
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(8) The competent authority or the arbitrator while determining the amount of compensation under
sub-section (1) or sub-section (6), as the case may be, shall take into consideration--
(a) the market value of the land on the date of publication of the notification under section 20A;
(b) the damage, if any sustained by the person interested at the time of taking possession of the land,
by reason of the severing of such land from other land;
(c) the damage, if any, sustained by the person interested at the time of taking possession of the
land, by reason of the acquisition injuriously affecting his other immovable property in any
manner, or his earnings;
(d) if, in consequences of the acquisition of the land, the person interested is compelled to change
his residence or place of business, the reasonable expenses, if any, incidental to such change.
(9) In addition to the market-value of the land as above provided, the competent authority or the arbitrator,
as the case may be, shall in every case award a sum of sixty per centum on such market-value, in consideration
of the compulsory nature of the acquisition.
S. 20G.
Criterion for determination of market-value of land.--
(1) The competent authority shall adopt the following criteria in assessing and determining the
market-value of the land,--
(i) the minimum land value, if any, specified in the Indian Stamp Act, 1899, (2 of 1899) for the
registration of sale deeds in the area, where the land is situated; or
(ii) the average of the sale price for similar type of land situated in the village or vicinity, ascertained
from not less than fifty per cent. of the sale deeds registered during the preceding three years,
where higher price has been paid, whichever is higher.
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(2) Where the provisions of sub-section (1) are not applicable for the reason that:--
(i) the land is situated in such area where the transactions in land are restricted by or under any
other law for the time being in force in that area; or
(ii) the registered sale deeds for similar land as mentioned in clause (i) of sub-section (1) are not
available for the preceding three years; or
(iii) the minimum land value has not been specified under the Indian Stamp Act,1899 (2 of 1899) by
the appropriate authority,
the concerned State Government shall specify the floor price per unit area of the said land based on the
average higher prices paid for similar type of land situated in the adjoining areas or vicinity, ascertained from
not less than fifty per cent. of the sale deeds registered during the preceding three years where higher price has
been paid, and the competent authority may calculate the value of the land accordingly.
(3) The competent authority shall, before assessing and determining the market- value of the land being
acquired under this Act,--
(a) ascertain the intended land use category of such land; and
(b) take into account the value of the land of the intended category in the adjoining areas or vicinity,
for the purpose of determination of the market-value of the land being acquired.
(4) In determining the market-value of the building and other immovable property or assets attached to the
land or building which are to be acquired, the competent authority may use the services of a competent engineer
or any other specialist in the relevant field, as may be considered necessary by the competent authority.
(5) The competent authority may, for the purpose of determining the value of trees and plants, use the
services of experienced persons in the field of agriculture, forestry, horticulture, sericulture, or any other field, as
may be considered necessary by him.
(6) For the purpose of assessing the value of the standing crops damaged during the process of land
acquisition proceedings, the competent authority may utilise the services of experienced persons in the field of
agriculture as he considers necessary.
S. 20H.
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Deposit and payment of amount.--
(1) The amount determined under section 20F shall be deposited by the Central Government, in such
manner as may be prescribed by that Government, with the competent authority before taking possession of the
land.
(2) As soon as may be after the amount has been deposited under sub-section (1), the competent authority
shall on behalf of the Central Government pay the amount to the person or persons entitled thereto.
(3) Where several persons claim to be interested in the amount deposited under sub-section (1), the
competent authority shall determine the persons who in its opinion are entitled to receive the amount payable to
each of them.
(4) If any dispute arises as to the apportionment of the amount or any part thereof or to any person to whom
the same or any part thereof is payable, the competent authority shall refer the dispute to the decision of the
principal civil court of original jurisdiction within the limits of whose jurisdiction the land is situated.
(5) Where the amount determined under section 20F by the arbitrator is in excess of the amount
determined by the competent authority, the arbitrator may award interest at nine per cent. per annum on such
excess amount from the date of taking possession under section 20-I till the date of actual deposit thereof.
(6) Where the amount determined by the arbitrator is in excess of the amount determined by the competent
authority, the excess amount together with interest, if any, awarded under sub-section (5) shall be deposited by
the Central Government, in such manner as may be prescribed by that Government, with the competent authority
and the provisions of sub-sections (2) to (4) shall apply to such deposit.
20-I.
Power to take possession.--
(1) Where any land has vested in the Central Government under sub-section (1) of section 20E, and the
amount determined by the competent authority under section 20F with respect to such land has been deposited
under sub-section (1) of section20H with the competent authority by the Central Government, the competent
authority may, by notice in writing, direct the owner as well as any other person who may be in possession of
such land to surrender or deliver possession thereof to the competent authority or any person duly authorised by
it in this behalf within a period of sixty days of the service of the notice.
(2) If any person refuses or fails to comply with any direction made under sub-section (1), the competent
authority shall apply--
(a) in case of any land situated in any area falling within the metropolitan area, to the Commissioner
of Police;
(b) in case of any land situated in any area other than the area referred to in clause (a), to the
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Collector of a district, and such Commissioner or Collector, as the case may be, shall enforce the
surrender of the land, to the competent authority or to the person duly authorised by it.
S. 20J.
Right to enter into land where land has vested in Central Government.--
Where the land has vested in the Central Government under section 20E, it shall be lawful for any person
authorised by the Central Government in this behalf, to enter and do other act necessary upon the land for
carrying out the building, maintenance, management or operation of the special railway project or part thereof or
any other work connected therewith.
S. 20K.
Competent authority to have certain powers of civil court.--
The competent authority shall have, for the purposes of this Act, all the powers of a civil court while trying
a suit under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters, namely:--
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of any document;
(c) reception of evidence on affidavits;
(d) requisitioning any public record from any court or office;
(e) issuing commission for examination of witnesses.
S. 20L.
Utilisation of land for the purpose it is acquired.--

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(1) The land acquired under this Act shall not be transferred to any other purpose except for a public
purpose, and after obtaining the prior approval of the Central Government.
(2) When any land or part thereof, acquired under this Act remains unutilised for a period of five years
from the date of taking over the possession, the same shall return to the Central Government by reversion.
S. 20M.
Sharing with landowners the difference in price of a land when transferred for a higher consideration.--
Whenever any land acquired under this Act is transferred to any person for a consideration, eighty per cent.
of the difference in the acquisition cost and the consideration received, which in no case shall be less than the
acquisition cost, shall be shared amongst the persons from whom the lands were acquired or their heirs, in
proportion to the value at which the lands were acquired, and for the purpose, a separate fund may be maintained
which shall be administered by the competent authority in such manner as may be prescribed by the Central
Government.
S. 20N.
Land Acquisition Act 1 of 1894 not to apply.--
Nothing in the Land Acquisition Act, 1894 shall apply to an acquisition under this Act.
S. 20-O.
Application of the National Rehabilitation and Resettlement Policy, 2007 to persons affected due to land
acquisition.--
The provisions of the National Rehabilitation and Resettlement Policy,
2007 for project affected families, notified by the Government of India in the Ministry of Rural
Development vide number F. 26011/4/2007-LRD, dated the 31st October, 2007, shall apply in respect of
acquisition of land by the Central Government under this Act.
S. 20P.
Power to make rules in respect of matters in this Chapter.--
(1) The Central Government may, by notification, make rules to carry out the purposes of this Chapter.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for
all or any of the following matters, namely:--
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(a) the manner of appointment of arbitrator under sub-section (6) of section 20F;
(b) the manner in which the amount shall be deposited with the competent authority under
subsections (1) and (6) of section 20H;
(c) the manner of maintenance and administration of separate fund for the purposes of section
20M.]
CHAPTER V
OPENING OF RAILWAYS
S. 21.
Sanction of the Central Government to the opening of railway.--
No railway shall be opened for the public carriage of passengers until the Central Government has, by
order, sanctioned the opening thereof for that purpose.
S. 22.
Formalities to be complied with before giving sanction to the opening of a railway.--
(1) The Central Government shall, before giving its sanction to the opening of a railway under section 21,
obtain a report from the Commissioner that--
(a) he has made a careful inspection of the railway and the rolling stock that may be used thereon;
(b) the moving and fixed dimensions as laid down by the Central Government have not been
infringed;
(c) the structure of lines of rails, strength of bridges, general structural character of the works and
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the size of, and maximum gross load upon, the axles of any rolling stock, comply with the
requirements laid down by the Central Government; and
(d) in his opinion, the railway can be opened for the public carriage of passengers without any
danger to the public using it.
(2) If the Commissioner is of the opinion that the railway cannot be opened without any danger to the
public using it, he shall, in his report, state the grounds therefor, as also the requirements which, in his opinion,
are to be complied with before sanction is given by the Central Government.
(3) The Central Government, after considering the report of the Commissioner, may sanction the opening
of a railway under section 21 as such or subject to such conditions as may be considered necessary by it for the
safety of the public.
S. 23.
Sections 21 and 22 to apply to the opening of certain works.--
The provisions of sections 21 and 22 shall apply to the opening of the following works if they form part of,
or are directly connected with, a railway used for the public carriage of passengers and have been constructed
subsequent to the giving of a report by the Commissioner under section 22, namely:--
(a) opening of additional lines of railway and deviation lines;
(b) opening of stations, junctions and level crossings;
(c) re-modelling of yards and re-building of bridges;
(d) introduction of electric traction; and
(e) any alteration or reconstruction materially affecting the structural character of any work to which
the provisions of sections 21 and 22 apply or are extended by this section.
Page 153
S. 24.
Temporary suspension of traffic.--
When an accident has occurred on a railway resulting in a temporary suspension of traffic, and either the
original lines of rails and works have been restored to their original standard or a temporary diversion has been
laid for the purpose of restoring communication, the original lines of rails and works so restored, or the
temporary diversion, as the case may be, may, without prior inspection by the Commissioner, be opened for the
public carriage of passengers, subject to the following conditions, namely:--
(a) the railway servant incharge of the works undertaken by reason of the accident has certified in
writing that the opening of the restored lines of rails and works, or of the temporary diversion will
not in his opinion be attended with danger to the public; and
(b) a notice of the opening of the lines of rails and works or the diversion shall be sent immediately
to the Commissioner.
S. 25.
Power to close railway opened for the public carriage of passengers.--
Where, after the inspection of any railway opened and used for the public carriage of passengers or any
rolling stock used thereon, the Commissioner is of the opinion that the use of the railway or of any rolling stock
will be attended with danger to the public using it, the Commissioner shall send a report to the Central
Government who may thereupon direct that--
(i) the railway be closed for the public carriage of passengers; or
(ii) the use of the rolling stock be discontinued; or
(iii) the railway or the rolling stock may be used for the public carriage of passengers subject to such
conditions as it may consider necessary for the safety of the public.
S. 26.
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Re-opening of closed railway.--
When the Central Government has, under section 25, directed the closure of a railway or the
discontinuance of the use of any rolling stock--
(a) the railway shall not be re-opened for the public carriage of passengers until it has been
inspected by the Commissioner and its re-opening is sanctioned in accordance with the provisions
of this Chapter; and
(b) the rolling stock shall not be used until it has been inspected by the Commissioner and its reuse
is sanctioned in accordance with the provisions of this Chapter.
S. 27.
Use of rolling stock.--
A railway administration may use such rolling stock as it may consider necessary for the construction,
operation and working of a railway:
Provided that before using any rolling stock of a design or type different from that already running on any
section of the railway, the previous sanction of the Central Government shall be obtained for such use:
Provided further that before giving any such sanction, the Central Government shall obtain a report from
the Commissioner that he has made a careful inspection of the rolling stock and, in his opinion, such rolling
stock can be used.
S. 28.
Delegation of powers.--
The Central Government may, by notification, direct that any of its powers or functions under this Chapter,
except section 29, or the rules made thereunder shall, in relation to such matters and subject to such conditions,
if any, as may be specified in the notification, be exercised or discharged also by a Commissioner.
S. 29.
Page 155
(a) the duties of a railway administration and the Commissioner in regard to the opening of a
railway for the public carriage of passengers;
(b) the arrangements to be made for and the formalities to be complied with before opening a
(c) for regulating the mode in which, and the speed at which rolling stock used on railways is to be
moved or propelled; and
(d) the cases in which and the extent to which the procedure provided in this Chapter may be
dispensed with.
CHAPTER VI
FIXATION OF RATES
S. 30.
Power to fix rates.--
(1) The Central Government may, from time to time, by general or special order fix, for the carriage of
passengers and goods, rates for the whole or any part of the railway and different rates may be fixed for different
classes of goods and specify in such order the conditions subject to which such rates shall apply.
(2) The Central Government may, by a like order, fix the rates of any other charges incidental to or
connected with such carriage including demurrage and wharfage for the whole or any part of the railway and
specify in the order the conditions subject to which such rates shall apply.
S. 31.
Power to classify commodities or alter rates.--
The Central Government shall have power to--

Page 156
(a) classify or re-classify any commodity for the purpose of determining the rates to be charged for
the carriage of such commodities; and
(b) increase or reduce the class rates and other charges.
S. 32.
Power of railway administration to charge certain rates.--
Notwithstanding anything contained in this Chapter, a railway administration may, in respect of the
carriage of any commodity and subject to such conditions as may be specified,--
(a) quote a station to station rate;
(b) increase or reduce or cancel, after due notice in the manner determined by the Central
Government, a station to station rate, not being a station to station rate introduced in compliance
with an order made by the Tribunal;
(c) withdraw, alter or amend the conditions attached to a station to station rate other than conditions
introduced in compliance with an order made by the Tribunal; and
(d) charge any lump sum rate.
CHAPTER VII RAILWAY RATES TRIBUNAL
S. 33.
Constitution of the Railway Rates Tribunal.--
(1) There shall be a Tribunal, to be called the Railway Rates Tribunal, for the purpose of discharging the
functions specified in this Chapter.
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(2) The Tribunal shall consist of a Chairman and two other members to be appointed by the Central
Government.
(3) A person shall not be qualified for appointment as the Chairman of the Tribunal unless he is, or has
been, a Judge of the Supreme Court or of a High Court and of the other two members, one shall be a person,
who, in the opinion of the Central Government, has special knowledge of the commercial, industrial or
economic conditions of the country, and the other shall be a person, who, in the opinion of the Central
Government, has special knowledge and experience of the commercial working of the railways.
(4) The Chairman and the other members of the Tribunal shall hold office for such period, not exceeding
five years, as may be prescribed.
(5) In case the Chairman or any other member is, by infirmity or otherwise, rendered incapable of carrying
out his duties or is absent on leave or otherwise in circumstances not involving the vacation of his office, the
Central Government may appoint another person to act in his place during his absence.
(6) A person who holds office as the Chairman or other member of the Tribunal shall, on the expiration of
the term of his office (not being an office to fill a casual vacancy), be ineligible for reappointment to that office.
(7) Subject to the provisions of sub-sections (5) and (6), the Chairman and other members of the Tribunal
shall hold office on such terms and conditions as may be prescribed.
(8) No act or proceeding of the Tribunal shall be invalidated merely by reason of--
(a) any vacancy in, or any defect in the constitution of, the Tribunal; or
(b) any defect in the appointment of a person acting as a Chairman or other member of the Tribunal.
S. 34.
Staff of the Tribunal.--
(1) The Tribunal may, with the previous approval of the Central Government, appoint such officers and
employees as it considers necessary for the efficient discharge of its functions under this Chapter.
(2) The terms and conditions of service of the officers and employees of the Tribunal shall be such as may
be determined by regulations.
S. 35.
Sittings of the Tribunal.--
The Tribunal may sit at such place or places as it may find convenient for the transaction of its business.
Page 158
S. 36.
Complaints against a railway administration.--
Any complaint that a railway administration--
(a) is contravening the provisions of section 70; or
(b) is charging for the carriage of any commodity between two stations at a rate which is
unreasonable; or
(c) is levying any other charge which is unreasonable,
may be made to the Tribunal, and the Tribunal shall hear and decide any such complaint in accordance with
the provisions of this Chapter.
S. 37.
Matters not within the jurisdiction of the Tribunal.--
Nothing in this Chapter shall confer jurisdiction on the Tribunal in respect of--
(a) classification or re-classification of any commodity;
(b) fixation of wharfage and demurrage charges (including conditions attached to such charges);
(c) fixation of fares levied for the carriage of passengers and freight levied for the carriage of
luggage, parcels, railway material and military traffic; and
(d) fixation of lump sum rates.

Page 159
S. 38.
Powers of the Tribunal.--
(1) The Tribunal shall have the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of
1908) for the purposes of taking evidence on oath, enforcing the attendance of witnesses, compelling the
discovery and production of documents, issuing commissions for the examination of witnesses and of review
and shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXXV of the Code of
Criminal Procedure, 1973 (2 of 1974) and any reference in such section or Chapter to the presiding officer of a
Court shall be deemed to include a reference to the Chairman of the Tribunal.
(2) The Tribunal shall also have power to pass such interim and final orders as the circumstances may
require, including orders for the payment of costs.
S. 39.
Reference to the Tribunal.--
Notwithstanding anything contained in section 37, the Central Government may make a reference to the
Tribunal in respect of any of the matter specified in that section and where any such reference is made in respect
of any such matter, the Tribunal shall make an inquiry into that matter and submit its report thereon to the
Central Government.
S. 40.
Assistance by the Central Government.--
(1) The Central Government shall give to the Tribunal such assistance as it may require and shall also place
at its disposal any information in the possession of the Central Government which that Government may think
relevant to any matter before the Tribunal.
(2) Any person duly authorised in this behalf by the Central Government shall be entitled to appear and be
heard in any proceedings before the Tribunal.
S. 41.
Burden of proof, etc.--
In the case of any complaint under clause (a) of section 36,--
(a) whenever it is shown that a railway administration charges one trader or class of traders or the
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traders in any local area, lower rates for the same or similar goods or lower charges for the same
or similar services than it charges to other traders in any other local area, the burden of proving
that such lower rate or charge does not amount to an undue preference, shall lie on the railway
administration;
(b) in deciding whether a lower rate or charge does not amount to an undue preference, the Tribunal
may, in addition to any other considerations affecting the case, take into consideration whether
such lower rate or charge is necessary in the interests of the public.
S. 42.
Decision, etc., of the Tribunal.--
The decisions or orders of the Tribunal shall be by a majority of the members sitting and shall be final.
S. 43.
Bar of jurisdiction of Courts.--
No suit shall be instituted or proceeding taken in respect of any matter which the Tribunal is empowered to
deal with, or decide, under this Chapter.
S. 44.
Reliefs which the Tribunal may grant.--
In the case of any complaint made under clause (b) or clause (c) of section 36, the Tribunal may--
(i) fix such rate or charge as it considers reasonable from any date as it may deem proper, not being
a date earlier to the date of the filing of the complaint;
(ii) direct a refund of amount, if any, as being the excess of the rate or charge fixed by the Tribunal
under clause ( i ).
S. 45.
Revision of decisions given by the Tribunal.--

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Where a railway administration considers that since the date of decision by the Tribunal, there has been a
material change in the circumstances on which it was based, it may, after the expiry of one year from such date,
make an application to the Tribunal and the Tribunal may, after making such inquiry as it considers necessary,
vary or revoke the decision.
S. 46.
Execution of decisions or orders of the Tribunal.--
The Tribunal may transmit any decision or order made by it to a Civil Court having local jurisdiction and
such civil Court shall execute the decision or order as if it were a decree made by that Court.
S. 47.
Report to the Central Government.--
The Tribunal shall present annually a report to the Central Government of all its proceedings under this
Chapter.
S. 48.
Power of the Tribunal to make regulations.--
(1) The Tribunal may, with the previous approval of the Central Government, make regulations consistent
with this Act and rules generally to regulate its procedure for the effective discharge of its functions under this
Chapter.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may
provide for all or any of the following matters, namely:--
(a) the terms and conditions of service of the officers and employees of the Tribunal;
(b) the award of costs by the Tribunal in any proceedings before it;
(c) the reference of any question to a member or to an officer of the Tribunal or any other person
appointed by the Tribunal, for report after holding a local inquiry;
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(d) the right of audience before the Tribunal, provided that any party shall be entitled to be heard in
person, or by a representative duly authorised in writing, or by a legal practitioner;
(e) the disposal by the Tribunal of any proceedings before it, notwithstanding that in the course
thereof there has been a change in the persons sitting as members of the Tribunal;
(f) a scale of fees for and in connection with the proceedings before the Tribunal.
CHAPTER VIII
CARRIAGE OF PASSENGERS
S. 49.
Exhibition of certain timings and tables of fares at stations.--
(1) Every railway administration shall cause to be pasted in a conspicuous and accessible place at every
station in Hindi and English and also in the regional language commonly in use in the area where the station is
situated,--
(i) a table of times of arrival and departure of trains which carry passengers and stop at that station,
and
(ii) list of fares from such station to such other stations as it may consider necessary.
(2) At every station where tickets are issued to passengers, a copy of the time table in force shall be kept in
the office of the station master.
S. 50.
Supply of tickets on payment of fare.--

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(1) Any person desirous of travelling on a railway shall, upon payment of the fare, be supplied with a ticket
by a railway servant or an agent authorised in this behalf and such ticket shall contain the following particulars,
namely:--
(i) the date of issue;
(ii) the class of carriage;
(iii) the place from and the place to which it is issued; and
(iv) the amount of the fare.
(2) Every railway administration shall display the hours during which booking windows at a station shall be
kept open for the issue of tickets to passengers.
(3) The particulars required to be specified on a ticket under clauses ( ii ) and ( iii ) of sub-section (1)
shall,--
(a) if it is for the lowest class of carriage, be set forth in Hindi, English and the regional language
commonly in use at the place of issue of the ticket; and
(b) if it is for any other class of carriage, be set forth in Hindi and English:
Provided that where it is not feasible to specify such particulars in any such language due to
mechanisation or any other reason, the Central Government may exempt such particulars being specified in that
language.
S. 51.
Provision for case in which ticket is issued for class or train not having accommodation for additional
passengers.--
(1) A ticket shall be deemed to have been issued subject to the condition of availability of accommodation
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in the class of carriage and the train for which the ticket is issued.
(2) If no accommodation is available in the class of carriage for which a ticket is issued, and the holder
thereof travels in a carriage of a lower class, he shall, on returning such ticket, be entitled to a refund of the
difference between the fare paid by him and the fare payable for the class of carriage in which he travels.
S. 52.
Cancellation of ticket and refund.--
If a ticket is returned for cancellation, the railway administration shall cancel the same and refund such
amount as may be prescribed.
S. 53.
Prohibition against transfer of certain tickets.--
A ticket issued in the name of a person shall be used only by that person:
Provided that nothing contained in this section shall prevent mutual transfer of a seat or berth by
passengers travelling by the same train:
Provided further that a railway servant authorised in this behalf may permit change of name of a
passenger having reserved a seat or berth subject to such circumstances as may be prescribed.
S. 54.
Exhibition and surrender of passes and tickets.--
Every passenger shall, on demand by any railway servant authorised in this behalf, present his pass or ticket
to such railway servant for examination during the journey or at the end of the journey and surrender such
ticket--
(a) at the end of the journey, or
(b) if such ticket is issued for a specified period, on the expiration of such period.
S. 55.
Prohibition against travelling without pass or ticket.--

Page 165
(1) No person shall enter or remain in any carriage on a railway for the purpose of travelling therein as a
passenger unless he has with him a proper pass or ticket or obtained permission of a railway servant authorised
in this behalf for such travel.
(2) A person obtaining permission under sub-section (1) shall ordinarily get a certificate from the railway
servant referred to in that sub-section that he has been permitted to travel in such carriage on condition that he
subsequently pays the fare payable for the distance to be travelled.
S. 56.
Power to refuse to carry persons suffering from infectious or contagious diseases.--
(1) A person suffering from such infectious or contagious diseases, as may be prescribed, shall not enter or
remain in any carriage on a railway or travel in a train without the permission of a railway servant authorised in
this behalf.
(2) The railway servant giving permission under sub-section (1), shall arrange for the separation of the
person suffering from such disease from other persons in the train and such person shall be carried in the train
subject to such other conditions as may be prescribed.
(3) Any person who enters or remains in any carriage or travels in a train without permission as required
under sub-section (1) or in contravention of any condition prescribed under sub-section (1), such person and a
person accompanying him shall be liable to the forfeiture of their passes or tickets and removal from railway by
any railway servant.
S. 57.
Maximum number of passengers for each compartment.--
Subject to the approval of the Central Government, every railway administration shall fix the maximum
number of passengers which may be carried in each compartment of every description of carriage, and shall
exhibit the number so fixed in a conspicuous manner inside or outside each compartment in Hindi, English and
also in one or more of the regional languages commonly in use in the areas served by the railway.
S. 58.
Earmarking of compartment, etc., for ladies.--
Every railway administration shall, in every train carrying passengers, earmark for the exclusive use of
females, one compartment or such number of berths or seats, as the railway administration may think fit.
S. 59.
Communications between passengers and railway servant in charge of train.--

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A railway administration shall provide and maintain in every train carrying passengers, such efficient
means of communication between the passengers and the railway servant in charge of the train as may be
approved by the Central Government:
Provided that where the railway administration is satisfied that the means of communication provided in a
train are being misused, it may cause such means to be disconnected in that train for such period as it thinks fit:
Provided further that the Central Government may specify the circumstances under which a railway
administration may be exempted from providing such means of communication in any train.
S. 60.
(a) the convenience and accommodation (including the reservation of seats or berths in trains) to
passengers;
(b) the amount of refund for the cancellation of a ticket;
(c) the circumstances under which change of names of passengers, having reserved seats or berths,
may be permitted;
(d) the carriage of luggage and the conditions subject to which luggage may be kept in the cloak
rooms at the stations;
(e) diseases which are infectious or contagious;
(f) the conditions subject to which a railway administration may carry passengers suffering from
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infectious or contagious diseases and the manner in which carriages used by such passengers may
be disinfected;
(g) generally, for regulating the travelling upon, and the use, working and management of the
railways.
(3) Any rule made under this section may provide that a contravention thereof shall be punishable with fine
which shall not exceed five hundred rupees.
(4) Every railway administration shall keep at every station on its railway a copy of all the rules made
under this section and shall also allow any person to inspect it free of charge.
CHAPTER IX
CARRIAGE OF GOODS
S. 61.
Maintenance of rate-books, etc., for carriage of goods.--
Every railway administration shall maintain, at each station and at such other places where goods are
received for carriage, the rate-books or other documents which shall contain the rate authorised for the carriage
of goods from one station to another and make them available for the reference of any person during all
reasonable hours without payment of any fee.
S. 62.
Conditions for receiving, etc., of goods.--
(1) A railway administration may impose conditions, not inconsistent with this Act or any Rules made
thereunder, with respect to the receiving, forwarding, carrying or delivering of any goods.
(2) A railway administration shall maintain, at each station and at such other places where goods are
received for carriage, a copy of the conditions for the time being in force under sub-section (1) and make them
available for the reference of any person during all reasonable hours without payment of any fee.
S. 63.
Provision of risk rates.--
(1) Where any goods are entrusted to a railway administration for carriage, such carriage shall, except
where owner's risk rate is applicable in respect of such goods, be at railway risk rate.
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(2) Any goods, for which owner's risk rate and railways risk rate are in force, may be entrusted for carriage
at either of the rates and if no rate is opted, the goods shall be deemed to have been entrusted at owner's risk rate.
S. 64.
Forwarding note.--
(1) Every person entrusting any goods to a railway administration for carriage shall execute a forwarding
note in such form as may be specified by the Central Government:
Provided that no forwarding note shall be executed in the case of such goods as may be prescribed.
(2) The consignor shall be responsible for the correctness of the particulars furnished by him in the
forwarding note.
(3) The consignor shall indemnify the railway administration against any damage suffered by it by reason
of the incorrectness or incompleteness of the particulars in the forwarding note.
S. 65.
Railway receipt.--
(1) A railway administration shall,--
(a) in a case where the goods are to be loaded by a person entrusting such goods, on the completion
of such loading; or
(b) in any other case, on the acceptance of the goods by it, issue a railway receipt in such form as
may be specified by the Central Government.
(2) A railway receipt shall be prima facie evidence of the weight and the number of packages stated
therein:
Provided that in the case of a consignment in wagon-load or train-load and the weight or the number of
packages is not checked by a railway servant authorised in this behalf, and a statement to that effect is recorded
in such railway receipt by him, the burden of proving the weight or, as the case may be, the number of packages
stated therein, shall lie on the consignor, the consignee or the endorsee.
S. 66.
Power to require statement relating to the description of goods.--

Page 169
(1) The owner or a person having charge of any goods which are brought upon a railway for the purposes
of carriage by railway, and the consignee or the endorsee of any consignment shall, on the request of any railway
servant authorised in this behalf, deliver to such railway servant a statement in writing signed by such owner or
person or by such consignee or endorsee, as the case may be, containing such description of the goods as would
enable the railway servant to determine the rate for such carriage.
(2) If such owner or person refuses or neglects to give the statement as required under sub-section (1) and
refuses to open the package containing the goods, if so required by the railway servant, it shall be open to the
railway administration to refuse to accept such goods for carriage unless such owner or person pays for such
carriage the highest rate for any class of goods.
(3) If the consignee or endorsee refuses or neglects to give the statement as required under sub-section
(1) and refuses to open the package containing the goods, if so required by the railway servant, it shall be
open to the railway administration to charge in respect of the carriage of the goods the highest rate for any class
of goods.
(4) If the statement delivered under sub-section (1) is materially false with respect to the description of any
goods to which it purports to relate, the railway administration may charge in respect of the carriage of such
goods such rate, not exceeding double the highest rate for any class of goods as may be specified by the Central
Government.
(5) If any difference arises between a railway servant and such owner or person, the consignee or the
endorsee, as the case may be, in respect of the description of the goods for which a statement has been delivered
under sub-section (1), the railway servant may detain and examine the goods.
(6) Where any goods have been detained under sub-section (5) for examination and upon such examination
it is found that the description of the goods is different from that given in the statement delivered under
sub-section (1), the cost of such detention and examination shall be borne by such owner or person, the
consignee or the endorsee, as the case may be, and the railway administration shall not be liable for any loss,
damage or deterioration which may be caused by such detention or examination.
S. 67.
Carriage of dangerous or offensive goods.--
(1) No person shall take with him on a railway, or require a railway administration to carry such dangerous
or offensive goods, as may be prescribed, except in accordance with the provisions of this section.
(2) No person shall take with him on a railway the goods referred to in sub-section (1) unless he gives a
notice in writing of their dangerous or offensive nature to the railway servant authorised in this behalf.
(3) No person shall entrust the goods referred to in sub-section (1) to a railway servant authorised in this
behalf for carriage unless he distinctly marks on the outside of the package containing such goods their
dangerous or offensive nature and gives a notice in writing of their dangerous or offensive nature to such railway
servant.
(4) If any railway servant has reason to believe that goods contained in a package are dangerous or
offensive and notice as required under sub-section (1) or sub-section (1), as the case may be, in respect of such
goods is not given, he may cause such package to be opened for the purpose of ascertaining its contents.
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(5) Notwithstanding anything contained in this section, any railway servant may refuse to accept any
dangerous or offensive goods for carriage or stop, in transit, such goods or cause the same to be removed, as the
case may be, if he has reason to believe that the provisions of this section for such carriage are not complied
with.
(6) Nothing in this section shall be construed to derogate from the provisions of the Indian Explosives Act,
1884 (4 of 1884), or any rule or order made under that Act, and nothing in sub-sections (4) and (5) shall be
construed to apply to any goods entrusted for carriage by order or on behalf of the Government or to any goods
which a soldier, sailor, airman or any other officer of the armed forces of the Union or a police officer or a
member of the Territorial Army or of the National Cadet Corps may take with him on a railway in the course of
his employment or duty as such.
S. 68.
Carriage of animals suffering from infectious or contagious diseases.--
A railway administration shall not be bound to carry any animal suffering from such infectious or
contagious disease as may be prescribed.
S. 69.
Deviation of route.--
Where due to any cause beyond the control of a railway administration or due to congestion in the yard or
any other operational reasons, goods are carried over a route other than the route by which such goods are
booked, the railway administration shall not be deemed to have committed a breach of the contract of carriage
by reason only of the deviation of the route.
S. 70.
Prohibition of undue preference.--
A railway administration shall not make or give any undue or unreasonable preference or advantage to, or
in favour of, any particular person or any particular description of traffic in the carriage of goods.
S. 71.
Power to give direction in regard to carriage of certain goods.--
(1) The Central Government may, if it is of the opinion that it is necessary in the public interest so to do, by
general or special order, direct any railway administration--
(a) to give special facilities for, or preference to, the carriage of such goods or class of goods
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consigned by or to the Central Government or the Government of any State or of such other
goods or class of goods;
(b) to carry any goods or class of goods by such route or routes and at such rates;
(c) to restrict or refuse acceptance of such goods or class of goods at or to such station for carriage,
as may be specified in the order.
(2) Any order made under sub-section (1) shall cease to have effect after the expiration of a period of one
year from the date of such order, but may, by a like order, be renewed from time to time for such period not
exceeding one year at a time as may be specified in the order.
(3) Notwithstanding anything contained in this Act, every railway administration shall be bound to comply
with any order given under sub-section (1) and any action taken by a railway administration in pursuance of any
such order shall not be deemed to be a contravention of section 70.
S. 72.
Maximum carrying capacity for wagons and trucks.--
(1) The gross weight of every wagon or truck bearing on the axles when the wagon or truck is loaded to its
maximum carrying capacity shall not exceed such limit as may be fixed by the Central Government for the class
of axle under the wagon or truck.
(2) Subject to the limit fixed under sub-section (1), every railway administration shall determine the normal
carrying capacity for every wagon or truck in its possession and shall exhibit in words and figures the normal
carrying capacity so determined in a conspicuous manner on the outside of every such wagon or truck.
(3) Every person owning a wagon or truck which passes over a railway shall determine and exhibit the
normal carrying capacity for the wagon or truck in the manner specified in sub-section (1).
(4) Notwithstanding anything contained in sub-section (1) or sub-section (1), where a railway
administration considers it necessary or expedient so to do in respect of any wagon or truck carrying any
specified class of goods or any class of wagons or trucks of any specified type, it may vary the normal carrying
capacity for such wagon or truck or such class of wagons or trucks and subject to such conditions as it may think
fit to impose, determine for the wagon or truck or class of wagons or trucks such carrying capacity as may be
specified in the notification and it shall not be necessary to exhibit the words and figures representing the
carrying capacity so determined on the outside of such wagon or truck or such class of wagons or trucks.
S. 73.
Punitive charge for overloading a wagon.--

Page 172
Where a person loads goods in a wagon beyond its permissible carrying capacity as exhibited under
sub-section (1) or sub-section (1), or notified under sub-section (4), of section 72, a railway administration may,
in addition to the freight and other charges, recover from the consignor, the consignee or the endorsee, as the
case may be, charges by way of penalty at such rates, as may be prescribed, before the delivery of the goods:
Provided that it shall be lawful for the railway administration to unload the goods loaded beyond the
capacity of the wagon, if detected at the forwarding station or at any place before the destination station and to
recover the cost of such unloading and any charge for the detention of any wagon on this account.
S. 74.
Passing of property in the goods covered by railway receipt.--
The property in the consignment covered by a railway receipt shall pass to the consignee or the endorsee, as
the case may be, on the delivery of such railway receipt to him and he shall have all the rights and liabilities of
the consignor.
S. 75.
Section 74 not to affect right of stoppage in transit or claims for freight.--
Nothing contained in section 74 shall prejudice or affect--
(a) any right of the consignor for stoppage of goods in transit as an unpaid vendor as defined under
the Sale of Goods Act, 1930 (3 of 1930) on his written request to the railway administration;
(b) any right of the railway to claim freight from the consignor; or
(c) any liability of the consignee or the endorsee, referred to in that section, by reason of his being
such consignee or endorsee.
S. 76.
Surrender of railway receipt.--
The railway administration shall deliver the consignment under a railway receipt on the surrender of such
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railway receipt:
Provided that in case the railway receipt is not forthcoming, the consignment may be delivered to the
person, entitled in the opinion of the railway administration to receive the goods, in such manner as may be
prescribed.
S. 77.
Power of railway administration to deliver goods or sale proceeds thereof in certain cases.--
Where no railway receipt is forthcoming and any consignment or the sale proceeds of any consignment are
claimed by two or more persons, the railway administration may withhold delivery of such consignment or sale
proceeds, as the case may be, and shall deliver such consignment or sale proceeds in such manner as may be
prescribed.
S. 78.
Power to measure, weigh, etc.--
Notwithstanding anything contained in the railway receipt, the railway administration may, before the
delivery of the consignment, have the right to--
(i) re-measure, re-weigh or re-classify any consignment;
(ii) re-calculate the freight and other charges; and
(iii) correct any other error or collect any amount that may have been omitted to be charged.
S. 79.
Weighment of consignment on request of the consignee or endorsee.--
A railway administration may, on the request made by the consignee or endorsee, allow weighment of the
consignment subject to such conditions and on payment of such charges as may be prescribed and the demurrage
charges, if any:
Provided that except in cases where a railway servant authorised in this behalf considers it necessary so to
do, no weighment shall be allowed of goods booked at owner's risk rate or goods which are perishable and are
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likely to lose weight in transit:
Provided further that no request for weighment of consignment in wagon-load or train-load shall be
allowed if the weighment is not feasible due to congestion in the yard or such other circumstances as may be
prescribed.
S. 80.
Liability of railway administration for wrong delivery.--
Where a railway administration delivers the consignment to the person who produces the railway receipt, it
shall not be responsible for any wrong delivery on the ground that such person is not entitled thereto or that the
endorsement on the railway receipt is forged or otherwise defective.
S. 81.
Open delivery of consignments.--
Where the consignment arrives in a damaged condition or shows signs of having been tampered with and
the consignee or the endorsee demands open delivery, the railway administration shall give open delivery in
such manner as may be prescribed.
S. 82.
Partial delivery of consignments.--
(1) The consignee or endorsee shall, as soon as the consignment or part thereof is ready for delivery, take
delivery of such consignment or part thereof notwithstanding that such consignment or part thereof is damaged.
(2) In the case of partial delivery under sub-section (1), the railway administration shall furnish a partial
delivery certificate, in such form as may be prescribed.
(3) If the consignee or endorsee refuses to take delivery under sub-section (1), the consignment or part
thereof shall be subject to wharfage charges beyond the time allowed for removal.
S. 83.
Lien for freight or any other sum due.--
(1) If the consignor, the consignee or the endorsee fails to pay on demand any freight or other charges due
from him in respect of any consignment, the railway administration may detain such consignment or part thereof
or, if such consignment is delivered, it may detain any other consignment of such person which is in, or
thereafter comes into, its possession.
(2) The railway administration may, if the consignment detained under sub-section (1) is--
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(a) perishable in nature, sell at once; or
(b) not perishable in nature, sell, by public auction,
such consignment or part thereof, as may be necessary to realise a sum equal to the freight or other charges:
Provided that where a railway administration for reasons to be recorded in writing is of the opinion that it
is not expedient to hold the auction, such consignment or part thereof may be sold in such manner as may be
prescribed.
(3) The railway administration shall give a notice of not less than seven days of the public auction under
clause ( b ) of sub-section (1) in one or more local newspapers or where there are no such newspapers in such
manner as may be prescribed.
(4) The railway administration may, out of the sale proceeds received under sub-section (1), retain a sum
equal to the freight and other charges including expenses for the sale due to it and the surplus of such proceeds
and the part of the consignment, if any, shall be rendered to the person entitled thereto.
S. 84.
Unclaimed consignment.--
(1) If any person fails to take delivery of--
(a) any consignment; or
(b) the consignment released from detention made under sub-section (1) of section83; or
(c) any remaining part of the consignment under sub-section (1) of section83, such consignment
shall be treated as unclaimed.
(2) The railway administration may,--
(a) in the case of an unclaimed consignment which is perishable in nature, sell such consignment in
the manner provided in clause ( a ) of sub-section (1) of section 83; or
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(b) in the case of an unclaimed consignment which is not perishable in nature, cause a notice to be
served upon the consignee if his name and address are known, and upon the consignor if the
name and address of the consignee are not known, requiring him to remove the goods within a
period of seven days from the receipt thereof and if such notice cannot be served or there is a
failure to comply with the requisition in the notice, sell such consignment in the manner provided
in clause ( b ) of sub-section (1) of section83.
(3) The railway administration shall, out of the sale proceeds received under sub-section (1), retain a sum
equal to the freight and other charges including expenses for the sale due to it and the surplus, if any, of such
sale proceeds, shall be rendered to the person entitled thereto.
S. 85.
Disposal of perishable consignments in certain circumstances.--
(1) Where by reason of any flood, land-slip, breach of any lines of rails, collision between trains,
derailment of, or other accident to a train or any other cause, traffic on any route is interrupted and there is no
likelihood of early resumption of such traffic, nor is there any other reasonable route whereby traffic of
perishable consignment may be diverted to prevent, loss or deterioration of, or damage to, such consignment, the
railway administration may sell them in the manner provided in clause ( a ) of sub-section (1) of section83.
equal to the freight and other charges including expenses for the sale due to it and the surplus, if any, of such
sale proceeds, shall be rendered to the person entitled thereto.
S. 86.
Sales under sections 83 to 85 not to affect the right to suit.--
Notwithstanding anything contained in this Chapter, the right of sale under sections 83 to 85 shall be
without prejudice to the right of the railway administration to recover by suit, any freight, charge, amount or
other expenses due to it.
S. 87.
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(a) goods in respect of which no forwarding note shall be executed under proviso to sub-section of
section 64;
(b) dangerous and offensive goods for the purposes of sub-section (1) of section67;
(a) infectious or contagious diseases for the purposes of section 68;
(b) rates of penalty charges under section 73;
(c) the manner in which the consignment may be delivered without a railway receipt under section
76;
(d) the manner of delivery of consignment or the sale proceeds to the person entitled thereto under
section 77;
(a) the conditions subject to which and charges payable for allowing weighment and circumstances
for not allowing weighment of consignment in wagon-load or train-load under section 79;
(b) the manner of giving open delivery under section 81;
(c) the form of partial delivery certificate under sub-section (1) of section82;
(d) the manner of sale of consignment or part thereof under the proviso to sub-section (1) of
section83;
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(a) the manner in which a notice under sub-section (1) of section83 may be given;
(b) generally, for regulating the carriage of goods by the railways.
(3) Any rule made under this section may provide that a contravention thereof shall be punishable with fine
which may extend to one hundred and fifty rupees.
(4) Every railway administration shall keep at each station a copy of the rules for the time being in force
under this section, and shall allow any person to refer to it free of charge.
CHAPTER X
SPECIAL PROVISIONS AS TO GOODS BOOKED TO NOTIFIED STATIONS
S. 88.
Definitions.--
In this Chapter, unless the context otherwise requires,--
(a) "essential commodity" means an essential commodity as defined in clause ( a ) of section 2 of

the Essential Commodities Act, 1955 (10 of 1955);
(b) "notified station" means a station declared to be a notified station under section 89;
(c) "State Government", in relation to a notified station, means the Government of the State in which
such station is situated, or where such station is situated in a Union territory, the administrator of
that Union territory appointed under article 239 of the Constitution.
S. 89.
Power to declare notified stations.--
(1) The Central Government may, if it is satisfied that it is necessary that goods entrusted for carriage by
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train intended solely for the carriage of goods to any railway station should be removed without delay from such
railway station, declare, by notification, such railway station to be a notified station for such period as may be
specified in the notification:
Provided that before declaring any railway station to be a notified station under this sub-section, the
Central Government shall have regard to all or any of the following factors, namely:--
(a) the volume of traffic and the storage space available at such railway station;
(b) the nature and quantities of goods generally booked to such railway station;
(c) the scope for causing scarcity of such goods by not removing them for long periods from such
railway station and the hardship which such scarcity may cause to the community;
(d) the number of wagons likely to be held up at such railway station if goods are not removed
therefrom quickly and the need for quick movement and availability of such wagons;
(e) such other factors (being relevant from the point of view of the interest of the general public) as
may be prescribed:
Provided further that the period specified in any notification issued under this sub-section in respect of
any railway station shall not exceed six months in the first instance, but such period may, by notification, be
extended from time to time by a period not exceeding six months on each occasion.
(2) If any person entrusting any goods to a railway administration to be carried to a notified station makes
an application in such form and manner as may be prescribed and specifies therein the address of the person to
whom intimation by registered post of the arrival of the goods at the notified station shall be
given and pays the postage charges required for giving such intimation, the railway administration shall, as
soon as may be after the arrival of the goods at the notified station, send such intimation accordingly.
(3) There shall be exhibited at a conspicuous place at each notified station a statement in the prescribed
form setting out the description of the goods which by reason of the fact that they have not been removed from
the station within a period of seven days from the termination of transit thereof are liable to be sold, in
accordance with the provision of sub-section (1) of section90, by public auction and the dates on which they
would be so sold:
Provided that different statements may be so exhibited in respect of goods proposed to be sold on different
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dates.
(4) If the goods specified in any statement to be exhibited under sub-section (1) include essential
commodities, the railway servant preparing the statement shall, as soon as may be after the preparation of such
statement, forward a copy thereof to--
(a) the representative of the Central Government, nominated by that Government in this behalf;
(b) the representative of the State Government, nominated by that Government in this behalf; and
(c) the District Magistrate within the local limits of whose jurisdiction the railway station is situated.
S. 90.
Disposal of unremoved goods at notified stations.--
(1) If any goods entrusted for carriage to any notified station by a train intended solely for the carriage of
goods are not, removed from such station by a person entitled to do so within a period of seven days after the
termination of transit thereof at such station, the railway administration may, subject to the provisions of
sub-section (1), sell such goods by public auction and apart from exhibiting, in accordance with the provisions
of sub-section (1) of section89, a statement containing a description of such goods, it shall not be necessary to
give any notice of such public auction, but the date on which such auction may be held under this sub-section
may be notified in one or more local newspapers, or where there are no such newspapers, in such manner as may
be prescribed:
Provided that if at any time before the sale of such goods under this sub-section, the person entitled
thereto pays the freight and other charges and the expenses due in respect thereof to the railway administration,
he shall be allowed to remove such goods.
(2) If any goods which may be sold by public auction under sub-section (1) at a notified station, being
essential commodities, are required by the Central Government or the State Government for its own use or if the
Central Government or such State Government considers that it is necessary for securing the availability of all or
any such essential commodities at fair prices so to do, it may, by order in writing, direct the railway servant
incharge of such auction to transfer such goods to it or to such agency, cooperative society or other person
(being an agency, co-operative society or other person subject to the control of the Government) engaged in the
business of selling such essential commodities as may be specified in the direction.
(3) Every direction issued under sub-section (1) in respect of any essential commodity shall be binding on
the railway servant to whom it is issued and the railway administration and it shall be a sufficient defence
against any claim by the person entitled to the goods that such essential commodities have been transferred in
compliance with such direction:
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Provided that--
(a) such direction shall not be binding on such railway servant or the railway administration--
(i) if it has not been received by the railway servant sufficiently in time to enable him to prevent the
sale of the essential commodities to which it relates; or
(ii) if before the time appointed for such sale, the person entitled to such goods pays the freight and
other charges and the expenses due in respect thereof and claims that he be allowed to remove the
goods; or
(iii) if the price payable for such goods (as estimated by the Central Government or, as the case may
be, the State Government) is not credited to the railway administration in the prescribed manner
and the railway administration is not indemnified against any additional amount which it may
become liable to pay towards the price by reason of the price not having been computed in
accordance with the provisions of sub-section (4);
(b) where directions are issued in respect of the same goods both by the Central Government and the
State Government, the directions received earlier shall prevail.
(4) The price payable for any essential commodity transferred in compliance with a direction issued under
sub-section (1) shall be the price calculated in accordance with the provisions of sub-section (1) of section3 of
the Essential Commodities Act, 1955 (10 of 1955):
Provided that--
(a) in the case of any essential commodity being a food-stuff in respect whereof a notification issued
under sub-section (3-A) of section 3 of the Essential Commodities Act, 1955 (10 of 1955), is in
force in the locality in which the notified station is situated, the price payable shall be calculated
in accordance with the provisions of clauses ( iii ) and ( iv ) of that subsection;
(b) in the case of an essential commodity being any grade or variety of foodgrains, edible oilseeds or
edible oils in respect whereof no notification issued under sub-section (3-A) of section 3 of the
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Essential Commodities Act, 1955 (10 of 1955), is in force in the locality in which the notified
station is situated, the price payable shall be calculated in accordance with the provisions of
sub-section (3-B) of that section;
(c) in the case of an essential commodity being any kind of sugar in respect whereof no notification
issued under sub-section (3-A) of section 3 of the Essential Commodities Act, 1955 (10 of 1955),
is in force in the locality in which the notified station is situated, the price payable shall, if such
sugar has been booked by the producer to himself, be calculated in accordance with the
provisions of sub-section (3-C) of that section.
Explanation .--For the purposes of this clause, the expressions "producer" and "sugar" shall have the
meanings assigned to these expressions in the Explanation to sub-section (3-C) of section 3, and clause
( e ) of section 2 of the Essential Commodities Act, 1955 (10 of 1955), respectively.
S. 91.
Price to be paid to person entitled after deducting dues.--
(1) Out of the proceeds of any sale of goods under sub-section (1) of section90 or the price payable therefor
under sub-section (4) of that section, the railway administration may retain a sum equal to the freight and other
charges due in respect of such goods and the expenses incurred in respect of the goods and the auction thereof
and render the surplus, if any, to the person entitled thereto.
(2) Notwithstanding anything contained in sub-section (1), the railway administration may recover by suit
any such freight or charge or expenses referred to therein or balance thereof.
(3) Any goods sold under sub-section (1) of section90 or transferred in compliance with the directions
issued under sub-section (1) of that section shall vest in the buyer or the transferee free from all encumbrances
but subject to a priority being given for the sum which may be retained by a railway administration under
sub-section (1), the person in whose favour such encumbrance subsists may have a claim in respect of such
encumbrance against the surplus, if any, referred to in that sub-section.
S. 92.
(b) the factors to which the Central Government shall have regard under clause ( e ) of the first
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proviso to sub-section (1) of section89;
(b) the form and manner in which an application may be made under sub-section (1) of section89;
(b) the form in which a statement is required to be exhibited under sub-section (1) of section89;
(b) the manner in which the dates of public auctions may be notified under sub-section (1) of
section90;
(b) the manner of crediting to the railway administration the price of goods referred to in subclause (
iii ) of clause ( a ) of the proviso to sub-section (1) of section90.
CHAPTER XI
RESPONSIBILITIES OF RAILWAY ADMINISTRATIONS AS CARRIERS
S. 93.
General responsibility of a railway administration as carrier of goods.--
Save as otherwise provided in this Act, a railway administration shall be responsible for the loss,
destruction, damage or deterioration in transit, or non-delivery of any consignment, arising from any cause
except the following, namely:--
(b) act of God;
(c) act of war;
(d) act of public enemies;

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(e) arrest, restraint or seizure under legal process;
(f) orders or restrictions imposed by the Central Government or a State Government or by an officer
or authority subordinate to the Central Government or a State Government authorised by it in this
behalf;
(a) act or omission or negligence of the consignor or the consignee or the endorsee or the agent or
servant of the consignor or the consignee or the endorsee;
(b) natural deterioration or wastage in bulk or weight due to inherent defect, quality or vice of the
goods;
(c) latent defects;
(d) fire, explosion or any unforeseen risk:
Provided that even where such loss, destruction, damage, deterioration or non-delivery is proved to have
arisen from any one or more of the aforesaid causes, the railway administration shall not be relieved of its
responsibility for the loss, destruction, damage, deterioration or non-delivery unless the railway administration
further proves that it has used reasonable foresight and care in the carriage of the goods.
S. 94.
Goods to be loaded or delivered at a siding not belonging to a railway administration.--
(1) Where goods are required to be loaded at a siding not belonging to a railway administration for carriage
by railway, the railway administration shall not be responsible for any loss, destruction, damage or deterioration
of such goods from whatever cause arising, until the wagon containing the goods has been placed at the
specified point of interchange of wagons between the siding and the railway administration and a railway
servant authorised in this behalf has been informed in writing accordingly by the owner of the siding.
(2) Where any consignment is required to be delivered by a railway administration at a siding not belonging
to a railway administration, the railway administration shall not be responsible for any loss, destruction, damage
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or deterioration or non-delivery of such consignment from whatever cause arising after the wagon containing the
consignment has been placed at the specified point of interchange of wagons between the railway and the siding
and the owner of the siding has been informed in writing accordingly by a railway servant authorised in this
behalf.
S. 95.
Delay or detention in transit.--
A railway administration shall not be responsible for the loss, destruction, damage or deterioration of any
consignment proved by the owner to have been caused by the delay or detention in their carriage if the railway
administration proves that the delay or detention arose for reasons beyond its control or without negligence or
misconduct on its part or on the part of any of its servants.
S. 96.
Traffic passing over railways in India and railways in foreign countries.--
Where in the course of carriage of any consignment from a place in India to a place outside India or from a
place outside India to a place in India or from one place outside India to another place outside India or from one
place in India to another place in India over any territory outside India, it is carried over the railways of any
railway administration in India, the railway administration shall not be responsible under any of the provisions
of this Chapter for the loss, destruction, damage or deterioration of the goods, from whatever cause arising,
unless it is proved by the owner of the goods that such loss, destruction, damage or deterioration arose over the
railway of the railway administration.
S. 97.
Goods carried at owner's risk rate.--
Notwithstanding anything contained in section 93, a railway administration shall not be responsible for any
loss, destruction, damage, deterioration or nondelivery in transit, of any consignment carried at owner's risk rate,
from whatever cause arising, except upon proof, that such loss, destruction, damage, deterioration or
non-delivery was due to negligence or misconduct on its part or on the part of any of its servants:
Provided that--
(a) where the whole of such consignment or the whole of any package forming part of such
consignment is not delivered to the consignee or the endorsee and such non-delivery is not
proved by the railway administration to have been due to fire or to any accident to the train; or
(b) where in respect of any such consignment or of any package forming part of such consignment
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which had been so covered or protected that the covering or protection was not readily removable
by hand, it is pointed out to the railway administration on or before delivery that any part of that
consignment or package had been pilfered in transit,
the railway administration shall be bound to disclose to the consignor, the consignee or the endorsee how
the consignment or the package was dealt with throughout the time it was in its possession or control, but if
negligence or misconduct on the part of the railway administration or of any of its servants cannot be fairly
inferred from such disclosure, the burden of proving such negligence or misconduct shall lie on the consignor,
the consignee or the endorsee.
S. 98.
Goods in defective condition or defectively packed.--
(1) Notwithstanding anything contained in the forgoing provisions of this Chapter, when any goods
entrusted to a railway administration for carriage--
(a) are in a defective condition as a consequence of which they are liable to damage, deterioration,
leakage or wastage; or
(b) are either defectively packed or not packed in such manner as may be prescribed and as a result
of such defective or improper packing are liable to damage, deterioration, leakage or wastage,
and the fact of such condition or defective or improper packing has been recorded by the consignor or his
agent in the forwarding note, the railway administration shall not be responsible for any damage, deterioration,
leakage or wastage or for the condition in which such goods are available for delivery at destination:
Provided that the railway administration shall be responsible for any such damage, deterioration, leakage
or wastage or for the condition in which such goods are available for delivery at destination if negligence or
misconduct on the part of the railway administration or of any of its servants is proved.
(2) When any goods entrusted to a railway administration for carriage are found on arrival at the destination
station to have been damaged or to have suffered deterioration, leakage or wastage, the railway administration
shall not be responsible for the damage, deterioration, leakage or wastage of the goods on proof by railway
administration,--
(a) that the goods were, at the time of entrustment to the railway administration, in a defective
condition, or were at that time either defectively packed or not packed in such manner as may be
prescribed and as a result of which were liable to damage, deterioration, leakage or wastage; and
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(b) that such defective condition or defective or improper packing was not brought to the notice of
the railway administration or any of its servants at the time of entrustment of the goods to the
railway administration for carriage by railway:
Provided that the railway administration shall be responsible for any such damage, deterioration, leakage
or wastage if negligence or misconduct on the part of the railway administration or of any of its servants is
proved.
S. 99.
Responsibility of a railway administration after termination of transit.--
(1) A railway administration shall be responsible as a bailee undersections 151, 152 and 161 of the Indian
Contract Act, 1872 (9 of 1872), for the loss, destruction, damage, deterioration or non-delivery of any
consignment up to a period of seven days after the termination of transit:
Provided that where the consignment is at owner's risk rate, the railway administration shall not be
responsible as a bailee for such loss, destruction, damage, deterioration or non-delivery except on proof of
negligence or misconduct on the part of the railway administration or of any of its servants.
(2) The railway administration shall not be responsible in any case for the loss, destruction, damage,
deterioration or non-delivery of any consignment arising after the expiry of a period of seven days after the
termination of transit.
(3) Notwithstanding anything contained in the foregoing provisions of this section, a railway administration
shall not be responsible for the loss, destruction, damage, deterioration or non-delivery of perishable goods,
animals, explosives and such dangerous or other goods as may be prescribed, after the termination of transit.
(4) Nothing in the foregoing provisions of this section shall affect the liability of any person to pay any
demurrage or wharfage, as the case may be, for so long as the consignment is not unloaded from the railway
wagons or removed from the railway premises.
S. 100.
Responsibility as carrier of luggage.--
A railway administration shall not be responsible for the loss, destruction, damage, deterioration or
non-delivery of any luggage unless a railway servant has booked the luggage and given a receipt therefor and in
the case of luggage which is carried by the passenger in his charge, unless it is also proved that the loss,
destruction, damage or deterioration was due to the negligence or misconduct on its part or on the part of any of
its servants.
S. 101.
Responsibility as a carrier of animals.--

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A railway administration shall not be responsible for any loss or destruction of, or injuries to, any animal
carried by railway arising from fright or restiveness of the animal or from overloading of wagons by the
consignor.
S. 102.
Exoneration from liability in certain cases.--
Notwithstanding anything contained in the foregoing provisions of this Chapter, a railway administration
shall not be responsible for the loss, destruction, damage, deterioration or non-delivery of any consignment,--
(a) when such loss, destruction, damage, deterioration or non-delivery is due to the fact that a
materially false description of the consignment is given in the statement delivered under
subsection (1) of section 66; or
(b) where a fraud has been practised by the consignor or the consignee or the endorsee or by an
agent of the consignor, consignee or the endorsee; or
(c) where it is proved by the railway administration to have been caused by, or to have arisen from--
(i) improper loading or unloading by the consignor or the consignee or the endorsee or by an agent
of the consignor, consignee or the endorsee;
(ii) riot, civil commotion, strike, lock-out, stoppage or restraint of labour from whatever cause
arising whether partial or general; or
(d) for any indirect or consequential loss or damage or for loss of particular market.
S. 103.
Extent of monetary liability in respect of any consignment.--

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(1) Where any consignment is entrusted to a railway administration for carriage by railway and the value of
such consignment has not been declared as required under sub-section (1) by the consignor, the amount of
liability of the railway administration for the loss, destruction, damage, deterioration or non-delivery of the
consignment shall in no case exceed such amount calculated with reference to the weight of the consignment as
may be prescribed, and where such consignment consists of an animal, the liability shall not exceed such amount
as may be prescribed.
(2) Notwithstanding anything contained in sub-section (1), where the consignor declares the value of any
consignment at the time of its entrustment to a railway administration for carriage by railway, and pays such
percentage charge as may be prescribed on so much of the value of such consignment as is in excess of the
liability of the railway administration as calculated or specified, as the case may be, under sub-section (1), the
liability of the railway administration for the loss, destruction, damage, deterioration or non-delivery of such
consignment shall not exceed the value so declared.
(3) The Central Government may, from time to time, by notification, direct that such goods as may be
specified in the notification shall not be accepted for carriage by railway unless the value of such goods is
declared and percentage charge is paid as required under sub-section (1).
S. 104.
Extent of liability in respect of goods carried in open wagon.--
Where any goods, which, under ordinary circumstances, would be carried in covered wagon and would be
liable to damage, if carried otherwise, are with the consent of the consignor, recorded in the forwarding note,
carried in open wagon, the responsibility of railway administration for destruction, damage or deterioration
which may arise only by reason of the goods being so carried, shall be one-half of the amount of liability for
such destruction, damage or deterioration determined under this Chapter.
S. 105.
Right of railway administration to check contents of certain consignment or luggage.--
Where the value has been declared under section 103 in respect of any consignment, a railway
administration may make it a condition of carrying such consignment that a railway servant authorised by it in
this behalf has been satisfied by examination or otherwise that the consignment tendered for carriage contain the
articles declared.
S. 106.
Notice of claim for compensation and refund of overcharge.--
(1) A person shall not be entitled to claim compensation against a railway administration for the loss,
destruction, damage, deterioration or non-delivery of goods carried by railway, unless a notice thereof is served
by him or on his behalf,--
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(a) to the railway administration to which the goods are entrusted for carriage; or
(b) to the railway administration on whom the railway the destination station lies, or the loss,
destruction, damage or deterioration occurs,
within a period of six months from the date of entrustment of the goods.
(2) Any information demanded or enquiry made in writing from, or any complaint made in writing to, any
of the railway administrations mentioned in sub-section (1) by or on behalf of the person within the said period
of six months regarding the non-delivery or delayed delivery of the goods with particulars sufficient to identify
the goods shall, for the purpose of this section, be deemed to be a notice of claim for compensation.
(3) A person shall not be entitled to a refund of an overcharge in respect of goods carried by railway unless
a notice therefor has been served by him or on his behalf to the railway administration to which the overcharge
has been paid within six months from the date of such payment or the date of delivery of such goods at the
destination station, whichever is later.
S. 107.
Applications for compensation for loss, etc., of goods.--
An application for compensation for loss, destruction, damage, deterioration or non-delivery of goods shall
be filed against the railway administration on whom a notice under section 106 has been served.
S. 108.
Person entitled to claim compensation.--
(1) If a railway administration pays compensation for the loss, destruction, damage, deterioration or
non-delivery of goods entrusted to it for carriage, to the consignee or the endorsee producing the railway receipt,
the railway administration shall be deemed to have discharged its liability and no application before the Claims
Tribunal or any other legal proceeding shall lie against the railway administration on the ground that the
consignee or the endorsee was not legally entitled to receive such compensation.
(2) Nothing in sub-section (1) shall affect the right of any person having any interest in the goods to enforce
the same against the consignee or the endorsee receiving compensation under that sub-section.
S. 109.
Railway administration against which application for compensation for personal injury is to be filed.--
An application before the Claims Tribunal for compensation for the loss of life or personal injury to a
passenger, may be instituted against,--
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(a) the railway administration from which the passenger obtained his pass or purchased his ticket, or
(b) the railway administration on whom the railway the destination station lies or the loss or personal
injury occurred.
S. 110.
Burden of proof.--
In an application before the Claims Tribunal for compensation for loss, destruction, damage, deterioration
or non-delivery of any goods, the burden of proving--
(a) the monetary loss actually sustained; or
(b) where the value has been declared under sub-section (1) of section103 in respect of any
consignment that the value so declared is its true value,
shall lie on the person claiming compensation, but subject to the other provisions contained in this Act, it
shall not be necessary for him to prove how the loss, destruction, damage, deterioration or non-delivery was
caused.
S. 111.
Extent of liability of railway administration in respect of accidents at sea.--
(1) When a railway administration contracts to carry passengers or goods partly by railway and partly by
sea, a condition exempting the railway administration from responsibility for any loss of life, personal injury or
loss of or damage to goods which may happen during the carriage by sea from act of God, public enemies, fire,
accidents from machinery, boilers and steam and all and every other dangers and accidents of the seas, rivers
and navigation of whatever nature and kind shall, without being expressed, be deemed to be part of the contract,
and, subject to that condition, the railway administration shall, irrespective of the nationality or ownership of the
ship used for the carriage by sea, be responsible for any loss of life, personal injury or loss of or damage to
goods which may happen during the carriage by sea, to the extent to which it would be responsible under the
Merchant Shipping Act, 1958 (44 of 1958), if the ships were registered under that Act and the railway
administration were owner of the ship and not to any greater extent.
(2) The burden of proving that any such loss, injury or damage as is mentioned in sub-section (1) happened
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during the carriage by sea shall lie on the railway administration.
S. 112.
(a) the manner of packing of goods entrusted to a railway administration under clause ( b ) of
subsection (1) of section 98;
(b) the goods for the purposes of sub-section (1) of section99; and
(c) the maximum amount payable by the railway administration for the loss, destruction, damage,
deterioration or non-delivery of any consignment under sub-section (1) of section103.
CHAPTER XII
ACCIDENTS
S. 113.
Notice of railway accident.--
(1) Where, in the course of working a railway,--
(a) any accident attended with loss of any human life, or with grievous hurt, as defined in the Indian
Penal Code (45 of 1860), or with such serious injury to property as may be prescribed; or
(b) any collision between trains of which one is a train carrying passengers; or
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(c) the derailment of any train carrying passengers, or of any part of such train; or
(d) any accident of a description usually attended with loss of human life or with such grievous hurt
as aforesaid or with serious injury to property; or
(e) any accident of any other description which the Central Government may notify in this behalf in
the Official Gazette,
occurs, the station master of the station nearest to the place at which the accident occurs or where there is
no station master, the railway servant in charge of the section of the railway on which the accident occurs, shall,
without delay, give notice of the accident to the District Magistrate and Superintendent of Police, within whose
jurisdiction the accident occurs, the Officer-in-charge of the police station within the local limits of which the
accident occurs and to such other Magistrate or police officer as may be appointed in this behalf by the Central
Government.
(2) The railway administration within whose jurisdiction the accident occurs, as also the railway
administration to whom the train involved in the accident belongs, shall, without delay, give notice of the
accident to the State Government and the Commissioner having jurisdiction over the place of the accident.
S. 114.
Inquiry by Commissioner.--
(1) On the receipt of a notice under section 113 of the occurrence of an accident to a train carrying
passengers resulting in loss of human life or grievous hurt causing total or partial disablement of permanent
nature to a passenger or serious damage to railway property, the Commissioner shall, as soon as may be, notify
the railway administration in whose jurisdiction the accident occurred of his intention to hold an inquiry into the
causes that led to the accident and shall at the same time fix and communicate the date, time and place of
inquiry:
Provided that it shall be open to the Commissioner to hold an inquiry into any other accident which, in his
opinion, requires the holding of such an inquiry.
(2) If for any reason, the Commissioner is not able to hold an inquiry as soon as may be after the
occurrence of the accident, he shall notify the railway administration accordingly.
S. 115.
Inquiry by railway administration.--

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Where no inquiry is held by the Commissioner under sub-section (1) of section114 or where the
Commissioner has informed the railway administration under sub-section (1) of that section that he is not able to
hold an inquiry, the railway administration within whose jurisdiction the accident occurs, shall cause an inquiry
to be made in accordance with the prescribed procedure.
S. 116.
Powers of Commissioner in relation to inquiries.--
(1) For the purpose of conducting an inquiry under this Chapter into the causes of any accident on a
railway, the Commissioner shall, in addition to the powers specified in section 7, have the powers as are vested
in a civil Court while trying a suit under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the
following matters, namely:--
(a) summoning and enforcing the attendance of persons and examining them on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) requisitioning any public record or copies thereof from any Court or office;
(e) any other matter which may be prescribed.
(2) The Commissioner while conducting an inquiry under this Chapter shall be deemed to be a Civil Court
for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
S. 117.
Statement made before Commissioner.--
No statement made by a person in the course of giving evidence in an inquiry before the Commissioner
shall subject him to, or be used against him in, any civil or criminal proceeding, except a prosecution for giving
false evidence by such statement:
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Provided that the statement is--
(a) made in reply to a question which is required by the Commissioner to answer; or
(b) relevant to the subject-matter of the inquiry.
S. 118.
Procedure, etc.--
Any railway administration or the Commissioner conducting an inquiry under this Chapter may send notice
of the inquiry to such persons, follow such procedure, and prepare the report in such manner as may be
prescribed.
S. 119.
No inquiry, investigation, etc., to be made if the Commission of Inquiry is appointed.--
Notwithstanding anything contained in the foregoing provisions of this Chapter, where a Commission of
Inquiry is appointed under the Commissions of Inquiry Act, 1952 (3 of 1952), to inquire into an accident, any
inquiry, investigation or other proceeding pending in relation to that accident shall not be proceeded with, and
all records or other documents relating to such inquiry shall be forwarded to such authority as may be specified
by the Central Government in this behalf.
S. 120.
Inquiry into accident not covered by section 113.--
Where any accident of the nature not specified in section 113 occurs in the course of working a railway,
the railway administration within whose jurisdiction the accident occurs, may cause such inquiry to be made into
the causes of the accident, as may be prescribed.
S. 121.
Returns.--
Every railway administration shall send to the Central Government, a return of accidents occurring on its
railway, whether attended with injury to any person or not, in such form and manner and at such intervals as
may be prescribed.
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S. 122.
(a) the injury to property which shall be considered serious under clause ( a ) of sub-section (1) of
section113;
(b) the forms of notice of accidents to be given under section 113 and the particulars of the accident
such notices shall contain;
(a) the manner of sending the notices of accidents, including the class of accidents to be sent
immediately after the accident;
(b) the duties of the Commissioner, railway administration, railway servants, police officers and
Magistrates on the occurrence of an accident;
(a) the persons to whom notices in respect of any inquiry under this Chapter are to be sent, the
procedure to be followed in such inquiry and the manner in which a report of such inquiry shall
be prepared;
(b) the nature of inquiry to be made by a railway administration into the causes of an accident under
section 120;
(c) the form and manner of sending a return of accidents by a railway administration under section
121.
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CHAPTER XIII
LIABILITY OF RAILWAY ADMINISTRATION FOR DEATH AND INJURY TO

PASSENGERS DUE TO ACCIDENTS
S. 123.
Definitions.--
(a) "accident" means an accident of the nature described in section 124;
(b) "dependant" means any of the following relatives of a deceased passenger, namely:--
(i) the wife, husband, son and daughter, and in case the deceased passenger is unmarried or is a
minor, his parent;
(ii) the parent, minor brother or unmarried sister, widowed sister, widowed daughter-in-law and a
minor child of a pre-deceased son, if dependant wholly or partly on the deceased passenger;
(iii) a minor child of a pre-deceased daughter, if wholly dependant on the deceased passenger;
(iv) the paternal grandparent wholly dependant on the deceased passenger.
(a) 4 [( c ) "untoward incident" means--
(1) (1)
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(i) the commission of a terrorist act within the meaning of sub-section (1) of section3 of the
Terrorist and Disruptive Act ivities (Prevention) Act, 1987 (28 of 1987); or
(ii) the making of a violent attack or the commission of robbery or dacoity; or
(iii) the indulging in rioting, shoot-out or arson,
by any person in or on any train carrying passengers, or in a waiting hall, cloak room or reservation or
booking office or on any platform or in any other place within the precincts of a railway station; or
(1) the accidental falling of any passenger from a train carrying passengers.]
S. 124.
Extent of liability.--
When in the course of working a railway, an 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, then whether or not there has been any wrongful act, neglect or default on the part of the
railway administration such as would entitle a passenger who has been injured or has suffered a loss to maintain
an action and recover damages in respect thereof, the railway administration shall, notwithstanding anything
contained in any other law, be liable to pay compensation to such extent as may be prescribed and to that extent
only for loss occasioned by the death of a passenger dying as a result of such accident, and for personal injury
and loss, destruction, damage or deterioration of goods owned by the passenger and accompanying him in his
compartment or on the train, sustained as a result of such accident.
Explanation .--For the purposes of this section "passenger" includes a railway servant on duty.
5Ins. by Act 28 of 1994, S. 3 (w.e.f. 1-8-1994).[S.
124-A. Compensation on account of untoward incident.--
When in the course of working a railway an untoward incident occurs, then whether or not there has been
any wrongful act, neglect or default on the part of the railway administration such as would entitle a passenger
who has been injured or the dependant of a passenger who has been killed to maintain an action and recover
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damages in respect thereof, the railway administration shall, notwithstanding anything contained in any other
law, be liable to pay compensation to such extent as may be prescribed and to that extent only for loss
occasioned by the death of, or injury to, a passenger as a result of such untoward incident:
Provided that no compensation shall be payable under this section by the railway administration if the
passenger dies or suffers injury due to--
(a) suicide or attempted suicide by him;
(b) self-inflicted injury;
(c) his own criminal act;
(d) any act committed by him in a state of intoxication or insanity;
(e) any natural cause or disease or medical or surgical treatment unless such treatment becomes
necessary due to injury caused by the said untoward incident.
Explanation .--For the purposes of this section, "passenger" includes--
(i) a railway servant on duty; and
(ii) a person who has purchased a valid ticket for travelling, by a train carrying passengers, on any
date or a valid platform ticket and becomes a victim of an untoward incident.]
S. 125.
Application for compensation.--
(1) An application for compensation under section 124 6 [or section 124-A] may be made to the Claims
Tribunal--
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(a) by the person who has sustained the injury or suffered any loss, or
(b) by any agent duly authorised by such person in this behalf, or
(c) where such person is a minor, by his guardian, or
(d) where death has resulted from the accident, 3 [or the untoward incident], by any dependant of the
deceased or where such a dependant is a minor, by his guardian.
(2) Every application by a dependant for compensation under this section shall be for the benefit of every
other dependant.
S. 126.
Interim relief by railway administration.--
(1) Where a person who has made an application for compensation under section 125 desires to be paid
interim relief, he may apply to the railway administration for payment of interim relief alongwith a copy of the
application made under that section.
(2) Where, on the receipt of an application made under sub-section (1) and after making such inquiry as it
may deem fit, the railway administration is satisfied that circumstances exist which require relief to be afforded
to the applicant immediately, it may, pending determination by the Claims Tribunal of the actual amount of
compensation payable under section 124 7 [or section 124-A], pay to any person who has sustained the injury
or suffered any loss, or where death has resulted from the accident, to any dependant of the deceased, such sum
as it considers reasonable for affording such relief, so, however, that the sum paid shall not exceed the amount of
compensation payable at such rates as may be prescribed.
(3) The railway administration shall, as soon as may be, after making an order regarding payment of
interim relief under sub-section (1), send a copy thereof to the Claims Tribunal.
(4) Any sum paid by the railway administration under sub-section (1) shall be taken into account by the
Claims Tribunal while determining the amount of compensation payable.
S. 127.
Determination of compensation in respect of any injury or loss of goods.--

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(1) Subject to such rules as may be made, the rates of compensation payable in respect of any injury shall
be determined by the Claims Tribunal.
(2) The compensation payable in respect of any loss of goods shall be such as the Claims Tribunal may,
having regard to the circumstances of the case, determine to be reasonable.
S. 128.
Saving as to certain rights.--
(1) The right of any person to claim compensation under section 124 8 [or section 124-A] shall not affect
the right of any such person to recover compensation payable under the Workmen's Compensation Act , 1923 (8
of 1923), or any other law for the time being in force; but no person shall be entitled to claim compensation
more than once in respect of the same accident.
(2) Nothing in sub-section (1) shall affect the right of any person to claim compensation payable under any
contract or scheme providing for payment of compensation for death or personal injury or for damage to
property or any sum payable under any policy of insurance.
S. 129.
(a) the compensation payable for death;
(b) the nature of the injuries for which compensation shall be paid and the amount of such
compensation.
CHAPTER XIV
REGULATION OF HOURS OF WORK AND PERIOD OF REST
S. 130.
Definitions.--
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(a) the employment of a railway servant is said to be "continuous" except when it is excluded or has
been declared to be essentially intermittent or intensive;
(b) the employment of a railway servant is said to be "essentially intermittent" when it has been
declared to be so by the prescribed authority on the ground that the daily hours of duty of the
railway servant normally include periods of inaction aggregating to fifty per cent. or more
(including at least one such period of not less than one hour or two such periods of not less than
half an hour each) in a tour of twelve hours' duty (on the average over seventy-two consecutive
hours), during which the railway servant may be on duty, but is not called upon to display either
physical activity or sustained attention;
(c) the employment of a railway servant is said to be "excluded", if he belongs to any one of the
following categories, namely:--
(i) railway servants employed in a managerial or confidential capacity;
(ii) armed guards or other personnel subject to discipline similar to that of any of the armed police
forces;
(iii) staff of the railway schools imparting technical training or academic education;
(iv) such staff as may be specified as supervisory under the rules;
(v) such other categories of staff as may be prescribed;

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(d) the employment of a railway servant is said to be "intensive" when it has been declared to be so
by the prescribed authority on the ground that it is of a strenuous nature involving continued
concentration or hard manual labour with little or no period of relaxation.
S. 131.
Chapter not to apply to certain railway servants.--
Nothing in this Chapter shall apply to any railway servant to whom the Factories Act, 1948 (63 of 1948) or
the Mines Act, 1952 (35 of 1952) or the Railway Protection Force Act, 1957 (23 of 1957) or the Merchant
Shipping Act, 1958 (44 of 1958), applies.
S. 132.
Limitation of hours of work.--
(1) A railway servant whose employment is essentially intermittent shall not be employed for more than
seventy-five hours in any week.
(2) A railway servant whose employment is continuous shall not be employed for more than fifty-four
hours a week on an average in a two-weekly period of fourteen days.
(3) A railway servant whose employment is intensive shall not be employed for more than forty-five hours
a week on an average in a two-weekly period of fourteen days.
(4) Subject to such rules as may be prescribed, temporary exemptions of railway servants from the
provisions of sub-section (1) or sub-section (1) or sub-section (1) may be made by the prescribed authority if it
is of opinion that such temporary exemptions are necessary to avoid serious interference with the ordinary
working of the railway or in cases of accident, actual or threatened, or when urgent work is required to be done
to the railway or to rolling stock or in any emergency which could not have been foreseen or prevented, or in
other cases of exceptional pressure of work:
Provided that where such exemption results in the increase of hours of employment of a railway servant
referred to in any of the sub-sections, he shall be paid overtime at not less than two times his ordinary rate of pay
for the excess hours of work.
S. 133.
Grant of periodical rest.--
(1) Subject to the provisions of this section, a railway servant--
(a) whose employment is intensive or continuous shall, for every week commencing on a Sunday,
be granted a rest of not less than thirty consecutive hours;
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(b) whose employment is essentially intermittent shall, for every week commencing on a Sunday, be
granted a rest of not less than twenty-four consecutive hours including a full night.
(2) Notwithstanding anything contained in sub-section (1),--
(i) any locomotive or traffic running staff shall be granted, each month, a rest of at least four periods
of not less than thirty consecutive hours each or at least five periods of not less than twenty-two
consecutive hours each, including a full night;
(ii) the Central Government may, by rules, specify the railway servants to whom periods of rest on
scales less than those laid down under sub-section (1) may be granted and the periods thereof.
(3) Subject to such rules as may be made in this behalf, if the prescribed authority is of the opinion that
such circumstances as are referred to in sub-section (4) of section132 are present, it may exempt any railway
servant from the provisions of sub-section (1) or clause ( i ) of sub-section (1):
Provided that a railway servant so exempted shall, in such circumstances as may be prescribed, be granted
compensatory periods of rest for the periods he has foregone.
S. 134.
Railway servant to remain on duty.--
Nothing in this Chapter or the rules made thereunder shall, where due provision has been made for the
relief of a railway servant, authorise him to leave his duty until he has been relieved.
S. 135.
Supervisors of railway labour.--
(1) Subject to such rules as may be made in this behalf, the Central Government may appoint supervisors of
railway labour.
(2) The duties of supervisors of railways labour shall be--
(i) to inspect railways in order to determine whether the provisions of this Chapter or of the rules
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made thereunder are duly observed; and
(ii) to perform such other functions as may be prescribed.
(3) A supervisor of railway labour shall be deemed to be a Commissioner for the purposes of sections 7
and 9.
S. 136.
(a) the authorities who may declare the employment of any railway servant essentially intermittent
or intensive;
(b) the appeals against any such declaration and the manner in which, and the conditions subject to
which any such appeal may be filed and heard;
(c) the categories of staff that may be specified under sub-clauses ( iv ) and ( v ) of clause ( c ) of
section 130;
(d) the authorities by whom exemptions under sub-section (4) of section132 or sub-section (1) of
section133 may be made;
(e) the delegation of power by the authorities referred to in clause ( d );
(f) the railway servants to whom clause ( ii ) of sub-section (1) of section133 apply and the periods
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of rest to be granted to them;
(g) the appointment of supervisors of railway labour and their functions.
CHAPTER XV
PENALTIES AND OFFENCES
S. 137.
Fraudulently travelling or attempting to travel without proper pass or ticket.--
(1) If any person, with intent to defraud a railway administration,--
(a) enters or remains in any carriage on a railway or travels in a train in contravention of section 55,
or
(b) uses or attempts to use a single pass or a single ticket which has already been used on a previous
journey, or in the case of a return ticket, a half thereof which has already been so used,
he shall be punishable with imprisonment for a term which may extend to six months, or with fine which
may extend to one thousand rupees, or with both:
Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the
judgment of the Court, such punishment shall not be less than a fine of five hundred rupees.
(2) The person referred to in sub-section (1) shall also be liable to pay the excess charge mentioned in
sub-section (1) in addition to the ordinary single fare for the distance which he has travelled, or where
there is any doubt as to the station from which he started, the ordinary single fare from the station from
which the train originally started, or if the tickets of passengers travelling in the train have been examined since
the original starting of the train, the ordinary single fare from the place where the tickets were so examined or, in
case of their having been examined more than once, were last examined.
(3) The excess charge referred to in sub-section (1) shall be a sum equal to the ordinary single fare referred
to in that sub-section or 9 [two hundred and fifty rupees], whichever is more.
(4) Notwithstanding anything contained in section 65 of the Indian Penal Code (45 of 1860), the Court
convicting an offender may direct that the person in default of payment of any fine inflicted by the Court shall
suffer imprisonment for a term which may extend to six months.
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S. 138.
Levy of excess charge and fare for travelling without proper pass or ticket or beyond authorised
distance.--
(1) If any passenger,--
(a) being in or having alighted from a train, fails or refuses to present for examination or to deliver
up his pass or ticket immediately on a demand being made therefor under section 54, or
(b) travels in a train in contravention of the provisions of section 55,
he shall be liable to pay, on the demand of any railway servant authorised in this behalf, the excess charge
mentioned in sub-section (1) in addition to the ordinary single fare for the distance which he has travelled or,
where there is any doubt as to the station from which he started, the ordinary single fare from the station from
which the train originally started, or, if the tickets of passengers travelling in the train have been examined since
the original starting of the train, the ordinary single fare from the place where the tickets were so examined or in
the case of their having been examined more than once, were last examined.
(a) travels or attempts to travel in or on a carriage, or by a train, of a higher class than that for which
he has obtained a pass or purchased a ticket; or
(b) travels in or on a carriage beyond the place authorised by his pass or ticket,
he shall be liable to pay, on the demand of any railway servant authorised in this behalf, any difference
between the fare paid by him and the fare payable in respect of the journey he has made and the excess charge
referred to in sub-section (1).
(3) The excess charge shall be a sum equal to the amount payable under sub-section (1) or sub-section (1),
as the case may be, or 10 [two hundred and fifty rupees], whichever is more:
Provided that if the passenger has with him a certificate granted under sub-section (1) of section55, no
excess charge shall be payable.
(4) If any passenger liable to pay the excess charge and the fare mentioned in sub-section (1), or the excess
charge and any difference of fare mentioned in sub-section (1), fails or refuses to pay the same on a demand
being made therefor under one or other of these sub-sections, as the case may be, any railway servant authorised
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by the railway administration in this behalf may apply to any Metropolitan Magistrate or a Judicial Magistrate of
the first or second class, as the case may be, for the recovery of the sum payable as if it were a fine, and the
Magistrate if satisfied that the sum is payable shall order it to be so recovered, and may order that the person
liable for the payment shall in default of payment suffer imprisonment of either description for a term which
may extend to one month but not less than ten days.
(5) Any sum recovered under sub-section (4) shall, as and when it is recovered, be paid to the railway
administration.
S. 139.
Power to remove persons.--
Any person failing or refusing to pay the fare and the excess charge referred to in section 138 may be
removed by any railway servant authorised in this behalf who may call to his aid any other person to effect such
removal:
Provided that nothing in this section shall be deemed to preclude a person removed from a carriage of a
higher class from continuing his journey in a carriage of a class for which he holds a pass or ticket:
Provided further that a woman or a child if unaccompanied by a male passenger, shall not be so removed
except either at the station from where she or he commences her or his journey or at a junction or terminal
station or station at the headquarters of a civil district and such removal shall be made only during the day.
S. 140.
Security for good behaviour in certain cases.--
(1) When a Court convicting a person of an offence under section 137 or section 138 finds that he has
been habitually committing or attempting to commit that offence and the Court is of the opinion that it is
necessary or desirable to require that person to execute a bond for good behaviour, such Court may, at the time
of passing the sentence on the person, order him to execute a bond with or without sureties, for such amount and
for such period not exceeding three years as it deems fit.
(2) An order under sub-section (1) may also be made by an appellate Court or by the High Court when
exercising its powers of revision.
S. 141.
Needlessly interfering with means of communication in a train.--
If any passenger or any other person, without reasonable and sufficient cause, makes use of, or interferes
with, any means provided by a railway administration in a train for communication between passengers and the
railway servant in charge of the train, he shall be punishable with imprisonment for a term which may extend to
one year, or with fine which may extend to one thousand rupees, or with both:
Provided that, in the absence of special and adequate reasons to the contrary to be mentioned in the
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judgment of the Court, where a passenger, without reasonable and sufficient cause, makes use of the alarm chain
provided by a railway administration, such punishment shall not be less than--
(a) a fine of five hundred rupees, in the case of conviction for the first offence; and
(b) imprisonment for three months in case of conviction for the second or subsequent offence.
S. 142.
Penalty for transfer of tickets.--
(1) If any person not being a railway servant or an agent authorised in this behalf--
(a) sells or attempts to sell any ticket or any half of a return ticket; or
(b) parts or attempts to part with the possession of a return ticket against which reservation of a seat
or berth has been made or any half of a return ticket or a season ticket,
in order to enable any other person to travel therewith, he shall be punishable with imprisonment for a term
which may extend to three months, or with fine which may extend to five hundred rupees, or with both, and
shall also forfeit the ticket which he sells or attempts to sell or parts or attempts to part.
(2) If any person purchases any ticket referred to in clause ( a ) of sub-section (1) or obtains the possession
of any ticket referred to in clause ( b ) of that sub-section from any person other than a railway servant or an
agent authorised in this behalf, he shall be punishable with imprisonment for a term which may extend to three
months and with fine which may extend to five hundred rupees and if the purchaser or holder of any ticket
aforesaid travels or attempts to travel therewith, he shall forfeit the ticket which he so purchased or obtained and
shall be deemed to be travelling without a proper ticket and shall be liable to be dealt with under section 138:
judgment of the Court, the punishment under sub-section (1) or sub-section (1) shall not be less than a fine of
two hundred and fifty rupees.
S. 143.
Penalty for unauthorised carrying on of business of procuring and supplying of railway tickets.--
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(1) If any person, not being a railway servant or an agent authorised in this behalf,--
(a) carries on the business of procuring and supplying tickets for travel on a railway or from
reserved accommodation for journey in a train; or
(b) purchases or sells or attempts to purchase or sell tickets with a view to carrying on any such
business either by himself or by any other person,
he shall be punishable with imprisonment for a term which may extend to three years or with fine which
may extend to ten thousand rupees, or with both, and shall also forfeit the tickets which he so procures, supplies,
purchases, sells or attempts to purchase or sell:
judgment of the Court, such punishment shall not be less than imprisonment for a term of one month or a fine of
five thousand rupees.
(2) Whoever abets any offence punishable under this section shall, whether or not such offence is
committed, be punishable with the same punishment as is provided for the offence.
S. 144.
Prohibition on hawking, etc., and begging.--
(1) If any person canvasses for any custom or hawks or exposes for sale any article whatsoever in any
railway carriage or upon any part of a railway, except under and in accordance with the terms and conditions of
a licence granted by the railway administration in this behalf, he shall be punishable with imprisonment for a
term which may extend to one year, or with fine which may extend to two thousand rupees, or with both:
judgment of the Court, such punishment shall not be less than a fine of one thousand rupees.
(2) If any person begs in any railway carriage or upon a railway station, he shall be liable for punishment as
provided under sub-section (1).
(3) Any person referred to in sub-section (1) or sub-section (1) may be removed from the railway carriage
or any part of the railway or railway station, as the case may be, by any railway servant authorised in this behalf
or by any other person whom such railway servant may call to his aid.
S. 145.
Drunkenness or nuisance.--
If any person in any railway carriage or upon any part of a railway--

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(a) is in a state of intoxication; or
(b) commits any nuisance or act of indecency or uses abusive or obscene language; or
(c) wilfully or without excuse interferes with any amenity provided by the railway administration so
as to affect the comfortable travel of any passenger,
he may be removed from the railway by any railway servant and shall, in addition to the forfeiture of his
pass or ticket, be punishable with imprisonment which may extend to six months and with fine which may
extend to five hundred rupees:
judgment of the Court, such punishment shall not be less than--
(a) a fine of one hundred rupees in the case of conviction for the first offence; and
(b) imprisonment of one month and a fine of two hundred and fifty rupees, in the case of conviction
for second or subsequent offence.
S. 146.
Obstructing railway servant in his duties.--
If any person wilfully obstructs or prevents any railway servant in the discharge of his duties, he shall be
punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one
thousand rupees, or with both.
S. 147.
Trespass and refusal to desist from trespass.--
(1) If any person enters upon or into any part of a railway without lawful authority, or having lawfully
entered upon or into such part misuses such property or refuses to leave, he shall be punishable with
imprisonment for a term which may extend to six months, or with fine which may extend to one thousand
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rupees, or with both:
judgment of the Court, such punishment shall not be less than a fine of five hundred rupees.
(2) Any person referred to in sub-section (1) may be removed from the railway by any railway servant or
by any other person whom such railway servant may call to his aid.
S. 148.
Penalty for making a false statement in an application for compensation.--
If in any application for compensation under section 125, any person makes a statement which is false or
which he knows or believes to be false or does not believe to be true, he shall be punishable with imprisonment
for a term which may extend to three years, or with fine, or with both.
S. 149.
Making a false claim for compensation.--
If any person requiring compensation from a railway administration for loss, destruction, damage,
deterioration or non-delivery of any consignment makes a claim which is false or which he knows or believes to
be false or does not believe to be true, he shall be punishable with imprisonment for a term which may extend to
three years, or with fine, or with both.
S. 150.
Maliciously wrecking or attempting to wreck a train.--
(1) Subject to the provisions of subsection (2), if any person unlawfully,--
(a) puts or throws upon or across any railway, any wood, stone or other matter or thing; or
(b) takes up, removes, loosens or displaces any rail, sleeper or other matter or things belonging to
any railway; or
(c) turns, moves, unlocks or diverts any points or other machinery belonging to any railway; or
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(d) makes or shows, or hides or removes, any signal or light upon or near to any railway; or
(e) does or causes to be done or attempts to do any other act or thing in relation to any railway,
with intent or with knowledge that he is likely to endanger the safety of any person travelling on or being
upon the railway, he shall be punishable with imprisonment for life, or with rigorous imprisonment for a term
which may extend to ten years:
judgment of the Court, where a person is punishable with rigorous imprisonment, such imprisonment shall not
be less than--
(a) three years, in the case of a conviction for the first offence; and
(b) seven years, in the case of conviction for the second or subsequent offence.
(2) If any person unlawfully does any act or thing referred to in any of the clauses of sub-section (1)--
(a) with intent to cause the death of any person and the doing of such act or thing causes the death of
any person; or
(b) with knowledge that such act or thing is so imminently dangerous that it must in all probability
cause the death of any person or such bodily injury to any person as is likely to cause the death of
such person,
he shall be punishable with death or imprisonment for life.
S. 151.
Damage to or destruction of certain railway properties.--
(1) If any person, with intent to cause, or knowing that he is likely to cause damage or destruction to any
property of a railway referred to in sub-section (1), causes by fire, explosive substance or otherwise, damage to
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such property or destruction of such property, he shall be punishable with imprisonment for a term which may
extend to five years, or with fine, or with both.
(2) The properties of a railway referred to in sub-section (1) are railway track, bridges, station buildings and
installations, carriages or wagons, locomotives, signalling, telecommunications, electric traction and block
equipments and such other properties as the Central Government being of the opinion that damage thereto or
destruction thereof is likely to endanger the operation of a railway, may, by notification, specify.
S. 152.
Maliciously hurting or attempting to hurt persons travelling by railway.--
If any person unlawfully throws or causes to fall or strike at, against, into or upon any rolling stock forming
part of a train, any wood, stone or other matter or thing with intent, or with knowledge that he is likely to
endanger the safety of any person being in or upon such rolling stock or in or upon any other rolling stock
forming part of the same train, he shall be punishable with imprisonment for life, or with imprisonment for a
term which may extend to ten years.
S. 153.
Endangering safety of persons travelling by railway by wilful act or omission.--
If any person by any unlawful act or by any wilful omission or neglect, endangers or causes to be
endangered the safety of any person travelling on or being upon any railway, or obstructs or causes to be
obstructed or attempts to obstruct any rolling stock upon any railway, he shall be punishable with imprisonment
for a term which may extend to five years.
S. 154.
Endangering safety of persons travelling by railway by rash or negligent act or omission.--
If any person in a rash and negligent manner does any act, or omits to do what he is legally bound to do,
and the act or omission is likely to endanger the safety of any person travelling or being upon any railway, he
shall be punishable with imprisonment for a term which may extend to one year or with fine, or with both.
S. 155.
Entering into a compartment reserved or resisting entry into a compartment not reserved.--
(1) If any passenger--
(a) having entered a compartment wherein no berth or seat has been reserved by a railway
administration for his use, or
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(b) having unauthorisedly occupied a berth or seat reserved by a railway administration for the use
of another passenger,
refuses to leave it when required to do so by any railway servant authorised in this behalf, such railway
servant may remove him or cause him to be removed, with the aid of any other person, from the compartment,
berth or seat, as the case may be, and he shall also be punishable with fine which may extend to five hundred
rupees.
(2) If any passenger resists the lawful entry of another passenger into a compartment not reserved for the
use of the passenger resisting, he shall be punishable with fine which may extend to two hundred rupees.
S. 156.
Travelling on roof, step or engine of a train.--
If any passenger or any other person, after being warned by a railway servant to desist, persists in travelling
on the roof, step or footboard of any carriage or on an engine, or in any other part of a train not intended for the
use of passengers, he shall be punishable with imprisonment for a term which may extend to three months, or
with fine which may extend to five hundred rupees, or with both and may be removed from the railway by any
railway servant.
S. 157.
Altering or defacing pass or ticket.--
If any passenger wilfully alters or defaces his pass or ticket so as to render the date, number or any material
portion thereof illegible, he shall be punishable with imprisonment for a term which may extend to three months,
or with fine which may extend to five hundred rupees, or with both.
S. 158.
Penalty for contravention of any of the provisions of Chapter XIV.--
Any person under whose authority any railway servant is employed in contravention of any of the
provisions of Chapter XIV or of the rules made thereunder, shall be punishable with fine which may extend to
five hundred rupees.
S. 159.
Disobedience of drivers or conductors of vehicles to directions of railway servant, etc.--

Page 216
If any driver or conductor of any vehicle while upon the premises of a railway disobeys the reasonable
directions of any railway servant or police officer, he shall be punishable with imprisonment for a term
which may extend to one month, or with fine which may extend to five hundred rupees, or with both.
S. 160.
Opening or breaking a level crossing gate.--
(1) If any person, other than a railway servant or a person authorised in this behalf, opens any gate or chain
or barrier set up on either side of a level crossing which is closed to road traffic, he shall be punishable with
imprisonment for a term which may extend to three years.
(2) If any person breaks any gate or chain or barrier set up on either side of a level crossing which is closed
to road traffic, he shall be punishable with imprisonment for a term which may extend to five years.
S. 161.
Negligently crossing unmanned level crossing.--
If any person driving or leading a vehicle is negligent in crossing an unmanned level crossing, he shall be
punishable with imprisonment which may extend to one year.
Explanation .--For the purposes of this section, "negligence" in relation to any person driving or leading a
vehicle in crossing an unmanned level crossing means the crossing of such level crossing by such person--
(a) without stopping or caring to stop the vehicle near such level crossing to observe whether any
approaching rolling stock is in sight, or
(b) even while an approaching rolling stock is in sight.
S. 162.
Entering carriage or other place reserved for females.--
If a male person knowing or having reason to believe that a carriage, compartment, berth or seat in a train
or room or other place is reserved by a railway administration for the exclusive use of females, without lawful
excuse,--
Page 217
(a) enters such carriage, compartment, room or other place, or having entered such carriage,
compartment, room or place, remains therein; or
(b) occupies any such berth or seat having been required by any railway servant to vacate it,
he shall, in addition to being liable to forfeiture of his pass or ticket, be punishable with fine which may
extend to five hundred rupees and may also be removed by any railway servant.
S. 163.
Giving false account of goods.--
If any person required to furnish an account of goods under section 66, gives an account which is
materially false, he and, if he is not the owner of the goods, the owner also shall, without prejudice to his
liability to pay any freight or other charge under any provision of this Act, be punishable with fine which may
extend to five hundred rupees for every quintal or part thereof of such goods.
S. 164.
Unlawfully bringing dangerous goods on a railway.--
If any person, in contravention of section 67, takes with him any dangerous goods or entrusts such goods
for carriage to the railway administration, he shall be punishable with imprisonment for a term which may
extend to three years, or with fine which may extend to one thousand rupees or with both and shall also be liable
for any loss, injury or damage which may be caused by reason of bringing such goods on the railway.
S. 165.
Unlawfully bringing offensive goods on a railway.--
If any person, in contravention of section 67, takes with him any offensive goods or entrusts such goods
for carriage to the railway administration, he shall be punishable with fine which may extend to five hundred
rupees and shall also be liable for any loss, injury or damage which may be caused by reason of bringing such
goods on the railway.
S. 166.
Defacing public notices.--
If any person without lawful authority--

Page 218
(a) pulls down or wilfully damages any board or document set up or pasted by the order of a railway
administration on a railway or any rolling stock; or
(b) obliterates or alters any letters or figures upon any such board or document or upon any rolling
stock,
he shall be punishable with imprisonment for a term which may extend to one month, or with fine which
may extend to five hundred rupees, or with both.
S. 167.
Smoking.--
(1) No person in any compartment of a train shall, if objected to by any other passenger in that
compartment, smoke therein.
(2) Notwithstanding anything contained in sub-section (1), a railway administration may prohibit smoking
in any train or part of a train.
(3) Whosoever contravenes the provisions of sub-section (1) or sub-section (1) shall be punishable with
fine which may extend to one hundred rupees.
S. 168.
Provision with respect to commission of offence by the children of acts endangering safety of person
travelling on railway.--
(1) If a person under the age of twelve years is guilty of any of the offences under sections 150 to 154, the
Court convicting him may require the father or guardian of such person to execute, within such time as the Court
may fix, a bond for such amount and for such period as the Court may direct for the good conduct of such
person.
(2) The amount of the bond, if forfeited, shall be recoverable by the Court as if it were a fine imposed by
itself.
(3) If a father or guardian fails to execute a bond under sub-section (1) within the time fixed by the Court,
he shall be punishable with fine which may extend to fifty rupees.
S. 169.
Levy of penalty on non-Government railway.--

Page 219
If a non-Government railway fails to comply with, any requisition made, decision or direction given, by the
Central Government, under any of the provisions of this Act, or otherwise contravenes any of the provisions of
this Act, it shall be open to the Central Government, by order, to levy a penalty not exceeding two hundred and
fifty rupees and a further penalty not exceeding one hundred and fifty rupees for every day during which the
contravention continues:
Provided that no such penalty shall be levied except after giving a reasonable opportunity to the
non-Government railway to make such representation as it deems fit.
S. 170.
Recovery of penalty.--
Any penalty imposed by the Central Government under section 169, shall be recoverable by a suit in the
District Court having jurisdiction in the place where the head office of the non-Government railway is situated.
S. 171.
Section 169 or 170 not to preclude Central Government from taking any other action.--
Nothing in section 169 or 170 shall preclude the Central Government from resorting to any other action to
compel a non-Government railway to discharge any obligation imposed upon it by or under this Act.
S. 172.
Penalty for intoxication.--
If any railway servant is in a state of intoxication while on duty, he shall be punishable with fine which may
extend to five hundred rupees and when the performance of any duty in such state is likely to endanger the
safety of any person travelling on or being upon a railway, such railway servant shall be punishable with
imprisonment for a term which may extend to one year, or with fine, or with both.
S. 173.
Abandoning train, etc., without authority.--
If any railway servant, when on duty, is entrusted with any responsibility connected with the running of a
train, or of any other rolling stock from one station or place to another station or place, and he abandons his duty
before reaching such station or place without authority or without properly handing over such train or rolling
stock to another authorised railway servant, he shall be punishable with imprisonment for a term which may
extend to two years, or with fine which may extend to one thousand rupees, or with both.
S. 174.
Obstructing running of train, etc.--

Page 220
If any railway servant (whether on duty or otherwise) or any other person obstructs or causes to be
obstructed or attempts to obstruct any train or other rolling stock upon a railway,--
(a) by squatting or picketing or during any rail roko agitation or bandh ; or
(b) by keeping without authority any rolling stock on the railway; or
(c) by tampering with, disconnecting or interfering in any other manner with its hose pipe or
tampering with signal gear or otherwise,
he shall be punishable with imprisonment for a term which may extend to two years, or with fine which
may extend to two thousand rupees, or with both.
S. 175.
Endangering the safety of persons.--
If any railway servant, when on duty, endangers the safety of any person--
(a) by disobeying any rule made under this Act; or
(b) by disobeying any instruction, direction or order under this Act or the rules made thereunder; or
(c by any rash or negligent act or omission,
he shall be punishable with imprisonment for a term which may extend to two years, or with fine which
may extend to one thousand rupees, or with both.
S. 176.
Obstructing level crossing.--

Page 221
If any railway servant unnecessarily--
(a) allows any rolling stock to stand across a place where the railway crosses a public road on the
level; or
(b) keeps a level crossing closed against the public, he shall be punishable with fine which may
extend to one hundred rupees.
S. 177.
False returns.--
If any railway servant required to furnish a return by or under this Act, signs and furnishes a return which is
false in any material particular or which he knows or believes to be false, or does not believe to be true, he shall
be punishable with imprisonment which may extend to one year, or with fine which may extend to five hundred
rupees, or with both.
S. 178.
Making a false report by a railway servant.--
If any railway servant who is required by a railway administration to inquire into a claim for loss,
destruction, damage, deterioration or non-delivery of any consignment makes a report which is false or which he
knows or believes to be false or does not believe to be true, he shall be punishable with imprisonment for a term
which may extend to two years, or with fine which may extend to one thousand rupees, or with both.
[S.
179. Arrest for offences under certain sections.--
(1) If any person commits any offence mentioned in sections 150 to 152, he may be arrested without
warrant or other written authority by any railway servant or police officer not below the rank of a head
constable.
(2) If any person commits any offence mentioned in sections 137 to 139, 141 to 147, 153 to 157, 159 to
167 and 172 to 176, he may be arrested, without warrant or other written authority, by the officer authorised by a
notified order of the Central Government. 12
Page 222
(3) The railway servant or the police officer or the officer authorised, as the case may be, may call to his aid
any other person to effect the arrest under sub-section (1) or sub-section (1), as the case may be.
(4) Any person so arrested under this section shall be produced before the nearest Magistrate within a
period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest
to the Court of the Magistrate.]
S. 180.
Arrest of persons likely to abscond, etc.--
(1) If any person who commits any offence under this Act, other than an offence mentioned in 13
[sub-section (1) of section179], or is liable to pay any excess charge or other sum demanded under section 138,
fails or refuses to give his name and address or there is reason to believe that the name and address given by him
are fictitious or that he will abscond, 14 [the officer authorised] may arrest him without warrant or written
authority.
(2) 15 [The officer authorised] may call to his aid any other person to effect the arrest under sub-section (1).
(3) Any person arrested under this section shall be produced before the nearest Magistrate within a period
of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the
Court of the Magistrate unless he is released earlier on giving bail or if his true name and address are ascertained
on executing a bond without sureties for his appearance before the Magistrate having jurisdiction to try him for
the offence.
(4) The provisions of the Chapter XXIII of the Code of Criminal Procedure, 1973 (2 of 1974), shall so far
as may be, apply to the giving of bail and the execution of bonds under this section.
2[S.[180-A.
Inquiry by officer authorised to ascertain commission of offence.--
For ascertaining facts and circumstances of a case, the officer authorised may make an inquiry into the
commission of an offence mentioned in sub-section (1) of section 179 and may file a complaint in the
competent Court if the offence is found to have been committed.
S. 180-B.
Powers of officer authorised to inquire.--
While making an inquiry, the officer authorised shall have power to,--
(i) summon and enforce the attendance of any person and record his statement;
Page 223
(ii) require the discovery and production of any document;
(iii) requisition any public record or copy thereof from any office, authority or person;
(i) enter and search any premises or person and seize any property or document which may be
relevant to the subject-matter of the inquiry.
S. 180-C.
Disposal of persons arrested.--
Every person arrested for an offence punishable under subsection (2) of section 179 shall, if the arrest was
made by a person other than the officer authorised, be forwarded, without delay, to such officer.
S. 180-D.
Inquiry how to be made against arrested person.--
(1) When any person is arrested by the officer authorised for an offence punishable under this Act, such officer
shall proceed to inquire into the charge against such person.
(2) For this purpose, the officer authorised may exercise the same powers and shall be subject to the same
provisions as the officer in charge of a police station may exercise and is subject to the provisions of the Code of
Criminal Procedure, 1973 (2 of 1974), when investigating a cognizable case:
Provided that--
(a) if the officer authorised is of the opinion that there is sufficient evidence or reasonable ground of
suspicion against the accused person, he shall either admit him to bail to appear before a Magistrate
having jurisdiction in the case, or forward him in custody to such Magistrate;
(b) if it appears to the officer authorised that there is not sufficient evidence or reasonable ground of
suspicion against the accused person, he shall release the accused person on his executing a bond,
with or without sureties as the officer authorised may direct, to appear, if and when so required,
Page 224
before the Magistrate having jurisdiction.
180-E.
Search, seizure and arrest how to be made.--
All searches, seizures and arrests made under this Act shall be carried out in accordance with the provisions of
the Code of Criminal Procedure, 1973 (2 of 1974), relating respectively to searches and arrests made under that
Code.
180-F.
Cognizance by Court on a complaint made by officer authorised.--
No Court shall take cognizance of an offence mentioned in sub-section (1) of section 179 except on a
complaint made by the officer authorised.
180-G.
Punishment for certain offences in relation to inquiry.--
Whoever intentionally insults or causes any interruption in the inquiry proceedings or deliberately makes a
false statement before the inquiring officer shall be punished with simple imprisonment for a term which may
extend to six months, or with fine which may extend to one thousand rupees, or with both.]
181.
Magistrate having jurisdiction under the Act.--
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no Court inferior to
that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try an offence under this Act.
182.
Place of trial.--
(1) Any person committing an offence under this Act or any rule made thereunder shall be triable for such
offence in any place in which he may be or which the State Government may notify in this behalf, as well as in any
Page 225
other place in which he is liable to be tried under any law for the time being in force.
(2) Every notification under sub-section (1) shall be published in the Official Gazette, and a copy thereof shall
be exhibited for the information of the public in some conspicuous place at such railway stations as the State
Government may direct.
CHAPTER XVI
MISCELLANEOUS
183.
Power to provide other transport services.--
(1) A railway administration may, for the purpose of facilitating the carriage of passengers or goods or to
provide integrated service for such carriage, provide any other mode of transport.
(2) Notwithstanding anything contained in any other law for the time being in force, the provisions of this Act
shall apply to the carriage of passengers or goods by the mode of transport referred to in subsection (1).
184.
Taxation on railways by local authorities.--
(1) Notwithstanding anything to the contrary contained in any other law, a railway administration shall not be
liable to pay any tax in aid of the funds of any local authority unless the Central Government, by notification,
declares the railway administration to be liable to pay the tax specified in such notification.
(2) While a notification of the Central Government under sub-section (1) is in force, the railway
administration shall be liable to pay to the local authority either the tax specified in the notification or, in lieu
thereof, such sum, if any, as an officer appointed in this behalf by the Central Government may, having regard to all
the circumstances of the case, from time to time, determine to be fair and reasonable.
(3) The Central Government may at any time revoke or vary a notification issued under sub-section (1).
(4) Nothing in this section shall be construed to prevent any railway administration from entering into a
contract with any local authority for the supply of water or light, or for the scavenging of railway premises, or for
any other service which the local authority may be rendering or be prepared to render to the railway administration.
S. 185.
Taxation on railways for advertisement.--

Page 226
(1) Notwithstanding anything to the contrary contained in any other law, a railway administration shall not be
liable to pay any tax to any local authority in respect of any advertisement made on any part of the railway unless
the Central Government, by notification, declares the railway administration to be liable to pay the tax specified in
such notification.
(2) The Central Government may at any time revoke or vary a notification issued under sub-section (1).
S. 186.
Protection of action taken in good faith.--
No suit, prosecution or other legal proceeding shall lie against the Central Government, any railway
administration, a railway servant or any other person for anything which is in good faith done or intended to be
done in pursuance of this Act or any rules or orders made thereunder.
S. 187.
Restriction on execution against railway property.--
(1) No rolling stock, machinery, plant, tools, fittings, materials or effects used or provided by a railway
administration for the purpose of traffic on its railway, or of its stations or workshops, shall be liable to be taken in
execution of any decree or order of any Court or of any local authority or person having by law the power to attach
or distrain property or otherwise to cause property to be taken in execution, without the previous sanction of the
Central Government.
(2) Nothing in sub-section (1) shall be construed to affect the authority of any Court to attach the earnings of a
railway in execution of a decree or order.
S. 188.
Railway servants to be public servants for the purposes of Chapter IX and section 409 of the Indian Penal
Code.--
(1) Any railway servant, who is not a public servant within the meaning of section 21 of the Indian Penal
Code (45 of 1860), shall be deemed to be a public servant for the purposes of Chapter IX and section 409 of that
Code.
(2) In the definition of "legal remuneration" in section 161 of the Indian Penal Code (45 of 1860), the word
"Government" shall, for the purposes of sub-section (1), be deemed to include any employer of a railway servant as
such.
S. 189.
Page 227
Railway servants not to engage in trade.--
A railway servant shall not--
(a) purchase or bid for, either in person or by an agent, in his own name or in that of another, or jointly
or in shares with others, any property put to auction under section 83 or section 84 or section 85 or
section 90; or
(b) in contravention of any direction of the railway administration in this behalf, engage in trade.
S. 190.
Procedure for delivery to railway administration of property detained by a railway servant.--
If a railway servant is discharged from service or is suspended, or dies or absconds or absents himself, and
he or his wife or widow or any member of his family or his representative refuses or neglects, after notice in
writing for that purpose, to deliver up to the railway administration or to a person appointed by the railway
administration, in this behalf, any station, office or other building with its appurtenances, or any books, papers,
keys, equipment or other matters, belonging to the railway administration and in the possession or custody of such
railway servant at the occurrence of any such event as aforesaid, any Metropolitan Magistrate or Judicial
Magistrate of the first class may, on application made by or on behalf of the railway administration, order any
police officer, with proper assistance, to enter upon the station, office or other building and remove any person
found therein and take possession thereof, or to take possession of the books, papers or other matters, and to
deliver the same to the railway administration or to a person appointed by the railway administration in that
behalf.
S. 191.
Proof of entries in records and documents.--
Entries made in the records or other documents of a railway administration shall be admitted in evidence in
all proceedings by or against the railway administration, and all such entries may be proved either by the
production of the records or other documents of the railway administration containing such entries or by the
production of a copy of the entries certified by the officer having custody of the records or other documents under
his signature and stating that it is a true copy of the original entries and that such original entries are contained in
the records or other documents of the railway administration in his possession.
S. 192.
Page 228
Service of notice, etc., on railway administration.--
Any notice or other document required or authorised by this Act to be served on a railway administration
may be served, in the case of a Zonal Railway, on the General Manager or any of the railway servant authorised
by the General Manager, and in the case of any other railway, on the owner or lessee of the railway or the person
working in the railway under an agreement--
(a) by delivering it to him; or
(b) by leaving it at his office; or
(c) by registered post to his office address.
S. 193.
Service of notice, etc., by railway administration.--
Unless otherwise provided in this Act or the rules framed thereunder, any notice or other document required
or authorised by this Act to be served on any person by a railway administration may be served--
(a) by delivering it to the person; or
(b) by leaving it at the usual or last known place of abode of the person; or
(c) by registered post addressed to the person at his usual or last known place of abode.
S. 194.
Presumption where notice is served by post.--

Page 229
Where a notice or other document is served by post, it shall be deemed to have been served at the time when
the letter containing it would be delivered in the ordinary course of post, and in proving such service, it shall be
sufficient to prove that the letter containing the notice or other document was properly addressed and registered.
S. 195.
Representation of railway administration.--
(1) A railway administration may, by order in writing, authorise any railway servant or other person to act
for, or represent it, as the case may be, in any proceeding before any civil, criminal or other Court.
(2) A person authorised by a railway administration to conduct prosecutions on its behalf shall,
notwithstanding anything in section 302 of the Code of Criminal Procedure, 1973 (2 of 1974), be entitled to
conduct such prosecutions without the permission of the Magistrate.
S. 196.
Power to exempt railway from Act.--
(1) The Central Government may, by notification, exempt any railway from all or any of the provisions of
this Act.
(2) Every notification issued under sub-section (1) shall be laid as soon as may be after it is issued before
each House of Parliament.
S. 197.
Matters supplemental to the definitions of "railway" and "railway servant".--
(1) For the purposes of sections 67, 113, 121, 123, 147, 151 to 154, 160, 164, 166, 168, 170, 171, 173 to
176, 179, 180, 182, 184, 185, 187 to 190, 192, 193, 195 and of this section, the word "railway" whether it occurs
alone or as a prefix to another word, has reference to a railway or portion of a railway under construction and to a
railway or portion of a railway not used for the public carriage of passengers, animals or goods as well as to a
railway falling within the definition of that word in clause (31) of section 2.
(2) For the purposes of sections 7, 24, 113, 146, 172 to 176 and 188 to 190, the expression "railway servant"
includes a person employed under a railway in connection with the service thereof by a person fulfilling a contract
with the railway administration.
S. 198.
Page 230
General power to make rules.--
Without prejudice to any power to make rules contained elsewhere in this Act, the Central Government may
make rules generally to carry out the purposes of this Act.
S. 199.
Rules to be laid before Parliament.--
Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of
Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two
or more successive sessions, and if, before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that
the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as
the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity
of anything previously done under that rule.
S. 200.
Repeal and saving.--
(1) The Indian Railways Act, 1890 (9 of 1890) is hereby repealed.
(2) Notwithstanding the repeal of the Indian Railways Act, 1890 (9 of 1890) (hereinafter referred to as the
repealed Act)--
(a) anything done or any action taken or purported to have been done or taken (including any rule,
notification, inspection, order or notice made or issued, or any appointment or declaration made or
any licence, permission, authorisation or exemption granted or any document or instrument
executed or any direction given or any proceedings taken or any penalty or fine imposed) under the
repealed Act shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to
have been done or taken under the corresponding provisions of this Act;
(b) any complaint made to the Railway Rates Tribunal under sub-section (1) of section41 of the
repealed Act but not disposed of before the commencement of this Act and any complaint that may
be made to the said Tribunal against any act or omission of a railway administration under the
repealed Act, shall be heard and decided by the Tribunal constituted under this Act in accordance
with the provisions of Chapter VII of this Act.
Page 231
(3) The mention of particular matters in sub-section (1) shall not be held to prejudice or affect the general
application ofsection 6 of the General Clauses Act, 1897 (10 of 1897), with regard to the effect of repeal.
1 Brought into force on 1-7-1990 vide SO 475(E), dated 12-6-1990, published in the Gazette of India, Ext., Pt. II, S. 3(ii),
dated 12-6-1990.
1a Ins. by Act 47 of 2005, s. 2 (w.e.f. 30-8-2006).
1b Ins. by Act 11 of 2008, s. 2 (w.e.f. 31-1-2008).
2 Ins. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 2( a ) (w.e.f. 1-7-2004).
2b Ins. by Act 47 of 2005, s. 2 (w.e.f. 30-8-2006).
3 Ins. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 2( b ) (w.e.f. 1-7-2004).
3b 3b. Ins. by Act 47 of 2005, s. 3 (w.e.f. 30-8-2006).
3c 3c. Ins. by Act 47 of 2005, s. 4 (w.e.f. 30-8-2006).
3d 3d. Ins. by Act, 11 of 2008, s. 3 (w.e.f. 31-1-2008).
4 Ins. by Act 28 of 1994, S. 2 (w.e.f. 1-8-1994).
5 Ins. by Act 28 of 1994, S. 3 (w.e.f. 1-8-1994).
6 Ins. by Act 28 of 1994, S. 4 (w.e.f. 1-8-1994).
3 Ins. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 2( b ) (w.e.f. 1-7-2004).
7 Ins. by Act 28 of 1994, S. 5 (w.e.f. 1-8-1994).
8 Ins. by Act 28 of 1994, S. 6 (w.e.f. 1-8-1994).
9 Subs. by the Railways (Amendment) Act, 2003 (56 of 2003), S. 2, for "fifty rupees" (w.e.f. 1-72004).
10 Subs. by the Railways (Amendment) Act, 2003 (56 of 2003), S. 3, for "fifty rupees" (w.e.f. 1-72004).
Page 232
11 Subs. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 3, for S. 179 (w.e.f. 1-72004). Prior to its
substitution, S. 179 read as under:-- "179. Arrest for offences under certain sections .--(1) If a person commits any offence
mentioned in sections 137, 141 to 147, 150 to 157, 160 to 162, 164, 166, 168 and 172 to 175, he may be arrested without warrant
or other written authority by any railway servant or police officer not below the rank of a head constable. (2) The railway servant
or the police officer may call to his aid any other person to effect the arrest under sub-section (1). (3) Any person so arrested under
this section shall be produced before the nearest Magistrate within a period of twenty-four hours of such arrest excluding the time
necessary for the journey from the place of arrest to the Court of the Magistrate."
12 All the officers of and above the rank of Assistant sub-Inspector in the Railway Protection Force as the officer authorised for
the purposes of the Act-- Vide S.O. 593(E), dated 17-5-2004, published in the Gazette of India, Ext., Pt. II, S. 3( ii ), Sl. No. 449,
dated 17-5-2004.
13 Subs. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 4( a )( i ), for " section 179" (w.e.f. 1-7-2004).
14 Subs. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 4( a )( ii ), for "any railway servant authorised in
this behalf or any police officer not below the rank of a head constable" (w.e.f. 1-7-2004).
15 Subs. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 4( b ), for "The railway servant or the police
officer" (w.e.f. 1-7-2004).
16 Ins. by the Railways (Second Amendment) Act, 2003 (51 of 2003), S. 5 (w.e.f. 1-7-2004).
Datta: Company Law/PART XI COMPANIES INCORPORATED OUTSIDE INDIA/Provisions as to Establishment of

Places of Business in India/S. 591. Application of sections 592 to 602 to foreign companies
C R Datta on The Company Law
May 2008
6 Edition 2008 4 [S. 561 to S. 658 to Schedule] 9788180384219
Copyright 2008 LexisNexis Butterworths Wadhwa Nagpur
Datta
S. 591.
Application of sections 592 to 602 to foreign companies.--

1
[(1)] Sections 592 to 602, both inclusive, shall apply to all foreign companies, that is to say, companies
falling under the following two classes, namely:--
(a) companies incorporated outside India which, after the commencement of this Act,
establish a place of business within India; and
(b) companies incorporated outside India which have, before the commencement of this Act,
established a place of business within India and continue to have an established place of
business within India at the commencement of this Act.
2[(2) Notwithstanding anything contained in sub-section (1), where not less than fifty per cent. of the
Page 233
paid up share capital (whether equity or preference or partly equity and partly preference) of a
company incorporated outside India and having an established place of business in India, is held
by one or more citizens of India or by one or more bodies corporate incorporated in India, or by
one or more citizens of India and one or more bodies corporate incorporated in India, whether
singly or in the aggregate, such company shall comply with such of the provisions of this Act as
may be prescribed with regard to the business carried on by it in India, as if it were a company
incorporated in India.]
COMMENTS
English Act, 1948 : Section 406
English Act, 1985 : Section 744
Legislative History.--The Companies Act, 1956 (1 of 1956).--The Notes on clauses explained Sections 591 to 608 as
follows:
?These are mostly based on the redraft sections recommended by the Company Law Committee as sections 277 to
277E.10 at pages 432-440 of the Report. The redraft closely follow sections 407 to 423 of the English Act.? [ Clauses
550 to 567 of the Companies Bill, 1953 (46 of 1953)].
The Notes on clauses explained original Section 591 as follows:
?See section 277 of the redraft and section 406 of the English Act.? [ Clause 550 of the Companies Bill, 1953 (46 of
1953)].
The recommendations of the Company Law Committee are reproduced below:
?Sections 277 to 277E of the Companies Act, 1913 (7 of 1913) deal with companies established outside India but
carrying on business in this Country. As we have already said in paragraph 29, the extent to which foreign capital
should be admitted into our country and whether any restrictions should be placed on the operation of foreign capitalists
is a question of economic policy and one for Government to decide. It has little to do with Company Law, and we do
not, therefore, feel called upon to express any views on it. It is, however, a well-established principle of Commercial
Law in all advanced countries that a corporation, duly incorporated in one country, is recognised as a corporation in
others and it would be contrary to the accepted policy of Nations to try and prevent a company incorporated in one
country from carrying on business in another, without being incorporated there. It is, however, open to a country to
regulate the activities of a Foreign Company within the limits of its jurisdiction. The principle underlying sections 277
to 277E of the Act of 1913 is that a company, incorporated outside India, should, in the matter of supplying information
to the public about its constitution, directorate, etc., of submission of accounts to the Registrar of Joint Stock Companies
and of the registration and contents of prospectuses be placed as far as practicable on the same footing as a company
incorporated in India. We have considered it desirable to recommend a redraft of these sections which follow very
closely the wording of sections 406 to 423 of the English Act except that sections 408, 416 and 418 of that Act which
have no application to this country have been omitted from our redrafts.
In these redrafts we have retained the provisions of section 277D about registration of charges on properties in India,
which are created or acquired by companies incorporated outside India but having an established place of business here.
Similarly, we have retained the provisions of section 277E which extends to these companies the principles contained in
sections 118 and 119. The provisions of section 277C relating to canvassing for sale of shares is already covered by our
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general recommendation that the prospectus requirements of Foreign Companies should be the same as those of
companies incorporated in this country. These requirements, in the case of domestic companies, prohibit such practice,
and it will be seen from the Explanation to our redraft of section 102 that for the purpose of this section shares or
debentures of foreign companies stand on the same footing as those of domestic companies.
The principal changes recommended by us in our redrafts are as follows:
(1) As regards documents to be delivered to the Registrar of Joint Stock Companies by oversea companies
carrying on business in India, we recommend that the existing particulars about directors, managers, etc.,
required under section 277(1)(b) should be considerably amplified in respect of their former names, if
any, the residential address, nationality, occupation, details of the directorships which they hold, etc.
(2) As regards any alteration in the above documents which are to be delivered to the Registrar by oversea
companies, we recommend that the alteration in the list to be filed with the Registrar should contain
particulars of any person occupying the position of a Secretary, by whatever name called.
(3) As regards the accounts, we recommend that in substitution of sub-section (3) of section 277 of the Act
of 1913, a Foreign Company should be required to make out its balance sheet and profit and loss
account, in such form and containing such particulars, as it would have had to do in this Country, if it
had been a company within the meaning of the Indian Companies Act.
It will be recalled that when the Amendment Act of 1936 was under consideration it was represented to
Government that, if foreign companies were required to prepare balance sheets and profit and loss
accounts in the form required for a company incorporated in India, considerable difficulty would be
experienced by certain companies incorporated abroad. It was, therefore, considered sufficient that these
companies should file with the Registrar, a copy of their own balance sheet, but should supplement it
with further documents giving information, which might be deemed essential. Form H in the Third
Schedule of the Act attempted to embody this requirement. Our present recommendation is based on the
analogous provisions of section 410 of the English Companies Act, and does away with this concession
to companies incorporated abroad, and places them, in regard to the submission of accounts, on the same
footing as Indian companies.
(4) As regards the office, where the documents would have to be filed by companies incorporated abroad,
we recommend that they should submit them to the Registrar of Joint Stock Companies, New Delhi, in
triplicate, and one set to the Registrar of the State where the principal business of the Foreign Company
is carried on. Our recommendation will facilitate the business of the foreign company, and at the same
time enable the State in which the principal business is being carried on to keep track of such companies.
(5) We recommend that the prospectus requirements of Foreign Companies should be brought in line with
those of companies incorporated in India, subject to certain minor changes, e.g., it would be no longer
necessary for a foreign company to state its objects.
(6) We also think it most desirable that Foreign Companies operating in India and whose shares are quoted
in a leading stock exchange in India should maintain a branch register in India.? [ Report : paras 223 and
224].
The Companies (Amendment) Act, 1974 (41 of 1974).--The Notes on clauses explained the reasons for insertion of
sub-section (2) as under:
?The provisions of the Act [the Companies Act, 1956] have no general application to Foreign Companies operating in
India. Foreign companies are merely required within 30 days of establishment of a place of business in India to file a
few specified documents, e.g., documents relating to their incorporation in the country of origin, document specifying
the agent of the company authorised to accept notices and processes on behalf of the company, etc. Annually such
foreign companies are also required to file the audited accounts with the Registrar. There is no further regulatory
provision to check the operations and activities of the foreign companies in India. Some of the foreign companies
operating in India are foreign only in name, i.e., only by virtue of incorporation in a foreign country, but the main
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business or trade or manufacture is conducted wholly or almost wholly in India. Many representations have been
received to extend the regulatory provisions of the Act to foreign companies. It is also proposed that in respect of
foreign companies, having an established place of business in India, in which more than 50 per cent. of the share capital
is held by Indian citizens or bodies corporate incorporated in India, such other provisions of the Act as may be notified
by the Central Government will become applicable to the extent specified in the notification.? [ Clauses 31 and 32 of
the Companies (Amendment) Bill, 1972 (72 of 1972)].
The Statement of Objects and Reasons appended to the Companies (Amendment) Bill, 1972 (72 of 1972) explained the
amendments as under:
?It is further proposed in the Bill to put foreign companies of which not less than fifty per cent. of the share capital is
held by one or more citizens of India or by one or more bodies corporate incorporated in India on par with Indian
companies for the purpose of compliance with such of the provisions of the Act as may be prescribed in that behalf. It is
also proposed that the provisions relating to inspection of the books of accounts of companies and investigation into the
affairs of companies shall apply to a foreign company having an established place of business in India. This meets the
demand that there should be more effective control over the working of Foreign Companies in this Country.? [
Statement of Objects and Reasons appended to the Companies (Amendment) Bill, 1972 (72 of 1972) : para 9].
See also Statement of Objects and Reasons and Legislative History in Comments under Sections 1 and section 600.
Foreign Company [Section 591(1)].--Sections 592 to 602 of the Companies Act, 1956 will (a) apply to companies
which were incorporated outside India, and after 1st April, 1956 established a place of business in India. (b) The
sections will also apply to companies incorporated outside India but having before 1st April, 1956 established a place of
business in India continued to have an established place of business within India after 1st April, 1956.
Company incorporated outside India has place of business in India.--In short a company which is incorporated
outside India but has a place of business in India is a Foreign Company for the purposes of the Companies Act, 1956.
Established a place of business in India.--If a company is incorporated outside India and employs agents in India but
has no office or does not establish a place of business in India within the meaning of this section, it will not be a Foreign
Company. A company is said to have established a place of business in India if it has a specified or identifiable place at
which it carries on business. There must be some store house, godown or other premises having some concrete
connection between the locality and its business. The word ?established? includes more than occasional connection.3
Share transfer or share registration office.--Having a share transfer office or share registration office will constitute a
place of business.4
See also Comments under Sections 147, 425, 592 and 602(c).
Foreign or Overseas Company--Place of business.--In order to ascertain that an Overseas Company has an
established place of business in India, it is necessary to show that it has some more or less permanent location from
which habitually or regularly its business is conducted. Such a company can be sued in India and the service of a writ
on it will be in accordance with the provisions of Law. If the dispute relates to delivery of goods in a foreign country.
The Forum in the foreign country would be a competent jurisdiction and an action being pending in the foreign country,
an application for the stay of winding up proceedings in India may be allowed.5
Residence of Foreign Company.--A Foreign Company or Corporation will be treated as carrying on business in India
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if its business was carried on at a fixed and definite place in India for a sufficiently and reasonably long period of time.
The mere presence of a representative of a foreign company will not however amount to carrying on its business if his
authority is limited to obtain orders from the customers but not to enter into any contract with them. A ship has no fixed
place of residence, except at the place of its Registration. A foreign corporation owning a ship does not reside in the
places visited by that ship.6
Place of business in the Hotel.--Even where representatives of a company incorporated outside the Country frequently
visited and stayed in a Hotel for looking after purchases of machinery and other articles, it was held that the company
had a place of business in the Hotel.7
See also Comments under 425 and 583.
Place of business of a Foreign or Overseas Company--Onus.--The onus or burden of establishing that an Overseas
Company had established a place of business in the U.K. was on the applicant by producing the relevant materials. The
Overseas Company's contention was that its activity in London was carried on by another company. The Overseas
Company was not a tenant of the London premises which was occupied by its agent. The annual review for the Website
constituted a legal document and the audience to which that material was addressed was not concerned with whether the
Overseas Company carried on business on its own account or through a wholly owned subsidiary. The evidence did not
show that the Overseas Company had established a place of business in Great Britain. The appeal was dismissed.8
Foreign Company having Branch in India.--A Foreign Company having Branch in India can be sued in India even
though the cause of action arose against the Company's Office in a foreign country. The processes can be served in
accordance with the Indian Laws and appropriate proceedings can be taken against the company in the appropriate
Forum in India.9
Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of Business)
Regulations, 2000.--The Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of
Business) Regulations, 2000 made under the FEMA, inter alia, provide for :
Branch office, Liaison office, Project office, Site office, Stand alone basis, Banking Company, Branch/Unit in Special
Economic Zones (SEZs).
Foreign Company in Special Economic Zones (SEZs) to comply with Part XI of the Companies Act, 1956 (Section 592
to 602).
Insurance Company--Liaison office, Prohibition against establishing a branch or office in India by citizens of certain
countries.
Application to the Reserve Bank of India (RBI) for opening branch or liaison office, Activities which may be
undertaken by the Branch or Office in India, Permitted Activities for a Branch in India, Permitted Activities for a
Liaison office in India.
Remittance of profit or surplus, Audited Accounts and Chartered Accountant's Certificates, etc., as provided in the FEM
(Establishment in India of Branch or Office or Other Place of Business) Regulations, 2000 made under the FEMA.
See detailed Comments on the Foreign Exchange Management (Establishment in India of Branch or Office or Other
Place of Business) Regulations, 2000 and the FEMA Act, Rules and Regulations later in this Section 591.
Incorporation of the Company is its Nationality.--Whether a company is a Foreign Company or an Indian Company
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will mainly depend on the incorporation of the company. Incorporation is the Nationality of the company and the
company may have Nationality different from its shareholders or Members. Nationality of a company will be decided
by the place of its incorporation. A company incorporated in India will be an Indian Company even though all its
shareholders or members are foreigners. A company having all Foreign shareholders may be incorporated in India and
in that case the company will be an Indian Company. Similarly a company may be incorporated in England having
shareholders who are all Indian citizens and the company will be a Foreign Company.10 The Nationality of the company
does not change by its becoming an enemy company.11
See also Comments under Sections 2(13), 12 and 34.
Effect of Incorporation or Registration--Legal Entity.--On incorporation the company becomes a legal person
having a separate existence from its Members.12
See detailed Comments on Effect of Registration or Incorporation of Companies in India under Section 34 the
Companies Act, 1956 in this Book.
Company not a citizen.--A company is not a citizen of India under the Constitution and does not enjoy Fundamental
Rights guaranteed by Article 19 of the Constitution of India.13
Domicile.--Similarly the domicile of the company registered in India will be India and that will remain so throughout
the company's existence and it cannot be changed. A Company's domicile is the place of its Registration, and it retains
that domicile so long as it exists.14 When a company acquires enemy character, it will be subject to the law of the place
where it was registered.15
See detailed Comments under Sections 2(13), 12 and 34.
Residence.-- A company resides, at the place where the real business is carried on, that is, the place of central
management and control.16
See detailed Comments under Section 34--Effect of Registration.
A Company can have only one Nationality and one Domicile but may have several residences at the same time
depending upon the circumstances. Income-tax law provides that a company is Ordinarily Resident where the actual
management of the company is carried on,17 even though it ought to be managed elsewhere according to its
Memorandum and Articles of Association18 and it may have dual Residence.19 A company cannot either be present in
India or absent from India.20
Enemy character.--A company registered in India may be an alien enemy if its control is in the hands of alien enemies.
The number of alien enemy shareholders is important in ascertaining the status of the company. The enemy or neutral
character of a company in times of war will be determined by reference to the natural persons who are members or
persons really in control.21
Where, the directors and majority of the shareholders of a company were English. The company's rubber estate in an
enemy territory was managed by a manager. It was held that merely doing business in enemy territory did not make the
company an alien enemy.22 An English company which had become an enemy company and its directors in enemy
territory entered into contract with another enemy, the contract was held to be invalid on the ground that on the outbreak
of war the authority of the English company terminated automatically.23
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Situs of shares.--The situs of the shares is the Registered Office of the company. The directors of an English company
resided in Holland, held meetings and carried out administrative work there. In an action by a German shareholder
domiciled in Germany, it was held that the shares were situate in England.24
Statutory Books and documents.--The statutory books and documents are also to be kept at the Registered Office of
the company.25
Contractual and other obligations.--The contractual and other obligations are governed by the Law of the place where
the company carries on its business.26
Foreign Company to comply Law of the place.--A Foreign Company is also required to comply with the Law of the
place where it carries on business.
Part XI containing Sections 591 to 608 of the Companies Act, 1956 (1 of 1956) makes certain provisions which a
company should comply with and if it fails to do so it will suffer from disabilities mentioned in Section 599 of the Act.
See detailed Comments, Form and Procedure under Sections 591 to 608.
Foreign Company--Relevant Provisions [Sections 591-608].--Special provisions have been made for Foreign
Companies in this Part XI of the Companies Act, 1956 (1 of 1956) as follows:
Part XI-- Companies Incorporated Outside India contains Provisions as to Establishment of Places of business in India
[Sections 591-602] and Prospectuses [Sections 603-608] of the Companies Act, 1956 (1 of 1956).
See detailed Comments under Sections 591 to 608.
Indian Citizen or Body Corporate holding 50% Share Capital in Foreign Company [Section 591(2)].--Where not
less than 50% of the paid-up share capital in a Foreign Company is held by Indian Citizens or Bodies Corporate
incorporated in India, such a Foreign Company will be treated as an Indian Company in respect of its Indian business.
Such a Foreign Company has to comply with the provisions of the Companies Act, 1956 as may be prescribed.
Object of Section 591(2).--The main object of Section 591(2) of the Companies Act, 1956 is to have more control over
those Foreign Companies which though incorporated outside India carry on practically the entire business in India.
Internal management of a Foreign Company.--It is not open to a Company Court [the Tribunal (NCLT)] to control
the exercise of a fiduciary power of a discretionary nature arising in the internal management of a Foreign Company.
The Company Court [the Tribunal (NCLT)] within whose jurisdiction the Foreign Company's Registered Office is
situate is the only appropriate Tribunal in which the Members of the Foreign Company would seek to control the
exercise of the power. It would be contrary to the principles on which the Company Court [the Tribunal (NCLT)] acts in
controlling persons in the exercise of fiduciary discretionary powers to make, at the instance of some only of the
members of a company, an order directing the person concerned to exercise his discretion in a certain manner.27
Fees on Applications to Central Government by Foreign Company.--As per Rule 2(1) of the Companies (Fees on
Applications) Rules, 1999* every application made to the Central Government by a Foreign Company as defined in
Section 591 of the Companies Act, 1956 under any provision [other than sub-section (1D) of Section 108 or clause (b)
of sub-section (7) of Section 555] of the said Act, shall be accompanied by the fee specified in Table I, namely:
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Table I(v) : By a foreign company--Rs. 1,000.
See detailed Comments, Form and Procedure under Sections Sections 591 to 608.
Department's view.-- Revision of rates of Fees for Applications made to Central Government by companies for
approvals under the Companies Act, 1956.--?The rates of application fees payable by companies and individuals to the
Central Government for various applications made by them for approvals under the Companies Act, 1956, have been
revised (w.e.f. 10-8-1999). This revision has been done by notifying the Companies (Fees on Applications) Rules, 1999,
in the Gazette of India, Extraordinary, dated 6th July, 1999. These rules supersede the earlier 1968 rules, namely, the
Companies (Fees on Applications) Rules, 1968. The details of the Changes ( relevant extracts) made in the Fee
Structure are given below:
4. Application Fee for Foreign Companies.--The application fee payable by a foreign company (as defined under
Section 591 of the Companies Act, 1956) has been increased from Rs. 200 to Rs. 1,000.
8. A copy of the Notification(s) has been placed at the Web Page of the Department of Company Affairs at the Internet
Address http://www.nic.in/dca.? [Extracts from Press Note No. 4 (1999 Series) (F. No. 1/17/97-CL-V), dated 16-7-1999
: (1999) 97 Comp. Cas. (St.) 86]. See full Text in Comments under Section 637A(2).
Ministry of Corporate Affairs website [ www.mca.gov.in].-- Now the Department of Company Affairs (DCA) under
the Ministry of Finance has been designated as the Ministry of Corporate Affairs (MCA), Government of India, ?A?
Wing, 5th Floor, Shastri Bhavan, Dr. Rajendra Prasad Road, New Delhi-110 001.
The erstwhile Department's website http://www.dca.nic.in has been moved to the Ministry of Corporate Affairs (MCA)
website http://www.mca.gov.in.
SeeMinistry of Corporate Affairs (MCA) website www.mca.gov.in.
Filing with ROC, New Delhi and State [Section 597].--(1) In relation to a Foreign Company the Registrar means the
Registrar of Companies (ROC), New Delhi with whom all the Documents are to be filed.
(2) Copies of all such Documents have also to be simultaneously filed by the Foreign Company with the Registrar of
Companies (ROC) of the concerned State where the Foreign Company has its principal place of business.
Filing Fees on Documents by Foreign Company [Section 601].--Filing Fees to be paid to the Registrar of Companies
(ROC), New Delhi under Sections 591 to 600 read with Section 601 of the Companies Act, 1956 for registering any
Document relating to a Foreign Company is Rs. 5,000 (w.e.f. 15-5-2002).
See Department's views on Filing and Registration Fees payable by Foreign Companies only to the Registrar of
Companies (ROC), New Delhi--Simultaneous filing of Documents/Returns (without fees) with the Registrar of
Companies (ROC) of the concerned State under Section 597.
Filing Fees on Applications by Foreign Company.--Application Fees payable by a Foreign Company defined under
Section 591 of the Companies Act, 1956 for all Applications to the Central Government has been increased from Rs.
200 to Rs. 1,000 (w.e.f. 10-8-1999) under the Companies (Fees on Applications) Rules, 1999.*
See detailed Comments, Department's views, Rules, Form and Procedure on Filing, Filing Fees and Additional Fees
under Sections 591, 594, 597 and 601.
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Regulations, 2000.--In exercise of the powers conferred by Section 6(6) of the Foreign Exchange Management Act,
1999 (42 of 1999), the Reserve Bank has made the Foreign Exchange Management (Establishment in India of Branch or
Office or Other Place of Business) Regulations, 2000? to prohibit, restrict and regulate establishment in India of a
Branch or Office or other place of business by a person Resident outside India.
Regulations amended (w.e.f. 25-4-2005).--The Foreign Exchange Management (FEM) (Establishment in India of
Branch or Office or Other Place of Business) Regulations, 2000?(w.e.f. 1-6-2000), as amended by the Foreign
Exchange Management (FEM) (Establishment in India of Branch or Office or Other Place of Business) (Amendment)
Regulations, 2003 (w.e.f. 1-9-2003), the FEM (Establishment in India of Branch or Office or Other Place of Business)
(Second Amendment) Regulations, 2003 (w.e.f. 29-10-2003) and the Foreign Exchange Management (Establishment in
India of Branch or Office or Other Place of Business) (Amendment) Regulations, 2005 (w.e.f. 25-4-2005), inter alia,
provide for :
Definitions [Regulation 2].--Regulation 2 of the Foreign Exchange Management (Establishment in India of Branch or
Office or Other Place of Business) Regulations, 2000 as amended (w.e.f. 25-4-2005), inter alia, defines the following
terms for these Regulations under the Foreign Exchange Management Act, 1999 (42 of 1999), unless the context
otherwise requires.
Foreign Company [Regulation 2(b)].--?Foreign company? means a body corporate incorporated outside India, and
includes a firm or other association of individuals.
This definition of Foreign Company is for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999).
For Meaning of Foreign Company under the Companies Act, 1956see Comments under Section 591(1)(a) and (b)
hereinbefore.
Branch [Regulation 2(c)].--?Branch? shall have the meaning assigned to it in sub-section (9) of Section 2 of the
Companies Act, 1956 (1 of 1956).
Branch Office [Section 2(9) of the Companies Act, 1956].--As per Section 2 of the Companies Act, 1956, the ?Branch
office? means any establishment: (a) described as a branch by the company, or (b) carrying on either the same or
substantially the same activity as that carried on by the head office of the company, or (c) engaged in any production,
processing or manufacture, but does not include any establishment specified in any order made by the Central
Government under Section 8.
See also Comments on Branch Office under Sections 8, 209, 228 and 292 of the Companies Act, 1956 in this Book.
Liaison office [Regulation 2(e)].--?Liaison office? means a place of business to act as a channel of communication
between the principal place of business or head office by whatever name called and entities in India but which does not
undertake any commercial/trading/industrial activity, directly or indirectly, and maintains itself out of inward
remittances received from abroad through normal banking channel.
Project office [Regulation 2(f)].--?Project office? means a place of business to represent the interests of the foreign
company executing a project in India but excludes a liaison office.
Site office [Regulation 2(g)].--?Site office? means a sub-office of the project office established at the site of a project
but does not include a liaison office.
Stand alone basis [Regulation 2(h)].--?Stand alone basis? means such branch offices would be isolated and restricted
to the Special Economic Zone alone and no business activity/transaction will be allowed outside the Special Economic
Zones in India which includes branches/subsidiaries of its parent office in India.
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Prohibition against establishing Branch or Office in India [Regulation 3].--No person resident outside India shall,
without prior approval of the Reserve Bank, establish in India a branch or a liaison office or any other place of business
by whatever name called.
Banking Company [Regulation 3, proviso].--Provided that no approval shall be necessary for a Banking Company, if
such company has obtained necessary approval under the provisions of the Banking Regulation Act, 1949 (10 of 1949).
Branch/Unit in Special Economic Zones (SEZs) [Regulation 3, provisos].--In Regulation 3, the following proviso has
been added by the Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of
Business) (Second Amendment) Regulations, 2003 (w.e.f. 29-10-2003):
Provided that no approval shall be necessary from RBI for a company to establish a branch/unit in Special Economic
Zones (SEZs) to undertake manufacturing and service activities:
Provided further that:
I. such Units are functioning in those Sectors where 100 per cent. FDI is permitted,
II. such Units comply with Part XI of the Companies Act, 1956 (Sections 592 to 602),
III. such Units function on a Stand-alone basis,
IV. in the event of Winding up of business and for Remittance of winding up proceeds, the branch shall
approach an authorised dealer in foreign exchange with the documents except (A) listed in Regulation
6(1)(iii) of Notification No. FEMA 13/2000-RB, dated 3rd May, 2000.
See Regulation 6(1)(iii) of the Foreign Exchange Management (Remittance of Assets) Regulations, 2000 [ Notification
FEMA 13/2000-RB, dated 3-5-2000].
Foreign Company in Special Economic Zones (SEZs) to comply with Part XI of the Companies Act, 1956 (Section
592 to 602).--As per the foregoing provisos to Regulation 3 of the Foreign Exchange Management (Establishment in
India of Branch or Office or Other Place of Business) Regulations, 2000, added by the Foreign Exchange Management
(Establishment in India of Branch or Office or Other Place of Business) (Second Amendment) Regulations, 2003 (w.e.f.
29-10-2003):
Foreign Companies for the purposes of these provisos, i.e., for Branch/Units in Special Economic Zones (SEZs) mean
the Foreign Companies which comply with Part XI of the Companies Act, 1956 (Sections 592 to 602).
Insurance Company--Liaison office [Regulation 3, further proviso].--The following further proviso has been added in
Regulation 3 of the Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of
Business) Regulations, 2000 by the FEM (Establishment in India of Branch or Office or Other Place of Business)
(Amendment) Regulations, 2005 (w.e.f. 25-4-2005):
Provided further that no approved shall be necessary for an insurance company, if such company has obtained approval
from the Insurance Regulatory and Development Authority established under Section 3 of the Insurance Regulatory and
Development Authority Act, 1999, for establishing a liaison office in India.
SeeSection 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) (IRDA) and Section 616
of the Companies Act, 1956.
Prohibition against establishing a branch or office in India by citizens of certain Countries [Regulation 4].--No
person, being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China, without prior permission of the
Reserve Bank, shall establish in India, a branch or a liaison office or a project office or any other place of business by
Page 242
whatever name called.
Application to the Reserve Bank of India (RBI) for opening branch or liaison office [Regulation 5].--Regulation 5 of
the Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of Business)
Regulations, 2000 as amended by the FEM (Establishment in India of Branch or Office or Other Place of Business)
(Amendment) Regulations, 2003 (w.e.f. 1-9-2003) provides:
(i) A person Resident outside India desiring to establish a branch or liaison office in India shall apply to the
Reserve Bank of India (RBI) in Form FNC 1? of the Foreign Exchange Management (Establishment in
India of Branch or Office or Other Place of Business) Regulations, 2000.
(ii) A Foreign Company may open a Project office/s in India provided it has secured from an Indian
company, a contract to execute a project in India, and
(a) the project is funded directly by inward remittance from abroad; or
(b) the project is funded by a bilateral or multilateral international financing agency; or
(c) the project has been cleared by an appropriate authority; or
(d) a company or entity in India awarding the contract has been granted term loan by a public
financial institution or a bank in India for the project.
(iii) The Foreign Company shall furnish a report to the concerned Regional Office of the Reserve Bank of
India under whose jurisdiction the project office is set up, giving details as under:
(a) Name and address of the foreign company,
(b) Reference number and date of letter awarding the contract referred to in clause (ii) of Regulation
5,
(c) Total amount of contract,
(d) Address and tenure of project office,
(e) Nature of project undertaken.
Explanation.--For the purpose of this Regulation,--
(i) ?a bilateral or multilateral international financing agency? means the World Bank or the International
Monetary Fund or similar other body;
(ii) ?public financial institution? is a public financial institution as defined in Section 4A of the Companies
Act, 1956.
Activities which may be undertaken by the Branch or Office in India [Regulation 6].--
(i) A person resident outside India permitted by the Reserve Bank of India (RBI) under Regulation 5 of the
Regulations, 2000, to establish a Branch or a Liaison office in India may undertake or carry on any
activity specified in Schedule I or, as the case may be, in Schedule II, but shall not undertake or carry on
other activity unless otherwise specifically permitted by the Reserve Bank.
(ii) Opening of project office under clause (ii) of Regulation 5 is permitted in India and such project office
shall not undertake or carry on any other activity other than the activity relating and incidental to
execution of the project.
Permitted Activities for a Branch in India [Schedule I].-- See Permitted Activities for a Branch in India of a Person
Resident Outside India in Schedule I?to the Foreign Exchange Management (Establishment in India of Branch or Office
or Other Place of Business) Regulations, 2000.
Permitted Activities for a Liaison office in India [Schedule II].-- See Permitted Activities for a Liaison office in India
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of a Person Resident Outside India in Schedule II? to the Foreign Exchange Management (Establishment in India of
Branch or Office or Other Place of Business) Regulations, 2000.
Remittance of profit or surplus [Regulation 7].--A person resident outside India permitted by the Reserve Bank (RBI)
under Regulation 5, to establish a Branch or project office in India may remit outside India the profit of the Branch or
surplus of the project on its completion, net of applicable Indian Taxes, on production of the following documents, and
establishing the net profit or surplus, as the case may, be to the satisfaction of the Authorised Dealer through whom the
remittance is effected.
I. For remittance of Profit of a Branch,--

(a) Certified copy of the Audited Balance-sheet and Profit and loss account for the relevant year;
(a) a Chartered Accountant's Certificate certifying,--
(i) the manner of arriving at the remittable profit,
(ii) that the entire remittable profit has been earned by undertaking the permitted activities,
and
(iii) that the profit does not include any profit on revaluation of the assets of the branch.
II. For remittance of surplus on completion of the project,--

(a) a Certified copy of the Final Audited project Accounts;
(b) a Chartered Accountant's Certificate showing the manner of arriving at the remittable surplus;
(c) Income-tax Assessment order or either documentary evidence showing payment of income-tax
and other applicable taxes, or a Chartered Accountant's Certificate stating that sufficient funds
have been set aside for meeting all Indian tax liabilities; and
(d) Auditor's Certificate stating that no statutory liabilities in respect of the project are outstanding.
Audited Accounts and Chartered Accountant's Certificates.--Regulation 7 of the Foreign Exchange Management
(Establishment in India of Branch or Office or Other Place of Business) Regulations, 2000, inter alia, requires a
Certified copy of the Audited Balance-sheet and Profit and loss account and Chartered Accountant's Certificates for
remittance of Profit or Surplus of a Branch or Foreign Company.
Foreign Exchange Management Act, 1999 (FEMA).--The Foreign Exchange Management Act, 1999 (42 of 1999)*
(w.e.f. 1-6-2000) has been enacted to consolidate and amend the law relating to Foreign Exchange with the objective of
facilitating external trade and payments and for promoting the orderly development and maintenance of foreign
exchange market in India.
The Foreign Exchange Management Act, 1999 (42 of 1999)*, inter alia, provides for the following matters:
Preliminary [Chapter I].--Definitions [Section 2] of the Foreign Exchange Management Act, 1999 (42 of 1999)*, inter
alia, defines the following terms:
Adjudicating Authority [Section 2(a)], ?Appellate Tribunal? means the Appellate Tribunal for Foreign Exchange
established under section section 18 [Section 2(b)].
Authorised Person [Section 2(c)], Capital account transaction [Section 2(e)], Currency [Section 2(h)], Currency notes
[Section 2(i)], Current account transaction [Section 2(j)], Director of Enforcement [Section 2(k)].
Export [Section 2(l)], Foreign Currency [Section 2(m)], Foreign Security [Section 2(o)], Import [Section 2(p)], Indian
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Currency [Section 2(q)].
Person [Section 2(u)], Person resident in India [Section 2(v)], Person resident outside India [Section 2(w)], Repatriate to
India [Section 2(y)].
Security [Section 2(za)], Service [Section 2(zb)], Special Director (Appeals) [Section 2(zc)], Specify means specified by
Regulations [Section 2(zd)].
?Transfer? includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title,
possession or lien [Section 2(ze)].
See Text of the Foreign Exchange Management Act, 1999 in Appendices.
?Foreign Exchange? [Section 2(n)].--?Foreign Exchange? means foreign currency and includes,--(i) deposits, credits
and balances payable in any foreign currency, (ii) drafts, travellers cheques, letters of credit or bills of exchange,
expressed or drawn in Indian currency but payable in any foreign currency, (iii) drafts, travellers cheques, letters of
credit or bills of exchange drawn by banks, institutions or persons outside India, but payable in Indian currency.
?Person? [Section 2(u)].--?Person? includes--(i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a
firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) every artificial juridical
person, not falling within any of the preceding sub-clauses, and (vii) any agency, office or branch owned or controlled
by such person.
?Person resident in India? [Section 2(v)].--?Person resident in India? means--
(i) a person residing in India for more than one hundred and eighty-two days during the course of the
preceding financial year but does not include--
(A) a person who has gone out of India or who stays outside India, in either case--(a) for or on taking
up employment outside India, or (b) for carrying on outside India a business or vocation outside
India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay
outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than--(a) for or on taking up
employment in India, or (b) for carrying on in India a business or vocation India, or (c) for any
other purpose, in such circumstances as would indicate his intention to stay in India for an
uncertain period;
(ii) any person or body corporate registered or incorporated in India,

(iii) an office, branch or agency in India owned or controlled by a person resident outside India,
(iv) an office, branch or agency outside India owned or controlled by a person resident in India.
?Person resident outside India? [Section 2(w)].--?Person resident outside India? means a person who is not resident in
India.
Regulation and Management of Foreign Exchange [Chapter II].--Chapter II, Sections 3 to 9 of the Foreign Exchange
Management Act, 1999 (42 of 1999) (FEMA), contain the provisions relating to following matters:
Dealing in foreign exchange, etc. [Section 3], Holding of foreign exchange, etc. [Section 4], Current account
transactions [Section 5], Capital account transactions [Section 6], Export of goods and services [Section 7], Realisation
and repatriation of foreign exchange [Section 8], and Exemption from realisation and repatriation in certain cases
[Section 9] of the FEMA, 1999 (42 of 1999).
Current account transactions [Section (5)].--Any person may sell or draw foreign exchange to or from an authorised
Page 245
person if such sale or drawal is a current account transaction:
Provided that the Central Government may, in public interest and in consultation with the Reserve Bank, impose such
reasonable restrictions for current account transactions as may be prescribed.
See Lists of the Foreign Exchange Management (FEM) Rules and Regulations along with Appendix Numbers, if any,
hereinafter.
Capital account transactions [Section (6)].--
(1) Subject to the provisions of sub-section (2), any person may sell or draw foreign exchange to or from an
authorised person for a capital account transaction.
(2) The Reserve Bank may, in consultation with the Central Government, specify--
(a) any class or classes of capital account transactions which are permissible;
(b) the limit up to which foreign exchange shall be admissible for such transactions:
Provided that the Reserve Bank shall not impose any restriction on the drawal of foreign exchange for
payments due on account of amortization of loans or for depreciation of direct investments in the
ordinary course of business.
(3) Without prejudice to the generality of the provisions of sub-section (2), the Reserve Bank may, by
Regulations prohibit, restrict or regulate the following:
(a) transfer or issue of any foreign security by a person resident in India;
(b) transfer or issue of any security by a person resident outside India;
(c) transfer or issue of any security or foreign security by any branch, office or agency in India of a
person resident outside India;
(d) any borrowing or lending in foreign exchange in whatever form or by whatever name called;
(e) any borrowing or lending in rupees in whatever form or by whatever name called between a
person resident in India and a person resident outside India;
(f) deposits between persons resident in India and persons resident outside India;
(g) export, import or holding of currency or currency notes;
(h) transfer of immovable property outside India, other than a lease not exceeding five years, by a
person resident in India;
(i) acquisition or transfer of immovable property in India, other than a lease not exceeding five
years, by a person resident outside India;
(j) giving of a guarantee or surety in respect of any debt, obligation or other liability incurred--
(i) by a person resident in India and owed to a person resident outside India; or
(ii) by a person resident outside India.
(4) A person resident in India may hold, own, transfer or invest in foreign currency, foreign security or any
immovable property situated outside India if such currency, security or property was acquired, held or
owned by such person when he was resident outside India or inherited from a person who was resident
outside India.
(5) A person resident outside India may hold, own, transfer or invest in Indian currency, security or any
immovable property situated in India if such currency, security or property was acquired, held or owned
by such person when he was resident in India or inherited from a person who was resident in India.
(6) Without prejudice to the provisions of this section, the Reserve Bank, may by regulation prohibit,
restrict, or regulate establishment in India of a branch, office or other place of business by a person
resident outside India, for carrying on any activity relating to such branch, office or other place of
business.
See Lists of the Foreign Exchange Management (FEM) Rules and Regulations along with Appendix Numbers, if any,
Page 246
hereinafter.
Export of goods and services [Section (7)].--
(1) Every exporter of goods shall--

(a) furnish to the Reserve Bank or to such other authority a declaration in such form and in such
manner as may be specified, containing true and correct material particulars, including the
amount representing the full export value or, if the full export value of the goods is not
ascertainable at the time of export, the value which the exporter, having regard to the prevailing
market conditions, expects to receive on the sale of the goods in a market outside India;
(b) furnish to the Reserve Bank such other information as may be required by the Reserve Bank for
the purpose of ensuring the realisation of the export proceeds by such exporter.
(2) The Reserve Bank may, for the purpose of ensuring that the full export value of the goods or such
reduced value of the goods as the Reserve Bank determines, having regard to the prevailing market
conditions, is received without any delay, direct any exporter to comply with such requirements as it
deems fit.
(3) Every exporter of services shall furnish to the Reserve Bank or to such other authorities a declaration in
such form and in such manner as may be specified, containing the true and correct material particulars in
relation to payment for such services.
Authorised person [Chapter III].--Authorised person [Section 10], Reserve Bank's (RBI's) powers to issue directions to
authorised person [Section 11], and Power of Reserve Bank to inspect authorised person [Section 12].
Contravention and Penalties [Chapter IV].--Penalties [Section 13], Enforcement of the orders of Adjudicating
Authority [Section 14], and Power to compound contravention [Section 15].
Adjudication and Appeal [Chapter V].--Appointment of Adjudicating Authority [Section 16], Appeal to Special
Director (Appeals) [Section 17], Establishment of Appellate Tribunal [Section 18], Appeal to Appellate Tribunal
[Section 19].
Composition of Appellate Tribunal, Qualifications for appointment of Chairperson, Member and Special Director
(Appeals), Terms and Conditions, Staff of Appellate Tribunal and Special Director (Appeals), etc. [Sections 20 to 27].
Procedure and powers of Appellate Tribunal and Special Director (Appeals) [Sections 28 to 33], Right of appellant to
take assistance of legal practitioner or Chartered Accountant and of Government, to appoint presenting officers [Section
32], Civil court not to have jurisdiction [Section 34], Appeal to High Court [Section 35].
Legal Practitioners and Chartered Accountants [Section 32].--Section 32 permits a person preferring an appeal, i.e.,
either Appellant or Central Government, if it so desires, to engage a Chartered Accountant (apart from a legal
practitioner) to present the case before Appellate Tribunal or the Special Director (Appeal).
Auditing Practices.-- See ICAI publication Referencer on FEMA (Foreign Exchange Management Act, 1999),
published by the Institute of Chartered Accountants of India (ICAI), New Delhi, First Edition, February, 2005.
Directorate of Enforcement [Chapter VI].--Directorate of Enforcement [S. 36], Power of search, seizure, etc. [Section
37], Empowering other officers [S. 38].
Miscellaneous [Chapter VII].--Presumption as to documents in certain cases [Section 39], Suspension of operation of
this Act [Section 40], Power of Central Government to give directions [Section 41].
Contravention by companies [Section 42], and Death or insolvency in certain cases [Section 43], Bar of legal
Page 247
proceedings [Section 44], Removal of difficulties [Section 45].
Power to make Rules [Section 46], Power to make Regulations [Section 47], Rules and Regulations to be laid before
Parliament [Section 48], and Repeal and Saving [Section 49] of the Foreign Exchange Management Act, 1999 (42 of
1999).
See Comments on the Foreign Exchange Management Act, 1999 (42 of 1999) (the FEMA Act) under respective
Sections 55, 55A, 73, 205 and 591.
See Text of the Foreign Exchange Management Act, 1999 in Appendices.
Contravention by Companies [Section 42].--(1) Where a person committing a contravention of any of the provisions of
this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the
contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of
the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be
proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that
the contravention took place without his knowledge or that he exercised due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or
of any rule, direction or order made thereunder has been committed by a company and it is proved that the
contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any
director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also
be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section--
(i) ?company? means any body corporate and includes a firm or other association of individuals; and
(ii) ?director?, in relation to a firm, means a partner in the firm.
See Text of the Foreign Exchange Management Act, 1999* in Appendices.
Penalty for Contravention on FEMA by Companies.--In case of a company, all the persons who were in charge at
the time of commission of the contravention of the Foreign Exchange Management Act, 1999 (42 of 1999) shall be
deemed to be guilty of the contravention in addition to the concerned company.
Defence.--However, the person concerned may not be punished, if he proves that he was not aware of or responsible for
the contravention or he had exercised due diligence and care to prevent the contravention.
See detailed Comments on Officers of Company in default under Section 5 of the Companies Act, 1956 in this Book.
See Comments on the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA) along with Appendix Number
dealt with above.
See Legislative History, further Comments and Lists of the Foreign Exchange Management Rules and Regulations
made under the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA) along with Appendix Numbers, if any,
below:
The Foreign Exchange Regulation Act, 1973 [ repealed].--The Foreign Exchange Regulation Act, 1973 (46 of 1973)
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(FERA) has been repealed and the Appellate Board constituted under Section 52(1) of the FERA, 1973 has been
dissolved. [ videSection 49(1) of the FEMA, 1999 (42 of 1999)].
See Repeal and Saving [Section 49(1) to (6)] of the FEMA, 1999, i.e., the Foreign Exchange Management Act, 1999
(42 of 1999).
Legislative History of FEMA.-- Statement of Objects and Reasons.--The Statement of Objects and Reasons appended
to the Foreign Exchange Management Bill, 1998 (93 of 1998) is reproduced below:
?The Foreign Exchange Regulation Act, 1973 (46 of 1973), was reviewed in 1993, and several amendments were
enacted as part of the on-going process of economic liberalisation relating to foreign investments and foreign trade for
closer interaction with the world economy. At that stage, the Central Government decided that a further review of the
Foreign Exchange Regulation Act would be undertaken in the light of subsequent developments and experience in
relation to foreign trade and investment. It was subsequently felt that a better course would be to repeal the existing
Foreign Exchange Regulation Act and enact a new legislation. The Reserve Bank of India was accordingly asked to
undertake a fresh exercise and suggest a new legislation. A Task Force constituted for this purpose submitted its Report
in 1994 recommending substantial changes in the existing Act.
Significant developments have taken place since 1993 such as substantial increase in our foreign exchange reserves,
growth in foreign trade, rationalisation of tariffs, current account convertibility, liberalisation of India investments
abroad, increased access to external commercial borrowings by Indian corporates and participation of foreign
institutional investors in our stock markets.
Keeping in view the changed environment, the Central Government has decided to introduce the Foreign Exchange
Management Bill and repeal the Foreign Exchange Regulation Act, 1973. The provisions of the Bill aim at
consolidating and amending the law relating to foreign exchange with the objective of facilitating external trade and
payments and for promoting the orderly development and maintenance of foreign exchange markets in India.
The Notes on Clauses explain in detail the various provisions contained in the Bill.? [ Statement of Objects and Reasons
appended to the Foreign Exchange Management Bill, 1998 (93 of 1998) : (1998) 93 Comp. Cas. (St.) 40].
Foreign Exchange Management (FEM) Rules.--List of the Foreign Exchange Management (FEM) Rules framed
under the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA Act) is as follows:
(1) The Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000.
(2) The Foreign Exchange (Authentication of Documents) Rules, 2000.
(3) The Foreign Exchange (Compounding Proceedings) Rules, 2000.
(4) The Foreign Exchange Management (Current Account Transactions) Rules, 2000.
(5) The Foreign Exchange Management (Encashment of Draft, Cheque, Instrument and Payment of Interest)
Rules, 2000.
Foreign Exchange Management (FEM) Regulations.--List of the Foreign Exchange Management (FEM) Regulations
made under the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA Act) is as follows:
(1) The Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India)
Regulations, 2000.
(2) The Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India)
Regulations, 2000.
Page 249
(3) The Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000.
(4) The Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000.
(5) The Foreign Exchange Management (Deposit) Regulations, 2000.
(6) The Foreign Exchange Management (Establishment in India of Branch or Office or other Place of
Business) Regulations, 2000.
(7) The Foreign Exchange Management (Export and Import of Currency) Regulations, 2000.
(8) The Foreign Exchange Management (Export of Goods and Services) Regulations, 2000.
(9) The Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India)
Regulations, 2000.
(10) The Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000.
(11) The Foreign Exchange Management (Guarantees) Regulations, 2000.
(12) The Foreign Exchange Management (Insurance) Regulations, 2000.
(13) The Foreign Exchange Management (Investment in Firm or Proprietary Concern in India) Regulations,
2000.
(14) The Foreign Exchange Management (Issue of Security in India by a Branch, Office or Agency of a
Person Resident Outside India) Regulations, 2000.
(15) The Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000.
(16) The Foreign Exchange Management (Offshore Banking Unit) Regulations, 2002.
(17) The Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000.
(18) The Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000.
(19) The Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange)
Regulations, 2000.
(20) The Foreign Exchange Management (Remittance of Assets) Regulations, 2000.
(21) The Foreign Exchange Management (Removal of Difficulties) Order, 2000.
(22) The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004.
(23) The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India)
Regulations, 2000.
(24) The Foreign Exchange Management [Withdrawal of General Permission to Overseas Corporate Bodies
(OCBs)] Regulations, 2003.
RBI website [ www.rbi.org.in].-- See the Foreign Exchange Management Act, 1999 (42 of 1999) (the FEMA Act), the
Foreign Exchange Management (FEM) Rules, Regulations, Notifications and RBI Circulars, etc., under the FEMA Act,
Rules, Regulations on the Reserve Bank of India (RBI) website at http://www.rbi.org.in.
Foreign Contribution Act and Rules.-- See also the Foreign Contribution (Regulation) Act, 1976 (49 of 1976) and
Rules framed thereunder.
(1) The Foreign Contribution (Regulation) Act, 1976 (49 of 1976).

(2) The Foreign Contribution (Regulation) Rules, 1976.
See Form FC-3 of the Foreign Contribution (Regulation) Rules, 1976 as amended by the Foreign Contribution
(Regulation) (Amendment) Rules, 2001 videNotification No. G.S.R. 557(E), dated 26-7-2001, published in the Gazette
of India, Extraordinary, No. 387, Part II, section 3(i) : (2002) 111 Comp. Cas. (St.) 226.
In Form FC-3 of the Foreign Contribution (Regulation) Rules, 1976, Item 2 has been substituted and 56 activities have
been enumerated in Columns 1 and 2.
Foreign Currency (NRI) Scheme.-- See the Foreign Currency (Non-Resident) Accounts (Banks) Scheme, 2000 as
Page 250
amended from time to time.
Money Laundering and other Acts.-- See also the Prevention of Money Laundering Act, 2002 (15 of 2003) and other
Acts:
(1) The Prevention of Money Laundering Act, 2002 (15 of 2003).

(2) Smugglers and Foreign Exchange Manipulators (Receipt, Management and Disposal of Forfeited
Property) Rules, 2006.
See detailed Comments, RBI Guidelines and Circulars under Section 58A.
Prevention of Money-Laundering Act, 2002.-- Notification under Section 1(3) : Commencement of the Act.--?In
exercise of the powers conferred by sub-section (3) of section 1 of the Prevention of Money-Laundering Act, 2002 (15
of 2003), the Central Government hereby appoints the 1st day of July, 2005, as the date on which all the provisions of
the said Act shall come into force.? [ Notification No. G.S.R. 436(E), dated 1-7-2005, published in the Gazette of India,
Extraordinary, No. 292, Part II, Section 3(i), dated 1-7-2005 : (2005) 126 Comp. Cas. (St.) 44].
Prevention of Money Laundering Act, 2002 (15 of 2003).-- See the Prevention of Money Laundering Act, 2002 (15
of 2003)* in Appendices.
Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the
Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance
of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries)
Rules, 2005 and Amendment Rules 2007.-- See also the Prevention of Money-Laundering (Maintenance of Records
of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing
Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies,
Financial Institutions and Intermediaries) Rules, 2005 Prevention of Money-Laundering (Maintenance of Records of the
Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and
Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions
and Intermediaries) Rules, 2005** as amended by the Prevention of Money-Laundering (Maintenance of Records of the
Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and
Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions
and Intermediaries) Amendment Rules, 2007 videNotification No. G.S.R. 389(E), dated 24-5-2007, published in the
Gazette of India, Extraordinary, No. 237, Part II, Section 3(i), dated 24-5-2007 : [(2007) 137 Comp. Cas. (St.) 128 :
Reserve Bank of India (RBI) website http://www.rbi.org.in] in Appendices.
SEBI Guidelines on Anti-Money Laundering Standards.-- See SEBI Circulars for SEBI Intermediaries in Comments
under Section 55A.
?Know your customer? (KYC) guidelines for NBFCs.--Para 4(12)(iii) of the Non-Banking Financial Companies
Acceptance of Public Deposits (Reserve Bank) Directions, 1998, contains guidelines relating to identification of
depositors.
In terms of these provisions, every Non-Banking Financial Company (NBFC) should obtain proper introduction of the
new depositors before opening their accounts and accepting the deposits and keep on its record the evidence on which it
has relied upon for the purpose of such introduction. The Non-Banking Financial Company (NBFCs) should also obtain
written confirmation from their introducers. In the absence of such introduction, any other document of identity of the
prospective deposit holders may be obtained and kept on their record. The NBFCs have been advised to ensure that the
Page 251
new depositor is not a fictitious person.
The ?Know your customer? (KYC) guidelines have been reviewed in the context of the provisions of the Prevention of
Money Laundering Act, 2002 (15 of 2003), and the need to put in place systems and procedures to help control financial
frauds, identify money laundering and suspicious activities. Further, the guidelines aim at safeguarding NBFCs from
being unwittingly used for transfer or deposit of funds derived from criminal activity or for financing of terrorism.
The guidelines are also applicable to deposits accepted from Non-Resident Indians (NRIs). Further, these guidelines
will also be applicable to Miscellaneous
Non-Banking Companies
(MNBCs)
and Residuary Non-Banking Companies (RNBCs).
See detailed Comments and Guidelines under Section 58A.
RBI Circulars.-- ?Know Your Customer? (KYC) Guidelines--Anti Money Laundering Standards.-- See ?Know Your
Customer? (KYC) Guidelines--Anti Money Laundering Standards [ RBI Circular No. DNBS(PD).CC
48/10.42/2004-05, dated 21-2-2005 : Issued by the Reserve Bank of India (RBI) : Chartered Secretary, April 2005,
pages 548 to 552 : RBI website www.rbi.org.in].
See Reserve Bank of India (RBI) Directions, Circulars, Guidelines and Schemes in Comments under Section 58A of the
Companies Act, 1956 in this Book.
See also Reserve Bank of India (RBI) website at www.rbi.org.in.
Fraud and Money Laundering.-- See detailed Comments under Sections 58A, 211(3C) and 227 of the Companies
Act, 1956 in this Book.
Auditing Practice.-- See Guidance Note on Certificate to be issued by the Auditor of a company pursuant to
Companies (Acceptance of Deposits) Rules, 1975, issued by the Institute of Chartered Accountants of India (ICAI),
Guidance Note on the duty cast on the Auditors under Section 45MA of the Reserve Bank of India Act, 1934, the
Companies (Auditor's Report) Order, 2003 [the CARO, 2003], the Non-Banking Financial Companies Auditor's Report
(Reserve Bank) Directions, 1998 and RBI Circulars in Comments under Sections 58A(7), 211, 227(2) and 227(4A).
See detailed Comments under Sections 58A, 211(3C) and 227.
Securities under the FEMA.--Section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999) defines the
terms as follows:
?Security? means shares, stocks, bonds and debentures, Government securities as defined in the Public Debt Act, 1944
(18 of 1944), savings certificates to which the Government Savings Certificates Act, 1959 (46 of 1959), applies, deposit
receipts in respect of deposits of securities and units of the Unit Trust of India established under sub-section (1) of
Section 3 of the Unit Trust of India Act, 1963 (52 of 1963), or of any mutual fund and includes certificates of title to
securities, but does not include bills of exchange or promissory notes other than Government promissory notes or any
other instruments which may be notified by the Reserve Bank as security for the purposes of the FEMA Act. [Section
2(za) of the FEMA Act, 1999].
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Foreign security.--?Foreign security? means any security, in the form of shares, stocks, bonds, debentures or any other
instrument denominated or expressed in foreign currency and includes securities expressed in foreign currency, but
where redemption or any form of return such as interest or dividends is payable in Indian currency. [Section 2(o) of the
FEMA Act, 1999].
Sections 55, 55A, 73, 205 and 591.
Dividends payable to Non-Resident Shareholders (NRIs).--Where investments are made by Non-Residents in the
shares of Indian Companies in accordance with the requirements of applicable Laws, Rules, Regulations, etc., Dividend
can be paid to such Non-Resident shareholders in accordance with the Foreign Exchange Management Act, 1999 (42 of
1999), Rules and Regulations.
RBI Circulars under the FEMA.-- Remittance of Dividend and Non-Resident Indians (NRIs)/Persons of Indian
Origin (PIOs), etc.-- See Relevant Circulars, e.g., Remittance of Current Income (Dividend etc.) by NRIs, Credits of
Dividend, etc., of NRIs to Non-Resident External Rupee (NRE) Accounts, (A) Remittance of Current Income, like
Dividend, etc., by Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)--No Objection Certificate and (B)
Repatriation of NRNR deposits, Income-tax Clearance Certificate/No Objection Certificate, Income-tax Clearance
Certificate/No Objection Certificate from Income-tax Authorities--Revision of Format of Undertaking and Certificate,
etc., in Comments under Section 205.
Sections 55, 55A, 73, 205 and 591.
FEMA Act, Rules and Regulations given inAppendices.--The Foreign Exchange Management Act, 1999 (42 of
1999)* (FEMA Act), Relevant FEM Rules and FEM Regulations have been reproduced in Appendices:
1. The Foreign Exchange Management Act, 1999 (42 of 1999)*

2. The Foreign Exchange Management (Deposit) Regulations, 2000.**
3. The Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of
Business) Regulations, 2000.***
4. The Foreign Exchange Management (Issue of Security in India by a Branch, Office or Agency of a
Person Resident Outside India) Regulations, 2000.?
5. The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2000.??
6. The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India)
Regulations, 2000.???
See also Reserve Bank of India (RBI) Circulars issued under the FEMA Act, Rules, Regulations under relevant Sections
55, 55A, 73, 205 and 591.
See also Reserve Bank of India (RBI) website at www.rbi.org.in.
FEM (Deposit) (Second Amendment) Regulations, 2007.--The Reserve Bank of India (RBI) has made following
amendments in the Foreign Exchange Management (Deposit) Regulations, 2000 ( Notification No. FEMA 5/2000-RB,
dated May 3, 2000) by the FEM (Deposit) (Second Amendment) Regulations, 2007:
Operations by Power of Attorney [Schedule 3, para 7A].--Authorised dealers/autho-rised banks may allow operations
on an NRO account in terms of a Power of Attorney, provided such operations are restricted to (i) all local payments in
rupees including payments for eligible investments subject to compliance with relevant Regulations made by the
Page 253
Reserve Bank; and (ii) remittance outside India of current income in India of the Non-Resident individual account
holder, net of applicable taxes. The resident Power of Attorney holder shall not repatriate outside India funds held in the
account under any circumstances other than to the Non-Resident individual account holder himself nor shall make
payment by way of gift to a resident on behalf of the Non-Resident account holder or transfer funds from the account to
another NRO account. Any remittance outside India shall be within the ceiling as may be prescribed by the Bank (RBI)
from time to time and subject to tax compliance.
[The FEM (Deposit) Regulations, 2000, Schedule 3, paragraph 7A inserted by the Foreign Exchange Management
(Deposit) (Second Amendment) Regulations, 2007 videNotification No. G.S.R. 664(E), dated 3-9-2007 [No. FEMA
158/2007-RB], published in the Gazette of India, Extraordinary, No. 464, Part II, Section 3(i), page 4, dated 16-10-2007
: (2007) 140 Comp. Cas. (St.) 3].
CENTRAL GOVERNMENT, FII, FDI, FIPB, DIPP, RBI AND MISCELLANEOUS GUIDELINES AND
SCHEMES
Sl. No. Appendix
1. Guidelines for Foreign Institutional Investors (FIIs) 291
2. Guidelines for Foreign Investment in Preference Shares 292
3. Guidelines for consideration of Foreign Direct Investment (FDI) proposals by the For- 293
eign Investment Promotion Board (FIPB)
4. FDI Policy and Sectoral Guidelines and Equity Cap on Foreign Direct Investment (FDI), 294
including Investment by Non-Resident Indians (NRIs), Overseas Corporate Bodies
(OCBs) and Foreign Institutional Investors (FIIs)
5. Portfolio Investments by Non-Resident Indians (NRIs)/Persons of Indian Origin 295
(PIOs)/Overseas Corporate Bodies (OCBs) in Indian Companies
6. The Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through De- 296
positary Receipt Mechanism) Scheme, 1993
7. Guidelines for Euro Issues 297
8. European Economic Community (EEC) International Institutional Partners Scheme, 298
1993
9. Guidelines on External Commercial Borrowings (ECB) 299
10. Guidelines for Indian Direct Investment (IDI) in joint ventures and wholly owned subsi- 300
diaries abroad
11. Policy Guidelines of the Government relating to Stipulation of Convertibility Clause and 301
Appointment of Nominee Directors
12. Guidelines for Valuation of Equity Shares of Companies and the Business and Net As- 302
sets of Branches
RBI Master Circulars, dated 2-7-2007.-- Master Circular on External Commercial Borrowings and Trade
Credits.--?External Commercial Borrowings and Trade Credits availed of by residents are governed by clause (d) of
sub-section 3 of Section 6 of the Foreign Exchange Management Act, 1999 read with Section 6 of Notification No.
FEMA 3/2000-RB, dated May 3, 2000 [ the Foreign Exchange Management (Borrowing or Lending in Foreign
Exchange) Regulations, 2000] as amended from time to time.
2. This Master Circular consolidates all existing instructions on the subject of ? External Commercial
Page 254
Borrowings and Trade Credits? at one place. The list of underlying Circulars/Notifications consolidated
in this Master Circular is furnished in Appendix [ See relevant Appendix of this Book].
3. This Master Circular is being issued with a sunset clause of one year. This Circular will stand withdrawn
on July 1, 2008 and will be replaced by an updated Master Circular on the subject.? [ RBI Master
Circular No. 2/2007-08, dated 2-7-2007 : Addressed to All Banks Authorised to Deal in Foreign
Exchange : the Reserve Bank of India (RBI) website http://www.rbi.org.in].
Master Circular on Direct Investment by Residents in Joint Venture (JV)/Wholly Owned Subsidiary (WOS)
abroad.--?Direct investments by residents in Joint Venture (JV) and Wholly Owned Subsidiary (WOS) abroad are being
allowed, in terms of clause (a) of sub-section (3) of Section 6 of the Foreign Exchange Management Act, 1999 (42 of
1999) read with Notification No. G.S.R. 757(E), dated November 19, 2004 and the FEMA Notification No.
120/RB-2004, dated July 7, 2004 [ the Foreign Exchange Management (Transfer or Issue of any Foreign Security)
Regulations, 2004] as amended from time to time.
2. This Master Circular consolidates the existing instructions on the subject of ? Direct Investment by
Residents in Joint Venture (JV)/Wholly Owned Subsidiary (WOS) abroad? at one place. The list of
underlying Circulars/Notifications is furnished in Appendix [ See relevant Appendix of this Book].
3. This Master Circular is issued with a sunset clause of one year. This Circular will stand withdrawn on
July 1, 2008 and be replaced by an updated Master Circular on the subject.? [ RBI Master Circular No.
1/2007-08, dated 2-7-2007 : Addressed to All Banks Authorised to Deal in Foreign Exchange : the
Reserve Bank of India (RBI) website http://www.rbi.org.in].
See also Comments under Sections 55A, 56 and 58A.
Indian Companies (Foreign Interests) Act, 1918 [ repealed].--Under the Indian Companies (Foreign Interests) Act,
1918 (20 of 1918), without the consent in writing of the Central Government a company could not alter its Articles
affecting in such a way as to bring the company under the control of foreign interests.
This Act has been repealed by the Indian Companies (Foreign Interests) and the Companies (Temporary Restrictions on
Dividends) Repeal Act, 2000 (24 of 2000).
Companies (Temporary Restrictions on Dividends) Act, 1974 [ repealed].--The Companies (Temporary Restrictions
on Dividends) Act, 1974 (35 of 1974) has also been repealed by the Indian Companies (Foreign Interests) and the
Companies (Temporary Restrictions on Dividends) Repeal Act, 2000 (24 of 2000).
Indian Companies (Foreign Interests) and the Companies (Temporary Restrictions on Dividends) Repeal Act,
2000 (24 of 2000).--The Indian Companies (Foreign Interests) and the Companies (Temporary Restrictions on
Dividends) Repeal Act, 2000 (24 of 2000) has repealed the following Acts:
(1) the Indian Companies (Foreign Interests) Act, 1918 (20 of 1918),
(2) the Companies (Temporary Restrictions on Dividends) Act, 1974 (35 of 1974).
Statement of Objects and Reasons.--The Statement of Objects and Reasons appended to the Indian Companies (Foreign
Interests) and the Companies (Temporary Restrictions on Dividends) Repeal Bill, 2000 (37 of 2000) is reproduced
below:
?The Commission on Review of Administrative Laws was set up by the Central Government on 8th May, 1998, inter
alia, for review of administrative laws and for recommending follow-up steps thereafter for repeal and amendment of
laws. In pursuance of the recommendations of the said Commission, the Central Government has decided to repeal the
Page 255
Indian Companies (Foreign Interests) Act, 1918 and the Companies (Temporary Restrictions on Dividends) Act, 1974,
which have become obsolete and retention thereof as separate Acts are unnecessary.
2. The Bill seeks to repeal the aforesaid Acts.?
[ See Text of the aforesaid Act and Statement of Objects and Reasons appended to the Bill in (2000) 102 Comp. Cas.
(St.) 81].
Foreign Direct Investment (FDI).--The policy on Foreign Direct Investment (FDI) has been reviewed on a continuing
basis and several measures announced from time to time for Rationalization/Liberalization of the Foreign Direct
Investment (FDI) Policy and Simplification of Procedures.
The Government of India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (DIPP)
has recently further reviewed the Policy on FDI vide Press Note No. 4 (2006 series) (F. No. 5(3)/2005-FC), Issued by
Government of India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (FC
Section), dated 10-2-2006 : (2006) 130 Comp. Cas. (St.) 2.
Press Note contains Policy on Foreign Direct Investment (FDI) in Annexure:
I. Sectors prohibited for FDI,

II. All Activities/Sectors that would require prior Government approval for FDI,
III. Sectors/Activities in which FDI is permitted up to 100 per cent. on the automatic route subject to
Sectoral Rules/Regulations applicable, and
IV. Sector specific Policy for FDI
Press Note No. 4 (2006 series), dated 10-2-2006 along with Annexure containing summary of the Foreign Direct
Investment (FDI) Policy and Regulations applicable in various Sectors/Activities issued by the Government of India,
Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (DIPP) (FC Section) referring to
relevant Press Notes of D/o IPP, www.dipp.gov.in and website addresses of other concerned Ministries is reproduced
below.
Department's view.-- Rationalisation of the FDI Policy.--?The policy on Foreign Direct Investment (FDI) has been
reviewed on a continuing basis and several measures announced from time to time for rationalization/liberalization of
the policy and simplification of procedures.
2. The Government of India has recently further reviewed the policy on FDI and decided as under:
(a) To allow under the automatic route, FDI up to 100 per cent., for:
(i) distillation and brewing of potable alcohol;
(ii) manufacture of industrial explosives;
(iii) manufacture of hazardous chemicals;
(iv) manufacturing activities located within 25 kms. of the Standard Urban Area limits which
require Industrial license under the Industries (Development and Regulation) Act, 1951
(65 of 1951);
(v) setting up Greenfield airport projects;
(vi) laying of Natural Gas/LNG pipelines, market study and formulation and Investment
financing in the Petroleum and Natural Gas sector; and
(vii) cash and carry wholesale trading and export trading.
(b) To increase FDI caps to 100 per cent. and permit it under the automatic route for:
(i) coal and lignite mining for captive consumption;
Page 256
(ii) setting up infrastructure relating to marketing in Petroleum and Natural Gas sector; and
(iii) exploration and mining of diamonds and precious stones.
(c) To allow FDI up to 100 per cent. under the automatic route in:
(i) power trading subject to compliance with regulations under the Electricity Act, 2003 (36
of 2003);
(ii) processing and warehousing of coffee and rubber.
(d) To allow FDI up to 51 per cent. with prior Government approval for retail trade of ?Single
Brand? products, detailed Guidelines for which have been notified vide Press Note 3 (2006
Series) [ printed hereinafter].
(e) To allow under the automatic route transfer of shares from residents to non-residents in financial
services, and where the Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations are attracted, in cases where approvals are required from the
Reserve Bank of India/Securities and Exchange Board of India (Substantial Acquisition of Shares
and Takeovers) Regulations/Insurance Regulatory and Development Authority. With this,
transfer of shares from residents to non-residents, including acquisition of shares in an existing
company would be on the automatic route subject to sectoral policy on FDI.
(f) To dispense with the requirement of mandatory divestment of 26 per cent. foreign equity in B2B
e-Commerce.
3. FDI/NRI investment under the automatic route shall continue to be governed by the Sectoral
regulations/licensing requirements.
4. A summary of the FDI policy and regulations applicable in various Sectors/Activi-ties is at the Annexure.
Annexure Policy on Foreign Direct Investment (FDI)
I. Sectors prohibited for FDI

(i) Retail trading (except Single Brand Product retailing)
(ii) Atomic energy
(iii) Lottery business
(iv) Gambling and betting.
II. All activities/sectors would require prior Government approval for FDI in the following
circumstances:
(i) where provisions of Press Note 1 (2005 Series) [ printed later] are attracted;
(ii) where more than 24 per cent. foreign equity is proposed to be inducted for manufacture of items
reserved for the small scale sector.
III. In sectors/activities not listed below, FDI is permitted up to 100 per cent. on the automatic route
subject to sectoral rules/regulations applicable.
IV. Sector specific policy for FDI.
Sl. No. Sector/Activity FDI Cap/Equity Entry Other conditions Relevant press Note is-
Route sued by D/o IPP
www.dipp.gov.in
1. Airports--
a. Greenfield projects 100% Auto- Subject to sectoral regulations PN 4/2006
matic notified by Ministry of Civil
Page 257
Aviation
www.civilaviation.nic.in
b. Existing projects 100% FIPB Subject to Sectoral regula- PN 4/2006
beyond tions Notified by Ministry of
74% Civil Aviation
2. Air Transport Services 40% FDI; 100% Auto- Subject to no direct or indir-
for NRI invest- matic ect participation by foreign
ment airlines. Government of India
Gazette Notification dated
2-11-2004 issued by Ministry
of Civil Aviation
3. Alcohol -- Distillation 100% Auto- Subject to license by appro- PN 4/2006
& Brewing matic priate authority
4. Asset Reconstruction 40% (only FDI) FIPB Where any individual invest-
Companies ment exceeds 10% of the
equity, provisions of Section
3(3)(f) of Securitisation and
Reconstruction of Financial
Assets and Enforcement of
Security Interest Act, 2002
(54 of 2002) should be com-
plied with. www.finmin.nic.in
5. Atomic Minerals 74% FIPB Subject to Guidelines issued
by Department of Atomic En-
ergy vide Reso-lution No.
8/1(1)/97-PSU/ 1422 dated
6-10-1998.
6. Banking -- Private Sec- 74% (FDI+FII) Auto- Subject to Guidelines for set- PN 2/2004
tor matic ting up branches/subsi-diaries
of foreign banks issued by
RBI. www.rbi.org.in
7. Broadcasting --
a. FM Radio FDI + FII invest- FIPB Subject to Guidelines notified PN 6/2005
ment up to 20% by Ministry of Information &
Broadcasting www.mib.nic.in
b. Cable network 49% (FDI+FII ) FIPB Subject to Cable Television
Network Rules (1994) Noti-
fied by Ministry of Informa-
tion and Broadcasting
www.mib.nic.in
c. Direct-To-Home 49% (FDI+FII ) FIPB Subject to Guidelines issued
Within this limit, by Ministry of Information
FDI component and Broadcasting www.mib.
not to exceed nic.in
Page 258
20%
d. Setting up hardware fa- 49% (FDI+FII ) FIPB Subject to Up-linking Policy PN 1/2006
cilities such as Up- Notified by Ministry of In-
lin-king, HUB, etc. formation and Broadcasting
www.mib.nic.in
e. Up-linking a News & 26% FDI + FII FIPB Subject to Guidelines issued PN 412006
Current Affairs TV by Ministry of Information &
Channel Broadcasting www.mib. nic.in
f. Up-linking a Non-news 100% FIPB Subject to Guidelines issued PN 1/2006
& Current Affairs TV by Ministry of Information &
Channel Broadcasting www.mib. nic.in
8. Cigars and Cigarettes -- 100% FIPB Subject to Industrial License PN 4/2006
Manufacture under the Industries
(Development & Regulation)
Act, 1951 (65 of 1951)
9. Coal and Lignite min- 100% Auto- Subject to provisions of Coal PN 4/2006
ing for captive con- matic Mines (Nationalization) Act,
sumption by power 1973 (26 of 1973)
projects, and iron & www.coal.nic.in
steel, cement produc-
tion and other eligible
activities permitted un-
der the Coal Mines
(Nationalisation) Act,
1973.
10. Coffee & Rubber pro- 100% Auto- PN 4/2006
cessing & warehousing matic
11. Construction Develop- 100% Auto- Subject to conditions notified PN 2/2005 & PN
ment projects, including matic vide Press Note 2 (2005 2/2006
housing, commercial Series) including: a. Minim-
premises, resorts, edu- um capitalization of US$ 10
cational institutions, re- million for wholly owned
creational facilities, city subsidiaries and US$ 5 mil-
and regional level infra- lion for joint venture. The
structure, townships. funds would have to be
brought within six months of
commencement of business of
the Company. b. Minimum
area to be developed under
each project--10 hectares in
case of development of ser-
viced housing plots; and built-
up area of 50,000 sq. mts. in
case of construction develop-
ment project; and any of the
above in case of a combina-
tion project. [ Note : For in-
Page 259
vestment by NRIs, the condi-

tions mentioned in Press Note
2/2005 are not applicable.]
12. Courier services for car- 100% FIPB Subject to existing laws and PN 4/2001
rying packages, parcels exclusion of activity relating
and other items which to distribution of letters,
do not come within the which is exclusively reserved
ambit of the Indian Post for the State.
Office Act, 1898 (6 of www.indiapost.gov.in
1898).
13. Defence Production. 26% FIPB Subject to Licensing under In- PN 4/2001 & PN
dustries (Development & 2/2002
Regulation) Act, 1951 (65 of
1951) and Guidelines on FDI
in production of arms and am-
munition.
14. Floriculture, Horticul- 100% Auto- PN 4/2006
ture, Development of matic
Seeds, Animal Hus-
bandry, Pisciculture,
aquaculture, cultivation
of vegetables, mush-
rooms, under controlled
conditions and services
related to agro and al-
lied sectors.
15. Hazardous chemicals, 100% Auto- Subject to Industrial License PN 4/2006
viz., hydrocyanic acid matic under the Industries
and its derivatives; (Development & Regulation)
phosgene and its deriv- Act, 1951 and other Sectoral
atives; and isocyanates regulations.
and di-isocyantes of hy-
drocarbon.
16. Industrial explosives -- 100% Auto- Subject to Industrial License PN 4/2006
Manufacture matic under Industries
(Development & Regulation)
Act, 1951 (65 of 1951) and
regulations under Explosives
Act, 1884 (4 of 1884)
17. Insurance 26% Auto- Subject to Licensing by the PN 10/2000
matic Insurance Regulatory & De-
velopment Authority
www.irda.nic.in
28[18. Investing companies in 100% FIPB Where there is a prescribed PN 2/2000 & PN
infrastructure/ services cap for Foreign investment, 5/2005
sector (except telecom only the direct investment
sector) will be considered for the pre-
Page 260
scribed cap and foreign in-

vestment in an investment
company will not be set off
against this cap provided the
foreign direct investment in
such investing company does
not exceed 49% and the man-
agement of the investing com-
pany is with the Indian own-
ers
19. Mining covering ex- 100% Auto- Subject to Mines and Miner- PN 2/2000 PN 3/2005
ploration and mining of matic als (Regulation and Develop- & PN 4/2006
diamonds & precious ment) Act, 1957 (67 of 1957)
stones; gold, silver and www.mines.nic.in Press Note
minerals. 18 (1998) and Press Note 1
(2005) are not applicable for
setting up 100% owned subsi-
diaries in so far as the mining
sector is concerned, subject to
a declaration from the applic-
ant that he has no existing
joint venture for the same
area and/or the particular min-
eral.
20. Non-Banking Finance 100% Auto- Subject to : a. Minimum cap- PN 2/2000, PN 6/2000
Companies -- Approved matic italization norms for fund & PN 2/2001
activities based NBFCs--US$ 0.5 mil-
lion to be brought upfront for
FDI up to 51%; US$ 5 million
to be brought upfront for FDI
above 51% and up to 75%;
and US$ 50 million out of
which US$ 7.5 million to be
brought upfront and the bal-
ance in 24 Months for FDI
beyond 75% and up to 100%.
b. Minimum capitalization
norms for non-fund based
NBFC activities--US$ 0.5
million. c. Foreign investors
can set up 100% operating
subsidiaries without the con-
dition to disinvest a minimum
of 25% of its equity to Indian
entities subject to bringing in
US$ 50 million without any
restriction on number of oper-
ating subsidiaries without
bringing additional capital. d.
Page 261
(i) Merchant Banking Joint venture operating

NBFC's that have 75% or less
(ii) Underwriting than 75% foreign investment
(iii) Portfolio Management will also be allowed to set up
Services subsidiaries for undertaking
(iv) Investment Advisory other NBFC activities subject
Services to the subsidiaries also com-
plying with the applicable
(v) Financial Consultancy minimum capital inflow. e.
(vi) Stock Broking Compliance with the
(vii) Asset Management Guidelines of the RBI.
(viii) Venture Capital

(ix) Custodial Services
(x) Factoring
(xi) Credit Reference Agen-
cies
(xii) Credit Rating Agencies
(xiii) Leasing & Finance
(xiv) Housing Finance
(xv) Forex Broking
(xvi) Credit card business
(xvii) Money chaning busi-
ness
(xviii) Micro credit
(xix) Rural credit
21. Petroleum & Natural
Gas Sector
a. Other than Refining and 100% Auto- Subject to Sectoral regula- PN 1/2004 & PN
including market study matic tions issued by Ministry of 4/2006
and formulation; invest- Petroleum & Natural Gas; and
ment/financing; setting in the case of actual trading
up infrastructure for and marketing of petroleum
marketing in Petroleum products, divestment of 26%
& Natural Gas Sector. equity in favour of Indian
partner/public within 5 years.
www.petroleum.nic.in
b. Refining 26% in case of FIPB Subject to Sectoral policy PN 2/2000
PSUs (in case www.petroleum.nic.in
of
PSUs)
100% in case of Auto-
Private Compan- matic
ies (in case
of
Page 262
Private
Com-
panies)
22. Print Media--
a. Publishing of newspa- 26% FIPB Subject to Guidelines Noti-
per and periodicals fied by Ministry of Informa-
dealing with news and tion & Broadcasting.
current affairs www.mib.nic.in
b. Publishing of scientific 100% FIPB Subject to Guidelines issued PN 1/2004
magazines/ speciality by Ministry of Information
journals/ periodicals and Broadcasting. www.
mib.nic.in
23. Power including gener- 100% Auto- Subject to provisions of the PN 2/1998, PN 7/2000
ation (except Atomic matic Electricity Act, 2003 (36 of & PN 4/2006
energy); transmission, 2003) www.powermin.nic.in
distribution and Power
Trading
24. Tea Sector, including 100% FIPB Subject to divestment of 26% PN 6/2002
tea plantation equity in favour of Indian
partner/Indian public within 5
years and prior approval of
State Government for change
in land use.
25. Telecommunication
a. Basic and cellular, Uni- 74% (including Auto- Subject to Guidelines notified PN 5/2005
fied Access Services, FDI, FII, NRI, matic in the PN 5 (2005 Series)
National/ International FCCBs, ADRs, upto
Long Distance, V-Sat, convertible pref- 49%
Public Mobile Radio erence shares, and FIPB
Trunked Services proportionate for- beyond
(PMRTS), Global Mo- eign equity in In- 49%
bile Personal Commu- dian promoters/In-
nications Services vesting Company)
(GMPCS) and other
Value Added Telecom
Services
b. ISP with gateways, ra- 74% Auto- Subject to Licensing and se- PN 4/2001
diopaging, end-to-end matic curity requirements Notified
bandwidth. up to by the Department of Tele-
49% communications
FIPB www.dotindia.com
beyond
49%
29[c. (a) ISP without gate- 100% Auto- Subject to the condition that PN 9/2000
way; (b) infrastructure matic such Companies shall divest
provider providing dark upto 26% of their equity in favour
fibre, right of way, duct 49% of Indian public in 5 years, if
Page 263
space, tower FIPB these Companies are listed in

(Category-I); (c) elec- beyond other parts of the world. Also
tronic mail and voice 49% subject to licensing and secur-
mail ity requirements, where re-
quired. www.dotindia.com
d. Manufacture of telecom 100% Auto- Subject to Sectoral require- PN 2/2000
equipments matic ments. www.dotindia.com
26. Trading
a. Wholesale/cash & carry 100% Auto- Subject to Guidelines for FDI PN 4/2006
trading matic in trading issued by Depart-
b. Trading for exports 100% Auto- ment of Industrial Policy &
matic Promotion vide Press Note 3
(2006 Series)
c. Trading of items 100% FIPB
sourced from small
scale sector
d. Test marketing of such 100% FIPB
items for which a com-
pany has approval for
manufacture
e. Single Brand product 51% FIPB
retailing
27. Satellites- 74% FIPB
-Establishment and op- Subject
eration to Sec-
toral
Guideli
nes is-
sued by
Depart-
ment of
Space/
ISRO
www.is
ro.org
28. Special Economic Subject to Special Economic PN 9/2000; PN 2/2006;
Zones and Free Trade Zones Act, 2005 (28 of 2005) & PN 4/2006.?
Warehousing Zones and the Foreign Trade Policy.
covering setting up of www.sezindia.nic.in
these Zones and setting
up Units in the Zones
[ Press Note No. 4 (2006 series) (F. No. 5(3)/2005-FC), Issued by Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy and Promotion (DIPP) (FC Section), dated 10-2-2006 : (2006) 130 Comp.
Cas. (St.) 2 : D/o IPP (DIPP) website www.dipp.gov.in].
Guidelines for FDI in Retail Trade of ?Single Brand? Products.--?The Government has decided to allow FDI up to
Page 264
51%, with prior Government approval, in retail trade of ?Single Brand? products. This is, inter alia, aimed at attracting
investments in production and marketing, improving the availability of such goods for the consumer, encouraging
increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global
designs, technologies and management practices.
2. FDI up to 51% in retail trade of ?Single Brand? products would be subject to the following conditions:
(i) Products to be sold should be of a ?Single Brand? only.
(ii) Products should be sold under the same brand internationally.
(iii) ?Single Brand? product-retailing would cover only products which are branded during
manufacturing.
3. FDI would be allowed only with prior approval of the Government. Application seeking permission of
the Government for FDI in retail trade of ?Single Brand? products would be made to the Secretariat for
Industrial Assistance (SIA) in the Department of Industrial Policy and Promotion. The application would
specifically indicate the product/ product categories which are proposed to be sold under a ?Single
Brand?. Any addition to the product/product categories to be sold under ?Single Brand? would require a
fresh approval of the Government.
4. Applications would be processed in the Department of Industrial Policy and Promotion, to determine
whether the products proposed to be sold satisfy the notified Guidelines, before being considered by the
FIPB for Government approval.
5. These Guidelines would come into force with immediate effect.? [ Press Note 3 (2006 Series) (F. No.
5(3)/2005-FC), dated 10-2-2006, Issued by the Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy and Promotion (FC Section), New Delhi : (2006) 130 Comp.
Cas. (St.) 1 : D/o IPP website http://www.dipp.gov.in].
Guidelines for FDI in Retail Trade of ?Single Brand? Products--Clarifications.--?Government allowed FDI up to 51
per cent. in single brand product retailing vide Press Note No. 3 (2006 Series) [ printed above] subject to the following
conditions:
(i) Products to be sold should be of a ?single brand? only.

(ii) Products should be sold under the same brand internationally.
(iii) ?Single brand? product-retailing would cover only products which are branded during manufacturing.
2. It is hereby clarified that products ?sold under the same brand internationally? would mean that the products are sold
under the same brand in one or more Countries other than India.? [ Press Note (F. No. 5(3)/2005-FC), dated
22-11-2007, Issued by the Government of India, Ministry of Commerce and Industry, Department of Industrial Policy
and Promotion (FC Section), New Delhi : DIPP website http://www.dipp.gov.in : (2007) 140 Comp. Cas. (St.) 42].
Enhancement of the Foreign Direct Investment ceiling from 49 per cent to 74 per cent in the Telecom
Sector--Revised guidelines.--?The Government vide Press Note 5 (2005 Series), dated 3-11-2005, had notified the
enhancement of Foreign Direct Investment (FDI) limits from 49 per cent. to 74 per cent. in certain Telecom services
subject to specified conditions.
2. The Government has on a review of the policy in this regard, decided to enhance the Foreign Direct
Investment limit from 49 per cent. to 74 per cent. in Telecom services subject to the following
conditions:
A. Foreign Direct Investment (FDI) :
(i) The enhancement of the FDI ceiling will be applicable in case of Basic, Cellular, Unified
Access Services, National/International Long Distance, V-Sat, Public Mobile Radio
Trunked Services (PMRTS), Global Mobile Personal Communications Services
(GMPCS) and other value added services.
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(ii) Both direct and indirect foreign investment in the licensee company shall be counted for
the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign
Institutional Investors (FIIs), Non-Resident Indians (NRIs), Foreign Currency Convertible
Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts
(GDRs) and convertible preference shares held by Foreign entities. Indirect foreign
investment shall mean foreign investment in the company/companies holding shares of
the licensee company and their holding company/companies or legal entities (such as
mutual funds, trusts) on proportionate basis. Shares of the licensee company held by
Indian public sector banks and Indian public sector financial institutions will be treated as
?Indian holding?. In any case, the ?Indian? shareholding will not be less than 26 per cent.
(iii) FDI up to 49 per cent. will continue to be on the automatic route. FDI in the licensee
company/Indian promoters/investment companies including their holding companies,
shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a
bearing on the overall ceiling of 74 per cent. While approving the investment proposals,
FIPB shall take note that investment is not coming from Countries of concern and/or
unfriendly entities.
(iv) The investment approval by FIPB shall envisage the conditionality that the Company
would adhere to the Licence Agreement.
(v) FDI shall be subject to laws of India and not the laws of the Foreign Country/Countries.
B. Security conditions :
(i) The Chief Officer incharge of technical network operations and the Chief Security Officer
should be a resident Indian citizen.
(ii) Details of infrastructure/network diagram (technical details of the network) could be
provided on a need basis only to Telecom equipment suppliers/manufacturers and the
affiliate/parents of the licensee company. Clearance from the licensor (Department of
Telecommunications, Government of India) would be required if such information is to be
provided to anybody else.
(iii) For security reasons, domestic traffic of such entities as may be identified/specified by the
licensor shall not be hauled/routed to any place outside India.
(iv) The licensee company shall take adequate and timely measures to ensure that the
information transacted through a network by the subscribers is secure and protected.
(v) The Officers/Officials of the Licensee Companies dealing with the lawful interception of
messages will be resident Indian citizens.
(vi) The majority Directors on the Board of the company shall be Indian citizens.
(vii) The positions of the Chairman, Managing Director, Chief Executive Officer (CEO) and/or
Chief Financial Officer (CFO), if held by foreign nationals, would require to be security
vetted by the Ministry of Home Affairs (MHA). Security vetting shall be required
periodically on yearly basis. In case something adverse is found during the security
vetting, the direction of the MHA shall be binding on the licensee.
(viii) The company shall not transfer the following to any person/place outside India:
(a) Any accounting information relating to subscriber (except for international
roaming/billing) (Note : it does not restrict a statutorily required disclosure of
financial nature); and
(b) User information (except pertaining to foreign subscribers using Indian operator's
network while roaming).
(ix) The company must provide traceable identity of their subscribers. However, in case of
providing service to roaming subscribers of Foreign Companies, the Indian company shall
endeavour to obtain traceable identity of roaming subscribers from the Foreign Company
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as a part of its roaming agreement.

(x) On request of the licensor or any other agency authorised by the licensor, the Telecom
service provider should be able to provide the geographical location of any subscriber
(BTS location) at a given point of time.
(xi) The Remote Access (RA) to network would be provided only to approved location(s)
abroad through approved location(s) in India. The approval for location(s) would be given
by the licensor (DOT) in consultation with the security agencies (IB).
(xii) Under no circumstances, should any RA to the suppliers/manufacturers and affiliate(s) be
enabled to access Lawful Interception System (LIS), Lawful Interception Monitoring
(LIM), call contents of the traffic and any such sensitive sector/data, which the licensor
may notify from time to time.
(xiii) The licensee company is not allowed to use remote access facility for monitoring of
content.
(xiv) Suitable technical device should be made available at Indian end to the designated
security agency/licensor in which a mirror image of the remote access information is
available on line for monitoring purposes.
(xv) Complete Audit Trail of the remote access activities pertaining to the network operated in
India should be maintained for a period of six months and provided on request to the
licensor or any other agency authorised by the licensor.
(xvi) The Telecom service providers should ensure that necessary provision
(hardware/software) is available in their equipment for doing the lawful interception and
monitoring from a centralised location.
(xvii) The Telecom service providers should familiarize/train Vigilance Technical Monitoring
(VTM)/security agency officers/officials in respect of relevant operations/ features of their
systems.
(xviii) It shall be open to the licensor to restrict the licensee company from operating in any
sensitive area from the national security angle.
(xix) In order to maintain the privacy of voice and data, monitoring shall only be upon
authorisation by the Union Home Secretary or Home Secretaries of the States/Union
Territories.
(xx) For monitoring traffic, the licensee company shall provide access of their network and
other facilities as well as to Books of Account to the security agencies.
(xxi) The aforesaid security conditions shall be applicable to all the licensee companies
operating Telecom services covered under this Press Note irrespective of the level of FDI.
(xxii) Other Service Providers (OSPs), providing services like Call Centres, Business Process
Outsourcing (BPO), tele-marketing, tele-education, etc., and are registered with DOT as
OSP. Such OSPs operate the service using the Telecom infrastructure provided by
licensed Telecom service providers and 100 per cent FDI is permitted for OSPs. As the
security conditions are applicable to all licensed Telecom service providers, the security
conditions mentioned above shall not be separately enforced on OSPs.
3. The conditions at paragraph 2 above shall also be applicable to the existing companies operating
Telecom service(s) with the FDI cap of 49 per cent.
4. The relevant provisions of FDI policy for ?investment companies?, as given in Press Note No. 2 (2000
Series), dated February 11, 2000, issued by Department of Industrial Policy and Promotion will no
longer be applicable to Telecom sector.
5. Press Note No. 15 (1998 Series) and Press Note No. 2 (2000 Series) issued by Department of Industrial
Policy and Promotion stand modified to the above extent.
6. An unconditional compliance to the aforesaid conditions shall be submitted by the existing Telecom
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service providers to the licensor within 3 months from date of the Press Note and, thereafter, compliance
report shall be submitted on 1st day of July and January on six monthly basis.
7. Press Note No. 5 (2005 Series), dated November 3, 2005, stands superseded by this Press Note.? [ Press
Note No. 3 (2007 Series) [F. No. 12/2/2006-FC], dated 19-4-2007 : Issued by the Government of India,
Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, SIA (FC Division),
New Delhi : (2007) 137 Comp. Cas. (St.) 4 : D/o IPP website www.dipp.gov.in].
FDI in Agriculture and Real Estate : Clarification.--?Government has rationalized the FDI Policy vide Press Note No.
4 (2006 Series), dated February 10, 2006 [ printed above]. It has now been brought to the notice of the Government that
the policy on FDI in Agriculture and Real Estate requires further clarification.
2. It is hereby clarified that the extant Policy with regard to Agriculture and Plantation Sector is as under:
(a) FDI up to 100 per cent. is permitted under the automatic route in the under mentioned activities,
viz., floriculture, horticulture, development of seeds; animal husbandry; pisciculture;
acquaculture; cultivation of vegetables; mushrooms under controlled conditions and services
related to Agro and allied sectors.
(b) FDI up to 100 per cent. with prior Government approval is permitted in Tea plantation subject to
the conditions of divestment of 26 per cent. equity of the company in favour of an Indian
partner/Indian public within a period of five years; and prior approval of the State Government
concerned in case of any future land use change.
(c) Besides the above two, FDI is not allowed in any other Agricultural sector/activity.
3. It is further clarified that apart from the permitted activities indicated at Serial No. 11 of Section IV of
the Annex to Press Note No. 4 (2006) [ printed above], FDI is not permitted in any other activity in the
Real Estate sector.? [ Press Note F. No. 5(3) 2005-FC, dated 12-7-2006 : Issued by the Government of
India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (DIPP), SIA
(FC Division), New Delhi : (2006) 132 Comp Cas (St.) 13].
FDI policy Changes--Press Release, dated 30-1-2008--Review of Foreign Direct Investment (FDI) Policy for
further liberalization.--?The Union Cabinet today reviewed and approved the FDI policy for further liberalization as
follows:
I. Civil Aviation
(i) To continue with the existing FDI cap at 49% on the automatic route and 100% for NRI, subject
to no direct or indirect participation by Foreign Airlines and reclassifying it as Domestic
Scheduled Passenger Airline Sector.
(ii) To allow FDI up to 74% on the automatic route for Non Scheduled Airlines; Chartered Airlines;
and Cargo Airlines with no direct or indirect participation by Foreign Airlines in Non-Scheduled
Airlines and Chartered Airlines. NRI investment would be allowed up to 100% on the automatic
route.
(iii) To allow FDI up to 74% on the automatic route for Ground Handling Services subject to Sectoral
regulations and security clearance. NRI investment would be allowed up to 100% on the
automatic route.
(iv) To allow FDI up to 100% on the automatic route for Maintenance and Repair organizations;
Flying training institutes; Technical training institutions; and Helicopter services/Seaplane
services in the aviation sector requiring DGCA approval.
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II. Petroleum & Natural Gas

(i) To delete the condition of compulsory divestment of up to 26% equity in favour of Indian
partner(s)/public within 5 years for actual trading and marketing of petroleum products.
(ii) To increase the equity cap from 26% to 49% with prior approval of FIPB in petroleum refining
by PSUs. However, it does not envisage or contemplate disinvestment or dilution in the existing
PSUs.
III. Commodity Exchanges

(a) To allow FDI upto 26% and FII upto 23% in Commodity Exchanges and subject to no single
investor holding more than 5%.
IV. Credit Information Companies

(i) To allow Foreign Investment up to 49% with prior Government approval in Credit Information
Companies subject to following conditions:
(a) FDI up to 49% will be allowed with specific approval of the Government and regulatory
clearance from RBI.
(b) FII investment will be permitted up to 24% only in the CICs listed at the Stock
Exchanges, within the overall limit of 49% for Foreign investment.
(ii) To delete ?Credit Reference Agencies? from the list of Non Banking Finance Companies (NBFC)
activities permitted for FDI up to 100% on the automatic route.
V. FDI in Mining of Titanium bearing Minerals and Ores and its value addition
(i) To allow FDI up to 100% with prior Government approval in Mining and mineral separation of
titanium bearing minerals and ores, its value addition and integrated activities subject to the
Sectoral regulations [including Mines and Minerals (Development and Regulation) Act, 1957 (67
of 1957)] and the following conditions for mineral separation:
(a) FDI up to 100% shall be allowed for mineral separation only if value addition facilities
are set up within India along with transfer of technology;
(b) Disposal of tailings during the mineral separation shall be carried out in accordance with
regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy
(Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive
Wastes) Rules, 1987.
VI Industrial Parks
Clarifications will be issued that provisions of Press Note 2 (2005) would not apply to Industrial Parks.
VII. Applicability of conditions for FDI in Construction Development Projects as per Press Note 2
(2005) for registered FIIs
To issue a clarification to the effect that investments by registered FIIs under the Portfolio Investment Scheme,
would be distinct from FDI and as such would be outside the purview of conditionalities specified in Press Note
2 (2005).
The approval would help in higher FDI inflows through liberalization of the FDI policy and reduction of levels of
approvals, which are no longer worthwhile.? [ PIB Press Release, dated 30-1-2008 : http://www.pib.nic.in].
Page 269
Foreign Direct Investment Policy, 2006.-- See Foreign Direct Investment Policy, published by the Department of
Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India, April 2006 Edition
: Department of Industrial Policy and Promotion (DIPP) website www.dipp.gov.in.
Relevant Press Notes on Foreign Direct Investment (FDI) have been dealt with above. See also Foreign Direct
Investment (FDI) Policy and relevant Press Notes on FDI issued from time to time in Appendices.
FDI Policy at DIPP website [ www.dipp.gov.in].-- See also the Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy and Promotion (DIPP) website http://www.dipp.gov.in.
Manual for FDI at DIPP website.--Manual for FDI brought out by the Department of Industrial Policy and Promotion
(DIPP) provides details about FDI Policy and Procedures and is available at following website:
Website: http://www.dipp.nic.in or http://www.dipp.gov.in
URL: http://www.dipp.nic.in/manual/fdi-manual-11-2006.pdf.
Sectoral policy/equity caps.--Sectoral policy/equity caps in certain sectors can be seen in the Manual for FDI in
Annexure II at above website.
All Press Notes of Department of Industrial Policy and Promotion (DIPP) that provide details about FDI policy are
available at Secretariat for Industrial Assistance in Department of Industrial Policy and Promotion, Government of India
website:
http://siadipp.nic.in/policy/changes.htm.
FDI policy notified by RBI.--FDI policy is also notified by Reserve Bank of India (RBI) under Foreign Exchange
Management Act (FEMA) and can be seen at:
RBI website: http://www.rbi.org.in.
Procedure under automatic route.--FDI in sectors/activities to the extent permitted under automatic route does not
require any prior approval either by the Government or RBI. The investors are only required to notify the Regional
Office concerned of RBI within 30 days of receipt of inward remittances and file the required documents with that
office within 30 days of issue of shares of Foreign Investors.
Procedure under Government Approval.--FDI in activities not covered under the automatic route require prior
Government approval.
Approvals of all such proposals including composite proposals involving Foreign Investment/Foreign Technical
Collaboration is granted on the recommendations of Foreign Investment Promotion Board (FIPB).
Application for FDI.--Application for all FDI cases, except Non-Resident Indian (NRI) investments and 100% Export
Oriented Units (EOUs), should be submitted to the FIPB Unit, Department of Economic Affairs (DEA), Ministry of
Finance.
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Application for NRI and 100% EOU.--Application for NRI and 100% EOU cases should be presented to SIA in
Department of Industrial Policy and Promotion.
EOUs-EPZs-SEZs-EHTPs-STPs.-- See List of Press Notes and Press Releases relating to Export Oriented Units
(EOUs), Export Promotion Zone (EPZ)/100% Export Oriented Units (EOUs) schemes, Trade Policy of GoI, Approvals
for setting up units in the Electronics Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and
Special Economic Zones (SEZs) on the SIA, DIPP website:
http://siadipp.nic.in/policy/changes.htm.
Industrial Licensing.--With progressive liberalization and deregulation of the economy, industrial license is required in
very few cases. Industrial Licences are regulated under the Industries (Development and Regulation) Act, 1951 (65 of
1951).
Application in Form FC-IL.--Application can be made in Form FC-IL. Plain paper applications carrying all relevant
details are also accepted. No fee is payable.
The guidelines for consideration of Foreign Direct Investment (FDI) proposals by the FIPB are at Annexure-III of the
Manual for FDI.
Download Forms.--Form FC-IL--COMPOSITE FORM FOR FOREIGN COLLABORATION AND INDUSTRIAL

LICENCE can be downloaded from:
Form FC-IL : http://siadipp.nic.in/download/il-form.doc
IEM Form : http://siadipp.nic.in/policy/policy/ip202.htm
Manual for FDI : http://www.dipp.nic.in/manual/fdi-manual-11-2006.pdf.
General permission of RBI under FEMA.--Indian Companies having foreign investment approval through FIPB route
do not require any further clearance from the RBI for receiving inward remittance and issue of shares to the foreign
investors.
The companies are required to notify the concerned Regional Office of the RBI of receipt of inward remittances within
30 days of such receipt and within 30 days of issue of shares to the Foreign Investors or NRIs.
Small Scale Sector.--The Ministry of Agro and Rural Industries and the Ministry of Small Scale Industries (SSI) have
been merged into a single Ministry, namely, Ministry of Micro, Small and Medium Enterprises (MSME).
Micro, Small and Medium Enterprises (MSME).-- See the Ministry of Micro, Small and Medium Enterprises
(MSME) website: http://www.msme.gov.in/.
Guidelines for Approval of Foreign/Technical Collaborations.--The Government of India, Ministry of Commerce

and Industry, Department of Industrial Policy and Promotion (DIPP) after reviewing the earlier Guidelines notified vide
Press Note 18 (1998 series) issued fresh Guidelines for new proposals for Foreign Investment/Technical Collaboration
under the automatic route, subject to Sectoral policies, which shall be considered as per the following Guidelines:
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DIPP Circulars and Press Notes.-- Guidelines pertaining to Approval of Foreign/Technical Collaborations under
the Automatic Route with previous Ventures/Tie-up in India.--?The Government has reviewed the Guidelines notified
vide Press Note 18 (1998 series) which stipulated approval of the Government for new proposals for foreign
investment/technical collaboration where the foreign investor has or had any previous joint venture or technology
transfer/trademark agreement in the same or allied field in India.
2. New proposals for foreign investment/technical collaboration would henceforth be allowed under the
automatic route, subject to Sectoral policies, as per the following guidelines:
(i) Prior approval of the Government would be required only in cases where the foreign investor has
an existing joint venture or technology transfer/trademark agreement in the ?same? field. The
onus to provide requisite justification as also proof to the satisfaction of the Government that the
new proposal would or would not in any way jeopardize the interests of the existing joint venture
or technology/trademark partner or other stakeholders would lie equally on the foreign
investor/technology supplier and the Indian partner.
(ii) Even in cases where the foreign investor has a joint venture or technology transfer/trademark
agreement in the ?same? field prior approval of the Government will not be required in the
following cases:
(a) Investments to be made by Venture Capital Funds registered with the Securities and
Exchange Board of India (SEBI); or
(b) where in the existing joint-venture investment by either of the parties is less than 3%; or
(c) where the existing venture/collaboration is defunct or sick.
(iii) In so far as joint ventures to be entered into after the date of this Press Note are concerned, the
joint venture agreement may embody a ?conflict of interest? clause to safeguard the interests of
joint venture partners in the event of one of the partners desiring to set up another joint venture or
a wholly owned subsidiary in the ?same? field of economic activity.
3. These Guidelines would come into force with immediate effect.? [ Press Note No. 1 (2005 Series), (F.
No. 8/1/2003-FC (Pt.), dated 12-1-2005, Issued by the Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy & Promotion, Secretariat for Industrial Assistance : (2005) 123
Comp. Cas. (St.) 122 : DIPP website www.dipp.gov.in].
Conversion of NRI investment into repatriable equity.--Recent Press Note No. 4 (2005 Series), dated 31-8-2005,
issued by the Government of India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion
(DIPP) reviewing its earlier Guidelines is reproduced below:
DIPP Circulars and Press Notes.-- Conversion of NRI non-repatriable investment into repatriable equity.--? Vide
Press Note No. 4 (2001 Series), investment by Non-Resident Indians (NRI) made in Foreign Exchange on
non-repatriable basis was allowed to be made fully repatriable whereas investment made in Indian rupees through
Rupee account continued to remain non-repatriable.
2. Proposals for conversion of NRI investment into repatriable equity are hitherto being considered by the
Foreign Investment Promotion Board (FIPB) for approval. This procedure has been reviewed in the
context of various liberalisation measures taken by the Government in the recent past.
3. It is clarified that in terms of Press Note No. 4 (2001 Series), all proposals would qualify for conversion
of non-repatriable equity into repatriable equity under the automatic route provided:
(a) the original investment by the NRI was made in Foreign Exchange under the FDI Scheme
(Schedule I of FEMA Regulations 20/2000, dated 3-5-2000) [ the Foreign Exchange
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Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations,

2000]; and
(b) the sector/activity in which the investment is proposed to be converted into repatriable equity is
on the automatic route for FDI.?
[ Press Note No. 4 (2005 Series), dated 31-8-2005, Issued by the Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy and Promotion (DIPP) (SIA) (FC Section), New Delhi : (2005) 127 Comp.
Cas. (St.) 39 : D/o IPP website http://www.dipp.gov.in].
SEBI Circulars and Press Notes.-- Foreign Investments in Infrastructure Companies in Securities Markets.--
?1. The Government of India has decided to have the following policy regarding foreign investments in
infrastructure companies in the Securities Markets, namely, Stock Exchanges, Depositories and Clearing
Corporations:
(a) Foreign investment upto 49% will be allowed in these companies with a separate Foreign Direct
Investment (FDI) cap of 26% and Foreign Institutional Investment (FII) cap of 23%;
(b) FDI will be allowed with specific prior approval of FIPB;
(c) FII will be allowed only through purchases in the secondary market;
(d) FII shall not seek and will not get representation on the Board of Directors;
(e) No Foreign Investor, including persons acting in concert, will hold more than 5% of the equity in
these companies.
2. Necessary Amendments to the respective Regulations are being issued separately by SEBI and RBI in
this regard.
3. The aforesaid limits for Foreign Investment in respect of Recognised Stock Exchanges shall be subject to
the limit of 5% shareholding by any person, directly or indirectly, as prescribed under the Securities
Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock
Exchanges) Regulations, 2006.
4. This Circular is being issued for information and necessary compliance by the concerned entities.? [
SEBI Circular No. MRD/DSA/SE/Dep/Cust/Cir-23/06, dated 22-12-2006 : Addressed to (1) All Stock
Exchanges, (2) All Depositories, and (3) All Custodians of Securities : Issued by the SEBI, Market
Regulation Department : Chartered Secretary, January 2007, page 91 : (2007) 135 Comp. Cas. (St.) 21 :
Securities and Exchange Board of India (SEBI) website http://www.sebi.gov.in].
Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised
Stock Exchanges) Regulations, 2006.-- See the Securities Contracts (Regulation) (Manner of Increasing and
Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006? referred to in the foregoing SEBI
Circular in Appendices.
Guidelines for Foreign Investment in preference shares (Revised 30-4- 2007).--?In supersession of Press Note (F.
No. 17/3/97-NRI), dated July 31, 1997, containing the Guidelines for Indian Companies for mobilizing Foreign
Investment through issue of preference shares for financial projects/industries, the following Guidelines are prescribed
with immediate effect:
(1) Foreign investment coming as fully convertible preference shares would be treated as part of share
capital. This would be included in calculating foreign equity for purposes of sectoral caps on foreign
equity, where such caps have been prescribed.
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(2) Foreign investment coming as any other type of preference shares (non-convertible, optionally
convertible or partially convertible) would be considered as debt and shall require conforming to ECB
Guidelines/ECB caps.
Any Foreign Investment as non-convertible or optionally or partially convertible preference shares as on and up to
today (April 30, 2007), would continue to be outside the sectoral cap till their current maturity.
Issue of preference shares of any type would continue to conform to the Guidelines of RBI/SEBI and other Statutory
bodies and would be subject to all Statutory requirements.? [ Press Note, dated 30-4-2007 : Issued by the Department of
Economic Affairs, Ministry of Finance, New Delhi : (2007) 137 Comp. Cas. (St.) 20].
Guidelines for Foreign Investment in preference shares (Press Note, dated 26-6-2007).--Revised guidelines for
foreign investment in preference shares were issued vide Press Note of April 30, 2007 [ printed above], in supersession
of the earlier Press Note dated July 31, 1997. The implication of this revision is that foreign investment coming as fully
convertible preference shares would be treated as part of share capital, while other types of preference shares, namely,
non-convertible, optionally convertible, shall be required to conform to ECB Guidelines/ECB Caps.
Government has received several representations that the revision of these guidelines has adversely affected the
business plans of entities that were at an advanced stage of issuing preference shares.
Government has examined the representations and has decided that in respect of such Institutions/Corporate/Companies
which have been taken verifiable and effective steps prior to April 30, 2007; exemption could be granted from the
purview of the revised guidelines announced in the Press Note of 30-04-2007.
To be eligible for such exemptions, the Institution/Corporate should have taken verifiable and effective steps.
?Verifiable steps? would be actions that have foot-prints in public domain and hence verifiable with reference to these
foot prints. ?Effective steps? would be actions that go beyond simple intention to act and should be such that they bind
the parties conclusively. Such cases would cover the following:
(a) Action under Section 81(1A) of the Companies Act, 1956, should have been taken prior to April 30,
2007.
(b) Application for permission from the Government, where necessary, should have been received before
April 30, 2007.
Parties claiming benefit under the above exemption should complete the process of issuing the shares and receipt of
money in lieu of issue of such shares by July 31, 2007. [ Press Note, dated 26-6-2007, Issued by the Government of
India, Ministry of Finance : (2007) 138 Comp. Cas. (St.) (Part 1) (Back Cover)].
RBI Circulars.-- Issue of American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) by
Banks--Depository Agreement.--?In the recent past, some Banks have raised funds through issue of American
Depository/Global Depository Receipts. Under such a mechanism, banks issue shares to the Depositories who in turn
issue ADRs/GDRs to the ultimate investors. Banks generally enter into an agreement with the Depository to the effect
that the depository would not exercise voting rights in respect of the shares held by them or they would exercise voting
rights as directed by the Board of Directors of the bank.
2. The matter relating to exercise of voting rights by the Depositories has been examined by RBI from the
angle of Corporate Governance. In this context, banks are advised to furnish to Reserve Bank a copy
each of the depository agreements entered into by them with the depositories. Further, to eliminate
possibility of any interference of the depositories in the management of the bank, banks should give an
undertaking to Reserve Bank that:
(i) they would not give cognizance to voting by the Depository, should the depository vote in
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contravention of its agreement with the bank;

(ii) no change would be made in terms of the Depository Agreement without prior approval of RBI.?
[ RBI Circular Ref. DBOD. No. PSBD. 7269/16.13.100/2006-07, dated 5-2-2007 : Addressed to All Scheduled
Commercial Banks (excluding RRBs) : Chartered Secretary, March 2007, page 330 : (2007) 135 Comp. Cas. (St.) 494 :
Reserve Bank of India (RBI) website http://www.rbi.org.in].
See also Comments under Sections 55A and 605A.
Foreign Currency Convertible Bonds (FCCBs) and Ordinary Shares (Through Depositary Receipt
Mechanism)--Simultaneous offering in domestic and ADR/GDR markets--SEBI's approval.--Paragraph 5(4)(cc) of
the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme,
1993* inserted by the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt
Mechanism) (Amendment) Scheme, 2005 provides as follows:
The companies going in for an offering in the domestic market and a simultaneous or immediate follow on offering
(within 30 days of domestic issue) through ADR/GDR issues wherein GDRs/ADRs are priced at or above the domestic
price, would be exempt from the requirement given at (ca)(i) and (ii). Companies going for such simultaneous or
immediate follow on offering in the ADR/GDR market will have to take SEBI's approval for such issue, which will
specify the percentage to be offered in the domestic and ADR/GDR markets.
[The Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism)
(Amendment) Scheme, 2005 videNotification No. G.S.R. 671(E), dated 17-11-2005, published in the Gazette of India,
Extraordinary, No. 463, Part II, Section 3(i) : (2005) 128 Comp. Cas. (St.) 106].
Guidelines pertaining to Approval of Foreign/Technical Collaborations under the Automatic Route with
previous Ventures/Tie-up in India.--?The Government has reviewed the Guidelines notified vide Press Note 18 (1998
series) which stipulated approval of the Government for new proposals for foreign investment/technical collaboration
where the foreign investor has or had any previous joint venture or technology transfer/trademark agreement in the same
or allied field in India.
2. New proposals for foreign investment/technical collaboration would henceforth be allowed under the
automatic route, subject to sectoral policies, as per the following guidelines:
(i) Prior approval of the Government would be required only in cases where the foreign investor has
an existing joint venture or technology transfer/trademark agreement in the ?same? field. The
onus to provide requisite justification as also proof to the satisfaction of the Government that the
new proposal would or would not in any way jeopardize the interests of the existing joint venture
or technology/trademark partner or other stakeholders would lie equally on the foreign
investor/technology supplier and the Indian partner.
(ii) Even in cases where the foreign investor has a joint venture or technology transfer/trademark
agreement in the ?same? field prior approval of the Government will not be required in the
following cases:
(a) Investments to be made by Venture Capital Funds registered with the Securities and
Exchange Board of India (SEBI); or
(b) where in the existing joint-venture investment by either of the parties is less than 3%; or
(c) where the existing venture/collaboration is defunct or sick.
(iii) In so far as joint ventures to be entered into after the date of this Press Note are concerned, the
joint venture agreement may embody a ?conflict of interest? clause to safeguard the interests of
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joint venture partners in the event of one of the partners desiring to set up another joint venture or
a wholly owned subsidiary in the ?same? field of economic activity.
3. These guidelines would come into force with immediate effect.? [ Press Note No. 1 (2005 Series), (F.
No. 8/1/2003-FC (Pt.), dated 12-1-2005, Issued by the Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy & Promotion, Secretariat for Industrial Assistance : (2005) 123
Comp. Cas. (St.) 122 : DIPP website www.dipp.gov.in].
SEBI (Foreign Institutional Investors) Regulations, 1995.--In exercise of the powers conferred by section 30 of the
SEBI Act, 1992, the Board has made the SEBI (Foreign Institutional Investors) Regulations, 1995* which, inter alia,
provide for:
?Foreign Institutional Investor? [Regulation 2(f)]. ?Sub-account? [Reg. 2(k)]. Application for grant of certificate of
registration as Foreign Institutional Investor (FII) with the SEBI shall be in Form A of First Schedule [Regulation 3].
Applicability of SEBI (Criteria for Fit and Proper Person) Regulations, 2004 [Regulation 6A]. Certificate of registration
shall be in Form B of First Schedule [Regulation 7]. Payment of fees specified in the Second Schedule [Regulation 7].
Foreign Institutional Investor to abide by Code of Conduct as specified in Third Schedule [Regulation 7A]. Application
for registration as a sub-account shall contain particulars as specified in paragraph 5(b) of Form A [Regulation 12(3)].
Investment conditions and restrictions [Regulations 14 and 15]. General Obligations and responsibilities [Regulations
16 to 20]. Appointment of Compliance Officer [Regulation 19A]. Liability for action in case of default [Regulation 21].
Application for registration as FII in Form A (w.e.f. 21-8-2006).--Application for Grant of Certificate of Registration
as Foreign Institutional Investor (FII) pursuant to Regulation 3(2) shall be in Form A* in the First Schedule to the SEBI
(Foreign Institutional Investors) Regulations, 1995.
Application for registration as Sub-Account in Form AA (w.e.f. 21-8-2006).--Application for Grant of Certificate of
Registration as Sub-Account (SA) pursuant to Regulation 12(1) shall be in Form AA* in the First Schedule to the SEBI
(Foreign Institutional Investors) Regulations, 1995.
[Forms A and AA substituted for earlier Form A in the First Schedule to the SEBI (Foreign Institutional Investors)
Regulations, 1995 as amended by the SEBI (Foreign Institutional Investors) (Second Amendment) Regulations, 2006
videNotification No. S.O. 1332(E), dated 21-8-2006, published in the Gazette of India, Extraordinary, No. 923, Part II,
Section 3(ii), dated 21-8-2006 : (2006) 133 Comp. Cas. (St.) 11 : SEBI website http://www.sebi.gov.in].
FII or Sub-Account to deliver Securities in Demat Form (w.e.f. 9-1-2007).--A Foreign Institutional Investor (FII) or a
Sub-Account (SA), shall, subject to such instructions as may be issued by the Board [SEBI], deliver or cause to be
delivered only Securities in Dematerialized Form for settlement of its transactions undertaken on a Recognised Stock
Exchange, except in cases where the issuer of securities has not established connectivity with all Depositories registered
with the Board under the SEBI (Depositories and Participants) Regulations, 1996.
[Regulation 15(3)(d) of the SEBI (Foreign Institutional Investors) Regulations, 1995 as substituted by the SEBI
(Foreign Institutional Investors) (Amendment) Regulations, 2007 videNotification No. SEBI/LAD/DOP/1446/2007,
dated 8-1-2007, published in the Gazette of India, Extraordinary, No. 11, Part III, Section 4, dated 9-1-2007 : (2007)
135 Comp. Cas. (St.) 70 : SEBI website http://www.sebi.gov.in].
See detailed Comments and Lists of SEBI Act, Rules, Regulations and the SEBI (Disclosure and Investor Protection)
Guidelines, 2000 along with Appendix Numbers under Section 55A of the Companies Act, 1956 in this Book.
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SEBI Circulars/Press Notes.-- Registration/renewal of Foreign Institutional Investors and Sub-Accounts.--?The

Reserve Bank of India (RBI), vide A.P. (DIR Series) Circular No. 53, dated 17th December, 2003, has announced its
decision to do away with the requirement of obtaining clearance from the RBI and the SEBI separately. Henceforth,
authorized dealers have been allowed, through general permission, to open bank account (either in foreign currency
and/or in rupees) for an FII that has already been registered with the SEBI.
Accordingly, with a view to further streamlining the process of registration of FIIs, it has been decided that all
prospective FII applicants shall submit the fees as prescribed in the SEBI (Foreign Institutional Investor) Regulations,
1995, along with the application. Similarly, those FIIs/sub-accounts who wish to renew their registration shall also
submit the fees as prescribed in the SEBI (Foreign Institutional Investors) Regulations, 1995, along with the application
for renewal.
A copy of the circular is available at the web page ?Foreign Institutional Investors? on our website www.sebi.gov.in.
The custodians are requested to bring the contents of this circular to the notice of their FII clients.? [ SEBI Circular Ref.
IMD/FII/12/2004, dated 1-1-2004 : To All Foreign Institutional Investors and Custodians of Securities : (2004) 118
Comp. Cas. (St.) 224].
Enhancement in the limits on investments by FIIs.--?Foreign institutional investors registered with the SEBI are
permitted to invest subject to an aggregate investment limit of 24 per cent. of the issued and paid-up capital of an Indian
company. In terms of the Press Note dated 1st March, 2000, Indian companies were permitted to enhance the normal
aggregate portfolio investment limit from 24 per cent. to 40 per cent. under specified special procedure.
In his Budget Speech 2001-2002, the Finance Minister had announced an increase in the portfolio investment ceiling
applicable to Foreign Institutional Investors (FIIs). Pursuant to the announcement, Indian companies would henceforth
be permitted to raise the aggregate ceiling for FII portfolio investment from the normal level of 24 per cent. to 49 per
cent. of the issued and paid-up capital of an Indian company subject to compliance with the special procedure, viz. :
(a) Approval by the Board of Directors of the company to the enhanced limit up to 49 per cent.; and
(b) A special resolution passed by the general body of the company approving the enhanced limit up to 49
per cent.
Aggregate portfolio investment limits applicable to FIIs would continue to be independent of the portfolio investment
limits for NRIs/PIOs/OCBs as announced in the Press Note issued on 22nd June, 1998. All other requirements
governing FII portfolio investments would continue to be operative as before.
In terms of RBI Notification No. FEMA 41/2001-RB, dated March 2, 2001, the above provision has been made
effective from 2nd March, 2001.? [ PIB Press Release, dated 9-3-2001 : Issued by the Ministry of Finance, Department
of Economic Affairs, New Delhi : (2001) 105 Comp. Cas. (St.) 2].
See the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations,
2000 [ videRBI Notification No. FEMA 41/2001-RB, dated March 2, 2001].
See Press Notes on Rationalisation of Foreign Direct Investment (FDI) Policy reproduced above. See Comments on
Enhancement in the Limits on Investments by the FIIs and FDI under Sections 55A and 591 read with relevant
Appendices.
See detailed Comments and Lists of SEBI Act, Rules, Regulations, Guidelines, SEBI Circulars/Press Note, Guidelines
for Foreign Institutional Investors (FIIs), etc., along with Appendix Numbers under Section 55A.
Guidelines for Foreign Institutional Investors (FIIs).--As per Regulation 2(h) of the SEBI (Foreign Institutional
Investors) Regulations, 1995 ?Government of India Guidelines? means Guidelines dated September 14, 1992, issued by
Page 277
the Government of India for Foreign Institutional Investors, as amended from time to time.
See Guidelines for Foreign Institutional Investors (FIIs) and further Press Notes Amending/Enhancing limits on
investments by Foreign Institutional Investors (FIIs), Issued by the Government of India, Ministry of Finance,
Department of Economic Affairs (Investment Division), New Delhi, reproduced in Appendices.
List of Government and RBI Guidelines.-- See List of Government of India and RBI Guidelines and Schemes relating
to Capital Issues under Section 55A.
FIIs/Sub-Accounts investments in Debt Securities.--Recent SEBI Circular on debt investment limits for the
FII/Sub-Account investments in Government Securities and Corporate Debt and allocation of limits among debt and
general FIIs/Sub-Accounts is reproduced below:
SEBI Circulars and Press Notes.-- FII investments in Debt Securities.--?The rise in the cumulative debt investment
limits from US$ 1.75 billion to US$ 2 billion and US$ 0.5 billion to US$ 1.5 billion for FII/Sub-Account investments in
Government Securities and Corporate Debt, respectively was informed by SEBI videCircular No. IMD/FII/ 20/2006,
dated April 5, 2006. The allocation of limits among 100% debt and general 70:30 FIIs/Sub-Accounts was also informed
in the aforementioned Circular. Subsequently, the individual limits were informed to the 100% debt FIIs/Sub-Accounts.
Now, after having reviewed the utilization versus the allocation of the aforementioned limits allocated among the 100%
debt and 70:30 FIIs/Sub-Accounts, the following revised limits shall be applicable with immediate effect:
1. The limits of USD 2 billion and USD 1.5 billion will be allocated among the 100% debt and general
70:30 FIIs/Sub-Accounts in the following manner:
(Figures in USD bn)
Type of FIIs 100% debt 70:30 Total permissible limit
Existing limits
Govt. Securities/T-Bills 1.75 0.25 2.00
Corporate Debt 1.35 0.15 1.50
Total 3.50
Revised Limits
Govt. Securities/T-Bills 1.4 0.6 2.00
Corporate Debt 1.0 0.5 1.50
Total 3.50
2. The 70:30 FIIs/Sub-Accounts are free to invest till the total investment limit reaches USD 540 million
and USD 450 million in Government Securities and Corporate Debt, respectively. Thereafter, the
approvals for limit allocation shall be granted as per the procedure mentioned in our Circular No.
IMD/FII/16/2004, dated November 2, 2004 for the remaining amount of USD 60 million and USD 50
million, respectively maintained as head rooms.
3. Separate ?headrooms? of USD 55 million and USD 80 million will be maintained for investments by
100% debt FIIs/Sub-Accounts in Government Securities and Corporate Debt, respectively. These limits
shall be allocated among the 100% debt FIIs/Sub-Accounts on a first-come-first-serve basis and a time
limit of 7 days shall be provided to the respective applicant to utilize the limits requested, on the expiry
of which the permission shall lapse.
4. It may be noted that the investment limits allocated for Upper Tier II Instruments vide our Circular No.
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IMD/FII&C/23/2006, dated September 15, 2006 remain unchanged.

5. With a view to monitor the allocation and utilization of limits for Government and Corporate Debt and
Upper Tier II Instruments, the Custodians are advised to submit fortnightly Reports to SEBI in the
format enclosed in Annexure A [ see SEBI website]. Reports for each instrument type should be filed on
a separate spreadsheet and should be part of the same Excel workbook.
6. The Reports should be submitted at the following e-Mail-id: fii_debt@sebi.gov.in.
7. The Revised Individual Limits for investment in Government Securities and limits for Corporate Debt is
being advised to the 100% debt FIIs/Sub-Accounts separately.
A copy of this Circular is available at the web page ?F.I.I.? on our website www.sebi.gov.in. The Custodians are
requested to bring the contents of this Circular to the notice of their FII clients.? [ SEBI Circular No.
IMD/FII&C/23/2006, dated 14-12-2006 : Addressed to All Foreign Institutional Investors (FIIs), and Custodians of
Securities : Issued by the SEBI, FII & Custodian Division, Investment Management Department : Chartered Secretary,
January 2007, page 93 : Securities and Exchange Board of India (SEBI) website http://www.sebi.gov.in].
SEBI (Foreign Venture Capital Investors) Regulations, 2000.--In exercise of the powers conferred by section 30(1)
of the SEBI Act, 1992 (15 of 1992), the Board has made the SEBI (Foreign Venture Capital Investors) Regulations,
2000* which, inter alia, provide for the following matters:
?Foreign venture capital investor? [Regulation 2(g)]. ?Negative List? specified in Third Schedule [Regulation 2(j)].
?Venture capital fund? [Regulation 2(l)].
Registration of Foreign Venture Capital Investors [Regulations 3-10]. Application for grant of certificate as Foreign
Venture Capital Investor shall be made to the SEBI in Form A of First Schedule [Regulation 3]. Eligibility criteria
[Regulation 4]. Applicability of SEBI (Criteria for Fit and Proper Person) Regulations, 2004 [Regulation 4A].
Certificate of registration shall be in Form B [Regulation 7(3)]. Fees in Part A shall be paid in the manner specified in
Part B of Second Schedule [Regulations 3 and 7(2)].
Application and Registration Fees (w.e.f. 6-9-2006).--Part A of the Second Schedule to the SEBI (Foreign Venture
Capital Investors) Regulations, 2000 substituted (w.e.f. 6-9-2006) prescribes the following Fees:
Part A
Amount to be paid as fees

Application fee US$ 5,000
Registration fee US$ 20,000
[Part A of the Second Schedule to the SEBI (Foreign Venture Capital Investors) Regulations, 2000 as substituted by the
SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2006 videNotification No. S.O. 1443(E), dated
4-9-2006, published in the Gazette of India, Extraordinary, No. 996, Part II, Section 3(ii), dated 6-9-2006 : (2006) 133
Comp. Cas. (St.) 26 : SEBI website http://www.sebi.gov.in].
Investment conditions and restrictions [Regulation 11]. General obligations and responsibilities [Regulations 12 to 15],
Inspection and Investigations [Regulations 16 to 19]. Procedure for action in case of default [Regulations 20 to 23].
SEBI Circulars/Press Notes.-- Salient features of SEBI (Foreign Venture Capital Investors) Regulations,
2000.--?The SEBI had set up the K.B. Chandrasekhar Committee to identify the impediments in the development of
Page 279
venture capital industry in India and to suggest suitable measures for its rapid growth. The report of the Committee was
submitted to the SEBI in January, 2000. The recommendations of the Committee were widely discussed. The
recommendations were accepted in principle by the Government also and pursuant to the same, the Finance Minister in
the Budget 2000 announced that the SEBI will be the single point nodal agency for registration and regulation of both
domestic and overseas venture capital funds and SEBI-registered venture capital funds would be given total tax
pass-through.
One important recommendation of the Committee was also aimed at making a hassle free environment for investment
and disinvestment by Foreign Venture Capital Investors in India and it was proposed by the Committee that in the
manner of Foreign Institutional Investors (FIIs), Foreign Venture Capital Investors (FVCIs) should be provided a
facility of registration with SEBI which should enable them to make investments in India without specific investment
approvals from FIPB within the overall sectoral ceilings for foreign investment under the Statement of Industrial Policy
of the Government of India. Also such FVCIs should have hassle free exit without requiring pricing approval from RBI
based on the old CCI formula.
In the light of the recommendations of the SEBI Committee on venture capital and the budget announcements, the
Board of SEBI in its meeting held on September 14, 2000, has approved the SEBI (Venture Capital Funds)
(Amendment) Regulations, 2000, and also the SEBI (Foreign Venture Capital Investors) Regulations. 2000.
The salient features of SEBI (Venture Capital Funds) (Amendment) Regulations, 2000, the SEBI (Venture Capital
Funds) Regulations, 1996, and the SEBI (Foreign Venture Capital Investors) Regulations, 2000 ( have been reproduced
in Comments under Section 55A).? [ SEBI Press Release (Ref. PR-185/2000), dated 14-9-2000, Issued by the SEBI,
Mumbai : (2000) 102 Comp. Cas. (St.) 104].
See detailed Comments and SEBI Circulars under Section 55A.
Portfolio investment limits for NRIs/PIOs/OCBs.--See Press Notes, Issued by the Ministry of Finance, Department
of Economic Affairs, New Delhi from time to time reproduced in Appendices.
See detailed Comments and List of Government of India and RBI Guidelines and Schemes relating to Capital Issues in
Section 55A.
SEBI (Portfolio Managers) Regulations, 1993.--In exercise of the powers conferred by section 30 of the SEBI Act,
1992 (15 of 1992), the Board with the previous approval of the Central Government has made the SEBI (Portfolio
Managers) Regulations, 1993* which, inter alia, provide for:
Registration of Portfolio Managers [Regulations 3 to 12]. An application for the grant or renewal of certificate of
registration shall be made to the SEBI in Form A of Schedule I [Regulations 3, 9]. Applicability of SEBI (Criteria for
Fit and Proper Person) Regulations, 2004 [Regulation 6A]. SEBI shall grant certificate in Form B of Schedule I
[Regulation 8]. Fees specified in Schedule II shall be paid [Regulations 8 and 12].
General obligations and responsibilities [Regulations 13-23]. Code of conduct as specified in Schedule III [Regulation
13]. Contract with clients and disclosures as specified in Schedules IV and V and Certificate in Form C of Schedule I
[Regulation 14]. General responsibilities of portfolio manager [Regulation 15]. Investment of client's moneys
[Regulation 16]. Portfolio manager may manage funds raised or collected or brought from outside India in accordance
with SEBI (Foreign Institutional Investors) Regulations, 1995 [Regulation 16A]. Books of account and records
[Regulations 17 and 19]. Submission of half-yearly results [Regulation 18]. Accounts and Audit [Regulations 20 and
22]. Reports to be furnished to the client [Regulation 21]. Disclosures to the SEBI [Regulation 23]. Appointment of
Compliance Officer [Regulation 23A].
Page 280
Inspection and disciplinary proceedings [Regulations 24 to 29]. Liability for action in case of default [Regulation 30],
Power of SEBI to issue clarifications [Regulation 39].
?Portfolio Manager?--Meaning (w.e.f. 7-9-2006).--?Portfolio Manager? means any person who pursuant to a contract
or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio
manager or otherwise) the management or administration of a portfolio of securities or the funds of the client, as the
case may be.
[Regulation 2(cb) of the SEBI (Portfolio Managers) Regulations, 1993 inserted by the SEBI (Portfolio Managers)
(Second Amendment) Regulations, 2006 videNotification No. S.O. 1450(E), dated 7-9-2006, published in the Gazette of
India, Extraordinary, No. 999, Part II, Section 3(ii), page 42, dated 7-9-2006 : (2006) 133 Comp. Cas. (St.) 65 : SEBI
website http://www.sebi.gov.in].
?Portfolio?.--?Portfolio? means the total holdings of securities belonging to any person.
[Regulation 2(ca) of the SEBI (Portfolio Managers) Regulations, 1993 inserted by the SEBI (Portfolio Managers)
(Second Amendment) Regulations, 2006].
?Discretionary Portfolio Manager?.--?Discretionary portfolio manager? means a portfolio manager who exercises or
may, under a contract relating to portfolio management, exercise any degree of discretion as to the investments or
management of the portfolio of securities or the funds of the client, as the case may be.
[Regulation 2(af) of the SEBI (Portfolio Managers) Regulations, 1993 inserted by the SEBI (Portfolio Managers)
(Second Amendment) Regulations, 2006].
SEBI (Portfolio Managers) Rules, 1993 rescinded (w.e.f. 7-9-2006).--Earlier, the terms ?Portfolio Manager?,
?Portfolio? and ?Discretionary Portfolio Manager? were defined in the SEBI (Portfolio Managers) Rules, 1993 which
have now been rescinded vide Notification No. S.O. 1455(E), dated 7-9-2006, published in the Gazette of India,
Extraordinary, No. 1000, Part II, Section 3(ii), dated 7-9-2006 : (2006) 133 Comp. Cas. (St.) 27 : SEBI website
http://www.sebi.gov.in.
Holding Company and Subsidiary Company.--Wholly owned Subsidiaries having no separate business operations
and the Holding Company may be treated in law as one entity by lifting the Corporate veil.30
See detailed Comments on Lifting of corporate veil in case of Holding Company and Subsidiary Company under
Sections 4 and 34.
Consolidated Financial Statements--GAAP.--Accounting and Financial Reporting Standards under the Indian GAAP,
i.e., the Companies (Accounting Standards) Rules, 2006 and Accounting Standards (AS), Pronouncements and
Guidance Notes, etc., of the Institute of Chartered Accountants of India (ICAI), the International GAAP (IAS/IFRS) of
the IASB, the English GAAP (FRS) of ICAEW and the US GAAP (FAS) of the FASB, etc., are as follows:
Indian GAAP.--Accounting and Financial Reporting Standards for Companies under the Indian GAAP are as follows:
The Companies (Accounting Standards) Rules, 2006.--In exercise of the powers conferred by Section 642(1)(a) read
with Section 211(3C) and Section 210A(1) of the Companies Act, 1956 (1 of 1956), the Central Government, in
consultation with National Advisory Committee on Accounting Standards has made the Companies (Accounting
Standards) Rules, 2006* (w.e.f. 7-12-2006) videNotification No. G.S.R. 739(E), dated 7-12-2006, published in the
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Gazette of India, Extraordinary, No. 582, Part II, section 3(i), page 217 : (2007) 135 Comp. Cas. (St.) 73.
See detailed Comments under Sections 210A and 211(3C).
ICAI Pronouncements and Accounting Standards (AS).--Pronouncements of the Institute of Chartered Accountants of
India (ICAI), Accounting Standards (AS), Accounting Standards Interpretations (ASIs) and Guidance Notes of the ICAI
to be read with the Companies (Accounting Standards) Rules, 2006 are as follows:
Consolidated Financial Statements [AS 21] of the Institute of Chartered Accountants of India (ICAI).
Interpretation of the term ?Near Future? ( Re. AS 21, AS 23 and AS 27) [ASI 8]. Notes to the Consolidated Financial
Statements ( Re. AS 21) [ASI 15]. Definition of ?Control? ( Re. AS 21) [ASI 24]. Exclusion of a subsidiary from
consolidation ( Re. AS 21) [ASI 25]. Accounting for taxes on income in the consolidated financial statements ( Re. AS
21) [ ASI 26]. Disclosure of parent's/venturer's shares in post-acquisition reserves of a subsidiary/jointly controlled
entity (Re. AS 21 and AS 27) [ASI 28].
Holding Company and Subsidiary.-- See also Balance sheet of holding company to include certain particulars as to its
subsidiaries [Section 212], Financial year of holding company and subsidiary [Section 213] and Rights of holding
company's representatives and members [Section 214] of the Companies Act, 1956.
International GAAP.--Consolidated and Separate Financial Statements [IAS 27].
US GAAP.--Consolidated Financial Statements [ARB 51]. Consolidation of All Majority-Owned Subsidiaries--An

amendment of ARB No. 51, with related amendments of APB Opinion No. 18 and ARB No. 43, Chapter 12 [FAS 94].
See detailed Comments under Sections 211(3C), 212 and 594.
Accounting and Auditing Practices.--Para 15.1 of the Statement on Auditing Practices issued by the Institute of
Chartered Accountants of India (ICAI) enumerated Salient provisions of the Companies Act, 1956 (1 of 1956)
concerning Chartered Accountants and stated as follows:
Compliance with the Companies Act.--The Companies Act lays down detailed provisions regarding various matters
and casts an obligation upon Directors and Officers of the company to carry out the requirements of the law.
Generally speaking, it is the duty of the Directors and the Management to ensure that the provisions of the Companies
Act have been complied with.
However, where non-compliance with the provisions of the Companies Act has a bearing upon the accounts and
transactions of the company, the Auditor would in the normal course of his inquiry become aware of the breaches of the
Act and may have an obligation to bring this to the attention of the shareholders.
In order to facilitate the work of the Auditors, a List of Important Sections of the Companies Act, 1956 concerning
Chartered Accountants was provided in the Statement on Auditing Practices issued by the ICAI in para 15.1.
List of important Sections provided in the Statement, inter alia, enumerated Section 591 of the Companies Act, 1956 as
follows:
Section 591 [Foreign Companies].--This Section deals with foreign companies. Where prima facie the provisions of
sub-section (2) are attracted, the company should comply with the Rules which may be framed under this Section.
The Auditor should enquire into the compliance with such of the Sections as have bearing on his role as Auditor.
Page 282
[See Statement on Auditing Practices, issued by the Institute of Chartered Accountants of India (ICAI), Third Edition,
1977, para 15.1 : Reproduced in Handbook of Auditing Pronouncements, Volume I-- Compendium of Statements and
Standards, published by the ICAI, Third Edition, 2005, para 15.1, pages II-30 to 39].
Statement on Auditing Practices (withdrawn).-- Statement on Auditing Practices has since been withdrawn by the
Council of the Institute of Chartered Accountants of India (ICAI), at its 249th Meeting held in March, 2005 pursuant to
the issuance of a number of Auditing and Assurance Standards (AASs) and Guidance Notes on the topics covered by the
various paragraphs of the said Statement.
[See Handbook of Auditing Pronouncements, Volume I-- Compendium of Standards and Statements, published by the
Institute of Chartered Accountants of India (ICAI), Fourth Edition, 2007, page IV.1].
Accounting Practices.-- See detailed Comments on Accounting Provisions under Sections 209 to 223 and the
Companies (Accounting Standards) Rules, 2006, ICAI Accounting Standards (AS) and Guidance Notes on Accounting
issued by the Institute of Chartered Accountants of India (ICAI) under Sectione 211(3C) and Schedule VI.
Auditing Practices.-- See detailed Comments on the Auditing Provisions under Sections 224 to 233B and ICAI
Auditing and Assurance Standards (AAS), Statements on Auditing (SAs), Statements and Guidance Notes on Auditing,
Statement on the Companies (Auditor's Report) Order, 2003 (CARO, 2003), etc., issued by the Institute of Chartered
Accountants of India (ICAI) under Section 227.
Foreign Company--Winding up as unregistered company.--A Foreign Company is a ?company? and may be treated
as an unregistered company for the purposes of Part X [Sections 582 to 590] of the Companies Act, 1956.31
Winding-up of Foreign Companies.--A Foreign Company which is carrying on its business in India may be wound up
by the Company Court [the Tribunal (NCLT)] as far as the branch of such company is situate in India. For winding up
proceedings, the Local Court will have the jurisdiction.32
See detailed Comments under Sections 582, 583 and 584.
Jurisdiction--Foreign Company.--The Company Court [the Tribunal (NCLT)] will have the necessary jurisdiction
under the Act to entertain the winding up petition in respect of a Foreign Company, Banking Company carrying on
business in India. However, the Company Court [the Tribunal (NCLT)] will have the jurisdiction to entertain the
proceedings against the company incorporated outside India, if such company carries on its business in India.33
See detailed Comments under Sections 582, 584 and 591.
Foreign Companies--Winding up--Assets in India.--Under Section 584 a body corporate incorporated outside India
irrespective of its number of Members may be wound up as an unregistered company. A company incorporated in West
Germany carried on business in India, did not pay for the goods supplied by the petitioner and the petitioner applied for
winding up of the company. The company took the defence that the Court had no jurisdiction, the company had no
assets in India and the company has been dissolved in West Germany and it had ceased to carry on business in India.
The Court admitted the petition and a Provisional Liquidator was appointed to ascertain whether the company has any
assets in India.34
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Scheme in Winding up of Foreign Company.--A Foreign Company may be a Government Company and it may be
wound up or a Scheme under Section 391 of the Act may be sanctioned by the Court [the Tribunal (NCLT)] in India.35
See detailed Comments under Sections 391 and 582.
1. Section 591 renumbered as sub-section (1) thereof by the Companies (Amendment) Act, 1974 (41 of 1974), s. 32 (w.e.f. 1-2-1975).
2. Inserted by the Companies (Amendment) Act, 1974 (41 of 1974), s. 32 (w.e.f. 1-2-1975).
3. Deverall v. Grant Advertising Inc. , (1955) Ch. 111 : (1954) 3 All ER 389 : (1954) 3 WLR 688 : (1954) 98 SJ 787 : (1955) 25 Comp. Cas.
37 (CA).
4. Employers' Liability Assurance Corporation v. Sedgwick, Collins & Co. , (1927) AC 95 : (1926) All ER Rep. 388 : 95 LJ KB 1015 : 136
LT 72 (HL); Madrid IN RE. , (1973) 1 All ER 216.
5. Cleveland Museum of Art v. Capricorn Art International SA, (1990) BCLC 546 (QB) (CC).
6. Johnson v. Astrofiel Armadorn S.A. of Panama , (1990) 69 Comp. Cas. 619 (Ker.) (FB).
7. Tovarishestvo Manufactugr Liudvig Rabenek IN RE. , (1944) Ch. 404 : (1944) 2 All ER 556 : 113 LJ Ch. 250 : 171 LT 66 : (1945) 15
Comp. Cas. 9 (Ch.).
8. Matchnet Plc. v. William Blayer & Co. LLC. , (2003) 2 BCLC 195 (Ch.).
9. Sea Assets Ltd. v. PT Garuda Indonesia , (2000) 4 All ER 371 (QB).
10. Gramophone and Typewriter Ltd. v. Stanley , (1908) 2 KB 89 : (1908-10) All ER Rep. 833 : 77 LJ KB 834 : 99 LT 39 : 24 TLR 480
(CA); Attorney-General v. Jewish Colonization Association , (1901) 1 KB 123; General Company for Promotion of Land Credit IN RE. ,
(1871) LR 5 HL 176 : 40 LJ Ch. 655 : 24 LT 641; Janson v. Driefontein Consolidated Mines Ltd. , (1902) AC 484 : 71 LJ KB 857 :
(1900-03) All ER Rep. 426 : 87 LT 372 : 51 WR 142 : 18 TLR 796 (HL); Kuenigl v. Donnersmarck, (1955) 1 QB 515 : (1955) 1 All ER 46 :
(1955) 2 WLR 82.
11. Hilckes, Re ex p. Muhesa Rubber Plantations , (1917) 1 KB 48 : 86 LJ KB 204 : 115 LT 490.
12. Section 34; Salomon v. Salomon & Co. Ltd. , (1897) AC 22 : (1895-99) All ER Rep. 33 : 66 LJ Ch. 35 : 75 LT 426 : 45 WR 193 : 13
TLR 46 : 41 SJ 63 (HL); State Trading Corporation of India Ltd. v. CTO , (1963) 33 Comp. Cas. 1057 (SC) : AIR 1963 SC 1811 : (1964) 4
SCR 99; Mrs. Bacha F. Guzdar v. CIT, (1955) 25 Comp. Cas. 1 (SC) : AIR 1955 SC 74 : (1955) 27 ITR 1 (SC) : (1955) 1 SCR 876. See
detailed Comments under Section Section 34--Effect of Registration.
13. State Trading Corporation of India Ltd. v. CTO , (1963) 33 Comp. Cas. 1057 (SC) : AIR 1963 SC 1811 : (1963) 2 Comp. LJ 234 (SC);
Tata Engineering and Locomotive Co. Ltd. v. State of Bihar, (1964) 34 Comp. Cas. 458 (SC) : AIR 1965 SC 40 : (1964) 6 SCR 885.
14. Gasque v. I.R.C. , (1940) 2 KB 80 : 109 LJ KB 769 : 56 TLR 683.
15. Kuenigl v. Donnersmarck , (1955) 1 QB 515 : (1955) 1 All ER 46 : (1955) 2 WLR 82. See detailed Comments under Section 34--Effect
of Registration.
16. De Beers Consolidated Mines Ltd. v. Howe , (1906) AC 455 (HL).
17. Section 6(3)(ii) of the Income-tax Act, 1961 (43 of 1961); Union Corporation Ltd. v. IRC , (1953) AC 482 : (1953) 1 All ER 729 :
(1953) 2 WLR 615 : (1953) 97 SJ 206 (HL); Unit Construction Co. Ltd. v. Bullock , (1960) AC 351 (HL) : (1959) 3 All ER 831 (HL) :
(1959) 3 WLR 1022 (HL) : (1959) 103 SJ 1027 (HL).
18. Unit Construction Co. Ltd. v. Bullock , (1960) AC 351 (HL) : (1959) 3 All ER 831 (HL) : (1959) 3 WLR 1022 (HL) : (1959) 103 SJ
1027 (HL).
19. Swedish Central Railway Co. v. Thompson , (1925) AC 495 : (1924) All ER Rep. 710 : 94 LJ KB 527 : 133 LT 97 (HL); Narottam and
Pereira Ltd. v. CIT , (1953) 23 ITR 454 (Bom.).
20. Turner Morrison & Co. Ltd. v. Hungerford Investment Trust Ltd. , (1972) 42 Comp. Cas. 512 (SC) : AIR 1972 SC 1311 : (1972) 3 SCR
711. See also Comments under Section 13.
21. Daimler Co. Ltd. v. Continental Tyre and Rubber Co. (Great Britain) Ltd. , (1916) 2 AC 307 : (1916-17) All ER Rep. 191 : 85 LJ KB
Page 284
1333 : 114 LT 1049 (HL). See also Comments under relevant discussions in Sections 34 and 146.
22. Hilckes, Re ex p. Muhesa Rubber Plantations, (1917) 1 KB 48 : 86 LJ KB 204 : 115 LT 490.
23. Kuenigl v. Donnersmarck , (1955) 1 QB 515 : (1955) 1 All ER 46 : (1955) 2 WLR 82.
24. Baelz v. Public Trustee , (1926) Ch. 863 : 95 LJ Ch. 400 : 135 LT 763 : 42 TLR 696.
25. See Comments under Sections 146 and 209.
26. Metliss v. National Bank of Greece , (1957) 3 All ER 608.
27. Pergamon Press Ltd. v. Maxwell , (1970) 2 All ER 809 : (1970) 1 WLR 1167 : 114 SJ 453.
* See the Companies (Fees on Applications) Rules, 1999 in Appendix 4.
? See the Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of Business) Regulations, 2000 in
Appendix 327.
* See the Foreign Exchange Management Act, 1999 (42 of 1999) in Appendix 325.
* See the Prevention of Money Laundering Act, 2002 (15 of 2003) in Appendix 289.
** See the Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner
of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the
Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 in Appendix 290.
** See the Foreign Exchange Management (Deposit) Regulations, 2000 in Appendix 326.
*** See the Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of Business) Regulations, 2000 in
Appendix 327.
? See the Foreign Exchange Management (Issue of Security in India by a Branch, Office or Agency of a Person Resident Outside India)
Regulations, 2000 in Appendix 328.
?? See the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 in Appendix 329.
??? See the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 in
Appendix 330.
28 Substituted vide Press Note (F. No. 5(3)2005-FC), dated 13-11-2006 : Issued by the Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy and Promotion (DIPP) (Secretariat for Industrial Assistance) (FC Section), New Delhi : (2006) 134
Comp. Cas. (St.) 145 : D/o IPP (DIPP) website http://www.dipp.gov.in.
29 Substituted vide Press Note No. 2 (2007 Series) (F. No. 12/2/2006-FC), Issued by the Government of India, Ministry of Commerce and
Industry, Department of Industrial Policy and Promotion (DIPP) (FC Section), dated 21-2-2007 : (2007) 136 Comp. Cas. (St.) 110 : D/o IPP
(DIPP) website http://www.dipp.gov.in.
? See the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges)
Regulations, 2006 in Appendix 230.
* See the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993 in
Appendix 296.
* See the SEBI (Foreign Institutional Investors) Regulations, 1995 in Appendix 251.
* See the SEBI (Foreign Venture Capital Investors) Regulations, 2000 in Appendix 252.
* See the SEBI (Portfolio Managers) Regulations, 1993 in Appendix 257.
30. D.H.N. Food Distributors Ltd. v. London Borough of Tower Hamlets , (1976) 3 All ER 462 : (1976) 1 WLR 852 : 120 SJ 215 (CA).
* See the Companies (Accounting Standards) Rules, 2006 in Appendix 51.
31. Travancore National and Quilon Bank Ltd. In re , (1939) 9 Comp. Cas. 14 (Mad.) : AIR 1939 Mad. 318. See detailed Comments under
Sections 582 to 584.
32. Dairen Kisen Kabushiki Kaisha v. Shiang Kee , (1942) 12 Comp. Cas. 1 (PC) : AIR 1941 PC 88; Rajah of Vizianagaram v. Official
Page 285
Receiver , (1962) 32 Comp. Cas. 1 (SC) : AIR 1962 SC 500 : (1962) Supp. 1 SCR 344. See detailed Comments under Sections 582 to 584.
33. Reserve Bank of India v. Bank of Credit and Commerce International (Overseas) Ltd. (No. 1) (1993) 78 Comp. Cas. 207 (Bom.); Reserve
Bank of India v. Bank of Credit and Commerce International (Overseas) Ltd. (No. 2) (1993) 78 Comp. Cas. 230 (Bom.).
34. Bremen v. Bharat Aluminium Co. Ltd. , (1984) 55 Comp. Cas. 727 (Cal.).
35. Rivers Steam Navigation Co. Ltd. In re (1967) 2 Comp. LJ 106 (Cal.) : 71 CWN 854.
M L Tannan : Banker's Manual- A commentary on Banking Laws and Allied Acts/TANNAN BANKER MANUAL
VOLUME 2/ BANKING & FINANCIAL INSTITUTIONS LAWS, STATUTES,ACTS, RULES,
REGULATIONS, ORDERS AND SCHEMES / PART XXVI FEMA &
MONEY-LAUNDERING ACTS & RULES /APPENDIX 109 THE PREVENTION OF
MONEY-LAUNDERING ACT, 2002
APPENDIX 109 THE PREVENTION OF MONEY-LAUNDERING

ACT, 2002
(ACT NO. 15 OF 2003)
[17 th January , 2003.]
LIST OF AMENDING ACTS
1. The Prevention of Money-Laundering (Amendment) Act, 2005 (20 of 2005).

TANN.019.LN2
An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved
in, money-laundering and for matters connected therewith or incidental thereto.
WHEREAS the Political Declaration and Global Programme of Act ion, annexed to the resolution S-17/2
was adopted by the General Assembly of the United Nations at its seventeenth special session on the
twenty-third day of February, 1990;
AND WHEREAS the Political Declaration adopted by the Special Session of the United Nations General
Assembly held on 8th to 10th June, 1998 calls upon the Member States to adopt national money-laundering
legislation and programme;
AND WHEREAS it is considered necessary to implement the aforesaid resolution and the Declaration;
BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:--
CHAPTER I
PRELIMINARY
Page 286
S. 1.
Short title, extent and commencement.--
(1) This Act may be called THE PREVENTION OF MONEY-LAUNDERING ACT, 2002.
(2) It extends to the whole of India.
(3) It shall come into force on such date 1. as the Central Government may, by notification in the Official
Gazette, appoint, and different dates may be appointed for different provisions of this Act and any
reference in any such provision to the commencement of this Act shall be construed as a reference to
the coming into force of that provision.
S. 2.
Definitions.--
(1) In this Act, unless the context otherwise requires,--

(a)
"Adjudicating Authority"
means an Adjudicating Authority appointed under sub-section (1) of Section
6;
(b)
"Appellate Tribunal"
means the Appellate Tribunal established under Section 25;
(c)
"Assistant Director"
means an Assistant Director appointed under sub-section (1) of Section 49;
(d)
"attachment"
means prohibition of transfer, conversion, disposition or movement of
property by an order issued under Chapter III;
Page 287
2.Inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).[(da)
"authorised person"
means an authorised person as defined in clause (c) ofsection 2 of the Foreign
Exchange Management Act, 1999 (42 of 1999);]
(e)
"banking company"
means a banking company or a co-operative bank to which the Banking
Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking
institution referred to in Section 51 of that Act;
(f)
"Bench"
means a Bench of the Appellate Tribunal;
(g)
"Chairperson"
means the Chairperson of the Appellate Tribunal;
(h)
"chit fund company"

means a company managing, conducting or supervising, as foreman, agent or
in any other capacity, chits as defined inSection 2 of the Chit Funds Act, 1982
(40 of 1982);
(i)
"co-operative bank"
shall have the same meaning as assigned to it in Clause ( dd ) of Section 2 of
the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of
1961);
(j)
Page 288
"Deputy Director"
means a Deputy Director appointed under sub-section (1) of Section 49;
3.Inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).[(ja)
"designated business or profession"

means carrying on activities for playing games of chance for cash or kind, and
includes such activities associated with casino or such other activities as the
Central Government may, by notification, so designate, from time to time;]
(k)
"Director" or "Additional Director" or "Joint Director"

means a Director or Additional Director or Joint Director, as the case may be,
appointed under sub-section (1) of Section 49;
(l)
"financial institution"
means a financial institution as defined in Clause ( c ) ofSection 45 -I of the
Reserve Bank of India Act, 1934 (2 of 1934) and includes a chit fund company,
a co-operative bank, a housing finance institution and 4. [an authorised person,
a payment system operator and a non-banking financial company];
(m)
"housing finance institution"

shall have the meaning as assigned to it in Clause ( d ) ofSection 2 of the
National Housing Bank Act, 1987 (53 of 1987);
(n)
"intermediary"
means a stock-broker, sub-broker, share transfer agent, banker to an issue,
trustee to a trust deed, registrar to an issue, merchant banker, underwriter,
portfolio manager, investment adviser and any other intermediary associated
with securities market and registered underSection 12 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992);
5.Ins. by Act 20 of 2005, s. 2 (w.e.f. 1-7-2005).[(na)

Page 289
"investigation"
includes all the proceedings under this Act conducted by the Director or by an
authority authorised by the Central Government under this Act for the
collection of evidence;]
(o)
"Member"
means a Member of the Appellate Tribunal and includes the Chairperson;
(p)
"money-laundering"
has the meaning assigned to it in Section 3;
(q)
"non-banking financial company"

shall have the same meaning as assigned to it in Clause ( f ) ofSection 45 -I of
the Reserve Bank of India Act, 1934 (2 of 1934) 6. [and includes a person
carrying on designated business or profession];
(r)
"notification"
means a notification published in the Official Gazette;
7.Clauses (ra) to (rc) inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).[(ra)
"offence of cross border

implications",
means--
(i) any conduct by a person at a place outside India which constitutes an offence at that
place and which would have constituted an offence specified in Part A, Part B or Part
C of the Schedule, had it been committed in India and if such person remits the
proceeds of such conduct or part thereof to India; or
(ii) any offence specified in Part A, Part B or Part C of the Schedule which has been
committed in India and the proceeds of crime, or part thereof have been transferred to a
place outside India or any attempt has been made to transfer the proceeds of crime, or
Page 290
part thereof from India to a place outside India.
Explanation. --Nothing contained in this clause shall adversely affect any

investigation, enquiry, trial or proceeding before any authority in respect of the
offences specified in Part A or Part B of the Schedule to the Act before the
commencement of the Prevention of Money-Laundering (Amendment) Act, 2009;
(rb)
"payment system"
means a system that enables payment to be effected between a payer and a
beneficiary, involving clearing, payment or settlement service or all of them.
Explanation.-- For the purposes of this clause, "payment system" includes the systems
enabling credit card operations, debit card operations, smart card operations, money transfer
operations or similar operations;
(rc)
"payment system operator"

means a person who operates a payment system and such person includes his
overseas principal.
Explanation.-- For the purposes of this clause, "overseas principal" means,--

(A) in the case of a person, being an individual, such individual residing outside India,
who owns or controls or manages, directly or indirectly, the activities or functions of
payment system in India;
(B) in the case of a Hindu undivided family, Karta of such Hindu undivided family
residing outside India who owns or controls or manages, directly or indirectly, the
activities or functions of payment system in India;
(s)
"person"
includes--
(i) an individual,
(ii) a Hindu undivided family,
(t)
"prescribed"
means prescribed by rules made under this Act;
(u)
"proceeds of crime"
Page 291
means any property derived or obtained, directly or indirectly, by any person

as a result of criminal activity relating to a scheduled offence or the value of
any such property;
(v)
"property"
means any property or assets of every description, whether corporeal or
incorporeal, movable or immovable, tangible or intangible and includes deeds
and instruments evidencing title to, or interest in, such property or assets,
wherever located;
(w)
"records"
include the records maintained in the form of books or stored in a computer or
such other form as may be prescribed;
(x)
"Schedule"
means the Schedule to this Act;
(y)
"scheduled offence"
means--
(i) the offences specified under Part A of the Schedule; or

8.Sub-clauses (ii) and (iii) substituted for sub-clause (ii) by the Prevention of
Money-Laundering
the offences (Amendment)
specified underAct,
Part2009
B of(21
the of
Schedule
2009), if
s. the
2 (w.e.f.
total value
1-6-2009).[(ii)
involved in such
offences is thirty lakh rupees or more; or
(z)
"Special Court"
means a Court of Session designated as Special Court under sub-section (1) of
Section 43;
(za)
Page 292
"transfer"
includes sale, purchase, mortgage, pledge, gift, loan or any other form of
transfer of right, title, possession or lien;
(zb)
"value"
means the fair market value of any property on the date of its acquisition by
any person, or if such date cannot be determined, the date on which such
property is possessed by such person.
(2) Any reference, in this Act or the Schedule, to any enactment or any provision thereof shall, in relation
to an area in which such enactment or such provision is not in force, be construed as a reference to the
corresponding law or the relevant provisions of the corresponding law, if any, in force in that area.
CHAPTER II
OFFENCE OF MONEY-LAUNDERING
S. 3.
Offence of money-laundering.--
Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually
involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall
be guilty of offence of money-laundering.
S. 4.
Punishment for money-laundering.--
Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term
which shall not be less than three years but which may extend to seven years and shall also be liable to fine which
may extend to five lakh rupees:
Provided that where the proceeds of crime involved in money-laundering relates to any offence specified
under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words
"which may extend to seven years", the words "which may extend to ten years" had been substituted.
CHAPTER III
Page 293
ATTACHMENT, ADJUDICATION AND CONFISCATION
S. 5.
Attachment of property involved in money-laundering.--
(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by him for
the purposes of this section, has reason to believe (the reason for such belief to be recorded in
writing), on the basis of material in his possession, that--
( a ) any person is in possession of any proceeds of crime;
(b) such person has been charged of having committed a scheduled offence; and
(c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner
which may result in frustrating any proceedings relating to confiscation of such proceeds of
crime under this Chapter, he may, by order in writing, provisionally attach such property for a
period not exceeding 9. [one hundred and fifty days] from the date of the order, in the manner
provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or
the other officer so authorised by him, as the case may be, shall be deemed to be an officer
under sub-rule ( e ) of Rule 1 of that Schedule:
10. [Provided that no such order of attachment shall be made unless, in relation to the
scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code
of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised
to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking
cognizance of the scheduled offence, as the case may be:
Provided further that, notwithstanding anything contained in clause (b), any property of
any person may be attached under this section if the Director or any other officer not below the
rank of Deputy Director authorised by him for the purposes of this section has reason to
believe (the reasons for such belief to be recorded in writing), on the basis of material in his
possession, that if such property involved in money-laundering is not attached immediately
under this Chapter, the non-attachment of the property is likely to frustrate any proceeding
under this Act.]
(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after
attachment under sub-section (1), forward a copy of the order, along with the material in his
possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the
manner as may be prescribed and such Adjudicating Authority shall keep such order and material for
such period as may be prescribed.
(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of
the period specified in that sub-section or on the date of an order made under sub-section (2) of
Section 8, whichever is earlier.
(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable
property attached under sub-section (1) from such enjoyment.
Explanation .--For the purposes of this sub-section, "person interested", in relation to any
immovable property, includes all persons claiming or entitled to claim any interest in the property.
(5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall,
within a period of thirty days from such attachment, file a complaint stating the facts of such
Page 294
attachment before the Adjudicating Authority.
S. 6.
Adjudicating Authorities, composition, powers, etc.--
(1) The Central Government shall, by notification, appoint 11. [an Adjudicating Authority] to exercise
jurisdiction, powers and authority conferred by or under this Act.
(2) An Adjudicating Authority shall consist of a Chairperson and two other Members:
Provided that one Member each shall be a person having experience in the field of law,
administration, finance or accountancy.
(3) A person shall, however, not be qualified for appointment as Member of an Adjudicating Authority,--
( a ) in the field of law, unless he--
(i) is qualified for appointment as District Judge; or
(ii) has been a member of the Indian Legal Service and has held a post in Grade I of that
service;
(b) in the field of finance, accountancy or administration unless he possesses such qualifications,
(4) The Central Government shall appoint a Member to be the Chairperson of the Adjudicating
Authority.
(5) Subject to the provisions of this Act,--
( a ) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof;
(b) a Bench may be constituted by the Chairperson of the Adjudicating Authority with one or two
Members as the Chairperson of the Adjudicating Authority may deem fit;
(c) the Benches of the Adjudicating Authority shall ordinarily sit at New Delhi and such other
places as the Central Government may, in consultation with the Chairperson, by notification,
specify;
(d) the Central Government shall, by notification, specify the areas in relation to which each
Bench of the Adjudicating Authority may exercise jurisdiction.
(6) Notwithstanding anything contained in sub-section (5), the Chairperson may transfer a Member from
one Bench to another Bench.
(7) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the
case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the
case or matter may be transferred by the Chairperson or, as the case may be, referred to him for
transfer, to such Bench as the Chairperson may deem fit.
(8) The Chairperson and every Member shall hold office as such for a term of five years from the date on
which he enters upon his office:
Provided that no Chairperson or other Member shall hold office as such after he has attained
the age of 12. [sixty-five] years.
(9) The salary and allowances payable to and the other terms and conditions of service of the Member
shall be such as may be prescribed:
Page 295
Provided that neither the salary and allowances nor the other terms and conditions of service of
the Member shall be varied to his disadvantage after appointment.
(10) If, for reasons other than temporary absence, any vacancy occurs in the office of the Chairperson or
any other Member, then the Central Government shall appoint another person in accordance with the
provisions of this Act to fill the vacancy and the proceedings may be continued before the
Adjudicating Authority from the stage at which the vacancy is filled.
(11) The Chairperson or any other Member may, by notice in writing under his hand addressed to the
Central Government, resign his office:
Provided that the Chairperson or any other Member shall, unless he is permitted by the Central
Government to relinquish his office sooner, continue to hold office until the expiry of three months
from the date of receipt of such notice or until a person duly appointed as his successor enters upon
his office or until the expiry of his term of office, whichever is the earliest.
(12) The Chairperson or any other Member shall not be removed from his office except by an order made
by the Central Government after giving necessary opportunity of hearing.
(13) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his death,
resignation or otherwise, the senior-most Member shall act as the Chairperson of the Adjudicating
Authority until the date on which a new Chairperson, appointed in accordance with the provisions of
this Act to fill such vacancy, enters upon his office.
(14) When the Chairperson of the Adjudicating Authority is unable to discharge his functions owing to
absence, illness or any other cause, the senior-most Member shall discharge the functions of the
Chairperson of the Adjudicating Authority until the date on which the Chairperson of the
Adjudicating Authority resumes his duties.
(15) The Adjudicating Authority shall not be bound by the procedure laid down by the Code of Civil
Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the
other provisions of this Act, the Adjudicating Authority shall have powers to regulate its own
procedure.
S. 7.
Staff of Adjudicating Authorities.--
(1) The Central Government shall provide each Adjudicating Authority with such officers and employees
as that Government may think fit.
(2) The officers and employees of the Adjudicating Authority shall discharge their functions under the
general superintendence of the Chairperson of the Adjudicating Authority.
(3) The salaries and allowances and other conditions of service of the officers and employees of the
Adjudicating Authority shall be such as may be prescribed.
S. 8.
Adjudication.--
Page 296
(1) On receipt of a complaint under sub-section (5) of Section 5, or applications made under sub-section
(4) of Section 17 or under sub-section (10) of Section 18, if the Adjudicating Authority has reason to
believe that any person has committed an 13. [offence under section 3 or is in possession of proceeds
of crime], it may serve a notice of not less than thirty days on such person calling upon him to indicate
the sources of his income, earning or assets, out of which or by means of which he has acquired the
property attached under sub-section (1) of Section 5, or, seized under Section 17 or Section 18, the
evidence on which he relies and other relevant information and particulars, and to show cause why all
or any of such properties should not be declared to be the properties involved in money-laundering
and confiscated by the Central Government:
Provided that where a notice under this sub-section specifies any property as being held by a
person on behalf of any other person, a copy of such notice shall also be served upon such other
person:
Provided further that where such property is held jointly by more than one person, such notice
shall be served to all persons holding such property.
(2) The Adjudicating Authority shall, after--
( a ) considering the reply, if any, to the notice issued under sub-section (1);
(b) having the aggrieved person and the Director or any other officer authorised by him in this
behalf; and
(c) taking into account all relevant materials placed on record before him,
by an order, record a finding whether all or any of the properties referred to in the notice
issued under sub-section (1) are involved in money-laundering:
Provided that if the property is claimed by a person, other than a person to whom the
notice had been issued, such person shall also be given an opportunity of being heard to prove
that the property is not involved in money-laundering.
(3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in
money-laundering, he shall, by an order in writing, confirm the attachment of the property made
under sub-section (1) of Section 5 or retention of property or record seized under Section 17 or
Section 18 and record a finding to that effect, such attachment or retention of the seized property or
record shall--
( a ) continue during the pendency of the proceedings relating to any scheduled offence before a
court; and
(b) become final after the guilt of the person is proved in the trial court and order of such trial
court becomes final.
(4) Where the provisional order of attachment made under sub-section (1) of Section 5 has been
confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf
shall forthwith take the possession of the attached property.
(5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the
attachment of the property or retention of the seized property or record under sub-section (3) and net
income, if any, shall cease to have effect.
(6) Where the attachment of any property or retention of the seized property or record becomes final
under Clause ( b ) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of
being heard to the person concerned, make an order confiscating such property.
Page 297
S. 9.
Vesting of property in Central Government.--
Where an order of confiscation has been made under sub-section (6) of Section 8 in respect of any property of a
person, all the rights and title in such property shall vest absolutely in the Central Government free from all
encumbrances:
Provided that where the Adjudicating Authority, after giving an opportunity of being heard to any other person
interested in the property attached under this Chapter, or seized under Chapter V, is of the opinion that any
encumbrance on the property or lease-hold interest has been created with a view to defeat the provisions of this
Chapter, it may, by order, declare such encumbrance or lease-hold interest to be void and thereupon the aforesaid
property shall vest in the Central Government free from such encumbrances or lease-hold interest:
Provided further that nothing in this section shall operate to discharge any person from any liability in respect
of such encumbrances which may be enforced against such person by a suit for damages.
S. 10.
Management of properties confiscated under this Chapter.--
(1) The Central Government may, by order published in the Official Gazette, appoint as many of its
officers (not below the rank of a Joint Secretary to the Government of India) as it thinks fit, to
perform the functions of an Administrator.
(2) The Administrator appointed under sub-section (1) shall receive and manage the property in relation
to which an order has been made under sub-section (6) of Section 8 in such manner and subject to
such conditions as may be prescribed.
(3) The Administrator shall also take such measures, as the Central Government may direct, to dispose of
the property which is vested in the Central Government under Section 9.
S. 11.
Power regarding summons, production of documents and evidence, etc.--
(1) The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in
a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the
( a ) discovery and inspection;
(b) enforcing the attendance of any person, including any officer of a banking company or a
financial institution or a company, and examining him on oath;
(c) compelling the production of records;
(d) receiving evidence on affidavits;
(e) issuing commissions for examination of witnesses and documents; and
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(f) any other matter which may be prescribed.
(2) All the persons so summoned shall be bound to attend in person or through authorised agents, as the
Adjudicating Authority may direct, and shall be bound to state the truth upon any subject respecting
which they are examined or make statements, and produce such documents as may be required.
(3) Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning
of Section 193 and Section 228 of the Indian Penal Code (45 of 1860).
CHAPTER IV
OBLIGATIONS OF BANKING COMPANIES, FINANCIAL INSTITUTIONS AND

INTERMEDIARIES
S. 12.
Banking companies, financial institutions and intermediaries to maintain records.--
(1) Every banking company, financial institution and intermediary shall--

( a ) maintain a record of all transactions, the nature and value of which may be prescribed,
whether such transactions comprise of a single transaction or a series of transactions integrally
connected to each other, and where such series of transactions take place within a month;
(b) furnish information of transactions referred to in Clause ( a ) to the Director within such time
as may be prescribed;
(c) verify and maintain the records of the identity of all its clients, in such manner as may be
prescribed:
Provided that where the principal officer of a banking company or financial institution
or intermediary, as the case may be, has reason to believe that a single transaction or series of
transactions integrally connected to each other have been valued below the prescribed value so
as to defeat the provisions of this section, such officer shall furnish information in respect of
such transactions to the Director within the prescribed time.
14. [(2)(a) Therecords referred to in clause (a) of sub-section (1) shall be maintained for a period of ten years
from the date of transactions between the clients and the banking company or financial institution or
intermediary, as the case may be.
(b) The records referred to in clause (c) of sub-section (1) shall be maintained for a period of ten years
from the date of cessation of transactions between the clients and the banking company or financial
institution or intermediary, as the case may be.]
COMMENTS
Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and
Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and
Intermediaries) Rules, 2005. --In exercise of the powers conferred by sub-section (1) read with clauses (h), (i), (j)
Page 299
and (k) of sub-section (2) of section 73 of the Prevention of Money-Laundering Act, 2002 (15 of 2003), the Central
Government has made the Prevention of Moneylaundering (Maintenance of Records of the Nature and Value of
Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and
Intermediaries) Rules, 2005 for the purposes of Section 12 of the Prevention of Money-Laundering Act, 2002.
Prevention of Money-Laundering (Maintenance of Records etc.) Amendment Rules, 2010. --The

foregoing Rules have been recently amended by the Prevention of Money-Laundering (Maintenance of Records of
the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing
Financial Institutions and Intermediaries) Third Amendment Rules, 2010.
See RBI Circulars on Obligations of the Banking Companies, Financial Institutions and Intermediaries on the
Requirements of aforesaid Rules on the Reserve Bank of India website http://www.rbi.org.in .
S. 13.
Powers of Director to impose fine.--
(1) The Director may, either of his own motion or on an application made by any authority, officer or
person, call for records referred to in sub-section (1) of Section 12 and may make such inquiry or
cause such inquiry to be made, as he thinks fit.
(2) If the Director, in the course of any inquiry, finds that a banking company, financial institution or an
intermediary or any of its officers has failed to comply with the provisions contained in Section 12,
then, without prejudice to any other action that may be taken under any other provisions of this Act,
he may, by an order, levy a fine on such banking company or financial institution or intermediary
which shall not be less than ten thousand rupees but may extend to one lakh rupees for each failure.
(3) The Director shall forward a copy of the order passed under sub-section (2) to every banking
company, financial institution or intermediary or person who is a party to the proceedings under that
sub-section.
S. 14.
No civil proceedings against banking companies, financial institutions, etc., in certain cases.--
Save as otherwise provided in Section 13, the banking companies, financial institutions, intermediaries and
their officers shall not be liable to any civil proceedings against them for furnishing information under Clause ( b ) of
sub-section (1) of Section 12.
S. 15.
Procedure and manner of furnishing information by banking company, financial institution and
intermediary.--
Page 300
The Central Government may, in consultation with the Reserve Bank of India, prescribe the procedure and the
manner of maintaining and furnishing information under sub-section (1) of Section 12 for the purpose of
implementing the provisions of this Act.
CHAPTER V
SUMMONS, SEARCHES AND SEIZURES, ETC.
S. 16.
Power of survey.--
(1) Notwithstanding anything contained in any other provisions of this Act, where an authority, on the
basis of material in his possession, has reason to believe (the reasons for such belief to be recorded in
writing) that an offence under Section 3 has been committed, he may enter any place--
(i) within the limits of the area assigned to him; or
(ii) in respect of which he is authorised for the purposes of this section by such other authority,
who is assigned the area within which such place is situated,
at which any act constituting the commission of such offence is carried on, and may require any
proprietor, employee or any other person who may at that time and place be attending in any manner
to, or helping in, such act so as to,--
(i) afford him the necessary facility to inspect such records as he may require and which may be
available at such place;
(ii) afford him the necessary facility to check or verify the proceeds of crime or any transaction
related to proceeds of crime which may be found therein; and
(iii) furnish such information as he may require as to any matter which may be useful for, or
relevant to, any proceedings under this Act.
Explanation .--For the purposes of this sub-section, a place, where an act which
constitutes the commission of the offence is carried on, shall also include any other place,
whether any activity is carried on therein or not, in which the person carrying on such activity
states that any of his records or any part of his property relating to such act are or is kept.
(2) The authority referred to in sub-section (1) shall, after entering any place referred to in that
sub-section immediately after completion of survey, forward a copy of the reasons so recorded along
with material in his possession, referred to in that sub-section, to the Adjudicating Authority in a
sealed envelope in the manner as may be prescribed and such Adjudicating Authority shall keep such
reasons and material for such period as may be prescribed.
(3) An authority acting under this section may--
(i) place marks of identification on the records inspected by him and make or cause to be made
extracts or copies therefrom,
(ii) make an inventory of any property checked or verified by him, and
(iii) record the statement of any person present in the place which may be useful for, or relevant
to, any proceeding under this Act.
Page 301
S. 17.
Search and seizure.--
(1) Where 15. [the Director or any other officer not below the rank of Deputy Director authorised by him
for the purposes of this section], on the basis of information in his possession, has reason to believe
(the reason for such belief to be recorded in writing) that any person--
(i) has committed any act which constitutes money-laundering, or
(ii) is in possession of any proceeds of crime involved in money-laundering, or
(iii) is in possession of any records relating to money-laundering,
then, subject to the rules made in this behalf, he may authorise any officer subordinate to
him to--
(a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect
that such records or proceeds of crime are kept;
(b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising
the powers conferred by Clause ( a ) where the keys thereof are not available;
(c) seize any record or property found as a result of such search;
(d) place marks of identification on such record or make or cause to be made extracts or copies
therefrom;
(e) make a note or an inventory of such record or property;
(f) examine on oath any person, who is found to be in possession or control of any record or
property, in respect of all matters relevant for the purposes of any investigation under this Act:
16. [ Provided that no search shall be conducted unless, in relation to the scheduled offence, a
report has been forwarded to a Magistrate under section 157 of the Code of Criminal Procedure, 1973
(2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned
in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the
case may be.]
(2) The authority, who has been authorised under sub-section (1) shall, immediately after search and
seizure, forward copy of the reasons so recorded along with material in his possession, referred to in
that sub-section, to the Adjudicating Authority in a sealed envelope, in the manner, as may be
prescribed and such Adjudicating Authority shall keep such reasons and material for such period, as
may be prescribed.
(3) Where an authority, upon information obtained during survey under Section 16, is satisfied that any
evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in
writing, enter and search the building or place where such evidence is located and seize that evidence:
Provided that no authorisation referred to in sub-section (1) shall be required for search under
this sub-section.
(4) The authority, seizing any record or property under this section, shall, within a period of thirty days
from such seizure, file an application, requesting for retention of such record or property, before the
Adjudicating Authority.
S. 18.
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Search of persons.--
(1) If an authority, authorised in this behalf by the Central Government by general or special order, has
reason to believe (the reason for such belief to be recorded in writing) that any person has secreted
about his person or in anything under his possession, ownership or control, any record or proceeds of
crime which may be useful for or relevant to any proceedings under this Act, he may search that
person and seize such record or property which may be useful for or relevant to any proceedings
under this Act.
17. [ Provided that no search of any person shall be made unless, in relation to the scheduled
offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal
Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the
offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the
scheduled offence, as the case may be.]
(2) The authority, who has been authorized under sub-section (1) shall, immediately after search and
seizure, forward a copy of the reasons so recorded along with material in his possession, referred to in
may be prescribed.
(3) Where an authority is about to search any person, he shall, if such person so requires, take such
person within twenty-four hours to the nearest Gazetted Officer, superior in rank to him, or a
Magistrate:
Provided that the period of twenty-four hours shall exclude the time necessary for the journey
undertaken to take such person to the nearest Gazetted Officer, superior in rank to him, or Magistrate's
Court.
(4) If the requisition under sub-section (3) is made, the authority shall not detain the person for more than
twenty-four hours prior to taking him before the Gazetted Officer, superior in rank to him, or the
Magistrate referred to in that sub-section:
from the place of detention to the office of the Gazetted Officer, superior in rank to him, or the
Magistrate's Court.
(5) The Gazetted Officer or the Magistrate before whom any such person is brought shall, if he sees no
reasonable ground for search, forthwith discharge such person but otherwise shall direct that search be
made.
(6) Before making the search under sub-section (1) or sub-section (5), the authority shall call upon two
or more persons to attend and witness the search, and the search shall be made in the presence of such
persons.
(7) The authority shall prepare a list of record or property seized in the course of the search and obtain
the signatures of the witnesses on the list.
(8) No female shall be searched by any one except a female.
(9) The Authority shall record the statement of the person searched under sub-section (1) or subsection
(5) in respect of the records or proceeds of crime found or seized in the course of the search.
18. [***]
(10) The authority, seizing any record or property under sub-section (1) shall, within a period of thirty
days from such seizure, file an application requesting for retention of such record or property, before
the Adjudicating Authority.
Page 303
S. 19.
Power to arrest.--
(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by
the Central Government by general or special order, has on the basis of material in his possession,
reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty
of an offence punishable under this Act, he may arrest such person and shall, as soon as may be,
inform him of the grounds for such arrest.
(2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest
of such person under sub-section (1), forward a copy of the order along with the material in his
manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for
such period, as may be prescribed.
(3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a judicial
Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction:
from the place of arrest to the Magistrate's Court.
S. 20.
Retention of property.--
(1) Where any property has been seized under Section 17 or Section 18, and the officer authorised by
the Director in this behalf has, on the basis of material in his possession, reason to believe (the reason
for such belief to be recorded by him in writing) that such property is required to be retained for the
purposes of adjudication under Section 8, such property may be retained for a period not exceeding
three months from the end of the month in which such property was seized.
(2) The officer authorized by the Director immediately after he has passed an order for retention of the
property for purposes of adjudication under Section 8 shall forward a copy of the order along with the
material in his possession, referred to in sub-section (1), to the Adjudicating Authority, in a sealed
envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order
and material for such period as may be prescribed.
(3) On the expiry of the period specified in sub-section (1), the property shall be returned to the person
from whom such property was seized unless the Adjudicating Authority permits retention of such
property beyond the said period.
(4) The Adjudicating Authority, before authorising the retention of such property beyond the period
specified in sub-section (1), shall satisfy himself that the property is prima facie involved in
money-laundering and the property is required for the purposes of adjudication under Section 8.
(5) After passing the order of confiscation under sub-section (6) of Section 8, the Adjudicating
Authority shall direct the release of all properties other than the properties involved in
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moneylaundering to the person from whom such properties were seized.

(6) Notwithstanding anything contained in sub-section (5), the Director or any officer authorised by him
in this behalf may withhold the release of any property until filing of appeal under Section 26 or
forty-five days from the date of order under sub-section (5), whichever is earlier, if he is of the
opinion that such property is relevant for the proceedings before the Appellate Tribunal.
S. 21.
Retention of records.--
(1) Where any records have been seized under Section 17 or Section 18, and the Investigating Officer
or any other officer authorised by the Director in this behalf has reason to believe that any of such
records are required to be retained for any inquiry under this Act, he may retain such records for a
period not exceeding three months from the end of the month in which such records were seized.
(2) The person, from whom records were seized, shall be entitled to obtain copies of records retained
under sub-section (1).
(3) On the expiry of the period specified under sub-section (1), the records shall be returned to the person
from whom such records were seized unless the Adjudicating Authority permits retention of such
records beyond the said period.
(4) The Adjudicating Authority, before authorising the retention of such records beyond the period
mentioned in sub-section (1), shall satisfy himself that the records are required for the purposes of
adjudication under Section 8.
(5) After passing of an order of confiscation under sub-section (6) of Section 8, the Adjudicating
Authority shall direct the release of the records to the person from whom such records were seized.
in this behalf may withhold the release of any records until filing of appeal under Section 26 or after
opinion that such records are relevant for the proceedings before the Appellate Tribunal.
S. 22.
Presumption as to records or property in certain cases.--
(1) Where any records or property are or is found in the possession or control of any person in the course
of a survey or a search, it shall be presumed that--
(i) such records or property belong or belongs to such person;
(ii) the contents of such records are true; and
(iii) the signature and every other part of such records which purport to be in the handwriting of
any particular person or which may reasonably be assumed to have been signed by, or to be in
the handwriting, of, any particular person, are in that person's handwriting, and in the case of a
record, stamped, executed or attested, that it was executed or attested by the person by whom
it purports to have been so stamped, executed or attested.
Page 305
(2) Where any records have been received from any place outside India, duly authenticated by such
authority or person and in such manner as may be prescribed, in the course of proceedings under this
Act, the Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be,
shall--
( a ) presume, that the signature and every other part of such record which purports to be in the
handwriting of any particular person or which the court may reasonably assume to have been
signed by, or to be in the handwriting of, any particular person, is in that person's handwriting;
and in the case of a record executed or attested, that it was executed or attested by the person
by whom it purports to have been so executed or attested;
(b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document
is otherwise admissible in evidence.
S. 23.
Presumption in inter-connected transactions.--
Where money-laundering involves two or more inter-connected transactions and one or more such transactions
is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under
Section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the
remaining transactions form part of such inter-connected transactions.
S. 24.
Burden of proof.--
When a person is accused of having committed the offence under Section 3, the burden of proving that
proceeds of crime are untainted property shall be on the accused.
CHAPTER VI
APPELLATE TRIBUNAL
S. 25.
Establishment of Appellate Tribunal.--
The Central Government shall, by notification, establish an Appellate Tribunal to hear appeals against the
orders of the Adjudicating Authority and the authorities under this Act.
S. 26.
Page 306
Appeals to Appellate Tribunal.--
(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made
by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal.
(2) Any banking company, financial institution or intermediary aggrieved by any order of the Director
made under sub-section (2) of Section 13, may prefer an appeal to the Appellate Tribunal.
(3) Every appeal preferred under sub-section (1) or sub-section (2) shall be filed within a period of
forty-five days from the date on which a copy of the order made by the Adjudicating Authority or
Director is received and it shall be in such form and be accompanied by such fee as may be
prescribed:
Provided that the Appellate Tribunal may, after giving an opportunity of being heard entertain
an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient
cause for not filing it within that period.
(4) On receipt of an appeal under sub-section (1) or sub-section (2), the Appellate Tribunal may, after
giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit,
confirming, modifying or setting aside the order appealed against.
(5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to
the concerned Adjudicating Authority or the Director, as the case may be.
(6) The appeal filed before the Appellate Tribunal under sub-section (1) or sub-section (2) shall be dealt
with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal
finally within six months from the date of filing of the appeal.
S. 27.
Composition, etc., of Appellate Tribunal.--
(1) The Appellate Tribunal shall consist of a Chairperson and two other Members.
( a ) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof;
(b) a Bench may be constituted by the Chairperson with one or two Members as the Chairperson
may deem fit;
(c) the Benches of the Appellate Tribunal shall ordinarily sit at New Delhi and at such other
specify;
Bench of the Appellate Tribunal may exercise jurisdiction.
Page 307
S. 28.
Qualifications for appointment.--
(1) A person shall not be qualified for appointment as Chairperson unless he is or has been a Judge of the
Supreme Court or of a 19. [High Court or is qualified to be a Judge of the High Court].
(2) A person shall not be qualified for appointment as a Member unless he--
20. [( a ) * * * ]
(b) has been a Member of the Indian Legal Service and has held a post in Grade I of that Service
for at least three years; or
(c) has been a member of the Indian Revenue Service and has held the post of Commissioner of
Income-tax or equivalent post in that Service for at least three years; or
(d) has been a member of the Indian Economic Service and has held the post of Joint Secretary or
equivalent post in that Service for at least three years; or
(e) has been a member of the Indian Customs and Central Excise Service and has held the post of
a Joint Secretary or equivalent post in that Service for at least three years; or
(f) has been in the practice of accountancy as a chartered accountant under the Chartered
Accountants Act, 1949 (38 of 1949) or as a registered accountant under any law for the time
being in force or partly as a registered accountant and partly as a chartered accountant for at
least ten years:
Provided that one of the members of the Appellate Tribunal shall be from category mentioned in
Clause ( f ); or
(g) has been a member of the Indian Audit and Accounts Service and has held the post of Joint
Secretary or equivalent post in that Service for at least three years.
(3) No sitting Judge of the Supreme Court or of a High Court shall be appointed under this section except
after consultation with the Chief Justice of India.
21. [(4) The Chairperson or a Member holding a post as such in any other Tribunal, established under any
law for the time being in force, in addition to his being the Chairperson or a Member of that Tribunal,
may be appointed as the Chairperson or a Member, as the case may be, of the Appellate Tribunal
under this Act.]
S. 29.
22. [ *****]
S. 30.
Conditions of service.--
Page 308
The salary and allowances payable to and the other 23. [terms and conditions of service (including tenure of
office)] of the Chairperson and other Members shall be such as may be prescribed:
Provided that neither the salary and allowances nor the other terms and conditions of service of the
Chairperson or any other Member shall be varied to his disadvantage after appointment.
S. 31.
Vacancies.--
If, for reason other than temporary absence, any vacancy occurs in the office of the Chairperson or any other
Member, then the Central Government shall appoint another person in accordance with the provisions of this Act to
fill the vacancy and the proceedings may be continued before the Appellate Tribunal from the stage at which the
vacancy is filled.
S. 32.
Resignation and removal.--
by the Central Government on the ground of proved misbehaviour or incapacity, after an inquiry
made by a person appointed by the President in which such Chairperson or any other Member
concerned had been informed of the charges against him and given a reasonable opportunity of being
heard in respect of those charges:
24. [ Provided that the Chief Justice of India shall be consulted before removal of the
Chairperson or a Member who was appointed on the recommendation of the Chief Justice of India.]
S. 33.
Member to act as Chairperson in certain circumstances.--
resignation or otherwise, the senior-most Member shall act as the Chairperson until the date on which
a new Chairperson, appointed in accordance with the provisions of this Act to fill such vacancy,
Page 309
enters upon his office.

(2) When the Chairperson is unable to discharge his functions owing to absence, illness or any other
cause, the senior-most Member shall discharge the functions of the Chairperson until the date on
which the Chairperson resumes his duties.
S. 34.
Staff of Appellate Tribunal.--
(1) The Central Government shall provide the Appellate Tribunal with such officers and employees as
that Government may think fit.
(2) The officers and employees of the Appellate Tribunal shall discharge their functions under the
general superintendence of the Chairperson.
Appellate Tribunal shall be such as may be prescribed.
S. 35.
Procedure and powers of Appellate Tribunal.--
(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil
other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own procedure.
(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the
same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while
trying a suit, in respect of the following matters, namely:--
( a ) summoning and enforcing the attendance of any person and examining him on oath;
(d) subject to the provisions ofSections 123 and 124 of the Indian Evidence Act, 1872 (1 of
1872), requisitioning any public record or document or copy of such record or document from
any office;
(e) issuing commissions for the examination of witnesses or documents;
(f) reviewing its decisions;
(g) dismissing a representation for default or deciding it ex parte ;
(h) setting aside any order of dismissal of any representation for default or any order passed by it
ex parte ; and
(i) any other matter, which may be, prescribed by the Central Government.
(3) An order made by the Appellate Tribunal under this Act shall be executable by the Appellate
Tribunal as a decree of civil court and, for this purpose, the Appellate Tribunal shall have all the
powers of a civil court.
(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any
Page 310
order made by it to a civil court having local jurisdiction and such civil court shall execute the order
as if it were a decree made by that court.
(5) All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within the
meaning of Sections 193 and 228Indian Penal Code (45 of 1860) and the Appellate Tribunal shall be
deemed to be a civil court for the purposes of Sections 345 and 346Code of Criminal Procedure, 1973
(2 of 1974).
S. 36.
Distribution of business amongst Benches.--
Where any Benches are constituted, the Chairperson may, from time to time, by notification, make provisions
as to the distribution of the business of the Appellate Tribunal amongst the Benches and also provide for the matters
which may be dealt with by each Bench.
S. 37.
Power of Chairperson to transfer cases.--
On the application of any of the parties and after notice to the parties, and after hearing such of them as he may
desire to be heard, or on his own motion without such notice, the Chairperson may transfer any case pending before
one Bench, for disposal, to any other Bench.
S. 38.
Decision to be by majority.--
If the Members of a Bench consisting of two Members differ in opinion on any point, they shall state the point
or points on which they differ, and make a reference to the Chairperson who shall either hear the point or points
himself or refer the case for hearing on such point or points by 25. [third Member] of the Appellate Tribunal and such
point or points shall be decided according to the opinion of the majority of the Members of the Appellate Tribunal
who have heard the case, including those who first heard it.
S. 39.
Right of appellant to take assistance of authorised representative and of Government to appoint presenting
officers.--
(1) A person preferring an appeal to the Appellate Tribunal under this Act may either appear in person or
Page 311
take the assistance of an authorised representative of his choice to present his case before the
Appellate Tribunal.
Explanation .--For the purposes of this sub-section, the expression "authorised representative"
shall have the same meaning as assigned to it under sub-section (2) of Section 288 of the Incometax
Act , 1961 (43 of 1961).
(2) The Central Government or the Director may authorise one or more authorised representatives or any
of its officers to act as presenting officers and every person so authorised may present the case with
respect to any appeal before the Appellate Tribunal.
S. 40
Members, etc., to be public servants.--
The Chairperson, Members and other officers and employees of the Appellate Tribunal, the Adjudicating
Authority, Director and the officers subordinate to him shall be deemed to be public servants within the meaning of
Section 21 of the Indian Penal Code (45 of 1860).
S. 41.
Civil Court not to have jurisdiction.--
No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the
Director, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine and
no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in
pursuance of any power conferred by or under this Act.
S. 42.
Appeal to High Court.--
Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court
within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any
question of law or fact arising out of such order:
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.
Explanation .--For the purposes of this section, "High Court" means--
(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on
business or personally works for gain; and
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( ii ) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which
the respondent, or in a case where there are more than one respondent, any of the respondents,
ordinarily resides or carries on business or personally works for gain.
CHAPTER VII
SPECIAL COURTS
S. 43.
Special Courts.--
(1) The Central Government, in consultation with the Chief Justice of the High Court, shall, for trial of
offence punishable under Section 4 by notification designate one or more Courts of Session as
Special Court or Special Courts for such area or areas or for such case or class or group of cases as
may be specified in the notification.
Explanation .--In this sub-section, "High Court" means the High Court of the State in which a
Sessions Court designated as Special Court was functioning immediately before such designation.
(2) While trying an offence under this Act, a Special Court shall also try an offence, other than an
offence referred to in sub-section (1), with which the accused may, under the Code of Criminal
Procedure, 1973 (2 of 1974), be charged at the same trial.
S. 44.
Offences triable by Special Courts.--
(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),--
( a ) the scheduled offence and offence punishable under Section 4 shall be triable only by the
Special Court constituted for the area in which the offence has been committed:
Provided that the Special Court, trying a scheduled offence before the commencement
of this Act, shall continue to try such scheduled offence; or
(b) a Special Court may, 26. [* * *] upon a complaint made by an authority authorised in this
behalf under this Act take cognizance of the offence for which the accused is committed to it
for trial.
(2) Nothing contained in this section shall be deemed to affect the special powers of the High Court
regarding bail under Section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High
Court may exercise such powers including the power under Clause ( b ) of sub-section (1) of that
section as if the reference to "Magistrate" in that section includes also a reference to a "Special Court"
designated under Section 43.
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S. 45.
Offences to be cognizable and non-bailable.--
27. [(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) no person
accused of an offence punishable for a term of imprisonment of more than three years under Part A of
the Schedule shall be released on bail or on his own bond unless,--]
(i) the Public Prosecutor has been given an opportunity to oppose the application for such
release; and
(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are
reasonable grounds for believing that he is not guilty of such offence and that he is not likely
to commit any offence while on bail:
Provided that a person, who, is under the age of sixteen years or is a woman or is sick or
infirm, may be released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take cognizance of any offence
punishable under Section 4 except upon a complaint in writing made by--
(i) the Director; or
(ii) any officer of the Central Government or State Government authorised in writing in this
behalf by the Central Government by a general or a special order made in this behalf by that
Government.
28. [(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) or any
other provisions of this Act, no police officer shall investigate into an offence under this Act unless
specifically authorised, by the Central Government by a general or special order, and, subject to such
conditions as may be prescribed.]
(2) The limitation on granting of bail specified in 29. [* * *] sub-section (1) is in addition to the
limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time
being in force on granting of bail.
S. 46.
Application of the Code of Criminal Procedure, 1973 to proceedings before Special Court.--
(1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of
1974) (including the provisions as to bails or bonds), shall apply to the proceedings before a Special
Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of
Session and the persons conducting the prosecution before the Special Court, shall be deemed to be a
Public Prosecutor:
Provided that the Central Government may also appoint for any case or class or group of cases
a Special Public Prosecutor.
(2) A person shall not be qualified to be appointed as a Public Prosecutor or a Special Public Prosecutor
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under this section unless he has been in practice as an Advocate for not less than seven years, under
the Union or a State, requiring special knowledge of law.
(3) Every person appointed as a Public Prosecutor or a Special Public Prosecutor under this section shall
be deemed to be a Public Prosecutor within the meaning of Clause ( u ) of Section 2 of the Code of
Criminal Procedure, 1973 (2 of 1974) and the provisions of that Code shall have effect accordingly.
S. 47.
Appeal and revision.--
The High Court may exercise, so far as may be applicable, all the powers conferred by Chapter XXIX or
Chapter XXX of the Code of Criminal Procedure, 1973 (2 of 1974), on a High Court, as if a Special Court within the
local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the
jurisdiction of the High Court.
CHAPTER VIII
AUTHORITIES
S. 48.
Authorities under the Act.--
There shall be the following classes of authorities for the purposes of this Act, namely:--
(a) Director or Additional Director or Joint Director,

(b) Deputy Director,
(c) Assistant Director, and
(d) such other class of officers as may be appointed for the purposes of this Act.
S. 49.
Appointment and powers of authorities and other officers.--
(1) The Central Government may appoint such persons as it thinks fit to be authorities for the purposes
of this Act.
(2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise the
Director or an Additional Director or a Joint Director or a Deputy Director or an Assistant Director
appointed under that sub-section to appoint other authorities below the rank of an Assistant Director.
(3) Subject to such conditions and limitations as the Central Government may impose, an authority may
exercise the powers and discharge the duties conferred or imposed on it under this Act.
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S. 50.
Powers of authorities regarding summons, production of documents and to give evidence, etc.--
(1) The Director shall, for the purposes of Section 12, have the same powers as are vested in a civil court
under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following
matters, namely:--
( a) discovery and inspection;
(2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have
power to summon any person whose attendance he considers necessary whether to give evidence or to
produce any records during the course of any investigation or proceeding under this Act.
(3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such
officer may direct, and shall be bound to state the truth upon any subject respecting which they are
examined or make statements, and produce such documents as may be required.
(4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within
the meaning of Section 193 and Section 228 of the Indian Penal Code (45 of 1860).
(5) Subject to any rules made in this behalf by the Central Government, any officer referred to in
sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records
produced before him in any proceedings under this Act:
Provided that an Assistant Director or a Deputy Director shall not--

(a) impound any records without recording his reasons for so doing; or
(b) retain in his custody any such records for a period exceeding three months, without obtaining
the previous approval of the Director.
S. 51.
Jurisdiction of authorities.--
(1) The authorities shall exercise all or any of the powers and perform all or any of the functions
conferred on, or, assigned, as the case may be, to such authorities by or under this Act or the rules
framed thereunder in accordance with such directions as the Central Government may issue for the
exercise of powers and performance of the functions by all or any of the authorities.
(2) In issuing the directions or orders referred to in sub-section (1), the Central Government may have
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regard to any one or more of the following criteria, namely:--

( a ) territorial area;
(b) classes of persons;
(c) classes of cases; and
(d) any other criterion specified by the Central Government in this behalf.
S. 52.
Power of Central Government to issue directions, etc.--
The Central Government may, from time to time, issue such orders, instructions and directions to the authorities
as it may deem fit for the proper administration of this Act and such authorities and all other persons employed in
execution of this Act shall observe and follow such orders, instructions and directions of the Central Government:
Provided that no such orders, instructions or directions shall be issued so as to--
(a) require any authority to decide a particular case in a particular manner; or

(b) interfere with the discretion of the Adjudicating Authority in exercise of his functions.
S. 53.
Empowerment of certain officers.--
The Central Government may, by a special or general order, empower an officer not below the rank of Director
of the Central Government or of a State Government to act as an authority under this Act:
Provided that the Central Government may empower an officer below the rank of Director if the officer of the
rank of the Director or above are not available in a particular area.
S. 54.
Certain officers to assist in inquiry, etc.--
The following officers are hereby empowered and required to assist the authorities in the enforcement of this
Act, namely:--
( a) officers of the Customs and Central Excise Departments;

(b) officers appointed under sub-section (1) of Section 5 of the Narcotic Drugs and Psychotropic
Substances Act, 1985 (61 of 1985);
(c) income-tax authorities under sub-section (1) of Section 117 of the Income-tax Act, 1961 (43 of
Page 317
1961);
(d) officers of the stock exchange recognised under Section 4 of the Securities Contracts (Regulation)
Act, 1956 (42 of 1956);
(e) officers of the Reserve Bank of India constituted under sub-section (1) of Section 3 of the Reserve
Bank of India Act, 1934 (2 of 1934);
(f) officers of Police;
(g) officers of enforcement appointed under sub-section (1) of Section 36 of the Foreign Exchange
Management Act, 1999 (40 of 1999);
(h) officers of the Securities and Exchange Board of India established underSection 3 of the Securities
and Exchange Board of India Act, 1992 (15 of 1992);
(i) officers of any other body corporate constituted or established under a Central Act or a State Act;
(j) such other officers of the Central Government, State Government, local authorities or banking
companies as the Central Government may, by notification, specify, in this behalf.
CHAPTER IX
RECIPROCAL ARRANGEMENT FOR ASSISTANCE IN CERTAIN MATTERS AND PROCEDURE

FOR ATTACHMENT AND CONFISCATION OF PROPERTY
S. 55.
Definitions.--
(a)
"contracting State"
means any country or place outside India in respect of which arrangements have been
made by the Central Government with the Government of such country through a
treaty or otherwise;
(b)
"identifying"
includes establishment of a proof that the property was derived from, or used in the
commission of an offence under Section 3;
(c)
"tracing"
means determining the nature, source, disposition, movement, title or ownership of
property.
Page 318
S. 56.
Agreements with foreign countries.--
(1) The Central Government may enter into an agreement with the Government of any country outside
India for--
( a ) enforcing the provisions of this Act;
(b) exchange of information for the prevention of any offence under this Act or under the
corresponding law in force in that country or investigation of cases relating to any offence
under this Act,
and may, by notification in the Official Gazette, make such provisions as may be necessary for
implementing the agreement.
(2) The Central Government may, by notification in the Official Gazette, direct that the application of
this Chapter in relation to a contracting State with which reciprocal arrangements have been made,
shall be subject to such conditions, exceptions or qualifications as are specified in the said
notification.
S. 57.
Letters of request to a contracting State in certain cases.--
(1) Notwithstanding anything contained in this Act or the Code of Criminal Procedure, 1973 (2 of 1974)
if, in the course of an investigation into an offence or other proceedings under this Act, an application
is made to a Special Court by the Investigating Officer or any officer superior in rank to the
Investigating Officer that any evidence is required in connection with investigation into an offence or
proceedings under this Act and he is of the opinion that such evidence may be available in any place
in a contracting State, and the Special Court, on being satisfied that such evidence is required in
connection with the investigation into an offence or proceedings under this Act, may issue a letter of
request to a court or an authority in the contracting State competent to deal with such request to--
(i) examine facts and circumstances of the case,
(ii) take such steps as the Special Court may specify in such letter of request, and
(iii) forward all the evidence so taken or collected to the Special Court issuing such letter of
request.
(2) The letter of request shall be transmitted in such manner as the Central Government may specify in
this behalf.
(3) Every statement recorded or document or thing received under sub-section (1) shall be deemed to be
the evidence collected during the course of investigation.
Page 319
S. 58.
Assistance to a contracting State in certain cases.--
Where a letter of request is received by the Central Government from a Court or authority in a contracting State
requesting for investigation into an offence or proceedings under this Act and forwarding to such Court or authority
any evidence connected therewith, the Central Government may forward such letter of request to the Special Court
or to any authority under the Act as it thinks fit for execution of such request in accordance with the provisions of
this Act or as the case may be, any other law for the time being in force.
S. 59.
Reciprocal arrangements for processes and assistance for transfer of accused persons.--
(1) Where a Special Court, in relation to an offence punishable under Section 4, desires that--
( a ) a summons to an accused person, or
(b) a warrant for the arrest of an accused person, or
(c) a summons to any person requiring him to attend and produce a document or other thing, or to
produce a document or other thing, or to produce it, or
(d) a search-warrant,
issued by it shall be served or executed at any place in any contracting State, it shall send such
summons or warrant in duplicate in such form, to such Court, Judge or Magistrate through such
authorities, as the Central Government may, by notification, specify in this behalf and that Court,
Judge or Magistrate, as the case may be, shall cause the same to be executed.
(2) Where a Special Court, in relation to an offence punishable under Section 4 has received for service
or execution--
produce it, or
(d) a search warrant,
issued by a Court, Judge or Magistrate in a contracting State, it shall cause the same to be served
or executed as if it were a summons or warrant received by it from another court in the said territories
for service or execution within its local jurisdiction; and where--
(i) a warrant of arrest has been executed, the person arrested shall, be dealt with in accordance
with the procedure specified under Section 19;
(ii) a search warrant has been executed, the things found in this search shall, so far as possible, be
dealt with in accordance with the procedure specified under Sections 17 and 18:
Provided that in a case where a summons or search warrant received from a contracting State
has been executed, the documents or other things produced or things found in the search shall be
forwarded to the court issuing the summons or search-warrant through such authority as the Central
Government may, by notification, specify in this behalf.
(3) Where a person transferred to a contracting State pursuant to sub-section (2) is a prisoner in India, the
Special Court or the Central Government may impose such conditions as that court or Government
deems fit.
(4) Where the person transferred to India pursuant to sub-section (1) is a prisoner in a contracting State,
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the Special Court in India shall ensure that the conditions subject to which the prisoner is transferred
to India are complied with and such prisoner shall be kept in such custody subject to such conditions
as the Central Government may direct in writing.
S. 60.
Attachment, seizure and confiscation, etc., of property in a contracting State or India.--
(1) Where the Director has made an order for attachment of any property under Section 5 or where an
Adjudicating Authority has made an order confirming such attachment or confiscation of any property
under Section 8, and such property is suspected to be in a contracting State, the Special Court, on an
application by the Director or the Administrator appointed under sub-section (1) of Section 10, as the
case may be, may issue a letter of request to a Court or an authority in the contracting State for
execution of such order.
(2) Where a letter of request is received by the Central Government from a Court or an authority in a
contracting State requesting attachment or confiscation of the property in India, derived or obtained,
directly or indirectly, by any person from the commission of an offence under Section 3 committed in
that contracting State, the Central Government may forward such letter of request to the Director, as it
thinks fit, for execution in accordance with the provisions of this Act.
(3) The Director shall, on receipt of a letter of request under Section 58 or Section 59, direct any
authority under this Act to take all steps necessary for tracing and identifying such property.
(4) The steps referred to in sub-section (3) may include any inquiry, investigation or survey in respect of
any person, place, property, assets, documents, books of account in any bank or public financial
institutions or any other relevant matters.
(5) Any inquiry, investigation or survey referred to in sub-section (4) shall be carried out by an authority
mentioned in sub-section (3) in accordance with such directions issued in accordance with the
provisions of this Act.
(6) The provisions of this Act relating to attachment, adjudication, confiscation and vesting of property
in Central Government contained in Chapter III and survey, searches and seizures contained in
Chapter V shall apply to the property in respect of which letter of request is received from a court or
contracting State for attachment or confiscation of property.
30. [(7) When any property in India is confiscated as a result of execution of a request from a contracting
State in accordance with the provisions of this Act, the Central Government may either return such
property to the requesting State or compensate that State by disposal of such property on mutually
agreed terms that would take into account deduction for reasonable expenses incurred in investigation,
prosecution or judicial proceedings leading to the return or disposal of confiscated property.]
S. 61.
Procedure in respect of letter of request.--
Every letter of request, summons or warrant, received by the Central Government from, and every letter of
request, summons or warrant, to be transmitted to a contracting State under this Chapter shall be transmitted to a
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contracting State or, as the case may be, sent to the concerned court in India and in such form and in such manner as
the Central Government may, by notification, specify in this behalf.
CHAPTER X
MISCELLANEOUS
S. 62.
Punishment for vexatious search.--
Any authority or officer exercising powers under this Act or any rules made thereunder, who without reasons
recorded in writing,--
(a) searches or causes to be searched any building or place; or

(b) detains or searches or arrests any person,
shall for every such offence be liable on conviction for imprisonment for a term which may
extend to two years or fine which may extend to fifty thousand rupees or both.
S. 63.
Punishment for false information or failure to give information, etc.--
(1) Any person wilfully and maliciously giving false information and so causing an arrest or a search to
be made under this Act shall on conviction be liable for imprisonment for a term which may extend to
two years or with fine which may extend to fifty thousand rupees or both.
( a ) being legally bound to state the truth of any matter relating to an offence under Section 3,
refuses to answer any question put to him by an authority in the exercise of its powers under
this Act; or
(b) refuses to sign any statement made by him in the course of any proceedings under this Act,
which an authority may legally require to sign; or
(c) to whom a summon is issued under Section 50 either to attend to give evidence or produce
books of account or other documents at a certain place and time, omits to attend or produce
books of account or documents at the place or time,
he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but
which may extend to ten thousand rupees for each such default or failure.
(3) No order under this section shall be passed by an authority referred to in sub-section (2) unless the
person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the
matter by such authority.
S. 64.
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Cognizance of offences.--
(1) No court shall take cognizance of any offence under Section 62 or sub-section (1) of Section 63
except with the previous sanction of the Central Government.
(2) The Central Government shall, by an order either give sanction or refuse to give sanction within
ninety days of the receipt of the request in this behalf.
S. 65.
Code of Criminal Procedure, 1973 to apply.--
The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not
inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation,
prosecution and all other proceedings under this Act.
S. 66.
Disclosure of information.--
The Director or any other authority specified by him by a general or special order in this behalf may furnish or
cause to be furnished to--
(i) any officer, authority or body performing any functions under any law relating to imposition of any
tax, duty or cess or to dealings in foreign exchange, or prevention of illicit traffic in the narcotic drugs
and psychotropic substances under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of
1985); or
( ii ) such other officer, authority or body performing functions under any other law as the Central
Government may, if in its opinion it is necessary so to do in the public interest, specify, by
notification in the Official Gazette, in this behalf, any information received or obtained by such
Director or any other authority, specified by him in the performance of their functions under this Act,
as may, in the opinion of the Director or the other authority, so specified by him, be necessary for the
purpose of the officer, authority or body specified in Clause ( i ) or Clause ( ii ) to perform his or its
functions under that law.
S. 67.
Bar of suits in Civil Courts.--
No suit shall be brought in any civil court to set aside or modify any proceeding taken or order made under this
Page 323
Act and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government
for anything done or intended to be done in good faith under this Act.
S. 68.
Notice, etc., not to be invalid on certain grounds.--
No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to
have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or
shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order,
document or other proceeding if such notice, summons, order, documents or other proceeding is in substance and
effect in conformity with or according to the intent and purpose of this Act.
S. 69.
Recovery of fines.--
Where any fine imposed on any person under Section 13 or Section 63 is not paid within six months from the
day of imposition of fine, the Director or any other officer authorised by him in this behalf may proceed to recover
the amount from the said person in the same manner as prescribed in Schedule II of the Income-tax Act, 1961 (43 of
1961) for the recovery of arrears and he or any officer authorised by him in this behalf shall have all the powers of
the Tax Recovery Officer mentioned in the said Schedule for the said purpose.
S. 70.
Offences by companies.--
(1) Where a person committing a contravention of any of the provisions of this Act or of any rule,
direction or order made thereunder is a company, every person who, at the time the contravention was
committed, was in charge of, and was responsible to the company, for the conduct of the business of
the company as well as the company, shall be deemed to be guilty of the contravention and shall be
liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to
punishment if he proves that the contravention took place without his knowledge or that he exercised
all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the
provisions of this Act or of any rule, direction or order made thereunder has been committed by a
company and it is proved that the contravention has taken place with the consent or connivance of, or
is attributable to any neglect on the part of any director, manager, secretary or other officer of any
company, such director, manager, secretary or other officer shall also be deemed to be guilty of the
contravention and shall be liable to be proceeded against and punished accordingly.
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Explanation .--For the purposes of this section,--

(i)
"company"
means any body corporate and includes a firm or other association of
individuals; and
(ii)
"director",
in relation to a firm, means a partner in the firm.
S. 71.
Act to have overriding effect.--
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any
other law for the time being in force.
S. 72.
Continuation of proceedings in the event of death or insolvency.--
(1) Where--
( a ) any property of a person has been attached under Section 8 and no appeal against the order
attaching such property has been preferred; or
(b) any appeal has been preferred to the Appellate Tribunal, and--
(i) in a case referred to in Clause ( a ), such person dies or is adjudicated an insolvent
before preferring an appeal to the Appellate Tribunal; or
(ii) in a case referred to in Clause ( b ), such person dies or is adjudicated an insolvent
during the pendency of the appeal,
then, it shall be lawful for the legal representatives of such person or the official assignee or the
official receiver, as the case may be, to prefer an appeal to the Appellate Tribunal or as the case may
be, to continue the appeal before the Appellate Tribunal, in place of such person and the provisions of
Section 26 shall, so far as may be, apply, or continue to apply, to such appeal.
(2) Where--
( a ) after passing of a decision or order by the Appellate Tribunal, no appeal has been preferred to
the High Court under Section 42; or
Page 325
(b) any such appeal has been preferred to the High Court,--
then--
(i) in a case referred to in Clause ( a ), the person entitled to file the appeal dies or is adjudicated
an insolvent before preferring an appeal to the High Court, or
(ii) in a case referred to in Clause ( b ), the person who had filed the appeal dies or is adjudicated
an insolvent during the pendency of the appeal befor the High Court,
then, it shall be lawful for the legal representatives of such person, or the official assignee or the
official receiver, as the case may be, to prefer an appeal to the High Court or to continue the appeal
before the High Court in place of such person and the provision of Section 42 shall, so far as may be,
apply or continue to apply to such appeal.
(3) The powers of the official assignee or the official receiver under sub-section (1) or subsection (2)
shall be exercised by him subject to the provisions of the Presidency-towns Insolvency Act, 1909 (3
of 1909) or the Provincial Insolvency Act, 1920 (5 of 1920), as the case may be.
S. 73.
Power to make rules.--
(1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide
for all or any of the following matters, namely:--
( a ) the form in which records referred to in this Act may be maintained;
(b) the manner in which the order and the material referred to in sub-section (2) of Section 5 to
be maintained;
(c) matters in respect of experience of Members under the proviso to sub-section (3) of Section
6;
(d) the salaries and allowances payable to and other terms and conditions of service of Members
of the Adjudicating Authority under sub-section (9) of Section 6;
(e) the salaries and allowances payable to and other terms and conditions of service of the
officers and employees of the Adjudicating Authority under sub-section (3) of Section 7;
(f) the manner in which and the conditions subject to which the properties confiscated may be
received and managed under sub-section (2) of Section 10;
(g) the additional matters in respect of which the Adjudicating Authority may exercise the powers
of a civil court under Clause ( f ) of sub-section (1) of Section 11;
(h) the nature and value of transactions in respect of which records shall be maintained under
Clause ( a ) of sub-section (1) of Section 12;
(i) the time within which the information of transactions under Clause ( b ) of sub-section (1) of
Section 12 shall be furnished;
(j) the manner in which records shall be verified and maintained by banking companies, financial
institutions and intermediaries under Clause ( c ) of sub-section (1) of Section 12;
(k) the procedure and the manner of maintaining and furnishing information under subsection (1)
of Section 12 as required under Section 15;
(l) the manner in which the reasons and material referred to in sub-section (2) of Section 16
shall be mentioned;
(m) the rules relating to search and seizure under sub-section (1) of Section 17;
(n) the manner in which the reasons and the material referred to in sub-section (2) of Section 17
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shall be maintained;
(o) the manner in which the reasons and the material referred to in sub-section (2) of Section 18
(p) the manner in which the order and the material referred to in sub-section (2) of Section 19
(q) the manner in which records authenticated outside India may be received under subsection (2)
of Section 22;
(r) the form of appeal and the fee for filing such appeal, under sub-section (3) of Section 26;
(s) the salary and allowances payable to and the other 31. [terms and conditions of service
(including tenure of office)] of the Chairperson and other Members of the Appellate Tribunal
under Section 30;
(t) the salaries and allowances and the conditions of service of the officers and employees of the
Appellate Tribunal under sub-section (3) of Section 34;
(u) the additional matters in respect of which the Appellate Tribunal may exercise the powers of a
Civil Court under Clause ( i ) of sub-section (2) of Section 35;
32.Ins. by Act 20 of 2005, s. 8 (w.e.f. 1-7-2005).(ua)
conditions subject to which a police officer may be
authorised to investigate into an offence under sub-section (1A) of section 45;]
(v) the additional matters in respect of which the authorities may exercise powers of a civil court
under Clause ( f ) of sub-section (1) of Section 50;
(w) the rules relating to impounding and custody of records under sub-section (5) of Section 50;
(x) any other matter which is required to be, or may be prescribed.
S. 74.
Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or
more successive sessions, and if, before the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule
should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case
may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything
previously done under that rule.
S. 75.
Power to remove difficulties.--
(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by
order, published in the Official Gazette, make such provisions not inconsistent with the provisions of
this Act as may appear to be necessary for removing the difficulty:
Provided that no order shall be made under this section after the expiry of two years from the
Page 327
commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each
House of Parliament.
THE SCHEDULE
[See Section 2 (y)]
PART A
PARAGRAPH 1OFFENCES UNDER THE INDIAN PENAL CODE
Section Description of offence

121 Waging, or attempting to wage war or abetting waging of war, against the Govern-
ment of India.
121-A Conspiracy to commit offences punishable by Section 121 against the State.
33. [489A Counterfeiting currency notes or bank notes.
489B Using as genuine, forged or counterfeit currency notes or bank notes.]
PARAGRAPH 2
OFFENCES UNDER THE NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES ACT, 1985

34. [15 Contravention in relation to poppy straw.
16 Contravention in relation to coca plant and coca leaves.
17 Contravention in relation to prepared opium.
18 Contravention in relation to opium poppy and opium.
19 Embezzlement of opium by cultivator.
20 Contravention in relation to cannabis plant and cannabis.
21 Contravention in relation to manufactured drugs and preparations.]
22 Contravention in relation to psychotropic substances.
23 Illegal import into India, export from India to transhipment of nar-
cotic drugs and psychotropic substances.
24 External dealings in narcotic drugs and psychotropic substances in
Page 328
contravention ofSection 12 of the Narcotic Drugs and Psychotropic

Substances Act, 1985.
25-A Contravention of orders made underSection 9 -A of the Narcotic
Drugs and Psychotropic Substances Act, 1985.
27-A Financing illicit traffic and harbouring offenders.
29 Abetment and criminal conspiracy.
35. [PARAGRAPH 3
OFFENCES UNDER THE EXPLOSIVE SUBSTANCES ACT, 1908

3 Causing explosion likely to endanger life or property.
4 Attempt to cause explosion, or for making or keeping explosives
with intent to endanger life or property.
5 Making or possessing explosives under suspicious circumstances.]
36. [PARAGRAPH 4
OFFENCES UNDER THE UNLAWFUL ACTIVITIES (PREVENTION) ACT, 1967

10 read with section 3 Penalty for being member of an unlawful association, etc.
11 read with sections 3 and 7 Penalty for dealing with funds of an unlawful association.
13 read with section 3 Punishment for unlawful activities.
16 read with section 15 Punishment for terrorist act.
16A Punishment for making demands of radioactive substances,
nuclear devices, etc.
17 Punishment for raising fund for terrorist act.
18 Punishment for conspiracy, etc.
18A Punishment for organising of terrorist camps.
18B Punishment for recruiting of any person or persons for ter-
rorist act.
Page 329
19 Punishment for harbouring, etc.

20 Punishment for being member of terrorist gang or organisa-
tion.
21 Punishment for holding proceeds of terrorism.
38 Offence relating to membership of a terrorist organisation.
39 Offence relating to support given to a terrorist organisation.
40 Offence of raising fund for a terrorist organisation.]
PART B
37.Paragraph 1 of Schedule, Part B, substituted by the Prevention of

Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 13 (w.e.f.
1-6-2009).[PARAGRAPH 1
OFFENCES UNDER THE INDIAN PENAL CODE

120B Criminal conspiracy.
255 Counterfeiting Government stamp.
257 Making or selling instrument for counterfeiting Government stamp.
258 Sale of counterfeit Government stamp.
259 Having possession of counterfeit Government stamp.
260 Using as genuine a Government stamp known to be counterfeit.
302 Murder.
304 Punishment for culpable homicide not amounting to murder.
307 Attempt to murder.
308 Attempt to commit culpable homicide.
327 Voluntarily causing hurt to extort property, or to constrain to an il-
legal act.
329 Voluntarily causing grievous hurt to extort property, or to constrain
to an illegal act.
364A Kidnapping for ransom, etc.
384 to 389 Offences relating to extortion.
392 to 402 Offences relating to robbery and dacoity.
411 Dishonestly receiving stolen property.
412 Dishonestly receiving property stolen in the commission of a da-
Page 330
coity.
413 Habitually dealing in stolen property.
414 Assisting in concealment of stolen property.
417 Punishment for cheating.
418 Cheating with knowledge that wrongful loss may ensue to person
whose interest offender is bound to protect.
419 Punishment for cheating by personation.
420 Cheating and dishonestly inducing delivery of properties.
421 Dishonest or fraudulent removal or concealment of property to pre-
vent distribution among creditors.
422 Dishonestly or fraudulently preventing debt being available for
creditors.
423 Dishonest or fraudulent execution of deed of transfer containing
false statement of consideration.
424 Dishonest or fraudulent removal or concealment of property.
467 Forgery of valuable security, will, etc.
471 Using as genuine a forged document or electronic record.
472 and 473 Making or possessing counterfeit seal, etc., with intent to commit
forgery.
475 and 476 Counterfeiting device or mark.
481 Using a false property mark.
482 Punishment for using a false property mark.
483 Counterfeiting a property mark used by another.
484 Counterfeiting a mark used by a public servant.
485 Making or possession of any instrument for counterfeiting a prop-
erty mark.
486 Selling goods marked with a counterfeit property mark.
487 Making a false mark upon any receptacle containing goods.
488 Punishment for making use of any such false mark.
PARAGRAPH 2
OFFENCES UNDER THE ARMS ACT, 1959

25 To manufacture, sell, transfer, convert, repair or test or prove or ex-
pose or offer for sale or transfer or have in his possession for sale,
transfer, conversion, repair, test or proof, any arms or ammunition in
contravention of Section 5 of the Arms Act, 1959.
To acquire, have in possession or carry any prohibited arms or prohib-
Page 331
ited ammunition in contravention ofSection 7 of the Arms Act, 1959.

Contravention ofSection 24 -A of the Arms Act, 1959 relating to pro-
hibition as to possession of notified arms in disturbed areas, etc.
Contravention ofSection 24 -B of the Arms Act, 1959 relating to pro-
hibition as to carrying of notified arms in or through public places in
disturbed areas.
Other offences specified in Section 25.
26 To do any act in contravention of any provisions ofSections 3, 4, 10 or
12 of the Arms Act, 1959 in such manner as specified in sub-section
(1) of Section 26 of the said Act.
To do any act in contravention of any provisions ofSections 5, 6, 7 or
27 Use of arms or ammunitions in contravention of Section 5 or use of
any arms or ammunition in contravention ofSection 7 of the Arms Act,
1959.
28 Use and possession of fire arms or imitation fire arms in certain cases.
29 Knowingly purchasing arms from unlicensed person or for delivering
arms, etc., to person not entitled to possess the same.
30 Contravention of any condition of a licence or any provisions of the
Arms Act, 1959 or any rule made thereunder.
PARAGRAPH 3
OFFENCES UNDER THE WILD LIFE (PROTECTION) ACT, 1972

38. [51 read with Section 9 Hunting of wild animals.]
51 read with Section 17 A Contravention of provisions of Section 17 -A relating to prohibi-
tion of picking, uprooting, etc. of specified plants.
51 read with Section 39 Contravention of provisions of Section 39 relating to wild anim-
als, etc., to be Government property.
51 read with Section 44 Contravention of provisions of Section 44 relating to dealings in
trophy and animal articles without licence prohibited.
51 read with Section 48 Contravention of provisions of Section 48 relating to purchase of
animal, etc., by licensee.
51 read with Section 49 -B Contravention of provisions of Section 49 -B relating to prohibi-
tion of dealings in trophies, animal articles, etc., derived from
Page 332
scheduled animals.
PARAGRAPH 4
OFFENCES UNDER THE IMMORAL TRAFFIC (PREVENTION) ACT, 1956

5 Procuring, including or taking person for the sake of prostitu-
tion.
6 Detaining a person in premises where prostitution is carried
on.
8 Seducing or soliciting for purpose of prostitution.
9 Seduction of a person in custody.
PARAGRAPH 5
OFFENCES UNDER THE PREVENTION OF CORRUPTION ACT, 1988

7 Public servant taking gratification other than legal remuneration in
respect of an official Act.
8 Taking gratification in order, by corrupt or illegal means, to influ-
ence public servant.
9 Taking gratification for exercise of personal influence, with public
servant.
10 Abetment by public servant of offences defined inSection 8 or 9 of
the Prevention of Corruption Act, 1988.
39. [13 Criminal misconduct by a public servant.]
40. [PARAGRAPH 6
OFFENCES UNDER THE EXPLOSIVES ACT, 1884

Page 333

9-B Punishment for certain offences.
9-C Offences by companies.
PARAGRAPH 7
OFFENCES UNDER THE ANTIQUITIES AND ARTS TREASURES ACT, 1972

25 read with section 3 Contravention of export trade in antiquities and art treas-
ures.
28 Offences by companies.
PARAGRAPH 8
OFFENCES UNDER THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

12A read with section 24 Prohibition of manipulative and deceptive devices, insider trading
and substantial acquisition of securities or control.
PARAGRAPH 9
OFFENCES UNDER THE CUSTOMS ACT, 1962

135 Evasion of duty or prohibitions.
Page 334
PARAGRAPH 10
OFFENCES UNDER THE BONDED LABOUR SYSTEM (ABOLITION) ACT, 1976

16 Punishment for enforcement of bonded labour.
18 Punishment for extracting bonded labour under the bonded la-
bour system.
20 Abetment to be an offence.
PARAGRAPH 11
OFFENCES UNDER THE CHILD LABOUR (PROHIBITION AND REGULATION) ACT, 1986

14 Punishment for employment of any child to work in contravention
of the provisions of section 3.
PARAGRAPH 12
OFFENCES UNDER THE TRANSPLANTATION OF HUMAN ORGANS ACT, 1994

18 Punishment for removal of human organ without authority.
19 Punishment for commercial dealings in human organs.
20 Punishment for contravention of any other provision of this
Act.
PARAGRAPH 13
Page 335
OFFENCES UNDER THE JUVENILE JUSTICE (CARE AND PROTECTION OF CHILDREN) ACT, 2000

23 Punishment for cruelty to juvenile or child.
24 Employment of juvenile or child for begging.
25 Penalty for giving intoxicating liquor or narcotic drug or psycho-
tropic substance to juvenile or child.
26 Exploitation of juvenile or child employee.
PARAGRAPH 14
OFFENCES UNDER THE EMIGRATION ACT, 1983

24 Offences and penalties.
PARAGRAPH 15
OFFENCES UNDER THE PASSPORTS ACT, 1967

12 Offences and penalties
PARAGRAPH 16
OFFENCES UNDER THE FOREIGNERS ACT, 1946

Page 336

14 Penalty for contravention of provisions of the Act, etc.
14B Penalty for using forged passport.
l4C Penalty for abetment.
PARAGRAPH 17
OFFENCES UNDER THE COPYRIGHT ACT, 1957

63 Offence of infringement of copyright or other rights conferred
by this Act.
63A Enhanced penalty on second and subsequent convictions.
63B Knowing use of infringing copy of computer programme.
68A Penalty for contravention of section 52 A.
PARAGRAPH 18
OFFENCES UNDER THE TRADE MARKS ACT, 1999

103 Penalty for applying false trade marks, trade descriptions, etc.
104 Penalty for selling goods or providing services to which false trade-
mark or false trade description is applied.
105 Enhanced penalty on second or subsequent conviction.
107 Penalty for falsely representing a trade mark as registered.
120 Punishment of abetment in India of acts done out of India.
PARAGRAPH 19
Page 337
OFFENCES UNDER THE INFORMATION TECHNOLOGY ACT, 2000

72 Penalty for breach of confidentiality and privacy.
75 Act to apply for offence or contravention committed outside
India.
PARAGRAPH 20
OFFENCES UNDER THE BIOLOGICAL DIVERSITY ACT, 2002

55 read with section 6 Penalties for contravention of section 6, etc.
PARAGRAPH 21
OFFENCES UNDER THE PROTECTION OF PLANT VARIETIES AND FARMERS' RIGHTS ACT, 2001

70 read with section 68 Penalty for applying false denomination, etc.
71 read with section 68 Penalty for selling varieties to which false denomination
is applied.
72 read with section 68 Penalty for falsely representing a variety as registered.
73 read with section 68 Penalty for subsequent offence.
PARAGRAPH 22
OFFENCES UNDER THE ENVIRONMENT PROTECTION ACT, 1986

Page 338

15 read with section 7 Penalty for discharging environmental pollutants.
15 read with section 8 Penalty for handling hazardous substance.
PARAGRAPH 23
OFFENCES UNDER THE WATER (PREVENTION AND CONTROL OF POLLUTION) ACT, 1974

41(2) Penalty for pollution of stream or well.
43 Penalty for contravention of provisions of section 24.
PARAGRAPH 24
OFFENCES UNDER THE AIR (PREVENTION AND CONTROL OF POLLUTION) ACT, 1981

37 Failure to comply with the provisions for operating industrial
plant.
PARAGRAPH 25
OFFENCES UNDER THE SUPPRESSION OF UNLAWFUL ACTS AGAINST SAFETY OF MARITIME

NAVIGATION AND FIXED PLATFORMS ON CONTINENTAL SHELF ACT, 2002

3 Offences against ship, fixed platform, cargo of a ship, maritime
navigational facilities, etc.]
Page 339
41.Part C of the Schedule, inserted by the Prevention of

1-6-2009).[PART C
An offence which is the offence of cross border implications and is specified in,--
(1) Part A; or
(2) Part B without any monetary threshold; or
(3) the offences against property under Chapter XVII of the Indian Penal Code.]
* As amended by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009) [(w.e.f. 1-6-2009) vide
Notification No. S.O. 1388(E), dated 1-6-2009).
1. 1-7-2005 vide Notification No. G.S.R. 436(E), dated 1-7-2005.
2. Inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).
4. Substituted by Act 21 of 2009, s. 2, for "a non-banking financial company" (w.e.f. 1-6-2009).
5. Ins. by Act 20 of 2005, s. 2 (w.e.f. 1-7-2005).
7. Clauses (ra) to (rc) inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).
8. Sub-clauses (ii) and (iii) substituted for sub-clause (ii) by the Prevention of Money-Laundering (Amendment) Act, 2009 (21
of 2009), s. 2 (w.e.f. 1-6-2009).
9. Substituted for the words "ninety days" by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 3
(w.e.f. 1-6-2009).
10. Provisos substituted for the existing proviso by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009),
s. 3 (w.e.f. 1-6-2009).
11. Substituted for "one or more Adjudicating Authorities" by the Prevention of Money-Laundering (Amendment) Act, 2009
(21 of 2009), s. 4 (w.e.f. 1-6-2009).
12. Substituted for "sixty-two" by the Act 21 of 2009, s. 4 (w.e.f. 1-6-2009).

Page 340
13. Subs. for the words and figure "offence under Section 3 " by the Prevention of Money-Laundering (Amendment) Act, 2009
(21 of 2009), s. 5 (w.e.f. 1-6-2009).
14. Substituted by the Act 21 of 2009, s. 6 (w.e.f. 1-6-2009).
15. Substituted for the words "the Director" by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s.
7 (w.e.f. 1-6-2009).
16. Proviso substituted by Act 21 of 2009, s. 7 (w.e.f. 1-6-2009).
17. Proviso inserted by Act 21 of 2009, s. 8 (w.e.f. 1-6-2009).
18. Proviso omitted by Act 21 of 2009, s. 8 (w.e.f. 1-6-2009).
19. Subs. by Act 20 of 2005, s. 3 for "High Court" (w.e.f. 1-7-2005).
20. Clause (a) "( a ) is or has been a Judge of a High Court; or" omitted by the Prevention of Money-Laundering (Amendment)
Act, 2009 (21 of 2009), s. 9 (w.e.f. 1-6-2009).
21. Ins. by Act 20 of 2005, s. 3 (w.e.f. 1-7-2005).
22. S. 29 [Term of office] omitted by Act 20 of 2005, s. 4 (w.e.f. 1-7-2005).
23. Subs. by Act 20 of 2005, s. 5, for terms and conditions of service" (w.e.f. 1-7-2005).
24. Proviso inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 10 (w.e.f. 1-6-2009).
25. Substituted for "one or more of the other Members" by the Prevention of Money-Laundering (Amendment) Act, 2009 (21
of 2009), s. 11 (w.e.f. 1-6-2009).
26. The words "upon perusal of police report of the facts which constitute an offence under this Act or" omitted by Act 20 of
2005, s. 6 (w.e.f. 1-7-2005).
27. Subs. by Act 20 of 2005, s. 7 (w.e.f. 1-7-2005).
29. Omitted by Act 20 of 2005, s. 7 (w.e.f. 1-7-2005).
30. Sub-section (7) of Section 60 inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 12
(w.e.f. 1-6-2009).
32. Ins. by Act 20 of 2005, s. 8 (w.e.f. 1-7-2005).

Page 341
33. Sections and entries relating thereto inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009),
s. 13 (w.e.f. 1-6-2009).
34. Substituted for sections 15, 18 and 20 and the entries relating thereto by the Prevention of Money-Laundering
(Amendment) Act, 2009 (21 of 2009), s. 13 (w.e.f. 1-6-2009).
35. Paragraph 3 of Schedule, Part A, inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s.
13 (w.e.f. 1-6-2009).
13 (w.e.f. 1-6-2009).
37. Paragraph 1 of Schedule, Part B, substituted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009),
s. 13 (w.e.f. 1-6-2009).
38. Inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 13 (w.e.f. 1-6-2009).
40. Paragraphs 6 to 25 of Schedule, Part B, inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of
2009), s. 13 (w.e.f. 1-6-2009).
41. Part C of the Schedule, inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 13
(w.e.f. 1-6-2009).
Central Acts of India/CENTRAL ACT OF INDIA/B/BE/THE BERAR LAWS ACT, 1941 (4 OF 1941)/THE FIRST
SCHEDULE
THE FIRST SCHEDULE
[See Sections 2(1) and 3]
ACTS EXTENDED TO BERAR

Year Number Short title
1850 XIX The Apprentices Act, 1850.
1850 XXI The Caste Disabilities Removal Act,
1850.
1855 XIII The Indian Fatal Accidents Act, 1855.
1856 XI The European Deserters Act, 1856.
1856 XV The Hindu Widow's Re-marriage Act,
1856.
1860 XLV The Indian Penal Code, 1860.
1864 III The Foreigners Act, 1864.
1865 III The Carriers Act, 1865.
Page 342
1866 XXI The Native Converts' Marriage Dissol-

ution Act, 1866.
1867 XXV The Press and Registration of Books
Act, 1867.
1869 IV The Indian Divorce Act, 1869.
1872 I The Indian Evidence Act, 1872.
1872 III The Special Marriage Act, 1872.
1872 IX The Indian Contract Act, 1872.
1872 XV The Indian Christian Marriage Act,
1872.
1873 V The Government Savings Banks Act,
1873.
1873 X The Indian Oaths Act, 1873.
1874 IX The European Vagrancy Act, 1874.
1875 XVIII The Indian Law Reports Act, 1875.
1876 IX The Native Coinage Act, 1876.
1877 I The Specific Relief Act, 1877.
1878 VIII The Sea Customs Act, 1878.
1878 XI The Indian Arms Act, 1878.
1879 XVIII The Legal Practitioners Act, 1879.
1881 XXVI The Negotiable Instruments Act, 1881.
1882 II The Indian Trusts Act, 1882.
1882 XII The Indian Salt Act, 1882.
1884 IV The Indian Explosives Act, 1884.
1888 III The Police Act, 1888.
1889 IV The Indian Merchandise Marks Act,
1889.
1890 VIII The Guardians and Wards Act, 1890.
1890 XI The Prevention of Cruelty to Animals
Act, 1890.
1891 XVIII The Bankers Books Evidence Act,
1891.
1898 V The Code of Criminal Procedure,
1898.
1901 II The Indian Tolls (Army) Act, 1901.
1903 VII The Indian Works of Defence Act,
1903.
1903 XV The Indian Extradition Act, 1903.
1904 VII The Ancient Monuments Preservation
Act, 1904.
Page 343
1905 IV The Indian Railway Board Act, 1905.

1906 III The Indian Coinage Act, 1906.
1908 V The Code of Civil Procedure, 1908.
1908 VI The Explosive Substances Act, 1908.
1908 IX The Indian Limitation Act, 1908.
1908 XIV The Indian Criminal LawAmendment
Act, 1908.
1908 XVI The Indian Registration Act, 1908.
1909 IV The Whipping Act, 1909.
1910 IX The Indian Electricity Act, 1910.
1911 II The Indian Patents and Designs Act,
1911.
1911 VIII The Indian Army Act, 1911.
1912 IV The Indian Lunacy Act, 1912.
1913 II The Official Trustees Act, 1913.
1913 III The Administrator-General's Act,
1913.
1914 III The Indian Copyright Act, 1914.
1916 VII The Indian Medical Degrees Act,
1916.
1917 II The Motor Spirit (Duties) Act, 1917.
1917 XVII The Post Office Cash Certificates Act,
1917.
1918 XXII The Bronze Coin (Legal Tender) Act,
1918.
1919 XII The Poisons Act, 1919.
1920 V The Provincial Insolvency Act, 1920.
1920 XIV The Charitable and Religious Trusts
Act, 1920.
1920 XV The Indian Red Cross Society Act,
1920.
1920 XLVH The Imperial Bank of India Act, 1920.
1920 xlvhi The Indian Territorial Force Act, 1920.
1920 XLIX The Auxiliary Force Act, 1920.
1921 XVIII The Maintenance Orders Enforcement
Act, 1921.
1922 XI The Indian Income-tax Act, 1922.
1922 XII The Indian Finance Act, 1922.
1922 [1] The Indian States (Protection against
Disaffection) Act, 1922,
Page 344
1923 IV The Indian Mines Act, 1923.

1923 V The Indian Boilers Act, 1923.
1923 VIII The Workmen's Compensation Act,
1923.
1923 XXIII The Legal Practitioners (Women) Act,
1923.
1924 VI The Criminal Tribes Act, 1924.
1925 XXXIX The Indian Succession Act, 1925.
1926 XI The Promissory Notes (Stamp) Act,
1926.
1926 XVI The Indian Trade Unions Act, 1926.
1926 XXI The Legal Practitioners (Fees) Act,
1926.
1926 XXXVIII The Indian Bar Councils Act, 1926.
1929 VII The Trade Disputes Act, 1929.
1929 XIX The Child Marriage Restraint Act,
1929.
1930 II The Dangerous Drugs Act, 1930.
1930 III The Indian Sale of Goods Act, 1930.
1930 XVIII The Silver (Excise Duty) Act, 1930.
1930 XIX The Indian Companies (Amendment)
Act, 1930.
1930 XXIV The Indian Lac Cess Act, 1930.
1931 [1] The Indian Finance Act, 1931.
1931 [1] The Indian Finance (Supplementary
and Extending) Act, 1931.
1931 XVI The Provisional Collection of Taxes
Act, 1931.
1931 XXIII The Indian Press (Emergency Powers)
Act, 1931.
1932 IX The Indian Partnership Act, 1932.
1932 XI The Public Suits Validation Act, 1932.
1932 XII The Foreign Relations Act, 1932.
1932 XIII The Sugar Industry (Protection) Act,
1932.
1932 XXIII The Criminal Law Amendment Act,
1932.
1933 II The Children (Pledging of Labour)
Act, 1933.
1933 VII The Indian Finance Act, 1933.
Page 345
1933 XVII The Indian Wireless Telegraphy Act,

1933.
1933 XXVII The Indian Medical Council Act, 1933.
1934 II The Reserve Bank of India Act, 1934.
1934 VIII The Khaddar (Name Protection) Act,
1934.
1934 IX The Indian Finance Act, 1934.
1934 XI The Indian States (Protection) Act,
1934.
1934 XIV The Sugar (Excise Duty) Act, 1934.
1934 XVI The Matches (Excise Duty) Act, 1934.
1934 XX The Indian Carriage by Air Act, 1934.
1934 XXII The Indian Aircraft Act, 1934.
1934 XXIII The Mechanical Lighters (Excise
Duty) Act, 1934.
1934 XXV The Factories Act, 1934.
1934 XXXI The Iron and Steel Duties Act, 1934.
1934 XXXII The Indian Tariff Act, 1934.
1936 III The Parsi Marriage and Divorce Act,
1936.
1936 IV The Payment of Wages Act, 1936.
1936 XIV The Geneva Convention Implementing
Act, 1936.
1937 I The Agricultural Produce (Grading and
Marking) Act, 1937.
1937 VI The Arbitration (Protocol and Conven-
tion) Act, 1937.
1 No Act number given to these Acts. Act made by the Governor-General under S.67B of the Government of India Act.
Central Acts of India/CENTRAL ACT OF INDIA/C/CO/THE CODE OF CRIMINAL PROCEDURE, 1973/CHAPTER

XXIII EVIDENCE IN INQUIRIES AND TRIALS/B.--Commissions for the examination of witnesses/293. Reports of
certain Government scientific experts.
CHAPTER XXIII
Page 346
EVIDENCE IN INQUIRIES AND TRIALS
B.--Commissions for the examination of witnesses
293 Reports of certain Government scientific experts.
(1) Any document purporting to be a report under the hand of a Government scientific expert to whom
this section applies, upon any matter or thing duly submitted to him for examination or analysis and
report in the course of any proceeding under this Code, may be used as evidence in any inquiry, trial
or other proceeding under this Code.
(2) The Court may, if it thinks fit, summon and examine any such expert as to the subject-matter of his
report.
(3) Where any such expert is summoned by a Court and he is unable to attend personally, he may, unless
the Court has expressly directed him to appear personally, depute any responsible officer working
with him to attend the Court, if such officer is conversant with the facts of the case and can
satisfactorily depose in Court on his behalf.
(4) This section applies to the following Government scientific experts, namely:--
(a) any Chemical Examiner or Assistant Chemical Examiner to Government;
1[(b) the Chief Controller of Explosives;]
(c) the Director of the Finger Print Bureau;
(d) the Director, Haffkeine Institute, Bombay;
(e) the Director 2[, Deputy Director or Assistant Director] of a Central Forensic Science
Laboratory or a State Forensic Science Laboratory;
(f) the Serologist to the Government;
3[(g) any other Government Scientific Expert specified, by notification, by the Central Government
for this purpose.]
Amendment Act, 2005.--The designation "the Chief Inspector of Explosives" appearing in the Indian Explosives Act, 1884 has
been changed to "the Chief Controller of Explosives" by the Indian Explosives (Amendment) Act, 1978. The opportunity has,
therefore, been taken to make the consequential amendment to section 293 where the expression "the Chief Inspector of
Explosives" occurs. (Notes on Clauses).
1 Substituted by Act 25 of 2005, S. 26, for Cl. (b) (w.e.f. 23-6-2006). Prior to its substitution, Cl. (b) read as under:--"(b) the Chief
Inspector of Explosives;".
2 Inserted by Act 45 of 1978, S. 21 (w.e.f. 18-12-1978).
3 Added by Act 25 of 2005, S. 26 (w.e.f. 23-6-2006).
Central Acts of India/CENTRAL ACT OF INDIA/D/DI/THE DISTURBED AREAS (SPECIAL COURTS) ACT,1976
(77 OF 1976)/THE SCHEDULE
SCHEDULE I THE SCHEDULE

Page 347
[See section 2(d)]
1. Offences under the following provisions of the Indian Penal Code (45 of 1860):--
Section 120-B;
Sections 143 to 145, 147, 148, 151 to 155, 157, 158 and 160;
Sections 182, 183, 186 to 190;
Sections 193 to 195, 199, 201 to 203, 211 to 214, 216, 216-A and 225; Sections 295 to 298;
Sections 302, 303, 304, 307, 308, 323 to 335, 341 to 348, 352 to 358, 363 to 369 and 376;
Sections 379, 380, 382, 384 to 387, 392 to 399, 402, 411, 412, 426, 427, 431, 435, 436, 440, 447 to
462;
Sections 504 to 506 and 509;

2. Offences under the following provisions of the Arms Act, 1959 (54 of
1955):--
Sections 25 to 30.
3. Offences under the following provisions of the Indian Explosives Act, 1884 (4 of 1884):--
Sections 6(3) and 8 (2)
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVE SUBSTANCES ACT, 1908 (6 OF 1908)
THE EXPLOSIVE SUBSTANCES ACT, 1908
[8th June, 1908]
An Act further to amend the law relating to explosive substances.
WHEREAS it is necessary further to amend the law relating to explosive substances; It is hereby enacted as
follows:--
Statement of Objects and Reasons--Recent events have brought prominently to notice the inadequacy of the existing law to
deal with crimes committed by means of explosive substances. The Indian Explosives Act, 1884, was framed to prevent
accidents rather, than to prevent crime and its provisions are clearly inadequate to meet the present emergency. No sentence of
imprisonment can be imposed under that Act and the maximum penalty is only a fine of three thousand rupees. The Indian
Arms Act, 1878, though it applies to the possession of explosives as well as arms is also inadequate in respect of both of the
penalties it allows and scope of its provisions for dealing promptly with preparations to manufacture bombs and other
explosives. The Penal Code provides for the punishment of persons to cause hurt or mischief by means of explosive substances
and it also deals with attempts to cause hurt or mischief but only when any act towards the commission of the offence is
actually done. But it does not provide any penalty for making or possessing explosive substances with unlawful intent and it
does not in other cases always provide such severe penalties as are requisite. The Governor-General-in-Council therefore
considers it necessary to supplement the existing law by an Act on the lines of the English Explosive Substances Act, 1883,
which was enacted for the express purpose of dealing with anarchist crimes. The Bill which has been drafted to give effect to
this decision provides for the punishment of any person who causes an explosion likely to endanger life or property, or who
attempts to cause such an explosion, or makes or has in his possession any explosive substance with intent to endanger life or
Page 348
property. It further makes the manufacture or possession of explosive substances for any other than a lawful object a
substantive offence and throws on the person who makes or is in possession of any explosive substance the onus of proving that
the making or possession was lawful. It also provides adequately for the punishment both of principals and accessories.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)
THE EXPLOSIVES ACT, 1884111
Legislation History
Name of Title Type Reference Number Effective Date

(Notification/Amendment)
The Ammonium Nitrate Notification GSR_553(E) 11-Jul-2012
Rules, 2012
The Ammonium Nitrate Notification G_S_R_469_E 09-Jul-2013
(Amendment) Rules, 2013
The Explosives Notification GSR_772(E) 11-Dec-2013
(Amendments) Rules, 2013
The Ammonium Nitrate Notification GSR_622(E) 28-Aug-2014
(Amendment) Rules, 2014
[26th February, 1884]
An Act to regulate the manufacture, possession, use, sale, 2[transport, import and export] of explosives.
WHEREAS it is expedient to regulate the manufacture, possession, use, sale, 2[transport, import and export] of
explosives; It is hereby enacted as follows:--
Statement of Objects and Reasons--The object of this Bill is to provide a comprehensive law regulating the
manufacture, keeping, sale, conveyance and importation of explosives throughout British India. The matter was first
brought to the notice of the Government in connection with an application made by the agents of Nobel's Explosives
Company, Limited, for permission to import dynamite manufactured by the Company. The Government of Bombay,
to whom the application was made, referred the question to a Committee, which reported that the expediency of
allowing the importation into that Presidency of dynamite and other preparations of nitro-glycerine was doubtful.
The Government of Bombay forwarded a copy of this report to the Government of India with a request that the
importation of preparations of nitro-glycerine might be prohibited until further notice by a notification under the Sea
Customs Act. Before complying with this request the Government of India thought it well to consult the
Governments of Madras and Bengal. In reply, both Governments expressed an opinion that the importation of these
explosives should not be forbidden. The Government of Bengal further submitted a draft set of rules to regulate the
importation, package, transport and storage of dynamite and similar substances, together with a report which had
been prepared by a Committee by the Lieutenant-Governor to consider the entire subject. This Committee, while
recommending that the draft rules should be published as rules under the Indian Arms Act, 1878, suggested the
enactment of a comprehensive Imperial Act of a similar nature to the English Explosives Act, 1875 (38 Vic., c. 17),
which would in a convenient and compendious Code deal with the subject of explosives in its entirety and furnish the
public, as well as Government officials, with an easy means of ascertaining their duties, responsibilities and powers
respecting articles which by their inflammable, explosive or dangerous nature imperil the public safety.
Page 349
It appears to the Government of India that it would be an abuse of the powers conferred by the Indian Arms Act,
1878, to make rules of the nature of those submitted by the Bengal Committee under that Act. There are, no doubt,
powers conferred by the Indian Arms Act which might, at first sight seem to authorise the making of such rules; but
the object to which such rules are directed is altogether different from that of the Act. The object of the Arms Act
was to enable the Government more effectually prevent arms and ammunition which term under section 4 includes
gun-cotton, dynamite, lithofracteur and other fulminating substances from getting into the hands of persons who
would make a bad use of them. In other words, the main object of that Act was to restrict the possession of arms and
ammunition. But the main object of the rules prepared by the Bengal Committee is not restrictive. Their object is to
protect the public against the dangerous nature of the explosives to which they relate by regulating all dealings with
those explosives. If they are restricted, it is only so far as is necessary to carry out their protective object. Under these
circumstances, it appears to the Government that the proposed rules could not properly be published under the Indian
Arms Act, 1878.
Nor does it appear that there is any other enactment, as the law at present stands, under which rules of the nature of
those prepared by the Bengal Committee can be issued. Under the existing law, the only enactment relating to this
subject are to be found in various fragmentary provisions dealing with gunpowder and fireworks only, which are in
force in the Presidency towns and in certain municipalities and ports. It appears to the Government that it is
unsatisfactory that the law should be in this state at a time when dynamite and other compounds of nitro-glycerine
are rapidly taking the place of gunpowder in all works where blasting is necessary. Already these explosives have
been used to a considerable extent in connection with various works undertaken both of the Government and by
private enterprise throughout India; and it is only natural to suppose that, as their superiority to gunpowder becomes
more widely known their use will increase.
Under these circumstances, the suggestion of the Committee that an Act drawn on the model of the English
Explosives Act, 1875, and dealing comprehensively with the whole subject of explosives should be added to the
Indian Statute-book, recommends itself to the Government of India, as being the only satisfactory method of treating
the subject. Accordingly the present Bill has been prepared. It embodies such of the provisions of the English Act as
are in the opinion of the Government necessary in this country. In addition to the omission from the Bill of certain
provisions of the English Act, the Bill further differs from that Act in that, in accordance with the well-recognized
principle of Indian legislation, it confers powers on the Local Governments to provide by means of rules, adapted to
the varying local circumstances of the provinces under their administration, for many points for which there are
specific provisions in the body of the English Act.
Amendment Act 32 of 1978--Statement of Objects and Reasons.--
(1) The Indian Explosives Act, 1984 was enacted nearly a century ago when there were no indigenous
manufacturers of high explosives in this country and only a few simpler type of explosive were
manufactured.
(2) After Independence many large and small companies began to manufacture high explosives. There
was a general complaint from the industry that the Explosives Act, which was based on the old British
pattern, was not adequate to meet the country's growing requirements and resulted in difficulties for
the industry. With a view to removing the shortcomings in the Indian Explosives Act and to obviate
the difficulties experienced by the industry, the Government appointed in 1966 a Committee on
Explosives to suggest ways and means for removal of the difficulties experienced in the working of
the Act. This Committee submitted its Report suggesting a number of amendments to the Indian
Explosives Act. These recommendations have been accepted by the Government. The more important
amongst these recommendations are--
(a) enlargement of the definition of "explosive" to include therein some modern explosives;
(b) providing for variations of conditions of licenses granted under the Act or for suspension and
revocation of the license, for appeals against the orders of the licensing authority; and
(c) empowering the Central Government to exempt any person or class off persons from the
Page 350
provisions of the Act or the rules made thereunder.
The main object of the Bill is to give effect to the recommendations of the Committee on
Explosives.
(3) Opportunity is also being taken to insert a provision in the Act for the laying of rules made under the
Act before the Parliament in accordance with the recommendations of the Committee on Subordinate
Legislation.
11 This Act has been declared, under S. 3(a) of the Scheduled Districts Act 14 of 1874, to be in force in the Districts of Hazaribagh,
Lohardaga (now called the Ranchi District--See Calcutta Gazette, 1899, Pt. I, p. 44). Palamau and Manbhum and in Pargana Dhalbhum
and the Kolhan in the Singhbhum District of the Chota Nagpur Division--See Gazette of India, 1896, Pt. I, p. 972.
It has been applied to the Sonthal Parganas under S. 3 of the Sonthal Parganas Settlement Regulation 3 of 1872, as amended by the
Sonthal Parganas Laws Regulation 3 of 1886, and by S. 3 of Regulation 3 of 1899, and to Porahat Estate by Bihar Regulation 2 of 1946.
It has been extended to Berar by the Berar Laws Act 4 of 1941. The Act has been extended to the Union territories of: (1) Goa, Daman
and Diu by Regulation 12 of 1962, S. 3 and Sch. Goa is now a State, see Act 18 of 1987, S.3 (w.e.f.30-5-1987); (2)Dadra and Nagar
Haveli by Regulation 6 of 1963, S.2 and Sch.I; (3) Pondicherry by Regulation 7 of 1963, S. 3 and Sch.I (w.e.f.1-10-1963) and
(4)Laccadive, Minicoy and Amindivi Islands by Regulation 8 of 1965, S. 3 and Sch. These islands are now known as Lakshadweep, see
Act 34 of 1973, S.3.
The Act has been extended to the State of Sikkim, see S.O. 208(E)/75, dated 16-5-1975 and enforced on 7-11-1992 vide S.O. 823(E),
dated 7-12-1992, Gazette of India, Ext., Pt. II, S. 3(ii).
1 For the law relating to explosive substances, see also the Explosive Substances Act, 1908 (6 of 1908).
2 Substituted by Act 32 of 1978, S. 2, for "transport and importation" (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/1. Short title.
1 Short title.
(1) This Act may be called THE 3[* * *] EXPLOSIVES ACT, 1884; and
(2) Local extent.--It extends to the whole of India 4[* * *].
3 The word "Indian" omitted by Act 32 of 1978, S.3 (w.e.f.2-3-1983).
4 The words and letter "except Part B States" omitted by Act 3 of 1951, S. 3 and Sch. (w.e.f.1-4-1951).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/2.

Commencement.
2 Commencement.
Page 351
(1) This Act shall come into force on such date5 as the Central Government, by notification in the Official
Gazette, appoints.
6[* * *]
5 Brought into force on 1-7-1887.
6 Sub-S.(2) repealed by Act 12 of 1891, S. 2 and Sch. I.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/3. Repeal of
portions of Act 12 of 1875.
3 Repeal of portions of Act 12 of 1875.
[Repealed by the Indian Ports Act, 1889 (10 of 1889)7, section 2 and Schedule II.]
7 Repealed by the Indian Ports Act, 1908 (15 of 1908).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/4. Definitions.
4 Definitions.
8[In this Act, unless the context otherwise requires,--

(a)
"aircraft"
means any machine which can derive support in the atmosphere from the reactions of
the air, other than the reactions of the air against the earth's surface, and includes
balloons, whether fixed or free, airships, kites, gliders and flying machines;
(b)
"carriage" includes any carriage, wagon, cart, truck, vehicle or other

means of conveying goods conveying goods or passengers by land, in whatever
manner the same may be propelled;
(c)
"District Magistrate", in relation to any area for which a Commissioner of Police has been appointed,
means the Commissioner of Police thereof and includes--
Page 352
(a) any such Deputy Commissioner of Police, exercising jurisdiction over the whole or any part of
such area, as may be specified by the State Government in this behalf in relation to such area
or part; and
(b) an Additional District Magistrate;
(d)
"explosive"
means gunpowder, nitroglycerine, nitroglycol, guncotton, di-nitro-toluene,
tri-nitro-toluene, picric acid, di-nitro-phenol, tri-nitroresorcinol (styphnic acid),
cyclo-tri-methylene-tri-nitramine, penta-erythritoltetranitrate, tetryl,
nitro-guanidine, lead azide, lead styphynate, fulminate of mercury or any other
metal diazo-di-nitro-phenol, coloured fires or any other substance whether a
single chemical compound or a mixture of substances, whether solid or liquid
or gaseous used or manufactured with a view to produce a practical effect by
explosion or pyrotechnic effect; and includes fogsignals, fireworks, fuses,
rockets, percussion-caps, detonators, cartridges, ammunition of all descriptions
and every adaptation or preparation of an explosive as defined in this clause;
(e)
"export"
means taking out of India to a place outside India by land, sea or air;
(f)
"import"
means to bring into India from a place outside India by land, sea or air;
(g) "master",--
(a) in relation to any vessel or aircraft means any person, other than a pilot, harbour
master, assistant harbour master or berthing master, having for the time being the
charge or control of such vessel or aircraft, as the case may be; and
(b) in relation to any boat belonging to a ship, means the master of that ship;
(h) "manufacture" in relation to an explosive includes the process of--

(1) dividing the explosive into its component parts or otherwise breaking up or unmaking
the explosive, or making fit for use any damaged explosive; and
(2) re-making, altering or repairing the explosive;
(i)
"prescribed"
(j) "vessel" includes any ship, boat, sailing vessel, or other description of vessel used in
navigation whether propelled by oars or otherwise and anything made for the conveyance,
Page 353
mainly by water, of human beings or of goods and a caisson.]
COMMENTS
Liquid petroleum gas compressed in metal cylinders, is covered by the expression "explosive" as defined in the Explosives Act
and the Rules made thereunder: A.I.R. 1976 All. 266.
8 Substituted by Act 32 of 1978, S. 4, for S.4 (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/5. Power to
make rules as to licensing of the manufacture, possession, use, sale, [transport, import and export] of explosives.
5 Power to make rules as to licensing of the manufacture, possession, use, sale, 9[transport, import and export]
of explosives.
(1) The Central Government may, for any part of 10[India] 11[* * *] make rules12 consistent with this Act
to regulate or prohibit, except under and in accordance with the conditions of a license granted as
provided by those rules, the manufacture, possession, use, sale, 9[transport, import and export] of
explosives, or any specified class of explosives.
(2) Rules under this section may provide for all or any of the following, among other matters, that is to
say:--
(a) the authority by which licenses may be granted;
(b) the fees to be charged for licenses, and the other sums (if any) to be paid for expenses by
applicants for licenses;
(c) the manner in which applications for licenses must be made, and the matters to be specified in
such applications;
(d) the form in which, and the conditions on and subject to which, licenses must be granted;
(e) the period for which licenses are to remain in force; 13[*]
(ee) 14[the authority to which appeals may be preferred under section 6-F, the procedure to be
followed by such authority and the period within which appeals shall be preferred, the fees to
be paid in respect of such appeals and the circumstances under which such fees may be
refunded;
(eea) the total quantity of explosives that a licensee can purchase in a given period of time;
(eeb) the fees to be charged by the Chief Controller of Explosives or any officer authorised by him
in this behalf, for services rendered in connection with the manufacture, transport, import or
export of explosives;]
(f) the exemption absolutely or subject to conditions of any explosives 14[or any person or class
of persons] from the operation of the rules.
15[* * *]
Page 354
COMMENTS
If Cl.(a) and Cl.(b) are read widely so as to cover every activity which might take place on the premises, Cl. (c) would be
rendered redundant. This is not a permissible way of reading statutes. It will be noticed that the Legislature regards an offence
under Cl.(a) of S. 5(3) to be more serious than one under Cl. (b) and an offence under Cl. (b) to be more serious than one under
Cl.(c). Further, the rules are many; some regulate minor matters, and it would be absurd to treat the breach of every rule to be a
breach of Cl.(a) or Cl.(b): A.I.R. 1968 S.C. 1273.
If there is a breach of a rule, it has to be ascertained in each case whether the rule or part of it relates to activities mentioned in
Cl.(a) of S.5(3) or Cl.(b) of S.5(3). If it does not relate to any of the activities mentioned in Cl.(a) or Cl.(b) of S.5(3), the breach
of the rule would fall under Cl.(c) of S.5(3): A.I.R. 1968 S.C. 1273.
There is no finding or evidence that the four minors were engaged to manufacture or were taking part in the manufacture of
fire-works. Held, no offence under S. 5(3) of the Explosives Act is made out: A.I.R. 1968 S.C. 1273.
9 Substituted by Act 32 of 1978, S. 5, for "transport and importation" (w.e.f. 2-3-1983).
10 Substituted by Act 3 of 1951, S. 3 and Sch., for "Part A States and Part C States" (w.e.f.1-4-1951).
11 The words "and each Local Government with the previous sanction of the Governor- General in Council, may for any part of the
territories under its administration" omitted by A.O. 1937.
12 For the Explosive Rules, 1940, made under Ss. 5 and 7, see Gazette of India, Ext., 1940, p. 749.
13 The word "and" omitted by Act 32 of 1978, S. 5 (w.e.f.2-3-1983).
14 Inserted by Act 32 of 1978, S. 5 (w.e.f.2-3-1983).
15 Sub-S.(3) omitted by Act 32 of 1978, S. 5 (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/5-A. Persons
already in business in respect of certain explosives to carry on such business without license for a certain period.
5-A Persons already in business in respect of certain explosives to carry on such business without license for a
certain period.16
[Notwithstanding anything in section 5 or in the rules made thereunder where, immediately before the
commencement of the Indian Explosives (Amendment) Act, 1978 (32 of 1978), any person was carrying on the
business of manufacture, sale, transport, import or export of any explosive [for which no license was required under
this Act before its amendment by the Indian Explosives (Amendment) Act, 1978], then, such person shall be entitled
to continue to carry on such business without license in respect of such explosive--
(a) for a period of three months from the date of such commencement; or
(b) if before the expiry of the said period of three months, such person has made an application for grant
of license under this Act for such business in such explosive, until the final disposal of his application,
whichever is later.]

Page 355
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/6. Power for
Central Government to prohibit the manufacture, possession or importation of specially dangerous explosives.
6 Power for Central Government to prohibit the manufacture, possession or importation of specially
dangerous explosives.
(1) Notwithstanding anything in the rules under the last foregoing section, the Central Government may,
from time to time, by notification in the Official Gazette,--
(a) prohibit, either absolutely or subject to conditions, the manufacture, possession or importation
of any explosive which is of so dangerous a character that, in the opinion of the Central
Government, it is expedient for the public safety to issue the notification; 17[*]
17[* * *]
(2) 18[The Customs Act, 1962 (52 of 1962), shall have effect in relation to any explosive with regard to
the importation of which a notification has been issued under this section and the vessel, carriage or
aircraft containing such explosive as that Act has in relation to any article the importation of which is
prohibited or regulated thereunder and the vessel, carriage or aircraft containing such article.]
19[* * *]
17 The word "and" and Cl.(b) repealed by Act 10 of 1914, S. 3 and Sch. II.
18 Substituted by Act 32 of 1978, S. 7, for sub-S.(2) (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/6-A. Prohibition
of manufacture, possession, sale or transport of explosives by young persons and certain other persons.
6-A Prohibition of manufacture, possession, sale or transport of explosives by young persons and certain other
persons.20
[Notwithstanding anything in the foregoing provisions of this Act,--
(a) no person,--
(i) who has not completed the age of eighteen years, or
(ii) who has been sentenced on conviction of any offence involving violence or moral turpitude
for a term of not less than six months, at any time during a period of five years after the
expiration of the sentence, or
(iii) who has been ordered to execute under Chapter VIII of the Code of Criminal Procedure, 1973
(2 of 1974), a bond for keeping the peace or for good behaviour, at any time during the term of
the bond, or
Page 356
(iv) whose license under this Act has been cancelled, whether before or after the commencement
of the Indian Explosives (Amendment) Act, 1978 (32 of 1978), for contravention of the
provisions of this Act or of the rules made thereunder, at any time during a period of five years
from the date of cancellation of such license,
shall,--
(1) manufacture, sell, transport, import or export any explosive, or
(2) possess any such explosive as the Central Government may, having regard to the
nature thereof, by notification in the Official Gazette, specify,
(b) no person shall sell, deliver or despatch any explosive to a person whom he knows or has
reason to believe at the time of such sale, delivery or despatch,--
(i) to be prohibited under clause (a) to manufacture, sell, transport, import, export or
possess such explosive, or
(ii) to be of unsound mind.]
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/6-B. Grant of
licenses.
6-B Grant of licenses.
(1) Where a person makes an application for license under section 5, the authority prescribed in the rules
made under that section for grant of licenses (hereinafter referred to in this Act as the licensing
authority), after making such inquiry, if any, as it may consider necessary, shall, subject to the other
provisions of this Act, by order in writing either grant the license or refuse to grant the same.
(2) The licensing authority shall grant a license--
(a) where it is required for the purpose of manufacture of explosives if the licensing authority is
satisfied that the person by whom license is required--
(i) possesses technical know-how and experience in the manufacture of explosives; or
(ii) has in his employment or undertakes to employ a person or persons possessing such
technical know-how and experience; or
(b) where it is required for any other purpose, if the licensing authority is satisfied that the person
by whom license is required has a good reason for obtaining the same.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/6-C. Refusal of
licenses.
Page 357
6-C Refusal of licenses.
(1) Notwithstanding anything contained in section 6-B, the licensing authority shall refuse to grant a
license--
(a) where such license is required in respect of any prohibited explosives; or
(b) where such license is required by a person whom the licensing authority has reason to
believe--
(i) to be prohibited by this Act or by any other law for the time being in force to
manufacture, possess, sell, transport, import or export any explosive, or
(ii) to be of unsound mind, or
(iii) to be for any reason unfit for a license under this Act; or
(c) where the licensing authority deems it necessary for the security of the public peace or for
public safety to refuse to grant such license.
(2) Where the licensing authority refuses to grant a license to any person it shall record in writing the
reasons for such refusal and furnish to that person on demand a brief statement of the same unless in
any case the licensing authority is of opinion that it will not be in the public interest to furnish such
statement.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/6-D. Licensing
authority competent to impose conditions in addition to prescribed conditions.
6-D Licensing authority competent to impose conditions in addition to prescribed conditions.
A license granted under section 6-B may contain in addition to prescribed conditions such other conditions as may be
considered necessary by the licensing authority in any particular case.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/6-E. Variation,
suspension and revocation of licenses.
6-E Variation, suspension and revocation of licenses.
(1) The licensing authority may vary the conditions subject to which a license has been granted except
such of them as have been prescribed and may for that purpose require the holder of license by notice
in writing to deliver-up the license to it within such time as may be specified in the notice.
(2) The licensing authority may, on the application of the holder of a license, also vary the conditions of
the license except such of them as have been prescribed.
(3) The licensing authority may, by order in writing, suspend a license for such period as it thinks fit or
revoke a license,--
(a) if the licensing authority is satisfied that the holder of the license is prohibited by this Act or
by any other law for the time being in force to manufacture, possess, sell, transport, import or
export any explosive, or is of unsound mind, or is for any reason unfit for a license under this
Page 358
Act; or
(b) if the licensing authority deems it necessary for the security of the public peace or for public
safety to suspend or revoke the license; or
(c) if the license was obtained by the suppression of material information or on the basis of wrong
information provided by the holder of the license or any other person on his behalf at the time
of applying for the license; or
(d) if any of the conditions of the license has been contravened; or
(e) if the holder of the license has failed to comply with a notice under sub-section (1) requiring
him to deliver-up the license.
(4) The licensing authority may also revoke a license on the application of the holder thereof.
(5) Where the licensing authority makes an order varying the conditions of a license under sub-section (1)
or an order suspending or revoking a license under sub-section (3), it shall record in writing the
reasons therefor and furnish to the holder of the license on demand a brief statement of the same
unless in any case the licensing authority is of the opinion that it will not be in the public interest to
furnish such statement.
(6) A Court convicting the holder of a license of any offence under this Act or the rules made thereunder
may also suspend or revoke a license:
Provided that if the conviction is set aside on appeal or otherwise, the suspension or revocation shall
become void.
(7) An order of suspension or revocation under sub-section (6) may also be made by an appellate Court or
by the High Court when exercising its powers of revision.
(8) The Central Government may, by order in the Official Gazette, suspend or revoke, or direct any
licensing authority to suspend or revoke, all or any licenses granted under this Act throughout India or
any part thereof.
(9) On the suspension or revocation of a license under this section the holder thereof shall without delay
surrender the license to the authority by whom it has been suspended or revoked or to such other
authority as may be specified in this behalf in the order of suspension or revocation.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/6-F. Appeals.
6-F Appeals.
(1) Any person aggrieved by an order of the licensing authority refusing to grant a license or varying the
conditions of a license or by an order of the licensing authority suspending or revoking a license may
prefer an appeal against that order to such authority (hereinafter referred to as the appellate authority)
and within such period as may be prescribed:
Provided that no appeal shall lie against an order made by, or under the direction of the Central
Government.
(2) No appeal shall be admitted if it is preferred after the expiry of the period prescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed therefor if the
appellant satisfies the appellate authority that he had sufficient cause for not preferring the appeal
within that period.
(3) The period prescribed for an appeal shall be computed in accordance with the provisions of the
Page 359
Limitation Act, 1963 (36 of 1963), with respect to the computation of periods of limitation
thereunder.
(4) Every appeal under this section shall be made by a petition in writing and shall be accompanied by a
brief statement of the reasons for the order appealed against where such statement has been furnished
to the appellant and by such fee as may be prescribed.
(5) In disposing of an appeal the appellate authority shall follow such procedure as may be prescribed:
Provided that no appeal shall be disposed of unless the appellant has been given a reasonable
opportunity of being heard.
(6) The order appealed against shall, unless the appellate authority conditionally or unconditionally
directs otherwise, be in force pending the disposal of the appeal against such order.
(7) Every order of the appellate authority confirming, modifying or reversing the order appealed against
shall be final.]
make rules conferring powers of inspection, search, seizure, detention and removal.
7 Power to make rules conferring powers of inspection, search, seizure, detention and removal.
(1) The Central Government 21[* * *] may make rules consistent with this Act authorising any officer,
either by name or in virtue of his office--
(a) to enter, inspect and examine 22[any place, aircraft, carriage or vessel] in which an explosive is
being manufactured, possessed, used, sold, 23[transported, imported or exported] under a
license granted under this Act, or in which he has reason to believe that an explosive has been
or is being manufactured, possessed, used, sold, 23[transported, imported or exported] in
contravention of this Act or of the rules made under this Act;
(b) to search for explosives therein;
(c) to make samples of any explosive found therein on payment of the value thereof; and
(d) 24[to seize, detain and remove any explosive or ingredient thereof found therein and, if
necessary, also destroy such explosive or ingredient.]
(2) The provisions of the 25[Code of Criminal Procedure, 1973 (2 of 1974)], relating to searches under
that Code shall, so far as the same are applicable, apply to searches by officers authorised by rules
under this section.
21 The words "or the Local Government with the previous sanction of the Governor- General in Council" omitted by A.O. 1937.
22 Substituted by Act 32 of 1978, S. 9, for "any place, carriage or vessel" (w.e.f.2-3-1983).
23 Substituted by Act 32 of 1978, S.9, for "transported or imported" (w.e.f.2-3-1983).
24 Substituted by Act 32 of 1978, S. 9, for Cl.(d) (w.e.f.2-3-1983).
25 Substituted by Act 32 of 1978, S. 9, for "Code of Criminal Procedure, 1898 (5 of 1898)" (w.e.f.2-3-1983).
Page 360
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/8. Notice of
accidents.
8 Notice of accidents.
(1)] 26[Whenever there occurs in or about, or in connection with, any place in which an explosive is
manufactured, possessed or used, or 27[any aircraft, carriage or vessel] either conveying an explosive
or on or from which an explosive is being loaded or unloaded, any accident by explosion or by fire
attended with loss of human life or serious injury to person or property, or of a description usually
attended with such loss or injury, the occupier of the place, or 28[the master of the aircraft or vessel],
or the person in charge of the carriage, as the case may be, shall 29[within such time and in such
manner as may be by rule prescribed give notice thereof and of the attendant loss of human life or
personal injury, if any, to the 30[Chief Controller of Explosives] and] to the officer-in-charge of the
nearest police station.
31[* * *]
26 S.8 renumbered as sub-S.(1) thereof by Ordinance 18 of 1945, S. 2.
27 Substituted by Act 32 of 1978, S. 10, for "any carriage or vessel" (w.e.f.2-3-1983).
28 Substituted by Act 32 of 1978, S. 10, for "the master of the vessel" (w.e.f.2-3-1983).
29 Substituted by Ordinance 18 of 1945, S. 2, for "forthwith give notice thereof".
30 Substituted by Act 32 of 1978, S. 10, for "Chief Inspector of Explosives in India" (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/9. Inquiry into
accidents.
9 Inquiry into accidents.32
(1) [Where any accident such as is referred to in section 8 occurs in or about or in connection with 33[any
place, aircraft, carriage or vessel] under the control of any of 34[Armed Forces of the Union], an
inquiry into the causes of the accident shall be held by the naval, military, or air force authority
concerned, and where any such accident occurs in any other circumstances, the District Magistrate
35[* * *] shall, in cases attended by loss of human life, or may, in any other case, hold or direct a
Magistrate subordinate to him to hold, such an inquiry.
(2) Any person holding an inquiry under this section shall have all the powers of a Magistrate in holding
an inquiry into an offence under the 36[Code of Criminal Procedure, 1973 (2 of 1974)], and may
exercise such of the powers conferred on any officer by rules under section 7 as he may think it
necessary or expedient to exercise for the purposes of the inquiry.
(3) The person holding an inquiry under this section shall make a report to the Central Government
Page 361
stating the causes of the accident and its circumstances.

(4) The Central Government may make rules--
(a) to regulate the procedure at inquiries under this section;
(b) to enable the 37[Chief Controller of Explosives] to be present or represented at any such
inquiry;
(c) to permit the 37[Chief Controller of Explosives] or his representative to examine any witnesses
at the inquiry;
(d) to provide that where the 37[Chief Controller of Explosives] is not present or represented at
any such inquiry, a report of the proceedings thereof shall be sent to him;
(e) to prescribe the manner in which and the time within which notices referred to in section 8
shall be given.
32 Substituted by Ordinance 18 of 1945, S. 3, for Ss.9 and 9-A.
33 Substituted by Act 32 of 1978, S. 11, for "any place, carnage or vessel" (w.e.f.2-3-1983).
34 Substituted by Act 32 of 1978, S. 11, for "the Indian Forces" (w.e.f.2-3-1983).
35 The brackets and words "(or in a Presidency-town, the Commissioner of Police)" omitted by Act 32 of 1978, S. 11 (w.e.f.2-3-1983).
36 Substituted by Act 32 of 1978, S. 9, for "Code of Criminal Procedure, 1898 (5 of 1898)" (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/9-A. Inquiry into
more serious accidents.
9-A Inquiry into more serious accidents.
(1) The Central Government may, where it is of opinion, whether or not it has received the report of an
inquiry under section 9, that an inquiry of more formal character should be held into the causes of an
accident such as is referred to in section 8, appoint the 38[Chief Controller of Explosives] or any other
competent person to hold such inquiry, and may also appoint one or more persons possessing legal or
special knowledge to act as assessors in such inquiry.
(2) Where the Central Government orders an inquiry under this section, it may also direct that any inquiry
under section 9 pending at the time shall be discontinued.
(3) The person appointed to hold an inquiry under this section shall have all the powers of a Civil Court
under the Code of Civil Procedure, 1908 (5 of 1908), for the purposes of enforcing the attendance of
witnesses and compelling the production of documents and material objects; and every person
required by such person as aforesaid to furnish any information shall be deemed to be legally bound
so to do within the meaning of section 176 of the Indian Penal Code (45 of 1860).
(4) Any person holding an inquiry under this section may exercise such of the powers conferred on any
officer by rules under section 7 as he may think it necessary or expedient to exercise for the purposes
of the inquiry.
(5) The person holding an inquiry under this section shall make a report to the Central Government
stating the causes of the accident and its circumstances, and adding any observations which he or any
Page 362
of the assessors may think fit to make; and the Central Government shall cause every report so made
to be published at such time and in such manner as it may think fit.
(6) The Central Government may make rules for regulating the procedure at inquiries under this section.]
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/9-B. Punishment
for certain offences.
(1) 39[Whoever, in contravention of rules made under section 5 or of the conditions of a license granted
under the said rules--
(a) manufactures, imports or exports any explosive shall be punishable with imprisonment for a
term which may extend to three years, or with fine which may extend to five thousand rupees,
or with both;
(b) possesses, uses, sells or transports any explosive shall be punishable with imprisonment for a
term which may extend to two years or with fine which may extend to three thousand rupees
or with both; and
(c) in any other case, with fine which may extend to one thousand rupees.
(2) Whoever in contravention of a notification issued under section 6 manufactures, possesses or imports
any explosive shall be punishable with imprisonment for a term which may extend to three years or
with fine which may extend to five thousand rupees or with both; and in the case of importation by
water, the owner and master of the vessel or in the case of importation by air, the owner and the
master of the aircraft, in which the explosive is imported shall, in the absence of reasonable excuse,
each be punishable with fine which may extend to five thousand rupees.
(3) Whoever,--
(a) manufactures, sells, transports, imports, exports or possesses any explosive in contravention of
the provisions of clause (a) of section 6-A; or
(b) sells, delivers or despatches any explosive in contravention of the provisions of clause (b) of
that section,
shall be punishable with imprisonment for a term which may extend to three years or with fine
or with both; or
(c) in contravention of the provisions of section 8 fails to give notice of any accident shall be
punishable,--
(i) with fine which may extend to five hundred rupees, or
(ii) if the accident is attended by loss of human life, with imprisonment for a term which
may extend to three months or with fine or with both.
Page 363
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/9-C. Offences by
companies.
(1) Whenever an offence under this Act has been committed by a company, every person who at the time
the offence was committed was in charge of, or was responsible to the company for the conduct of the
business of the company, as well as the company, shall be deemed to be guilty of the offence and shall
be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment under this Act if he proves that the offence was committed without his knowledge and
that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been
committed by a company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other
officer of the company, such director, manager, secretary or other officer shall also be deemed to be
guilty of that offence and shall be liable to be proceeded against the punished accordingly.
Explanation.--For the purposes of this section,--

(a)
"company"
means any body corporate, and includes a firm or other association of
individuals; and
(b)
"director", in relation to a firm,

means a partner in the firm.]
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/10. Forfeiture of
explosives.
10 Forfeiture of explosives.
When a person is convicted of an offence punishable under this Act or the rules made under this Act, the Court
before which he is convicted may direct that the explosive, or ingredient of the explosive, or the substance (if any) in
respect of which the offence has been committed, or any part of that explosive, ingredient or substance, shall, with
Page 364
the receptacles containing the same, be forfeited.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/11. Distress of
aircraft or vessel.
11 Distress of aircraft or vessel.
40[Where the owner or master of any aircraft or vessel is adjudged under this Act to pay a fine for any offence
committed with, or in relation to, that aircraft or vessel, the Court may, in addition to any power it may have for the
purpose of compelling payment of the fine, direct it to be levied by distress and sale of,--
(a)
the aircraft and its furniture or so much of the furniture, or
(b)
the vessel and the tackle, apparel and furniture of such vessel or so much of the tackle, apparel and furniture thereof,
as is necessary for the payment of the fine.]
40 Substituted by Act 32 of 1978, S. 14, for S.11 (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/12. Abetment
and attempts.
12 Abetment and attempts.
Whoever abets, within the meaning of the Indian Penal Code (45 of 1860), the commission of an offence punishable
under this Act, or the rules made under this Act, attempts to Act, or commit any such offence and in such attempt
does any act towards the commission of the same, shall be punished as if he had committed the offence.
arrest without warrant persons committing dangerous offences.
13 Power to arrest without warrant persons committing dangerous offences.
Whoever is found committing any act for which he is punishable under this Act or the rules under this Act, and
which tends to cause explosion or fire in or about any place where an explosive is manufactured or stored, or any
railway or port, or any carriage, 41[aircraft or vessel], may be apprehended without a warrant by a police officer, or
by the occupier of, or the agent or servant of, or other person authorised by the occupier of, that place, or by any
agent or servant of, or other person authorised by the railway administration or 42[conservator of the port or officer in
charge of the airport], and be removed from the place where he is arrested and conveyed as soon as conveniently
may be before a Magistrate.
Page 365
41 Substituted by Act 32 of 1978, S. 15, for "ship or boat" (w.e.f. 2-3-1983).
42 Substituted by Act 32 of 1978, S. 15, for "conservator of the port" (w.e.f. 2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/14. Saving and
power to exempt
14 Saving and power to exempt
(1) 43[Nothing in this Act, except sections 89 and 9-A shall apply to the manufacture, possession, use,
transport or importation of any explosive--
(a) by any of the 44[Armed Forces of the Union, and Ordinance Factories or other establishments
of such Forces] in accordance with rules or regulations made by 45[* * *] the Central
Government;
(b) by any person employed under 46[the Central Government or under a State Government] in
execution of this Act.
(2) The Central Government may by notification in the Official Gazette exempt, absolutely or subject to
any such conditions as it may think fit to impose, 47[any explosive and any person or class of persons
from all or any of the provisions of this Act or the rules made thereunder].
43 Substituted by Ordinance 18 of 1945, S. 4, for S.14.
44 Substituted by Act 32 of 1978, S. 16, for "Indian Forces" (w.e.f.2-3-1983).
45 The words "His Majesty's Government in the United Kingdom or" omitted by Ordinance 18 of 1945, S. 4.
46 Substituted by A.O. 1948, for "any Government in British India".
47 Substituted by Act 32 of 1978, S. 16, for certain words (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/15. Saving of
[Arms Act, 1959].
15 Saving of [Arms Act, 1959].
48Nothing in this Act shall affect the provisions of the 48[Arms Act, 1959 (54 of 1959)]:
Provided that an authority granting a license under this Act for the manufacture, possession, sale, transport or
importation of an explosive may, if empowered in this behalf by the rules under which the license is granted, direct
by an order written on the license that it shall have the effect of a like license granted under the said 49[* * *] Arms
Act.
Page 366
48 Substituted by Act 32 of 1978, S. 17, for "Indian Arms Act, 1878 (11 of 1878)" (w.e.f.2-3-1983).
49 The word "Indian" omitted by Act 32 of 1978, S. 17 (w.e.f.2-3-1983).
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/16. Saving as to
liability under other law.
16 Saving as to liability under other law.
Nothing in this Act or the rules under this Act shall prevent any person from being prosecuted under any other law
for any act or omission which constitutes an offence against this Act or those rules, or from being liable under that
other law to any other or higher punishment or penalty than that provided by this Act or those rules:
Provided that a person shall not be punished twice for the same offence.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/17. Extension of
definition of "explosive" to other explosive substances.
17 Extension of definition of "explosive" to other explosive substances.
The Central Government may, from time to time, by notification in the Official Gazette, declare that any substance
which appears to the Central Government to be specially dangerous to life or property, by reason either of its
explosive properties or of any process in the manufacture thereof being liable to explosion, shall be deemed to be an
explosive within the meaning of this Act, and the provisions of this Act (subject to such exceptions, limitations and
restrictions as may be specified in the notification) shall accordingly extend to that substance in like manner as if it
were included in the definition of the term "explosive" in this Act.
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/17-A. [Power to
delegate.
17-A [Power to delegate.
50The Central Government may, by notification in the Official Gazette, direct that any power or function which may
be exercised or performed by it under this Act other than the power under sections 5, 6, 6-A, 14 and 17 may, in
relation to such matters and subject to such conditions, if any, as it may specify in the notification, be exercised or
performed also by--
(a) such officer or authority subordinate to the Central Government, or
(b) such State Government or such officer or authority subordinate to the State Government.]
Central Acts of India/CENTRAL ACT OF INDIA/E/EX/THE EXPLOSIVES ACT, 1884 (4 OF 1884)/18. Procedure
Page 367
for making, publication and confirmation of rules.
18 Procedure for making, publication and confirmation of rules.
(1) An authority making rules under this Act shall, before making the rules, publish a draft of the
proposed rules for the information of persons likely to be affected thereby.
(2) The publication shall be made in such manner as the Central Government, from time to time, by
notification in the Official Gazette prescribes51.
(3) There shall be published with the draft a notice specifying a date at or after which the draft will be
taken into consideration.
(4) The authority making the rules shall receive and consider any objection or suggestion which may be
made by any person with respect to the draft before the date so specified.
(5) A rule made under this Act shall not take effect 52[* * *] until it has been published in the Official
Gazette, 52[* * *].
(6) The publication in the Official Gazette of a rule purporting to be made under this Act shall be
conclusive evidence that it has been duly made, and , if it requires sanction, that it has been duly
sanctioned.
(7) All powers to make rules conferred by this Act may be exercised from time to time as occasion
requires.
(8) 53[Every rule made under this Act shall be laid, as soon as may be after it is made, before each House
of Parliament, while it is in session, for a total period of thirty days which may be comprised in one
session or in two or more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree in making any
modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter
have effect only in such modified form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the validity of anything previously done
under that rule.]
51 For mode prescribed, see Gazette of India, 1927, Pt. I, p. 769.
52 Certain words omitted by A.O. 1937.
Central Acts of India/CENTRAL ACT OF INDIA/M/ME/THE MERCHANT SHIPPING ACT, 1958 (44 OF
1958)/PART IX - SAFETY Dangerous goods and grain cargoes/331. Carriage of dangerous goods.
PART IX
SAFETY
Dangerous goods and grain cargoes
331. Carriage of dangerous goods.

Page 368
(1) The Central Government may make rules for regulating in the interests of safety the carriage of
dangerous goods in ships.
53[(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide
for the classification, packing, labelling and marking of such goods or any class of such goods,
stowing of such goods (whether with or without other cargo) including plans for stowing, the fixing of
the maximum quantity of any such class of goods which may be carried in different ships or classes of
ships, and such other matters relating to dangerous goods as required to be provided for implementing
the provisions of the Safety Convention.]
(3) The owner, master or agent of a ship carrying or intending to carry any dangerous goods as cargo and
about to make a voyage from a port in India shall furnish in advance the prescribed particulars of the
ship and the cargo to such authority as may be prescribed for the purpose.
(4) A surveyor may inspect the ship for the purpose of securing that any rules under this section are
complied with.
(5) If any of the rules made in pursuance of this section is not complied with in relation to any ship, the
ship shall be deemed for the purpose of this Part to be an unsafe ship.
(6) This section shall apply, in the same manner as it applies to Indian ships, to ships other than Indian
ships while they are within any port in India or are embarking or disembarking passengers or are
loading or, discharging cargo or fuel within Indian jurisdiction.
Explanation.--In this section, the expression "dangerous goods" means goods which by reason of the nature,
quantity(a)
or mode
anyoffog
stowage
or distress
are either
signals
singly
or other
or collectively
stores or equipment
liable to endanger
required to
thebelife
carried
or theby
health
the ship
of under
persons on or near
this the
Actship
or the
or rules
to imperil
or regulations
the ship, and
thereunder;
includes all substances within the meaning of the
expression
(b) "explosive"
particularascargoes
definedcarried
in the Indian
in shipsExplosives
specially built
Act, or
1884,
converted
and anyasother
a wholegoods
for which
that purpose,
the Central
Government may such tankers.] in the Official Gazette specify as dangerous goods 54[but shall not
byasnotification
include,--
53 Substituted by Act 21 of 1966, S. 26, for sub-S. (2) (w.e.f. 28-5-1966).
54 Substituted by Act 21 of 1966, S. 26, for certain words (w.e.f. 28-5-1966).
Central Acts of India/CENTRAL ACT OF INDIA/M/MI/THE MINES ACT, 1952 (35 OF 1952)/CHAPTER VIII
REGULATIONS, RULES AND BYE-LAWS/57. Power of Central Government to make regulations.
CHAPTER VIII
REGULATIONS, RULES AND BYE-LAWS
57 Power of Central Government to make regulations.
The Central Government may, by notification in the Official Gazette, make regulations82 consistent with this Act for
all or any of the following purposes, namely:--
(a) for prescribing the qualifications required for appointment as Chief Inspector or Inspector;
(b) for prescribing and regulating the duties and powers of the Chief Inspector and of Inspectors in regard
to the inspection of mines under this Act;
(c) for prescribing the duties of owners, agents and managers of mines and of persons acting under them,
and for prescribing the 83[qualifications (including age) of agents and managers] of mines and of
persons acting under them;
Page 369
(d) for requiring facilities to be provided for enabling managers of mines and other persons acting under
them to efficiently discharge their duties;
(e) for regulating the manner of ascertaining, by examination or otherwise, the qualifications of managers
of mines and persons acting under them, and the granting and renewal of certificates of competency;
(f) for fixing the fees, if any, to be paid in respect of such examinations and of the grant and renewal of
such certificates;
(g) for determining the circumstances in which and the conditions subject to which it shall be lawful for
more mines than one to be under a single manager, or for any mine or mines to be under a manager
not having the prescribed qualifications;
84[(h) for providing for inquiries to be made under this Act, including any inquiry relating to misconduct or
incompetence on the part of any person holding a certificate under this Act and for the suspension or
cancellation of any such certificate and for providing, wherever necessary, that the person appointed
to hold an inquiry shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908
(5 of 1908), for the purpose of enforcing the attendance of witnesses and compelling the production of
documents and material objects;]
(i) for regulating, subject to the provisions of the Indian Explosives Act, 1884 (4 of 1884), and of any
rules made thereunder, the storage, conveyance and use of explosives;
85[(j) for prohibiting, restricting or regulating the employment of 86[* * *] women in mines or in any class
of mines or on particular kinds of labour which are attended by danger to the life, safety or health of
such persons and for limiting the weight of any single load that may be carried by any such person;]
(k) for providing for the safety of the persons employed in a mine, their means of entrance thereinto and
exit therefrom, the number of shafts or outlets to be furnished, and the fencing of shafts, pits, outlets,
pathways and subsidences;
(l) for prohibiting the employment in a mine either as manager or in any other specified capacity of any
person except persons paid by the owner of the mine and directly answerable to the owner or manager
of the mine;
87[(m) for providing for the safety of the roads and working places in mines, including the sitting,
maintenance and extraction or reduction of pillars or blocks of minerals and the maintenance of
sufficient barriers between mine and mine;
(n) for the inspection of workings and sealed off fire-areas in a mine, and for the restriction of workings
in the vicinity of the sea or any lake or river or any other body of surface water, whether natural or
artificial, or of any public road or building, and for requiring due precaution to be taken against the
irruption or inrush of water or other liquid matter into, outbreak of fire in or premature collapse of,
any workings;]
(o) for providing for the ventilation of mines and the action to be taken in respect of dust, fire and
inflammable and noxious gases, including precautions against spontaneous combustion, underground
fire and coal dust;
88[(p) for regulating, subject to the provisions of the Indian Electricity Act, 1910 (9 of 1910), and of any
rules made thereunder, the generation, storage, transformation, transmission and use of electricity in
mines and for providing for the care and the regulation of the use of all electrical apparatus and
electrical cables in mines and of all other machinery and plant therein;]
(q) 89[for regulating the use of machinery in mines, for providing for the safety of persons employed on
or near such machinery and on haulage roads] and for restricting the use of certain classes of
locomotives underground;
(r) for providing for proper lighting of mines and regulating the use of safety lamps therein and for the
search of persons entering a mine in which safety lamps are in use;
(s) for providing against explosions or ignitions 90[of inflammable gas or dust] or irruptions of or
accumulations of water in mines and against danger arising therefrom and for prohibiting, restricting
or regulating the extraction of minerals in circumstances likely to result in the premature collapse of
90[workings] or to result in or to aggravate the collapse of 90[workings] or irruptions of water or
Page 370
ignitions in mines;
(t) 91[for prescribing under clause (g) of sub-section (1) of section 23, the types of accidents and for
prescribing the notices] of accidents and dangerous occurrences, and the notices, reports and returns
of mineral output, persons employed and other matters provided for by regulations, to be furnished by
owners, agents and managers of mines, and for prescribing the forms of such notices, returns and
reports, the persons and authorities to whom they are to be furnished, the particulars to be contained in
them, and the time within which they are to be submitted;
92[(u) 89[for requiring owners, agents and managers of mines to have fixed boundaries for the mines, for
prescribing the plans and sections and field notes connected therewith to be kept by them] and the
manner and places in which such plans, sections and field notes are to be kept for purposes of record
and for the submission of copies thereof to the Chief Inspector; and for requiring the making of fresh
surveys and plans by them, and in the event of non-compliance, for having the survey made and plans
prepared through any other agency and for the recovery of expenses thereof in the same manner as an
arrear of land revenue;]
(v) for regulating the procedure on the occurrence of accidents or accidental explosions or ignitions in or
about mines 93[for dealing effectively with the situation];
(w) for prescribing the form of, and the particulars to be contained in, the notice to be given by the owner,
agent or manager of a mine under section 16;
(x) for prescribing the notice to be given by the owner, agent or manager of a mine before mining
operations are commenced at or extended to any point within 94[forty-five metres] of any railway
subject to the provisions of the Indian Railways Act, 1890 (9 of 1890)95 or of any 96[public roads or
other works, as the case may be, which are maintained by the Government or any local authority];
(y) for the protection from injury, in respect of any mine when the workings are discontinued, of property
vested in the Government or any local authority or railway company as defined in the Indian Railways
Act, 1890 (9 of 1890)95;
97[(yy) for requiring protective works to be constructed by the owner, agent or manager of a mine before the
mine is closed, and in the event of non-compliance, for getting such works executed by any other
agency and for recovering the expenses thereof from such owner in the same manner as an arrear of
land revenue;]
(z) for requiring the fencing of any mine or part of a mine or any quarry, incline, shaft, pit or outlet,
whether the same is being worked or not, or any dangerous or prohibited area, subsidence, haulage,
tramline or pathway, where such fencing is necessary for the protection of the public; and
(zz) any other matter which has to be or may be prescribed.
82 See the Mysore Gold Mines Regulations, 1953, see Gazette of India, 1953, Pt. I, S. 3, p. 1504, and for the Coal Mines Regulations,
1957, see Gazette of India, Pt. II, S. 3, p. 2569.
83 Substituted by Act 62 of 1959, S. 31, for "qualification of managers" (w.e.f. 16-1-1960).
84 Substituted by Act 62 of 1959, S. 31, for Cl. (h) (w.e.f. 16-1-1960).
85 Substituted by Act 62 of 1959, S. 31, for Cl. (j) (w.e.f. 16-1-1960).
86 The words "adolescents and" omitted by Act 42 of 1983, S. 30 (w.e.f. 31-5-1984).
87 Substituted by Act 62 of 1959, S. 31, for Cls. (m) and (n) (w.e.f. 16-1-1960).
88 Substituted by Act 62 of 1959, S. 31, for Cl. (p) (w.e.f. 16-1-1960).

Page 371
91 Substituted by Act 62 of 1959, S. 31, for "for prescribing the notices" (w.e.f. 16-1-1960).
92 Substituted by Act 62 of 1959, S. 31, for Cl. (u) (w.e.f. 16-1-1960).
94 Substituted by Act 42 of 1983, S. 30, for "fifty yards" (w.e.f. 30-5-1984).
95 Now see the Railways Act, 1989 (24 of 1989).
97 Inserted by Act 62 of 1959, S. 31, for Cl. (yy) (w.e.f. 16-1-1960).
Central Acts of India/CENTRAL ACT OF INDIA/M/MO/THE MOTOR VEHICLES ACT, 1988 (59 OF 1988)/THE
LIQUEFIED PETROLEUM GAS (REGULATION OF USE IN MOTOR VEHICLES) ORDER, 2001/2. Definitions.
2 Definitions.3
[In this Order, unless the context otherwise requires,--
(a)
"Auto Liquefied Petroleum Gas (auto LPG)"

means a mixture of certain light hydrocarbons derived from petroleum, which are
gaseous at normal ambient temperature and atmospheric pressure but may be
condensed to the liquid state at normal ambient temperature by the application of
moderate pressure, and which conforms to the Indian Standard Specification No. IS
14861;
(b)
"Auto Liquefied Petroleum Gas Dispensing Station"

means the premises used for storing and dispensing auto LPG to the motor vehicles for
automotive purpose;
(c)
"Auto Liquefied Petroleum Gas Dispensing Station Dealer"

means a person, firm, association of persons, company, institution, organisation or a
co-operative society appointed by a Government Oil Company or a parallel marketeer
and engaged in the business of purchase, storage and sale of auto Liquefied Petroleum
Gas and licensed by the Chief Controller of Explosives under the Static and Mobile
Pressure Vessels (Unfired) Rules, 1981;
(d)
"Auto Liquefied Petroleum Gas Import Substitution"

Page 372
means import of auto LPG by a Government oil company or parallel marketeer for
auto LPG, as a substitution for--
(i) use of indigenous Liquefied Petroleum Gas as auto LPG, produced from
specific refineries or fractionators, authorised by the Central Government;
(ii) Liquefied Petroleum Gas through petrochemical units as authorised by Central
Government from time to time, conforming to Indian Standard Specification IS:
14861;
(e)
"Auto Liquefied Petroleum Gas Tank"

means a steel container for storage and transport of auto liquefied petroleum gas fitted
permanently in a motor vehicle or vehicle as its fuel tank, for automotive fuel and
filled in that position, having a volume exceeding five hundred millilitres but less than
thousand litres, as approved by the Chief Controller of Explosives under Gas Cylinder
Rules, 1981, and conforming to the Indian Standard Specification No. IS : 14899;
(f)
"Chief Controller of Explosives" shall have the same

meaning assigned to it in the Explosives Act, 1884 (4 of 1884);
(g)
"Consumer"
means a registered owner of a motor vehicle or a person having in his possession a
motor vehicle or vehicle fitted with an auto Liquefied Petroleum Gas tank and a
conversation kit as notified by the Government of India in the Ministry of Road
Transport and Highways, and runs such motor vehicle by using auto LPG as
automotive fuel alone or with some other petroleum fuel;
(h)
"Conversion kit or original equipment manufacturer (OEM) fittings"

means a complete system assembly, duly tested by one of the testing agencies
mentioned in the Central Motor Vehicles Rules, 2001, and approved by the Ministry of
Road Transport and Highways, in a bifuel mode;
(i)
"Government Oil Company"

means an oil refining company or oil marketing company being a Government
company as defined in section 617 of the Companies Act, 1956 (1 of 1956) and
specified in Schedule V;
Page 373
(j)
"Government Oil Company System"

means the system under which a Government Oil Company carries on any or all of the
business of importing (including Auto LPG Import Substitution), storing, distribution
or selling LPG for automotive purpose through dispensing stations;
(k)
"Indian Standard" shall have the same

meaning as assigned to it in clause (g) of section 2 of the Bureau of Indian Standards
Act, 1986 (63 of 1986);
(l)
"motor vehicle" or "vehicle" shall have the same

meaning assigned to it in sub-section (28) of section 2 of the Motor Vehicles Act, 1988
(59 of 1988);
(m)
"parellel marketeer for auto LPG"

means any person, firm, company, institution, association of persons, co-operative
society or organisation other than a Government Oil Company carrying on all or any of
the business of importing (including Auto LPG Import Substitution), storing,
marketing, distributing and selling of auto LPG for automotive purpose under the
parellel marketing system and having a rating certificate as specified in Schedule II;
(n)
"parellel marketing system for auto LPG"

means the system, other than the system followed by the Government Oil Company in
marketing auto LPG, under which a parellel marketeer carries on all or any of the
business of importing (including Auto LPG Import Substitution), storing, distribution
or selling auto LPG through dispensing stations under his own arrangement;
(o)
"Schedule"
means the Schedule appended to this Order.]
3 Substituted by G.S.R. 99(E), dated 24-2-2010 (w.e.f. 24-2-2010).

Page 374
Central Acts of India/CENTRAL ACT OF INDIA/P/PE/THE PETROLEUM ACT, 1934 (30 OF 1934)/THE
LIQUEFIED PETROLEUM GAS (REGULATION OF SUPPLY AND DISTRIBUTION) ORDER, 2000/2.
Definitions.
2 Definitions.
In this Order, unless the context otherwise requires,--
(a) "Chief Controller of Explosives" shall have the same meaning as assigned to it in the Explosives Act,
1884 (4 of 1884);
(b)
"consumer"
means a registered person, firm, company, institution, association of persons,
co-operative society or organisation, who has been granted liquefied petroleum gas
connection or supply, either in bulk or in cylinder, by a distributor or a Government Oil
Company or a parallel marketeer;
(c)
"cylinder"
means a metal container utilized for storing liquefied petroleum gas conforming to the
specifications laid down in Schedules II and III;
(d)
"delivery person"
means a person engaged by a distributor of a Government Oil Company or a parallel
marketeer to deliver liquefied petroleum gas in cylinder to consumers;
(e)
distributor"
means a person, firm, association of persons, company, institution, organisation or a
co-operative society appointed by a Government Oil Company or parallel marketeer
and engaged in the business of purchase, sale or storage for sale of liquefied petroleum
gas in cylinders to consumers on the basis of an agreement with a Government Oil
Company or a parallel marketeer, as the case may be;
(f)
"gas cylinder valve"

means a valve which is fitted to a cylinder;
(g)
"Government Oil Company"

Page 375
means,--
(1) Bharat Petroleum Corporation Limited;

(2) Bongagaigaon Refinery and Petrochemicals Limited;
(3) Cochin Refineries Limited;
(4) Gas Authority of India Limited;
(5) Hindustan Petroleum Corporation Limited;
(6) Indian Oil Corporation Limited;
(7) Indo-Burma Petroleum Company Limited;
(8) Chennai Petroleum Company Limited;
(9) Numaligarh Refinery Limited;
(10) Oil India Limited;
(11) Oil and Natural Gas Corporation Limited; or
(12) any other Government Company or a statutory body or a company or a firm, declared as such
by notification in the Official Gazette, to be a "Government Oil Company" by the Central
Government, for the purposes of this Order;
(h) "Indian Standard" shall have the same meaning as assigned to it in clause (g) of section 2 of the
Bureau of Indian Standards Act, 1986 (63 of 1986);
(i)
"liquefied petroleum gas (or LPG)"

means a mixture of light hydrocarbons which may include propane, isobutane, normal
butane, butylenes, etc., which are gaseous at normal ambient temperature and
atmospheric pressure but may be condensed to liquid state at normal ambient
temperature by the application of pressure and which conforms to Indian Standard
Specification Number IS: 4576;
(j)
"parallel marketeer"
means any person, firm, company, institution, association of persons, co-operative
society or organisation carrying on any or all of the business of importing, storing,
bottling, marketing, distributing and/ or selling liquefied petroleum gas under the
parallel marketing system;
(k)
"parallel marketing system"

means the system other than the public distribution system, under which a parallel
marketeer carries on any or all of the business of importing storing, bottling,
distribution or selling in bulk or in retail, packed or filled in cylinder, liquefied
petroleum gas under his own arrangement;
(l)
"public distribution system"

Page 376
means the system of distribution, marketing or selling of liquefied petroleum gas by a

Government Oil Company at the Government controlled or declared price through a
distribution system approved by the Central or a State Government;
(m)
"pressure regulator"
means the equipment used for regulating the flow and pressure of liquefied petroleum
gas from a cylinder to a gas stove;.
(n)
"Schedule"
means a Schedule appended to this Order;
(o)
"seal"
means seal put on the cap of the valve of the cylinder for the purpose of sealing a
cylinder after it has been filled with liquefied petroleum gas;
(p)
"storage point"
means the premises licensed by the Chief Controller of Explosives;
(q)
"transporter"
means a person authorised by a Government Oil Company, parallel marketeer or a
distributor for transportation of LPG in bulk or in cylinders and also of empty or
defective cylinders.
Central Acts of India/CENTRAL ACT OF INDIA/P/PR/THE PREVENTION OF MONEY-LAUNDERING ACT,

2002 (15 OF 2003)/SCHEDULE I
SCHEDULE I SCHEDULE I
[See section 2(y)]
PART A
PARAGRAPH 1
Page 377

121 Waging, or attempting to wage war or abetting waging of
war, against the Government of India.
121-A Conspiracy to commit offences punishable by section 121
against the State.
34[489-A Counterfeiting currency notes or bank notes.
489-B Using as genuine, forged or counterfeit currency notes or
bank notes.]
PARAGRAPH 2
35[15 Contravention in relation to poppy straw.
21 Contravention in relation to manufactured drugs and pre-
parations.]
23 Illegal import into India, export from India to tranship-
ment of narcotic drugs and psychotropic substances.
24 External dealings in narcotic drugs and psychotropic sub-
stances in contravention of section 12 of the Narcotic
Drugs and Pyschotropic Substances Act, 1985.
25-A Contravention of orders made under section 9-A of the
Narcotic Drugs and Psychotropic Substances Act, 1985.
PARAGRAPH 3
36[OFFENCES UNDER THE EXPLOSIVE SUBSTANCES ACT, 1908
4 Attempt to cause explosion, or for making or keeping ex-
plosives with intent to endanger life or property.
5 Making or possessing explosives under suspicious circum-
stances.
Page 378
PARAGRAPH 4

16-A Punishment for making demands of radioactive sub-
stances, nuclear devices, etc.
18-A Punishment for organising of terrorist camps.
18-B Punishment for recruiting of any person or persons for ter-
rorist act.
20 Punishment for being member of terrorist gang or organ-
isation.
39 Offence relating to support given to a terrorist organisa-
tion.
PART B
PARAGRAPH 1
37[OFFENCES UNDER THE INDIAN PENAL CODE
120-B Criminal conspiracy.
257 Making or selling instrument for counterfeiting Govern-
ment stamp.
260 Using as genuine a Government stamp known to be coun-
terfeit.
302 Murder.
304 Punishment for culpable homicide not amounting to
murder.
Page 379

327 Voluntarily causing hurt to extort property, or to constrain
to an illegal act.
329 Voluntarily causing grievous hurt to extort property, or to
constrain to an illegal act.
364-A Kidnapping for ransom, etc.
"PARAGRAPH 1

302 Murder.
304 Culpable homicide not amounting to murder, if act by
which the death is caused is done with the intention of
causing death.
307 Attempt to murder
327 Voluntarily causing hurt to extort property, or a valuable
security, or to constrain to do anything which is illegal or
which may facilitate the commission of the offence.
329 Voluntarily causing hurt to extort property, or a valuable
security, or to constrain to do anything which is illegal or
which may facilitate the commission of the offence.
467 Forgery of a valuable security, will or authority to make or
transfer any valuable security, or to receive any money,
etc.
489-A Counterfeiting currency notes or bank notes.
bank notes..
412 Dishonestly receiving property stolen in the commission
of a dacoity.
418 Cheating with knowledge that wrongful loss may ensure
to person whose interest offender is bound to protect.
Page 380

421 Dishonest or fraudulent removal or concealment of prop-
erty to prevent distribution among creditors.
422 Dishonestly or fraudulently preventing debt being avail-
able for creditors.
423 Dishonest or fraudulent execution of deed of transfer con-
taining false statement of consideration.
424 Dishonest or fraudulent removal or concealment of prop-
erty.
472 and 473 Making or possessing counterfeit seal, etc., with intent to
commit forgery.
485 Making or possession of any instrument for counterfeiting
a property mark.
487 Making a false mark upon any receptacle containing
goods.
488 Punishment for making use of any such false mark.]
PARAGRAPH 2

25 To manufacture, sell, transfer, convert, repair or test or
prove or expose or offer for sale or transfer or have in his
possession for sale, transfer, conversion, repair, test or
proof, any arms or ammunition in contravention of section
5 of the Arms Act, 1959.
To acquire, have in possession or carry any prohibited
arms or prohibited ammunition in contravention of section
7 of the Arms Act, 1959.
Contravention of section 24-A of the Arms Act, 1959 re-
lating to prohibition as to possession of notified arms in
disturbed areas, etc.
Contravention of section 24-B of the Arms Act, 1959 re-
lating to prohibition as to carrying of notified arms in or
Page 381
through public places in disturbed areas.

Other offences specified in section 25.
26 To do any act in contravention of any provisions of sec-
tion 3, 4, 10 or 12 of the Arms Act, 1959 in such manner
as specified in sub-section (1) of section 26 of the said
Act.
To do any act in contravention of any provisions of sec-
tion 5, 6, 7 or 11 of the Arms Act, 1959 in such manner as
specified in sub-section (1) of section 26 of the said Act.
Other offences specified in section 26.
27 Use of arms or ammunitions in contravention of section 5
or use of any arms or ammunition in contravention of sec-
tion 7 of the Arms Act, 1959.
28 Use and possession of fire arms or imitation fire arms in
certain cases.
29 Knowingly purchasing arms from unlicensed person or for
delivering arms, etc., to person not entitled to possess the
same.
30 Contravention of any condition of a licence or any provi-
sions of the Arms Act, 1959 or any rule made thereunder.
PARAGRAPH 3

38[51 read with section 9 Hunting of wild animals.]
51 read with section 17-A Contravention of provisions of section 17-A relating to
prohibition of picking, uprooting, etc., of specified plants.
51 read with section 39 Contravention of provisions of section 39 relating to wild
animals, etc., to be Government property.
51 read with section 44 Contravention of provisions of section 44 relating to deal-
ings in trophy and animal articles without licence prohib-
ited.
51 read with section 48 Contravention of provisions of section 48 relating to pur-
chase of animal, etc., by licensee.
51 read with section 49-B Contravention of provisions of section 49-B relating to
prohibition of dealings in trophies, animal articles, etc.,
derived from scheduled animals.
PARAGRAPH 4

5 Procuring, inducing or taking person for the sake of prosti-
tution.
Page 382
6 Detaining a person in premises where prostitution is car-

ried on.
PARAGRAPH 5

7 Public servant taking gratification other than legal remu-
neration in respect of an official Act.
8 Taking gratification in order, by corrupt or illegal means,
to influence public servant.
9 Taking gratification for exercise of personal influence,
with public servant.
10 Abetment by public servant of offences defined in section
8 or section 9 of the Prevention of Corruption Act, 1988.
39[13 Criminal misconduct by a public servant.]
PARAGRAPH 6
40[OFFENCES UNDER THE EXPLOSIVES ACT, 1884
9-C Offences by Companies.
PARAGRAPH 7
OFFENCES UNDER THE ANTIQUITIES AND ART TREASURES ACT, 1972

ures.
28 Offences by Companies.
PARAGRAPH 8
PARAGRAPH 9

PARAGRAPH 10
Page 383

18 Punishment for extracting bonded labour under the bonded
labour system.
PARAGRAPH 11
14 Punishment for employment of any child to work in con-
travention of the provisions of section 3.
PARAGRAPH 12

18 Punishment for removal of human organ without author-
ity.
20 Punishment for contravention of any other provision of
this Act.
PARAGRAPH 13
25 Penalty for giving intoxicating liquor or narcotic drug or
psychotropic substance to juvenile or child.
PARAGRAPH 14

PARAGRAPH 15

Page 384
PARAGRAPH 16

14-B Penalty for using forged passport.
14-C Penalty for abetment.
PARAGRAPH 17

63 Offence of infringement of copyright or other rights con-
ferred by this Act.
63-A Enhanced penalty on second and subsequent convictions.
63-B Knowing use of infringing copy of computer programme.
68-A Penalty for contravention of section 52-A.
PARAGRAPH 18

103 Penalty for applying false trade marks, trade descriptions,
etc.
104 Penalty for selling goods or providing services to which
raise trademark or false trade description is applied.
PARAGRAPH 19

75 Act to apply for offence or contravention committed out-
side India.
PARAGRAPH 20

55 read with 6 Penalties for contravention of section 6, etc.
PARAGRAPH 21
Page 385
OFFENCES UNDER THE PROTECTION OF PLANT VARIETIES AND FARMER'S RIGHTS ACT, 2001
70 read with 68 Penalty for applying false denomination, etc.
71 read with 68 Penalty for selling varieties to which false denomination is
applied.
72 read with 68 Penalty for falsely representing a variety as registered.
73 read with 68 Penalty for subsequent offence.
PARAGRAPH 22

15 read with 7 Penalty for discharging environmental pollutants.
15 read with 8 Penalty for handling hazardous substance.
PARAGRAPH 23
PARAGRAPH 24
37 Failure to comply with the provisions for operating indus-
trial plant.
PARAGRAPH 25

3 Offences against ship, fixed platform, cargo of a ship,
maritime navigational facilities, etc.]
PART C
41[An offence which is the offence of cross border implications and is specified in,--
(1) Part A; or
(3) the offences against property under Chapter XVII of the Indian penal code.]
Page 386
34 Inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(i)(a) (w.e.f. 1-6-2009).
35 Substituted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(i)(b), for entries 15, 18 and 20
(w.e.f. 1-6-2009). Prior to its substitution, entries 15, 18 and 20 read as under:--"15 Contravention in relation to poppy straw.
20 Contravention in relation to cannabis plant and cannabis.".
36 Inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(i)(a) (w.e.f. 1-6-2009).
37 Substituted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(i)(b), for paragraph 1 (w.e.f.
1-6-2009). Prior to its substitution, paragraph 1 read as under:--
38 Inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(ii)(b) (w.e.f. 1-6-2009).
39 Inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(ii)(c) (w.e.f. 1-6-2009).
40 Inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(ii)(c) (w.e.f. 1-6-2009).
41 Inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), S. 13(ii)(b) (w.e.f. 1-6-2009).
Central Acts of India/CENTRAL ACT OF INDIA/P/PR/THE PREVENTION OF TERRORISM ACT, 2002 (15 OF
2002)/CHAPTER II PUNISHMENT FOR, AND MEASURES FOR DEALING WITH, TERRORIST ACTIVITIES/5.
Enhanced penalties.
CHAPTER II
PUNISHMENT FOR, AND MEASURES FOR DEALING WITH, TERRORIST ACTIVITIES
5 Enhanced penalties.
(1) If any person with intent to aid any terrorist contravenes any provision of, or any rule made under the
Explosives Act, 1884 (4 of 1884), the Explosive Substances Act, 1908 (6 of 1908), the Inflammable
Substances Act, 1952 (20 of 1952) or the Arms Act, 1959 (54 of 1959), he shall, notwithstanding
anything contained in any of the aforesaid Acts or the rules made thereunder, be punishable with
imprisonment for a term which may extend to imprisonment for life and shall also be liable to fine.
(2) For the purposes of this section, any person who attempts to contravene or abets, or does any act
preparatory to the contravention of any provision of any law, rule or order, shall be deemed to have
contravened that provision, and the provisions of sub-section (1) shall, in relation to such person, have
effect subject to the modification that the reference to "imprisonment for life" shall be construed as a
reference to "imprisonment for ten years".
Central Acts of India/CENTRAL ACT OF INDIA/R/RA/THE RAILWAYS ACT, 1989 (24 OF 1989)/CHAPTER IX
CARRIAGE OF GOODS/67. Carriage of dangerous or offensive goods.
CHAPTER IX
CARRIAGE OF GOODS
Page 387
67 Carriage of dangerous or offensive goods.
(1) No person shall take with him on a railway, or require a railway administration to carry such
dangerous or offensive goods, as may be prescribed, except in accordance with the provisions of this
section.
behalf for carriage unless he distinctly marks on the outside of the package containing such goods
their dangerous or offensive nature and gives a notice in writing of their dangerous or offensive nature
to such railway servant.
offensive and notice as required under sub-section (2) or sub-section (3), as the case may be, in
respect of such goods is not given, he may cause such package to be opened for the purpose of
ascertaining its contents.
dangerous or offensive goods for carriage or stop, in transit, such goods or cause the same to be
removed, as the case may be, if he has reason to believe that the provisions of this section for such
carriage are not complied with.
(6) Nothing in this section shall be construed to derogate from the provisions of the Indian Explosives
Act, 1884 (4 of 1884), or any rule or order made under that Act, and nothing in sub-sections (4) and
(5) shall be construed to apply to any goods entrusted for carriage by order or on behalf of the
Government or to any goods which a soldier, sailor, airman or any other officer of the armed forces of
the Union or a police officer or a member of the Territorial Army or of the National Cadet Corps may
take with him on a railway in the course of his employment or duty as such.
Central Acts of India/CENTRAL ACT OF INDIA/U/UN/THE UNLAWFUL ACTIVITIES (PREVENTION) ACT,

1967/CHAPTER IV PUNISHMENT FOR TERRORIST ACTIVITIES/23. Enhanced penalties.
1[CHAPTER IV
PUNISHMENT FOR TERRORIST ACTIVITIES
23. Enhanced penalties.--
(1) 1.1[If
any person with intent to aid any terrorist or a terrorist organisation or a terrorist gang
contravenes] any provision of, or any rule made under the Explosives Act, 1884 (4 of 1884) or the
Explosive Substances Act, 1908 (6 of 1908) or the Inflammable Substances Act, 1952 (20 of 1952) or
the Arms Act, 1959 (54 of 1959), or is in unauthorised possession of any bomb, dynamite or
hazardous explosive substance or other lethal weapon or substance capable of mass destruction or
biological or 1.2[chemical substance of warfare or high quality counterfeit Indian currency, he shall],
notwithstanding anything contained in any of the aforesaid Acts or the rules made thereunder, be
punishable with imprisonment for a term which shall not be less than five years but which may extend
to imprisonment for life, and shall also be liable to fine.
(2) 2[Any person who with the intent to aid any terrorist, or a terrorist organisation or a terrorist gang],
Page 388
attempts to contravene or abets, or does any act preparatory to contravention of any provision of any
law or rule specified in sub-section (1), shall be deemed to have contravened that provision under
sub-section (1) and the provisions of that sub-section in relation to such person, have effect subject to
the modification that the reference to "imprisonment for life" therein shall be construed as a reference
to "imprisonment for ten years".
1 Substituted by Act 29 of 2004, S. 7, for Chapter IV (w.e.f. 21-9-2004).
1.1 Substituted by Act 35 of 2008, S. 9(a), for "If any person with intent to aid any terrorist contravenes".
1.2 Substituted by the Unlawful Activities (Prevention) Amendment Act, 2012 (3 of 2013), S.8, for "chemical substance of warfare, he
shall".
2 Substituted by Act 35 of 2008, S. 9(b), for "Any person who, with intent to aid any terrorist".
M P Jain & S N Jain : Principles of Administrative Law/Volume 2/CHAPTER XXIX TORTIOUS LIABILITY &
COMPENSATION
CHAPTER XXIX
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.1 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 quoante is restored. This aspect of Administrative Law has been
discussed in detail in later Chapters.2 In case of payment of compensation, the party injured by an action of the
As there is increasing legislative regulation of human activity,3 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
Page 389
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.
when private rights are disturbed under the law, e.g., compensation is payable under the law providing for compulsory
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?
(a) Britain
There is the simple case of a recognised tort being committed--especially negligence4--by a public employee in the
course of his employment. The question then arises : can the government be held liable to compensate the injured
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.6
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
law in Britain.7
(b) U.S.A.
under like circumstances. Intentional torts (such as assault, battery, false imprisonment etc.) are excluded. The U.S.
Page 390
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.8
In U.S. v. Muniz,9 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 Cort 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
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
Legislature. No law has so far been passed as contemplated by Art. 300(1).
Constitution came into force. S. 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. S. 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 1858.10 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.
The Company, to start with, was purely a mercantile body. Gradually, it acquired territories in India and also sovereign
Page 391
power to make war and peace and raise armies.11 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,12 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 1833,13 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.
that they should do so, subject to the same liabilities as individuals . . ."14 In other words, if the company were carrying
committed during the course of such activities. The court went on to say :15
"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
The P.&O. case thus laid down two propositions :
sovereign powers.
(2) The Secretary of State was not liable for anything done in the exercise of sovereign powers.16
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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.17
It could also be argued that what the court said in P.&O. to be a 'clear' distinction between 'sovereign' and
(1) Hari Bhanji
The P.&O. case was considered by the Madras High Court in Hari Bhanji.18 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,"19 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
is of the former only that in this country the municipal courts in British India cannot take cognizance."20
At another place, the court observed :
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."21
As regards P.&O., it was said that it was an authority for the proposition that the government was responsible for
respects. In Hari Bhanji, a broader view of government liability, and a narrower view of the P&O ruling, was adopted.
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.22 Had the view propounded in Hari Bhanji found judicial acceptance in India, the position as regards the tortious
(2) Cockraft
This view was applied by the courts in a number of cases. Thus, in Secretary of State v. Cockraft,23 the plaintiff was
injured by the negligent leaving of a heap of gravel on a military road maintained by the Public Works Department,
the government.
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(3) McInerny
In McInerny v. Secretary of State,24 the Calcutta High Court held that the government was not carrying on any
(4) Gurucharan
The High Court held in Gurucharan Kaur v. Madras Province,25 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,26 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.27
(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.28
(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.29
(9) Srigobinda
sovereign function.30
(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
powers, and so no action would lie.31
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(11) Ramnath
In Secretary of State for India v. Ramnath Bhatia,32 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,33 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.34
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. Khushaldas35 and adopted the Hari Bhanji
view of the government liability. The Court restricted the observations in P.&O. only to an 'act of state'36 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 :37
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
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 :38
"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
the courts."
When the case reached the Supreme Court (Which had just been started under the new Constitution) in appeal,39 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 :40
"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
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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."
illegally exercised could certainly have been brought against the Secretary of State," if the Government of India Act,
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
(1) Maharaja Bose
exercise of sovereign powers."41
(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.42
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.
view that it forms an important part of the governance of the state."43
undertakings.44
(3) Sheoramjee
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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.45
(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."46
(5) District Board
In District Board, Bhagalpur v. State of Bihar,47 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
(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,48 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,49 it was held that the State was not liable
even if revenue officials acted in a high handed and malicious manner.
(8) Chetti
was not liable for the tort committed by the tehsildar as the act was done in the discharge of sovereign function.50
5. LAW COMMISSION 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."51
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 cononial era in
India. The theory of non-liability of the state for sovereign functions was only another dimension of the theory of "act of
state."52 But "act of state" is justifiable only when committed in a foreign land towards a foreign national; it is
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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.53 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 anable 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.
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
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
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."54
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.
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."55
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."56
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.57
Act, 1947, changing the old law. The colonial law in India was based on the common law principles which prevailed in
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It is hightime that Parliament puts the law of government tortious liability on a rational basis in line with. Britain The
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.
(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.58
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
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."59
Referring to the P.&O. case, the Court derived the proposition that the government would be liable for damages
emerge from the following statement :60
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
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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
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
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.61 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
The appellant argued, on the basis of Vidhyawati, that once negligence of the police officers was established, there
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.
argument but the Court went back to the P & O. case. It held that the police officers were grossly negligent in taking
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
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act committed by the public servant in discharge of statutory functions which are referable to, and ultimately based on, the
might have been employed by a private individual for the same purpose."62
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.
at all."63 On the other hand, the power to arrest a person, to search him and to seize the property found with him, was a
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
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."
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, 1947.64
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.
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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,65i.e. keeping the goods of another safely for a period--an activity capable of
being undertaken by a private individual?66 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.
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
7. DEVELOPMENTS AFTER KASTURI LAL
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.
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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.
restrictively interpret the concept of 'sovereign' functions and not to expand it unduly.67 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 :68
"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 :69
"The theory of sovereign power which was propounded in Kasturi Lal'scase 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 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,70 the Supreme Court has observed that sovereign functions essentially are "primary inalienable
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,71 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."
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
Page 403
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 im-unity".
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. 32.72
(c) Art. 21 of the Constitution runs as follows :
Art. 21 has played a tremendous role in shaping the law of government's tortious liability.
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.73 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.
(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,74 the
(2) Hindustan Lever
In State of Uttar Pradesh v. Hindustan Lever,75 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
(3) Mukherji
An employee of the State of Bihar was crossing the river Kosi in a boat belonging to the State Kosi Project Department.
Page 404
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. Mukherji76 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.77
(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.78
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.
taken by the Department in the instant case, the Court awarded Compensation to the parents of the deceased.79
person due to negligence in the maintenance of roads by the State.80
(6) Janamohan
In Janamohan Das v. State of Orissa81 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."82
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(b) Transportation
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.83
(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.84
(2) Amulya Patnaik
Again, in Amulya Patnaik v. State of Orissa,85 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
(3) Ram Pratap
In State v. Ram Pratap,86 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.87
(4) Shyam Sunder
In Shyam Sunder v. State of Rajasthan,88 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
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.
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
(5) Radhabai
Page 406
In Indian Insurance Co. Ass. Pool v. Radhabai,89 a motor vehicle belonging to the State of Madhya Pradesh and
health centre could not be regarded as a "sovereign function in the traditional sense."90
(6) Padma Rani
In State of Sau v. K. Padma Rani,91 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 Sunder92 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
Act93 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."
(7) Cheru Babu
In State of Kerala v. K. Cheru Babu,94 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
(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.95 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.96
(9) Amruta
Page 407
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.97
(10) Satya Narain
Since Independence, the bulk of the road transportation has been taken over by the States.98 The Supreme Court ruled in
Satya Narain v. District Engineer, P.W.D.99 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,1 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
(11) Narain Shankar
For example, in Rajasthan State Road Transport Corporation, Jaipur v. Narain Shankar,2KRISHNA IYER J. in the
Supreme Court adversely commented on the social consciousness and sense of responsibility displayed by public
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 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.
Page 408
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.
injury to, the travelling public and the pedestrian users of highways. The Court observed :
(12) Darshana
In Darshana Devi,3 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
appealling 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
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.4
(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
driver.
dompensation.
Page 409
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.5 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 :6
"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
The Court observed further :7
". . . 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
(c) Railways
(1) Chandrima
power.8
(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
employee.9
(2) Sugrabai
Page 410
When a military truck was carrying record sound ranging machine and other equipment from the military workshop 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 :10
". . . 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."11
(3) Jasso
In Union of India v. Jasso,12 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.13
(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.14
(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 referale to the exercise of any delegated sovereign power as the
jawans could have been transported to the unit headquarters in a private truck.15
In the last case, the court said that the jawanscould 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,
vehicle.
(6) Iqbal Kaur
In Iqbal Kaur v. Chief of Army Staff,16an 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
Page 411
any delegation of sovereign powers.17
(8) Sadashiv
A military crane belonging to the defence department having developed some trouble was being towed away for 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.18 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 India19 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 gratiapayment 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 Thangarajanseems 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.20 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,
left the vehicle on the road without taking any precautions for the safety of the road users.21
Page 412
(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 :22
"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."
(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.23
(14) Raya
In M.S. Raya v. Gowrawwa,24 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
rejected.
(1) Kazi
In Mohd. Shafi Suleman Kazi v. Dr. Villas Dhondu Kavishwar,25 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,26 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
Sethi27 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 Kazicase 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 Supplycase28 wherein the
Safdar Jung Hospitalwas overruled. The court held in Kazithat "activities undertaken by the government in pursuit of
Page 413
welfare policies, and in compliance with the directive principles, were not part of the regal functions of the state,29 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,30 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 quartum of compensation.
(3) Achutrao
In Achutrao,31 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 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,32Kasturilal,33Nagendra Rao34and Kanchanmal,35 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."36
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 :37
"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 Lalitself 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."38
After a review of the evidence on record and the law regarding negligence on the part of the doctors,39 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.40
Page 414
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
hospital.41
(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.42
(6) Santra
To the same effect is State of Haryana v. Santra.43 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 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.
(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.44
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.45
(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.46
(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.47
Page 415
(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
of India. The court stated :48
"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
was not a direct consequence of the grant of the licence.49
(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.50 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 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
Page 416
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.51
(8) Basava Patil
magistrate who diveted 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,52the 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
Explosives Act, 1884. The reason to suspand the license was that the appellant refused to comply with the district
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.53
(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,54the 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.55 Thus, the Court held the plaintiff entitled to
receive from the State Rs. 10,000/- along with interest.56
(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
Page 417
tantamounts to conversion, again being actionable in tort."57
(12) Oswal
In Oswal,58 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
(13) Jaya Laxmi
In Jaya Laxmi,59 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 bundhflowing 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 bundhwas done in a
therewith. But, the Court dismissed his case on the ground that it was barred by limitation.60
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 :61
" . . . the axis around which the law of negligence revolves is duty, duty to take care, duty to take reasonable care. But concept of
At another place, the Court observed :62
"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
compensated."
Page 418
discharge of public duty and mistake at various stages."63 Said the Court on this point :64
"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."65
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.66 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
Government of Sau.67A person having an orchard suffered extensive damage due to percolation of water in a canal
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
In this area, Art. 21 of the Constitution plays a very important role. Art. 21 runs as follows :
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,68 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.
Art 21 means right to live with human dignity and this includes a guarantee against. Accordingly, the Supreme Court
has asserted :
Page 419
"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."69
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,70 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 viotative 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.71
(h) Law and Order
(1) Dattamal
In State v. Dattamal,72 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,73 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.74 The
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.75
(3) Chironjilal
Similarly, in State of Madhya Pradesh v. Chironjilal,76 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 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.77
(4) Nanik Sewa
Page 420
announced ex gratiacompensation of Rs. one lakh for the death of a student and Rs. 25,000/- for the death of a
government relented and agreed to pay Rs. one lac for the death of every person, student or non-student alike.78
(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,79 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
person.
It appears from the above cases that what started as ex gratiapayment 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 Gandhicases 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
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;80
(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.81
(1) Reddy
C. Ramakonda Reddy v. State82 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 prosoner lodged
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
After reviewing the evidence on record, the High Court concluded that the said incident could not have happened but
Page 421
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
:83
"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, Sebastianetc. 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.
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 :84
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.85 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."86
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,87 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.88 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.89
(3) Inder Puri

Page 422
government; it cannot abdicate this function and put the life and liberty of the citizens in jeopardy.90
(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 2191 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.92 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."93
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
(5) Jeet Stores
In State of J&K v. Jeet General Stores,94 as a result of sudden flare of communal riots in Jammu, a particular
petitioners in Jeet. The Court said : "(I)t was the duty of the writ petitioners to have specifically alleged as to how, in
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
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.95
Page 423
public aurtery from time to time against custodial deaths.
For some time now, a new judiciant trend has been manifesting itself in the area of personal liberty. Arrest and
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.1 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.2 The Court has characterised custodial death as
"perhaps one of the worst crimes in a civilised society governed by the rule of law."3
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 Bihar4 (the Bhagalpur Blindingcase), 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."5 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
his action and therefore there is no violation of Art 21."6 In this case, however the Court did not award any
(2) Rudul Shah
In Rudul Shah v. State of Bihar,7 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
Page 424
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 corpuspetition was moved on his behalf in the
Supreme Court. The State authorities failed to place before the Court any satisfactory material for his continued
CHANDRACHUD, C.J.) felt that if it refused to pass an order of compensation in favour of the petitioner, "it will be
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 :8
"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 mulet 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."
dangerous situations, and not retreat behind the shelter of self-imposed limitations evolved by them for certain
purposes.9Rudul Sah has become the basis of subsequent decisions awarding. compensation under Arts. 32 and 226 of
(2) Sebastian
In Sebastian M. Hongray v. Union of India,10the Supreme Court by a writ of habeas corpusrequired 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,11 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.
Page 425
(4) Nilabati Behera
A significant pronouncement in this line of cases is Nilabati Behera v. State of Orissa.12 A person died in 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 Constitution13 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."
The Court observed on this point :14
"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
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 :15
"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 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 Court then went on to observe :16
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."
Page 426
(5) Arvinder
In Arvinder,17 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 :18
". . . 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
compensation to the victims of police torture or their family members in case of custodial death19 have been examined
in depth by the Supreme Court vis-a-visArt. 21 of the Constitution in D.K. Basu v. State of West Bengal.20 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."
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."21 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.
S. 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"22
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),23
(CBI). There are reports of torture and death in custody of these authorities as well.24 Accordingly, the Supreme Court
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
jurisdiction is, thus, in addition to the traditional remedies and not in derogation of them.25
Page 427
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.26 In the case noted
below,27 the Supreme Court awarded a sum of Rs. 1,50,000/- for a custodial death.
(7) Bhim Singh
In Bhim Singh v. Jammu & Kashmir,28 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 corpuspetition wasdisposed of by the Court, nevertheless,
the Court directed the State Government to pay him Rs. 50,000 as exemplary costs. Referring to Rudul Sah29 and
Sebastian,30 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 :
"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,31 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 :32
"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,
(9) Patil
In Patil,33 the Court directed the State to pay Rs. 10,000 as compensation to the petitioner for violation of his
The Rajasthan High Court awarded an interim compensation as rehabilitation grants to several tribal girls who were
Page 428
raped by police officials and were victimised by police. It is interesting to note that the High Court judge suo motutook
notice of the incident after seeing a report in a local newspaper.34
(10) PUCL
In People's Union for Civil Liberties v. Union of India,35 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 gratiaPayments
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.36At an eye camp organised by a club,
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 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.37
In a number of cases, the courts did exempt the state from liability on this account.38 A few such cases are mentioned
below.
(1) Shivabhajan
In Shivabhajan v. Secretary of State,39 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.40
(2) Ross
Page 429
In Ross v. Secretary of State,41 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,42 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.43
(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.44 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 case45 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.46 The Shivabhajan case47 was cited with approval by the court. The difficulty in
regarding statutory functions as sovereign functions has already been mentioned above.48
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."49 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.50
(6) Rikhabchand
Under the Rajasthan Public Safety Act, the Rajasthan Government conferred power on the commissioner to make
own and not that of the employer.51
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
Page 430
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.
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.52 In India, the Law Commission's
recommendation on the point was also to the effect that government should be liable in such a case.53 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 Sau.54 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
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
immunity of the State, discharge of statutory duty by the officers in good faith etc. Rejecting the State arguments, the
Confiscation of an essential commodity is provided for in S. 6A of the Act.55 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
seize the goods."56
Under S. 6A, a report of seizure of the essential commodity is to be made without unreasonable delay to the 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
Page 431
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."57
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'.58
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.
except to a very limited extent. The Court has observed on this point (per SAHAI, J.) :59
"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,
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
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."60
Accordingly, the Court has ruled that the " ratio of Kasturi Lal61 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
such functions is a different matter . . . Maintenance of law and order or repression of crime may be inalienable function, for proper
unless it trenches into and encroaches on the fundamental rights of life and liberty guaranteed by the Constitution."62
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 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
Page 432
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.
Memon Mahomed Haji Hasan,63 the Court ruled that where the goods confiscated or seized are required to be returned
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 226.64 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
this area, the courts have awarded compensation on an ex gratia basis.65
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,66 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.67
(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
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,68 following several
English cases, such as, Yuen Kun-yeu v. Alt. Gen. of HongKong,69 and Davis v. Radcliffe.70 The Court ruled that one
Page 433
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.
to protect the interests of the depositors and yet the law could not impose any liability on RBI for lack of
accountability.71
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.72 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.73
(1) Jiwan Mal
This traditional judicial attitude is indicated in Jiwan Mal Kochar v. Union of India.74 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 ramarks "shall not be taken into consideration in
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
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.75 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.
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Starting in 1981, with Khatri v. State of Bihar,76 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,77 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,78 the Supreme Court has observed :
"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."79
In some cases of death of persons due to negligence of the concerned government employees, the Court has awarded
interimcompensation on humanitarian grounds pending the settlement of the question of negligence in a regular suit.80
In cases of riots, police firing etc., the Court has ordered payment of ex gratia compensation to the victims.81
In D.K. Basu v. State of West Bengal, the Supreme Court awarded damages to the Victims of police torture. In the
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. 21.82
Compensation has also been awarded for medical negligence. In the instant case,83 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.
petitioner to take recourse to a civil suit for the purpose. Thus, in Deoki Nandan Prasad v. State of Bihar,84 the
his pension. In the words of the Court during which abominably long period "the mandamus of . . . [the] court has been
In Assam Sillimanite Ltd. v. Union of India,85 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
Page 435
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.86 Under Art. 226, a High Court can exercise the power for a non-fundamental rights as well.87 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.88that the writ petition was
maintainable because Art. 21 of the Constitution which casts an obligation on the state to protect and preserve human
life.
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.89Art. 21 of the
constitution was pressed into service.
"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. 226.90 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.91
(6) Ghosal
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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.92 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.
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
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 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."93
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.94 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
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.
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
Page 437
In Venkatesh v. The City Municipal Council,95 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 Dayal96 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.97 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 Lal98 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.
In Cooper v. Wandsworth Corporation,1 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.2
(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.3
(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.4
(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.5

Page 438
In Bhiwandi Municipality v. K.S. Works,6 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,7 the municipality had the statutory right to lay down pipelines in the plaintiff's
of the plaintiff was damaged. The court held that the municipality was liable.
(8) Sreedharamurthy
seizure was not bona fide and awarded substantial damages to the plaintiff.8
(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
discharge of this duty was actionable.9
(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.10
(11) Kumari
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.11
(12) Bishambar Nath
An important case in this series of cases is Lala Bishambar Nath v. The Agra Nagar Mahapalika, Agra.12 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.
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,
Page 439
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 :13
"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
corporation was negligent in discharging its duty.14
The government sets up a number of statutory corporations or bodies incorporated under the Companies Act.15 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,16 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,17 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.18
(1) Manoharlal
In Manoharlal v. Madhya Pradesh Electricity Board,19 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.
(2) Shiv Charan Lal

Page 440
A buffalo died by coming in contact with a live wire. The Rajasthan High Court in PSEB, Jaipur v. Shiv Charan Lal,20
ruled that the accident occurred because of the Board's negligence and, accordingly, directed the board to pay
(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,21 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,22 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.23
(5) Thressia
An old agricultural labourer was electroculated by a snapped wire. The incident took place in October, 1979. The
board to pay Rs. 72,000 as compensation to the widow.24 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
not being aware of the leakage of electricity came in contact with the live wire, got electroculated and died
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.25
(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.26

Page 441
In Chairman, Grid Corp. v. Sukamani Das,27 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.28
(1) Nazim
Union of India v. Mohd. Nazim29 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 statute30 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.31
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 of India was absolved from the liability under the proviso to S. 34.32
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
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
(1) G.M.S. Rly
The Supreme Court held in State ofKerala v. G.M.S. Rly,34 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 juristic
(2) S.S. Works
In Union ofIndia v. S.S. Works,35 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
Page 442
(3) Krishna Goods
Krishna Goods Carriers (P) Ltd. v. Union of India,36 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.
reasonably entitled to assume that no train is approaching and that the line may be crossed with safety.37
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.38
of contributory negligence raised by the railways with the following observation :39
(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.40 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 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 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

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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.41 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."42
(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
provision as there was no accident to the train.43 When a heavy girder, loosely and carelessly fixed for electrification
that the case was covered under the above provision as it fell within the expression 'other accidents to a train.'44
(8) Imaman
In Imaman v. Union of India,45 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
Page 444
certain precautions while starting or stopping trains.46
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."47
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.48 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;49 in some, to any person for anything done under the statute50 (it is
doubtful whether any person would include the government also); and in some, to officers of the government only.51
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.52 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 :

done.
Page 445
whatsoever, and (2) he was acting without good faith in believing himself to have jurisdiction.53
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
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."54
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."55 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.
exercise of power out of dishonest intent or corrupt motive.56 In Prem Lal v. U.P. Government,57 the power of
Emergency Powers Act, 1947 not because the government genuinely needed the vehicles but "to teach him a lesson"
The Supreme Court in Bhiwandi Municipality v. K.S. Works58 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,59 the Court stated :60
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 fides 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 fides.
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,61 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
Page 446
instead of passing through the canal flooded the respondent's property. The municipality was held liable to pay
In Mathura Municipality v. Gopinath, the municipality had the statutory right to lay down pipelines in the plaintiff's
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,62 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 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
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 India63 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
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
in respect of an act done by the state against an alien outside its territory.64
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.
In Nabob of Carnatic v. East India Co.,65 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,66 it was held that the

Page 447
The most important case on 'act of state' is Secretary of State v. Kamachee Boye Sahaba,67 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
(3) Raja of Coorg
In Raja of Coorg v. East India Co.,68 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 must be
tested by the municipal law and in municipal courts.69 The principle can be illustrated by reference to Forester v.
Secretary of State.70
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
the new sovereign recognizes and the rights he had under the rule of the predecessors avail him nothing.71 In State of
Saurashtra v. Memon Haji Ismail,72 the administration of the princely State of Junagadh was taken over by the
(6) Vora Fiddali
In State of Gujarat v. Vora Fiddali,73 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
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(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,74 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 may be express or may be implied from the circumstances.75
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 :

(3) Judicial creativity in India which has liberalised the Indian law of compensation against government over
a period, especially Art. 21 of time.
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 :76
If what is done by the administration can be made to fit within one of the recognised torts (such as trespass, nuisance,
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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.77 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. Sharp78 it has been held that an individual who relied to his
against both the official and his employing authority.79 This tort can be useful in cases of misleading official advice--a
topic discussed earlier under Promissory Estoppel.80
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
(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.81 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 dilligence.
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.82 The House of Lords basing itself on
statutory authority ruled : "Where Parliament by express direction or by necessary implication has authorised the
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from any action based on nuisance."83 The Act in question showed that Parliament considered it in the public interest
that a refinery be constructed. However, the refunery would be liable to pay compensation for negligence and for
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."84
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.85
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.
(2) Dorset
discharging their functions is Dorset Yacht Co. Ltd. v. Home Office.86 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 plantiff 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 :87

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(3) Dutton
Another case in the same line is Dutton.88 The Council's building inspector had inspected the excavations for a
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.89
(4) Anns
The most outstanding case in this series is the House of Lords decision in Anns.90 It was observed there :91
"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."92
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 WLBERFORCE who said that Lord DENNING in Dutton "puts the duty too
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.93 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."94
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
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are to be carried out."95 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.1
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."2
failure to exercise a power was not actionable."3 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
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 . . .4 If the action of the authority is deliberately wrongful or malicious, then there is no doubt that it
will be liable in damages."5
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,6 negligence by a local authority in
compensable. In Fellowes,7Anns 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 plaintiff by reason of such act."8
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

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In Peabody Trust9 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
distinguished in Peabosy.
(6) Yuen Kum Yen
In Yuen Kum Yen,10 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
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.11
social workers to name only a few."12
(7) Murphy
At last, however, in Murphy v. Brentwood DC,13 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
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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 :14
"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
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.15
(8) Davis
In Davis v. Radcliffe,16 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
Under the present-day law, as mentioned above, damages are awared 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,17 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 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.
Page 455
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
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.18
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,
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,19 the Court of Appeal unanimously agreed that a minister who in
(1) Dunlop
Reference may be made in this connection to Dunlop v. Woollahara Municipal Council,20 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.
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 :21
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"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 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."22
discussed earlier.23 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 DIPLOCK 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.24
(2) Rowling
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.25 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.26 The High Court then ruled27 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."
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'reversion factor' (an irrelevant consideration) ahead of all other factors, while making the decision.28
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.
When there is a statutory duty, action may lie to enforce due performance thereof e.g. a writ, injunction, etc.29 In
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),30 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,31 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.32 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.33
(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,34 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,35 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
Page 458
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,
(3) De Falco
imposes burdensome duties on local authorities. As Lord DENNING has observed in De Falco :36
"This is a statute which is passed for the protection of private persons, in their capacity as private persons. It is not passed 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.37
(4) Cutler
In Cutler v. Wandsworth Stadium Ltd.,38 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,39 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
common law.40
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.41
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
Page 459
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 descretion conferred, then a common law liability may arise. But "a
duties."42
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.43
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,44 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.
when in his opinion an act of maladministration has caused injustice to the complainant,45 but this is not a satisfactory
referred to this defect in English Law when he pointed out in Hoffman La Roche46 that in the law there was an
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 initiothis is simply a reflection of a
conclusion, already reached on unexpressed grounds, that the court is not willing in casuto give compensation or other redress to
Page 460
administrative acts or decisions," or "a direct remedy in damages for public law error."47 It is argued that the
these mistakes be shared by the community as a whole in whose name they are made?48 Surely it is preferable that the
result of invalid administrative acts.49
provide an indirect way of challenging administrative action.50
The lack of such a general remedy has been adversely criticised by several leading administrative lawyers. For example,
Schwartz says :51
"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."
Another scholar observes :52
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?"53 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.54 In
France, the conseil d'Etathas built a general principle of liability without faultbased on the theory of risk.55
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.56 The principle of equality as applied to the sharing of
public burdens has been succinctly explained by Duguit as follows :57
Page 461
"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
In fact, LORD WILBERFORCE referred to this aspect of the matter when he pointed out in Hoffman La Roche,58 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'.
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. Bernard59 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,60 several Law Lords put an expansionary gloss on this formulation, i.e.
the expression 'government servants' would include police personnel as well as local and other officials. As Lord
DIPLOCK clarified the position :61
"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.,62 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."
1 HARLOW, Compensation and Government Torts, (1982).

Page 462
2 See, infra, Chapter, XXXI et. seq.
3 JAIN, Treatise, I, Chapter I.
4 For further discussion on tort of negligence and its application to administration, see, infra.
5 For discussion on the principle of vicarious liability, see, infra.
6 Tamlin v. Hannaford, (1951) 1 KB 18.
7 For comments on the Act see : GLANVILLE WILLIAMS, Crown Proceedings (1947); STREET, Governmental Liability, (1953); HOGG,
The Liability of the Crown, (1971).
8 See, infra.
9 (1963) 10 Led 2d 805.
10 By 3 & 4 Will IV, C. 85, the East India Co. was made a trustee for the Crown in respect of all the property which it possessed in India.
The Act of 1858 transferred the Indian Territories to the Crown. As the Queen could not be sued in her own courts under the common law
prevailing at the time, the Act provided that the Secretary of State as a body corporate would have the same rights of suit as the Company
had and would be subject to the same liability of being sued as previously attached to the East India Company.
12 5 Bom HCR App. 1; see, JAIN.
16 For comments on this case, see : ALICE JACOB, Vicarious Liability of government in Torts 7 JILI 247 (1965); BLACKSHIELD,
Tortious Liability of Government : A Jurisprudential Case Note, 8 JILI 643 (1966).
17 For discussion on 'Act of State,' see, infra, this Chapter.
18 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273.
19 Infra.
20 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273, 279.
21 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273, 279, emphasis supplied.
22 Forrester v. Secretary of State for India, IA, Suppl. Vol. 55, see, infra.
23 AIR 1915 Mad 993.
24 (1911) 38 ILR Cal 797.
25 AIR 1942 Mad 539.
26 AIR 1939 Mad 663.
27 Mata Prasad v. Secretary of State, AIR 1931 Oudh 29.
28 Kessoram Poddar & Co v. Secretary of State, (1927) 54 ILR 909.
29 Purnendu Deb. v. Union of India, AIR 1956 Cal 66.
30 Secretary of State v. Srigobinda Chaudhari, AIR 1932 Cal 834.
31 Nobin Chunder Dey v. Secretary of State for India, ILR 1 Cal 11 (1875).
32 37 CWN 957. Also see, Udey Chand Mahtab v. Province of Bengal, ILR (1947) 2 Cal 141.
33 40 IA 48.
Page 463
34 State of Bihar v. Sonabati, AIR 1954 Pat 513; Uday Chand v. Province of Bengal, 51 CWN 537; Union of India v. Ram Kamal, AIR
1953 Ass 116.
35 AIR 1949 Bom 277 : 51 Bom LR 342.
36 See, infra.
39 Province of Bombay v. Khushaldas, AIR 1950 SC 222 : 1950 SCR 621.
40 Province of Bombay v. Khusaldas, AIR 1950 SC 222 : 1950 SCR 621.
41 Maharaja Bose v. Governor-General in Council, AIR 1952 Cal 242.
42 Union of India v. Murlidhar, AIR 1952 Ass 141.
43 Bata Shoe Co. v. Union of India, AIR 1954 Bom 129. This judgment was delivered by GAJENDRAGADKAR, J. who later delivered the
judgment in the Supreme Court in Kasturilal Rallia Ram and rigidified the law in the are. See, infra. The Calcutta High Court also agreed
with this view in Calcutta Motor Cycle v. Union of India, AIR 1953 Cal 1 and K.G. Kalwani v. Union of India, AIR 1960 Ass 85.
44 Pratap Chandra Biswas v. Union of India, AIR 1956 Ass 85.
45 Secretary of State v. Sheoramjee Hanumantrao, AIR 1952 Nag 213.
46 K. Krishnamurthy v. State of Andhra Pradesh, AIR 1961 AP 283.
47 AIR 1954 Pat 259.
48 AIR 1959 Punj 39.
49 State of Andhra Pradesh v. Pini Setti Ankanna, AIR 1967 AP 41.
50 J. Kuppanna Chetti Ambuti Ramayya Chetty & Co. v. Collector of Anantpur, AIR 1965 AP 457.
51 First Report, 8 (1956). Also see, infra. For extracts from this report see, JAIN, Cases, IV, Chapter XXVIII.
52 See, infra,
53 This is what was decided in Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273. See also, FRIEDMANN, Law and Social Change,
273.
57 Commenting on the 1965 Bill, the Bombay High Court observed in President, Union of India v. Sadashiv, AIR 1985 Bom 345 : "An
abortive attempt was made by the Government to introduce a bill on the subject sometime in 1965. Numerous exceptions carved out to the
liability of the State for torts committed by its servants decinated the bill to such an extent that no tears need be shed that the bill already
bleeding copiously by these exceptions, was allowed to die its natural death."
58 AIR 1962 SC 933 : 1962 Supp (2) SCR 989. For comments on Vidhyawati, see, C.P. GUPTA, A Comment on State of Rajasthan v.
Vidhyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989 : 4 JILI 279, 287 (1962).
59 State of Rajasthan v. Vidyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989.
60 State of Rajasthan v. Vidyawati, AIR 1962 SC 933: 1962 Supp (2) SCR 989.
61 AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1966 (2) LLJ 583. For comments on the case see, ALICE JACOB, Vicarious Liability of
Page 464
64 For The Crown Proceedings Act, see, supra, this chapter.
65 See, State of Gujarat v. Menon Mahomed Haji Hasan, AIR 1967 SC 1885, 1889 : 1967 (3) SCR 938, infra.
66 See BLACKSHIELD, Tortious Liability of Government: A Jurisprudential Case Note 8 JILI 658 (1966); JACOB, Vicarious Liability of
67 In this connection, GAJENDRAGADKAR, C.J., observed as follows :
67 "It is not difficult to realize the significance and importance of making such a distinction (sovereign v. non-sovereign functions)
particularly at the present time when, in pursuit of their welfare ideal, the Government of the States as well as the Government of India
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. It is necessary to limit the area of these affairs of
the State in relation to the exercise of sovereign power, so that if acts are committed by Government employees in relation to other activities
which may be conveniently described as non-governmental or non-sovereign, citizens who have a cause of action for damages should not be
precluded from making their claim against the State. That is the basis on which the area of the 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."
68 Association Pool v. Radhabai, AIR 1976 MP 164.
69 AIR 2000 SC 988 : (2000) 2 SCC 465 : 2000 CrLJ 1473. Also see, N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC
205 : AIR 1994 SC 2663 : 1994 (3) Scale 977; see, infra. Also see, infra, under "Statutory Functions" for discussion on this case.
70 Agricultural Produce Market Committee v. Ashok Haribuni, (2000) 8 SCC 61 at 80-81 : 2000 (2) LLJ 1382 : AIR 2000 SC 3116.
71 Chairman Railway Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465 : 2000 (2) Mad LJ 26.
72 For a full fledged discussion on Arts 32 and 226 of the Constitution, see, infra, under Judicial Control of Administrative Action.
73 See, Chairman, Railway Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465. For full discussion on this
constitutional provision, reference may be made to M.P. JAIN, Indian Constitutional Law, Chapter XXVI.
74 AIR 1972 Bom 93.
75 AIR 1972 All 486.
76 AIR 1976 Pat 24.
77 State v. Rameshwar Prasad, AIR 1980 Pat 267.
78 Kumari v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : JT 1992 (2) SC 16.
79 V. Srinivas v. Machines and Machine tools P. Ltd. SS. Vendantacharya v. Highways Dept. of South Arcot,. Vendantacharya v. Highways
Dept. of South Arcot, (1987) 3 SCC 400 : 1987 (2) ACJ 783.
80 Collector of South Arcot v. Vendanthachariar, AIR 1972 Mad 148.
81 AIR 1993 Ori at 168. Also see, JAIN, Cases, III.
82 AIR 1993 Ori at 170.
84 Annamalai v. Abithakujambal, AIR 1979 Mad 276.
85 AIR 1967 Ori 116.
86 AIR 1972 MP 219.
87 Also see, on the same point, State v. Dole Ram, AIR 1981 HP 87.
88 AIR 1974 SC 890 : (1974) 1 SCC 690 : 1974 LIC 598.
89 AIR 1976 MP 164.
90 Also see, State of Madhya Pradesh v. Prema Bai, AIR 1979 MP 85.
91 AIR 1976 AP 122.

Page 465
92 Shyam Sunder v. State of Rajasthan, AIR 1974 SC 890 : (1974) 1 SCC 690 : 1974 LIC 598.
93 S. 110(1) empowered the State Government to constitute accident claims tribunals for the purpose of adjudicating upon claims for
compensation in respect of accidents involving death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to
any property of a third party so arising or both.
93 S. 110B provided, inter alia, that the claims tribunal shall hold an inquiry into the claim and may make an award determining the amount
of compensation which appears to be just. The parallel provision in the newly enacted Motor Vehicles Act are ss. 165-176. For discussions
on Claims Tribunals, see, JAIN Treatise, I, Chapter XIII; JAIN, Cases, II, 1095-1104.
94 AIR 1978 Ker 43.
95 State of Tamil Nadu v. M.N. Shamsudeen, (1981) 1 MLJ 17.
96 State of Orissa v. Madhuwilata Ray, AIR 1981 NOC 104. Also, Union of India v. Marcia E. Dutta, AIR 1982 Gau 4; Mariyam Jusab v.
Hamatlal Ratilal, AIR 1982 Guj 23.
97 Amruta Dei v. State, AIR 1982 Ori 12. On appeal, State of Orissa v. Amruta Dei, AIR 1987 Ori 217.
98 See, infra, under Public Sector Undertakings.
99 AIR 1962 SC 1161 : 1962 Supp (3) SCR 105.
1 Shubhakar Sridhar Shastry v. Mysore State Road Transport Corporation, AIR 1975 Knt 73; Madhya Pradesh State Road Transport
Corp. v. Sudhakar, AIR 1968 MP 47; C.S.T. Corp. v. Kamal Prakash, AIR 1976 Cal 2; Rehana v. Ahmedabad Municipal Transport
Service, AIR 1976 Guj 37; Agya Kaur v. General Manager, Pepsu Road Transport Corp., AIR 1980 P&H 183; Sushma Mitra v. M.P. State
R.T. Corp., AIR 1974 MP 68; Gujarat S.R.T., Ahmedabad v. Keshavlal, AIR 1981 Guj 205; Gen. Man., Karnataka S.R.T. Corp. v.
Peerappa Parasappa, AIR 1979 Knt 154; Karnataka S.R.T. Corp. v. Krishnan, AIR 1981 Knt 11; Delhi Transport Corp. v. Lalita, AIR
1982 Del 558; O.S.C.T. Corp. v. Dhumali Bewa, AIR 1982 Ori 70; Himachal Road Transport Corporation v. Miss Neena, AIR 1987 HP
32; Himachal Road Transport Corpn. v. Kaushalya Devi, AIR 1986 HP 21; Gujarat State Road Transport Corpn. v. Haribhai Vallabhbhai
Darji, AIR 1983 Guj 210; State of Punjab v. Rajrani, AIR 1986 P&H 414; Sampath Reddy v. G.M.S. Venkatamma, AIR 1989 AP 337.
2 AIR 1980 SC 695 : (1980) 2 SCC 180 : 1980 ACJ 411.
3 State of Haryana v. Darshana Devi, AIR 1979 SC 855 : (1979) 2 SCC 236 : 1979 ACJ 205. Also see, JAIN, Treatise, I, Chapter XIII;
JAIN, Cases, II, 1097.
Asstt. Engineer, P.W.D. (B. & R.) Jaipur v. Dhappo, (1980) Lab & Ind CASES 1202 (Raj). Also see, State of Gujarat v. Dushyantbhai, AIR
1981 NOC 214 (Guj); R.S.R.T. Corporation v. Jhami Bhai, AIR 1987 Raj 68.
5 State of Maharashtra v. Kanchanmal Vijaysing Shirke, (1995) 5 SCC 659, 661 : AIR 1995 SC 2499 : (1996) 85 Comp Cas 542.
8 Chairman, Rly. Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : JT 2000 (1) SC 426.
9 Satya Wati v. Union of India, AIR 1967 Del 98. Also see, Union of India v. P.S. Mahal, AIR 1976 J&K 80.
10 Union of India v. Sugrabhai, AIR 1969 Bom 13.
11 Union of India v. Sugrabhai, AIR 1969 Bom 13 : 1968 Mah LJ 468 : 70 Bom LR 212.
12 AIR 1962 Punj 315.
13 Union of India v. Harban Singh, AIR 1959 Punj 39 : 61 Punj LR 30.
14 Union of India v. Neelam Dayaram, 1979 MPLJ 732.
15 Union of India v. Savita Sharma, AIR 1979 J&K 6.
16 AIR 1978 All 417.
17 Nandram Heeralal v. Union of India, AIR 1978 MP 209.
18 President, Union of India, New Delhi v. Sadashiv, AIR 1985 Bom 345.
Page 466
19 AIR 1975 Mad 32.
20 Union of India v. Hardeo Dutta, AIR 1986 Bom 350.
21 Pushpinder Kaur v. Corporal Sharma, AIR 1985 P&H 81.
22 Usha Aggarwal v. Union of India, AIR 1985 P&H 279, 281.
23 Pushpa Thakur v. Union of India, AIR 1986 SC 1199 : 1985 (1) ACC 76.
24 AIR 1987 Kant 107.
25 AIR 1982 Bom 27.
26 State of Maharashtra v. A.H. Khodwe, ILR (1980) Bom 660. Also see, Etli v. Secretary of State, AIR 1939 Mad 663 : 1939 (1) Mad LJ
784 : 49 Mad LW 679.
27 AIR 1970 SC 1407 : 1970 (2) LLJ 266 : (1970) 1 SCC 735.
28 Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548 : (1978) 2 SCC 213 : 1978 (1) LLJ 349.
29 Also see, State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610 : 1960 (1) LLJ 251 : 1960 (2) SCR 866, where a government
hospital was held to be an 'industry'. The question was whether the Industrial Disputes Act, 1947, applied to government hospitals and
whether they were "industry" within the meaning of that Act. The Court said : "It is the character of the activity which decides the question
as to whether the activity in question attracts the provision of s. 2(j); who conducts the activity and whether it is conducted for profit or not
do not make a material difference." The activities carried on by the state to comply with the directive principles or in pursuit of its welfare
policies cannot be regarded as regal activities as they cannot be said to be "primary and inalienable functions of a constitutional government"
and they are not such that "no private citizen can undertake the same."
30 Kalawati v. State of Himachal Pradesh, AIR 1989 HP 5. Also see, Pinnamaneni Narasimha Rao v. Gundavarapu Jayaprakasu, AIR
1990 AP 207. In this case was cited the following observation of Lord DENNING in Cassidy v. Minister of Health, (1951) 1 KB 343 on the
question of vicarious liability of the government for negligence of the doctors in a hospital maintained by it :
30 " . . . authorities who run a hospital, be they local authorities, government boards or any other corporation, are in law under the self same
duty as the humblest doctor; whenever they accept a patient for treatment, they must use reasonable care and skill to cure him of his ailment.
The hospital authorities cannot, of course, do it by themselves; they have no ears to listen through the stethoscope, and no hands to hold the
surgeon's knife. They must do it by the staff which they employ, and if their staff are negligent in giving the treatment, they are just as liable
for that negligence as is anyone else who employs others to do his duties for him. What possible difference in law, I ask can there be
between hospital authorities who accept a patient for treatment and railway or shipping authorities who accept a passenger for carriage?
None whatever. Once they undertake the task they come under a duty to use care in the doing of it, and that is so whether they do it for
reward or not. It is no answer for them to say that their staff are professional men and women who do not tolerate any interference by their
lay masters in the way they do their work. The reason why the employers are liable in such CASES is not because they can control the way
in which the work is done they often have not sufficient knowledge to do so but because they employ the staff and have chosen them for the
task and have in their hands the ultimate sanction for good conducts, the power of dismissal."
31 Achutrao Haribhau Khodwa v. State of Maharashtra, (1996)2 SCC 634 : AIR 1996 SC 2377.
34 N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 : AIR 1994 SC 2663 : JT 1994 (5) SC 572; Infra.
35 State of Maharashtra v. Kanchanmal Vijaysingh Shirke, (1995) 5 SCC 659 : AIR 1995 SC 2499 : (1996) 85 Comp Cas 542; supra,
Khodwa v. State of Mahrashtra, (1996) 2 SCC 634 : AIR 1996 SC 2377.
41 M. Vijaya v. Chairman and Managing Director, Singrani Collieries Co. Ltd., AIR 2001 AP 502. See, infra, for details of the case.
Page 467
42 Shakuntala Sharma v. State of Uttar Pradesh, AIR 2000 All 219.
43 (2000) 5 SCC 182 : AIR 2000 SC 1888 : 2000 (3) Mad LJ 98. Also see, Legal Aid Committee v. State of Bihar, (1991) 3 SCC 482;
Jocob George (Dr.) v. State of Kerala, (1994) 3 SCC 430 : 1994 CrLJ 3851 : 1994 (2) Crimes 100; Paschim Banga Khet Mazdoor Samity v.
State of West Bengal, AIR 1996 SC 2426 : (1996) 4 SCC 37 : JT 1996 (6) SC 43.
44 Union of India v. Sat Pal, AIR 1969 J&K 128.
45 State of Punjab v. Modern Cultivators, AIR 1965 SC 17 : 1964 (8) SCR 273.
46 Rooplal v. Union of India, AIR 1972 J&K 23.
47 Dhian Singh Sobha Singh v. Union of India, AIR 1958 SC 274 : 1958 SCR 781.
48 Union of India v. Ram Kamal, AIR 1953 Ass. 116.
49 Municipal Board, Khari v. Ram Bharosey, AIR 1961 All 430.
50 On Seizure and Confiscation, see, JAIN, Treatise, I, Chapter XVI, Chapter XVI; JAIN, Cases, III, Chapter XVIII.
51 State of Gujarat v. Memon Mahomed Haji Hasan, AIR 1967 SC 1885 : 1967 (3) SCR 938.
52 AIR 1977 SC 1749 : (1977) 4 SCC 358 : 1977 CrLJ 1141.
53 Sunder Lal v. District Magistrate, Sagar, (1988) 21 Reports (MP) 587; I.L.I., Annual Survey of India Law, XXIV, 1,2 (1988).
54 AIR 1993 Raj 51.
55 Hazur Singh v. Behari Lal, AIR 1993 Raj 51 : 1993 (1) Civ LJ 95 : 1992 (2) Raj LW 49.
56 Also see, N. Nagendra Rao & Co. v. State of Andhra Pradesh, (1994) 6 SCC 205, 211 : AIR 1994 SC 2663 : JT 1994 (5) SC 572; infra.
57 M.S. Chokkalingam Chettiyar v. State, AIR 1991 Knt 116, 118.
58 Oswal Spinning and Weaving Mills Ltd. v. Collector of Customs, (1988) 3 SCC 310 : JT (1988) 2 SC 135 : (1988) 35 ELT 244.
59 Jay Laxmi Salt Works (P.) Ltd. v. State of Gujarat, (1994) 4 SCC 5 : JT 1994 (3) SC 492.
60 The High Court took the view by majority that the case fell under Article 36 of the Limitation Act and, thus, the case ought to have been
filed within two years of the cause of action arising. The court held that Article 120 permitting a limitation period of six years was not
applicable to the fact situation.
61 Jay Laxmi Salt Work (P.) Ltd. v. State of Gujarat, (1994) 4 SCC 5 : JT 1994 (3) SC 492 : 1994 (3) Cur CC 8 (per SAHAI, J.).
67 AIR 1982 AP 118.
68 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248; Olga Tellis v. Bombay Municipal Corp., AIR 1986 SC 180 :
(1985) 3 SCC 545; JAIN, Indian Constitution Law, Chapter XXVI.
69 D.K. Basu v. State of West Bengal, AIR 1997 SC 610, at 617 : 1997 CrLJ 743 : (1997) 1 SCC 416.
70 AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465.
71 For more case on Art. 21, see, infra.
72 AIR 1967 MP 246.
73 AIR 1975 Ori 41.

Page 468
75 JAIN, Treatise, I, Chapter VII.
76 AIR 1981 MP 65.
77 Also see, State of Madhya Pradesh v. Premabai, AIR 1979 MP 85; Roop Lal v. Union of India, AIR 1972 J&K 22.
78 Nanik Sewa v. State of Orissa, AIR 1996 Ori 131.
79 AIR 1987 SC 355 : 1987 CrLJ 528 : (1987) 1 SCC 265.
80 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248.
81 See, infra, under 'Police Lawlessness'.
82 AIR 1989 AP 238.
83 C. Ramakonda Reddy v. State, AIR 1989 AP 235 : 1989 (2) Andh LT 1 (per JEEVAN REDDY, J.).
85 State of Andhra Pradesh v. Challa Ramakrishna Reddy, AIR 2000 SC 2083 : (2000) 5 SCC 712 : JT 2000 (6) SC 334.
86 State of Andhra Pradesh v. Challa Ramkrishana Reddy, AIR 2000 SC 2083, 2090 : (2000) 5 SCC 712 : 2000 (3) Cur CC 19.
88 On Public Interest Litigation, see, infra.
89 Peoples's Union of Democratic Rights v. State of Bihar, AIR 1987 SC 355 : (1987) 1 SCC 265 : 1987 CrLJ 528.
90 Inder Puri General Store v. Union of India, AIR 1992 J&K 11.
91 See, JAIN, Indian Constitutional Law,
92 JAIN, Indian Constitutional Law, Ch. XXXII.
93 R. Gandhi v. Union of India, AIR 1989 Mad 205.
94 AIR 1996 J&K 51.
95 S.S. Ahluwalia v. Union of India, AIR 2001 SC 1309 : (2001) 4 SCC 452 : JT 2001 (3) SC 523.
1 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248. See, JAIN, Indian Constitutional Law, Chapter XXVI; JAIN,
Cases, I, 522.
2 See, Raghubir Singh v. State of Haryana, AIR 1980 SC 1087, at 1088 : 1980 CrLJ 801 : (1980) 3 SCC 70.
3 D.K. Basu v. State of West Bengal, AIR 1997 SC 610, at 617 : 1997 CrLJ 743 : 1996 (4) Crimes 233.
4 AIR 1981 SC 928 : 1981 CrLJ 470 : (1981) 1 SCC 627.
5 AIR 1981 SC 928 : 1981 CrLJ 470.
6 Khatri v. State of Bihar, AIR 1981 SC 1068, 1074 : 1981 CrLJ 597 : (1981) 2 SCC 493.
7 AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141. For comments on this case, see S.N. JAIN, Money Compensation for
Administrative Wrongs through Art 32, (1983) 25 JILI 118.
8 AIR 1983 SC 1086 at 1089 : 1983 CrLJ 1644 : 1983 (2) Scale 103,
9 On 'Moulding of Relief', see, infra.
10 AIR 1984 SC 1026 : 1984 (2) Crimes 22 : 1984 CrLJ 830 : (1984) 3 SCC 82.
11 AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141.
12 AIR 1993 SC 1960 : (1993) 2 SCC 746 : 1993 CrLJ 2899.

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13 For discussion on Arts. 32 and 226, see, infra, under Judicial Review of Administrative Action.
14 AIR 1993 SC 1960 at 1967 : JT 1993 (2) SC 503 (2) : 1993 (2) Scale 309.
15 AIR 1993 SC 1960 at 1966 : 1993 (2) CCR 107. Emphasis has been added by the author.
16 AIR 1993 SC 1960 at 1969-70 : (1993) 2 SCC 746 : 1993 CrLJ 2899.
17 Arvinder Singh Bagga v. State of U.P. (1994) 6 SCC 565 : AIR 1995 SC 117 : 1994 (3) Crimes 694.
18 Arvinder Singh Bagga v. State of U.P., (1994) 6 SCC 565 : AIR 1995 SC 117 : 1994 (3) Crimes 694.
19 There has been a spate of CASES in this area where the High Courts and the Supreme Court have award compensation under Art 226 or
32 to the victims or their heirs in case of custodial violence or death. See, for example : Arvinder Singh Bagga v. State of U.P., (1994) 6
SCC 565 : JT 1994 (6) SC 478 : 1994 (4) Scale 466; Lalitha v. Director General of Police, Madras, (1989) Cr LJ 1732; Civil Liberties v.
Kukrety Assam Rifles, (1989) 1 Crimes 748 (Gau); Rajasthan Kisan Sangthan v. State, AIR 1989 Raj 10; Luithkula v. Risheang Keishing,
AIR 1989 NOC 182 (Gau); Joginder Kumar v. State of Uttar Pradesh, (1994) 4 SCC 260 : AIR 1994 SC 1349 : 1994 CrLJ 1981. In Punjab
& Haryana Bar Association v. State of Punjab, (1996) 4 SCC 742, 745 : 1966 (4) Scale 416, the Supreme Court awarded a sum of ten lacs to
the parents of Kulwan Singh, an advocate, who was allegedly abducted and killed by the police.
20 AIR 1997 SC 610 : 1997 CrLJ 743 : 1997 SCC (Cri) 92.
21 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : (1997) 1 SCC 416 : 1997 CrLJ 743.
22 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : 1996 (4) Crimes 233 : JT 1997 (1) SC 1.
23 See, JAIN, Treatise, I. Also, JAIN, Cases, II, 1033-1035, 1159, 1163, 1295, 1301, 1419-1422, 1537-1543.
24 See, for example, Re Death of Sawinder Singh Grover, (1995) Supp (4) SCC 450 : 1992 (3) Scale 34 (2), who died in the custody of
Directorate of Enforcement, The Supreme Court awarded a sum of Rs. two lacs as compensation to his widow.
25 (1997) 1 SCC 416 at 443 : AIR 1997 SC 610 : 1996 (4) Crimes 233.
26 People's Union for Civil Liberties v. Union of India, AIR 1997 SC 1203, 1205 : (1997) 3 SCC 433 : 1997 (1) Crimes 190.
27 State of Maharashtra v. Christian Community Welfare Council of India, (2003) 8 SCC 546 : AIR 2004 SC 7 : 2004 CrLJ 14 : 2003 (4)
Crimes 367.
28 AIR 1986 SC 494 : (1985) 4 SCC 677 : 1986 CrLJ 192.
29 Rudul Shah v. State of Bihar, AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141; JAIN, Cases, IV.
30 Sebastian M. Hongray v. Union of India, AIR 1984 SC 1026 : (1984) 3 SCC 82 : 1984 CrLJ 830.
31 Saheli, A Woman's Resources Centre v. Commissioner of Police, Delhi Police Head Quarters, AIR 1990 SC 513 : (1990) 1 SCC 422.
32 Saheli, A Woman's Resources Centre v. Commr. of Police, Delhi Police Head Quarters, AIR 1990 SC 513 : (1990) 1 SCC 422 : JT 1989
(4) SC 553.
33 State of Maharashtra v. Ravikant S. Patil, (1991) 2 SCC 373 : (1991) (1) Crimes 810 : JT 1991 (5) SC 442.
34 See, ILI, Annual Survey of Indian Law, 6-7 (1988).
35 AIR 1997 SC 1203 : (1997) 3 SCC 433 : 1977 (1) Crimes 190.
36 AIR 1989 SC 1570 : (1989) 3 SCC 223 : JT 1989 (2) SC 419.
37 See, Street, Governmental Liability, 33-34 (1953). Also, VTobin v. The Queen, 143 ER 1148; V. Srinivas v. Machines and Machine
tools P. Ltd. 1901 AC 561; Stanbury v. Exeter Corporation, (1905) 2 KB 839.
38 See, Mohammad Murad v. Govt. of U.P., AIR 1956 All 75. The Allahabad High Court observed in this case : "This exemption of the
State from liability to pay damages for the tortious acts of its servants, where a government servant is carrying out or purporting to carry out
duties imposed by the law, has also been justified on the ground that in such CASES the government servant purports to carry out duties
imposed by the letter of the law and is controlled by the law and not by the State Government. This as already pointed out, still leaves the
individual liability of the government servant committing the tortious act intact unless he is otherwise protected."
39 (1904) 28 ILR Bom 314.

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41 AIR 1915 Mad 434.
42 AIR 1932 Cal 834.
43 Secretary of State v. Ramnath, AIR 1934 Cal 128.
44 Ram Ghulam v. U.P. Government, AIR 1950 All 206. Other Cases to the same effect are : Ram Shanker v. Secretary of State, AIR 1932
All 575; Uday Chand v. Province of Bengal, (1946) 51 CWN 537; State of Bihar v. Sonabati, AIR 1954 Pat 513; Union of India v. Dhansa
Coal Co., AIR 1959 Pat 347; State of Uttar Pradesh v. Chhotey Lal, AIR 1967 All 327; State v. Tulsi Ram, AIR 1971 All 162.
45 Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1965 (1) SCR 375.
46 GAJENDRAGADKAR, C.J., observed on this point in Kasturilal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (1) SCR 375
: 1966 (2) LLJ 583.
46 "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 the
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 delegation of any sovereign power, an action for damages would lie."
48 Supra,
49 Abdul Kadir v. State of Saurashtra, AIR 1956 Sau 62, 65.
50 Abdul Kadir v. State of Saurashtra, AIR 1956 Sau 62, 65 : 8 Sau LR 437. Also, Uday Chand v. Province of Bengal, (1949) 51 CWN
537.
51 State of Rajasthan v. Rikhabchand, AIR 1961 Raj 64.
52 S. 2(3) of this Act reads :
52 "Where any functions are conferred or imposed upon an officer of the Crown as such either by any rule of the common law or by statute,
and that officer commits a tort while performing or purporting to perform those functions, the liabilities of the Crown in respect of the tort
shall be such as they would have been if those functions had been conferred or imposed solely by instructions lawfully given by the Crown."
54 (1994) 6 SCC 205 : AIR 1994 SC 2663 : JT 1994 (5) SC 572.
55 The Essential Commodities Act, 1955. For this provision, see, JAIN, Treatise, I, Chapter XVI; JAIN, Cases, III, 2772-2781, 2802 et seq.
58 See, supra, Chapter XX.
61 Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (1) SCR 375.
63 AIR 1967 SC 1885 : 1967 (3) SCR 938.

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fault on the part of the Administration, see, infra. Anns decision, see, infra, under "Position in Britain" also needs to be considered in this
respect.
67 There also remains the question of ultra vires administrative action without negligence which may cause economic loss to the individual.
These questions are referred to in the Section under 'Position in Britain'.
68 (2004) 3 SCC 415 : AIR 2004 SC 3338 : (2004) 120 Comp Cas 137.
69 (1987) 2 All ER 705; see, infra.
70 (1990) 2 All ER 536.
71 See, infra, for comments, on this aspect.
72 For discussion on these constitutional provisions, see, infra, under Writ Jurisdiction.
73 See, infra.
74 AIR 1983 SC 1102, 1107 : (1983) 4 SCC 148.
75 The reason given by the Law Commission to exclude Art. 32 from the scope of its recommendation was : "The remedy guaranteed by
article 32 to move the Supreme Court, though of basic importance in our constitutional scheme, is not so frequently resorted to." This is not a
correct assessment as a large number of CASES complaining violations of fundamental rights come before the Supreme Court under Art. 32.
For discussion on Article 32, see, infra.
76 AIR 1981 SC 928 : (1981) 1 SCC 627 : 1981 CrLJ 470.
77 AIR 1983 SC 1086 : 1983 CrLJ 1644 : 1983 (2) Scale 103.
78 Nilabati Bahera v. State of Orissa, AIR 1993 SC 1960 : (1993) 2 SCC 746 : 1993 CrLJ 2899.
79 Nilabati Behera v. State of Orissa, AIR 1993 SC 1960 : JT 1993 (2) SC 503 (2) : 1993 (2) Scale 309; Rudul Shah v. State of Bihar, AIR
1983 SC 1086 : (1983) 4 SCC 141 : 1983 CrLJ 1644; D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : 1997 CrLJ 743 : 1997 SCC
(Cri) 92; Kumari (Smt.) v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : JT 1992 (2) SC 16; Chairman, Rly. Board v.
Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465; People's Union for Civil Liberties v. Union of India, AIR 1997
SC 1203 : (1997) 3 SCC 433 : 1997 CrLJ 190.
80 Shankuntala Devi v. Delhi Electricity Supply Undertaking, (1995) 2 SCC 369 : 1995 (1) Cur CC 302 : JT 1995 (1) SC 547.
81 Supra.
82 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : JT 1997 (1) SC 1 : 1996 (8) Supreme 581.
83 Jacob George (Dr.) v. State of Kerala, (1994) 3 SCC 430 : 1994 CrLJ 3851 : 1994 (2) Crimes 100. Also, Paschim Banga Khet Mazdoor
Samity v. State of West Bengal, AIR 1996 SC 2426 : (1996) 4 SCC 37.
84 AIR 1983 SC 1134 : (1983) 4 SCC 20; for final decision in the case, see, AIR 1984 SC 1560 : 1984 (2) LLJ 318 : 1984 Supp SCC 410.
Also, JAIN, Treatise, I, Chapter XIX. The mandamus was issued in 1971 : For full history of the case, see, JAIN, Cases, III,
85 AIR 1990 SC 1417 : (1990) 3 SCC 182.
86 See, for example, R. Gandhi v. Union of India, AIR 1989 Med. 205, where the Madras High Court ordered payment of ex gratia
compensation to the Sikh victims of a communal riot.
87 Also see, infra.
88 AIR 2001 AP 502. Also see, State of Andhra Pradesh v. Challa Ramkrishna Reddy, AIR 2000 SC 2083 : (2000) 5 SCC 712 : JT 2000 (6)
JT SC 334.
89 Chairman, Rly. Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465. On PIL writ petitions, see, infra.
90 All India Lawyers Union v. Union of India, AIR 1999 Del 120. For further discussion on this matter see, infra.
91 Marri Yadamma v. State of Andhra Pradesh, AIR 2002 AP 164.
92 Rabindra Nath Ghosal v. University of Calcutta, AIR 1992 Cal 208.

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93 Rabindra Nath Ghoshal v. Unversity of Calcutta, (2002) 7 SCC 478 : AIR 2002 SC 3560.
94 For a full-fledged discussion on writs, see, infra, Chapters XXXIII to XXXVI.
95 AIR 1975 Knt 62.
96 AIR 1975 All 132.
97 See, JAIN, Treatise, I, Chapter XIX; JAIN, Cases, III, Chapter XVI.
98 Prem Lal v. State of U.P. Government, AIR 1962 All 233; see, infra.
1 11 WR 646; YARDLEY, A Source Book of Administrative Law, 116 (1970) supra.
2 See, infra, next Chapter.
3 Shri Shivkor Mota Singh v. Ram Naresh Muni Singh, AIR 1978 Guj 115.
4 Municipal Board, Jaunpur v. Brahmkishore, AIR 1978 All 168.
5 Municipal Corp., Delhi v. Sobhagwati, AIR 1960 Punj 300.
6 AIR 1975 SC 529 : (1974) 2 SCC 596. Also see, supra.
7 AIR 1962 All 211.
8 G. Sreedharamurthy v. Bellary Municipal Council, AIR 1982 Knt 287.
9 Municipal Commissioner v. David J. Bhanu, (1988) 1 KLT 675.
10 Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum, (1991) 1 GLR 650.
11 Kumari v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : 1993 (1) ACC 80.
12 AIR 1973 SC 1289 : (1973) 1 SCC 788.
13 Lala Bishambar Nath v. The Agra Nagar Mahapalika, Agra, AIR 1973 SC 1289 : (1973) 1 SCC 788.
14 Municipal Corp. of Delhi v. Sushila Devi, AIR 1999 SC 1929 : (1999) 4 SCC 317.
15 See, infra.
16 For this Article, see, supra.
17 AIR 1979 All 35.
18 See, supra, for CASES for compensation brought against State Transport Corporations. Also see, R.N. Ghosal v. Univ. of Calcutta, AIR
1992 Cal 207 : 1992 (1) Cal HN 134 : (2002) 7 SCC 478 : AIR 2002 SC 3560; also see for CASES against electricity undertakings which
are statutory bodies : infra.
19 AIR 1976 MP 38.
20 AIR 1986 Raj 176. Also See, K.S.E. Board v. Kamalakshy Amma, AIR 1987 Ker 253.
21 AIR 1986 Ker 72.
23 Also see, Asa Ram v. M.C.D., AIR 1995 Del 168.
24 Thressia v. Kerala State Electricity Board, AIR 1988 Ker 206.
25 Shakuntala Devi v. Delhi Electric Supply Undertaking, (1995) 2 SCC 369 : JT 1995 (1) SC 547.
26 Padma Beharilal v. Orissa Electricity Board, AIR 1992 Ori 68.
27 AIR 1999 SC 3412 : (1999) 7 SCC 298 : JT 1999 (7) SC 109. Also see, Tamil Nadu Electricity Board v. Sunathi, AIR 2000 SC 1603 :
(2000) 4 SCC 543 : 2000 (3) Mad LJ 124.
Page 473
28 On Writs, see, infra.
29 AIR 1980 SC 431 : (1980) 1 SCC 284.
30 The Post Office Act, 1898.
31 Triafus & Co. Ltd., v. Post Office, (1957) 2 QB 352; Cf. C.I.T. v. P.M. Rathod & Co., AIR 1959 SC 1394 : 1960 (1) SCR 401; Union of
India v. Amar Singh, AIR 1960 SC 233 : 1960 (2) SCR 75.
32 S. 191 of the Indian Contract Act, 1872.
33 Union of India v. Ladulal Jain, AIR 1963 SC 1681 : 1964 (3) SCR 628. Also see, Union of India v. Murlidhar, AIR 1952 Ass 141.
34 AIR 1976 SC 2538 : (1976) 4 SCC 265.
35 AIR 1976 SC 1414 : (1976) 3 SCC 32.
36 AIR 1980 Del 92.
37 Commissioners for Railways v. Mc Dermott, (1967) AC 169.
crossing must be kept closed when the train is due to pass. In Union of India v. Hindustan Lever, AIR 1975 P&H 259, the accident occurred
because the gates were left open at the time of the passing of the train. The Court characterised this as 'statutory negligence' on the part of the
railway employees and, on the principle of vicarious liability, the Union of India was held liable to pay damages to the plaintiff due to the
aforesaid negligence.
39 CHARLESWORTH, On Negligence, 825 (11th ed.).
40 AIR 1980 All 168.
41 AIR 1989 Cal 207.
42 Nathulal Jain v. State, AIR 1993 Raj at 155.
43 Union of India v. Sunil Kumar, AIR 1984 SC 1737 : (1984) 4 SCC 246; Ratnakar Tanbaje Itankar v. Union of India, AIR 1994 Bom
133; see, JAIN, Treatise, I, Chapter XIII.
44 D. Srinivasa v. Union India, AIR 1995 Knt 223. Also see, Ratnakar Tanbaji Itankar v. Union of India, AIR 1994 Bom 132; JAIN,
Treatise, I, Chapter XIII; JAIN, Cases, II, 1077-1084.
45 AIR 1976 All 85.
46 Ulhasamnan v. Union of India, (1992) ACJ 151.
48 Supra.
49 For instance, S. 54 of the Banking Companies Act, 1949; S. 15 of the Essential Commodities Act, 1955.
50 For instance, S. 117 of the Factories Act, 1948; S. 155 of the Customs Act, 1962.
51 For instance, S. 19 of the Prize Competition Act, 1955; V. Srinivas v. Machines and Machine tools P. Ltd. S. 293 of the Income Tax Act,
1961.
53 R. Subha Rao v. Advocate-General, A.P., AIR 1981 SC 755 at 757 : (1981) 2 SCC 577.
54 State v. Tulsi Ram, AIR 1971 All 162.
55 Law Commision of India, First Report (Liability of the State in Tort), 39 (1956).
56 See, infra, Chapter XXX under Misfeasance in Public office. For discussion on mala fide action on the part of the government, see, JAIN,
Treatise, I, Chapter XIX.
57 AIR 1962 All 233.

Page 474
58 AIR 1975 SC 529: (1974) 2 SCC 596 See, infra.
59 (1877) 2 AC 616.
60 AIR 1975 SC 529 at 531: (1974) 2 SCC 596.
61 AIR 1975 SC 529: (1974) 2 SCC 596.
62 AIR 1985 SC 285, 293: (1985) 1 SCC 449.
63 AIR 1975 SC 460: (1974) 2 SCC 630.
64 Eshugbayi Eleko v. Govt. of Nigeria, (1931) AC 692; WADE AND BRADLEY, Constitutional Law, 267 (1970).
65 30 ER 391 and 521 (1793).
66 7 MIA 555 (1827).
67 7 MIA 476 (1859). This case is also known as the Rajah of Tanjore case. Also see, JAIN, Cases, IV, Chapter XXVIII for the text of this
case.
68 54 ER 642 (1860). Other old Cases on the act of state are : Raja Saligram v. Secy. of State, (1872) IA Suppl Vol. p. 119; Sirdar
Bhagwan Singh v. Secy. of State, (1872) 2 IA 38; Secy. of State v. Rustam Khan, (1941) 68 IA 109; Vaje Singhji Joravar Singhji v. Secy. of
State, 51 IA 357.
69 P.V. Rao v. Khushaldas, AIR 1949 Bom 277, 278.
70 (1872) IA Supp Vol., p. 10.
71 Promod v. State of Orissa, AIR 1962 SC 1288: 1962 Supp (1) SCR 405; Virendra Singh v. State of Uttar Pradesh, AIR 1954 SC 417:
1955 (1) SCR 415; State of Madras v. Rajagopalan, AIR 1965 SC 817: 1955 (2) SCR 541; Dalmia Dadri Cement Co. v. Commr.,
Income-tax., AIR 1958 SC 816: 1959 SCR 729.
72 AIR 1959 SC 1383: 1960 (1) SCR 537. Also, Dalmia Dadri Cement Co. v. CIT, AIR 1958 SC 816 : 1959 SCR 729: (1958) 34 ITR 514.
73 AIR 1964 SC 1043: 1964 (6) SCR 461.
74 AIR 1967 SC 40: 1966 Supp SCR 81.
75 This principle has been applied by the Supreme Court in several earlier Cases, see, for example, Dalmia Dadri Cement Co. Ltd. v.
Commissioner of Income tax, AIR 1958 SC 816, 818: (1958) 34 ITR 54; Maharaja Shree Umaid Mills Ltd. v. Union of India, AIR 1963 SC
953: (1963) 48 ITR 186; State of Gujarat v. Vohra Fiddali Badruddess Mithi barwala, AIR 1964 SC 1043: 1964 (6) SCR 461.
76 Administrative Justice : Some Necessary Reforms, para 11.2 (1988).
77 (1964) AC 465.
78 (1970) 2 QB 223.
79 Also see, Meates v. Attorney General, (1983) NZLR 308; Clifford Metal Industries Ltd. v. Export Credit Guarantee Dept., (1981) The
Times 25 March; WADE, Administrative Law, 774-775 (1995).
80 Supra.
81 (1980) QB 156.
82 (1981) 2 WLR 188.
83 Per Lord WILBERFORCE.
84 See the comment by JOHN MURDOCH NATES, STATUTORY AUTHORITY AND NUISANCE, 97 LQR 205 (1981).
85 For comments on Allen, see, P.P. CRAIG, Administrative Law. Also, Manchester Corporation v. Farnworth, (1930) AC 171; Tate &
Lyle Industries Ltd. v. Greater London Council, (1983) 2 WLR 649.
86 (1970) AC 1004.
87 Dorset Yacht Co. Ltd. v. Home Office, (1970) AC 1004 at 1031.

Page 475
88 Dutton v. Bognor Regis Urban District Council, (1972) 1 QB 373.
89 See, infra, under Breach of Statutory Duty.
92 WADE, Administrative Law, 658-9 (1982).
1 Justice--All Souls, Report, 337.
2 Negligence in the Exercise of a Statutory Power. 94 LQR 428, 440 (1978). Also, CRAIG, Adm. Law, 539 (1983).
4 P.P. CRAIG, Administrative Law, (1994).
5 See GOULD, Damages as Remedy in Administrative Law, (1972) 5 NZULR 105. Apart from the material referred to in the earlier pages,
supra, on damages for administrative wrongs, reference may also be made to the following materials : GANZ, Compensation for Negligent
Administrative Action, 1973 Pub Law 84; GANZ, Public Law and the Duty of Care, 1977 Pub Law 306; HENRY MOLOT, Administrative
Discretion and Current Judicial Activism, 11 Ottawa L.R. 337, 353 (1978); MICHAEL G. BRIDGE, Governmental Liability, The Tort of
Negligence, 24 McGill LJ 277 (1978); New Zealand Law Reform Committee, Damages in Administrative Law, (1980); DE SMITH, Judicial
Review of Administrative Action, 321-24, 337-39 (1980).
6 Dennis v. Charnwood Borough Council, (1983) QB 409.
8 In Stovin v. Wise, (1994) 3 All ER 467, the Highway Authority was held in breach of the common law duty of care. In Lewis v. Kant
LCC, (1992) 90 LGR 416, the Highway Authority was held liable for non-feasance, i.e., failure to exercise its statutory power to erect
warning signs resulting in physical injury to a motor cyclist.
9 Peabody Trust v. Sir Lindsay Parkinson Ltd., (1985) 1 AC 210.
10 Yuen Kum Yen v. Att. Gen. of Hongkong, (1988) AC 175.
11 Other Cases in the series are : Investors in Industry Commercial Properties Ltd. v. South Bedfordshire District Council, (1986) 1 All ER
787; Jones v. Dept. of Employment, (1988), All ER 725; Hill v. Chief Constable of West Yorkshire, (1989) AC 59; Davis v. Redcliffe,
(1990) 1 WLR 821.
12 (1988) AC 175 at 198.
13 (1990) 2 All ER 908.
15 For comments on Murphy see : (1991) CJ 58; 54 MLR 561; (1991) 107 LQR 228: (1992) 55 MLJ 619.
16 (1990) 2 All ER 536.
17 See, Cooper v. Wandsworth Board of Works, JAIN, Treatise, I,
18 X (Minors), (1995) 2 AC 633, at 730.
19 Bourgoin S.A. v. Ministry of Agriculture, (1985) 3 All ER 585, at 618, 632. Also see, infra, under Misfeasance in Public office.
20 (1981) 1 All ER 1202.
22 Also see, infra, on this point.

Page 476
23 JAIN, Tratise, I, Chapter IX; JAIN, Cases, I, Chapter VIII, 466-640.
24 See, for comments on Dunlop : JUSTICE-ALL SOULS, Administrative Justice, 346 (1988).
25 Rowling v. Takaro Properties, (1975) 2 NZLR 62.
28 See, (1988) AC 473, (1988) 1 All ER 163 (PC); infra, under Misfeasance in office.
29 Supra.
30 See the judgment of Lord BROWNE WILKINSON in X (minors) v. Bedfordshire CC, (1995) 3 All ER 360, where he has lucidly
explained the law in this area. In this case, the House of Lords discussed the issue whether the careless performance by a local authority of
its statutory duties relating to education and welfare of children could found an action for negligence by children adversely affected by the
local authority's action.
31 See, Yuen Kun Yeu v. Att. Gen. of Hong Kong, (1988) AC 175.
32 Street, Law of Torts, 270-71 (1963); GRIFFITH AND STREET, Principles of Administrative Law, 250-52 (1973). See Lord WRIGHT in
London Passenger Transport Board v. Upson, (1949) AC 155, 168.
33 Also see, Barrett v. Enfield LBC, (2001) 2 AC 550; O Rourke v. Camden LBC, (1998) AC 188; Phelps v. Hillingdon LBC, (2001) 2 AC
619.
34 Pasmore v. The Oswald Twistle Urban District Council, (1898) HL 387.
35 (1938) 4 All ER 631.
36 De Falco v. Crawley BC, (1980) QB 460.
37 See, Meade v. London Borough of Haringey, (1979) 2 All ER 1016, 033-1024; Thornton v. Kirklees Metropolitan Borough Council,
(1979) 2 All ER 349.
38 (1949) 1 All ER 544. Also see Lonrho v. Shell, (1981) 2 All ER 456.
39 Geddis v. Proprietors of Bann Reservoir, (1878) 3 AC 430.
40 Lord BROWNE WILKINSON, X (Minors) v. Bedfordshire CC, (1995) 3 All ER 360 at 367.
41 X (Minors) v. Bedfordshihe CC, (1995) AC 633, at 732-733.
43 Caparo, (1990) 1 All ER 568.
44 Dunlop v. Woollahara Municipal Council, (1981) 1 All ER 1202.
45 Even the Australian Ombudsman has recognised the need for ex gratia payments. In his annual Report 1987-1988, the Commonwealth
Ombudsman has observed at p. 23 : " . . .on occasions, the only remedy that will adequately compensate a person for defective
administration is an act of grace [ex gratia] payment. A person affected by defective action will not have a legal claim but the unfairness
discussion on the institution of Ombudsman, see, infra.
46 Hoffman La Roche and Co. v. Secretary of State for Trade and Industry, (1983) 1 All ER 513 at 522. See, JAIN, Treatise, I, Chapter XII.
47 H. Robertson SC, Remedies, Present and Future, (1995) Admin Review, No. 44; L. ROOTS, Damages for Wrongful Administrative
Action : A Future Remedy Needed Now, (1995) 2 AJ Admin L, 129; DE SMITH WOOLF AND JOWELL, Judicial Review of Adm.
Action, 760 (1995); J.S. READ, Damages in Administrative Law, (1988) Commonwealth Law Bulletin, 428.
48 Public and Administrative Law Reform Committee, Report on Damages in Administrative Law, 2, (New Zealand, 1980, Minority view).
The majority favoured the evolution of any such remedy by the courts and piece-meal legislation by Parliament in specific Cases for
payment of damages, instead of enacting a general law. Also see, CRAIG, Compensation in Public Law, (1980) 96 LQR 413; MC BRIDGE,
Damages as Remedy for Unlawful Administrative Action, (1979) 38 CLJ 323; CRAIG, Administrative Law, 613-651 (1994); WOOLF,
HARRY, SIR, Protection of the Public--A New Challenge, 56-62 (1990); J.S. READ, Damages in Administrative Law, (1988) 14
Page 477
Commonwealth Law Bulletin, 428; JUSTICE-ALL SOULS, Report on Administrative Justice, 361-362 (1989).
49 READ, Damages in Administrative Law, (1988), 440.
50 JUSTICE, Administration Under Law, 31 (1971); JUSTICE, Review of Adm. Law in U.K. 78 (1981); HARLOW, Compensation and
Government Torts, 89-101. For the present, as stated above, the gap in law is being filled in by awarding ex gratia payments to the suffering
individuals. The reports of the Ombudsman in Britain are replete with instances of ex gratia payments to concerned persons for acts of
administrative maladministration. See, HARLOW, Compensation and Government Torts, 117-143. For discussion on Ombudsman, see,
infra.
51 B. SCHWARTZ, Introduction to Americal Administrative Law, 207 (1958).
52 E.J. HAUGHEY, The Liability of Administrative Authorities, (1975).
53 See, supra.
54 BROWN & BELL, French Administrative Law, 174-183 (1993).
55 BROWN & BELL, French Administrative Law, 184-188.
56 Traite de Droit Constitutional, (3 ed.) 469.
58 F. Hoffman La Roche & Co. AG v. Secretary of State for Trade and Industry, (1975) AC 295; JAIN, Cases, I, 396.
59 (1964) 1 All ER 367.
60 (1972) 1 All ER 801.
61 Cassell & Co. Ltd. v. Broome, (1972) 1 All ER 801, at 875. See, JAIN, Cases, IV.
62 (1993) 1 All ER 609.
MP Jain & SN Jain: Principle of Administrative Law 7th Edition 2013/MP Jain - Principle of Admin law,7th
Edition/Volume 2/CHAPTER XXIX TORTIOUS LIABILITY & COMPENSATION
CHAPTER XXIX
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. 1 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. 2 In case of payment of compensation, the party injured by an action of the
As there is increasing legislative regulation of human activity, 3 a bulk of statutory powers have come to be
conferred on the Administration in modern times. These powers are of various types--regulatory, promotional,
Page 478
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
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.
when private rights are disturbed under the law, e.g. , compensation is payable under the law providing for compulsory
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?

(a) Britain
There is the simple case of a recognised tort being committed--especially negligence 4 --by a public employee in
the course of his employment. The question then arises: can the government be held liable to compensate the injured
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. 6
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
Page 479
exception, inter alia , as defence of the realm, maintenance of armed forces and postal services. The Crown thus
law in Britain. 7
(b) U.S.A.
under like circumstances. Intentional torts (such as assault, battery, false imprisonment etc .) are excluded. The U.S.
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. 8
In U.S. v. Muniz , 9 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
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
Legislature. No law has so far been passed as contemplated by Art. 300(1) .
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
Page 480
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. 10 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.
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. 11 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 , 12 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, 13 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.
that they should do so, subject to the same liabilities as individuals..." 14 In other words, if the company were carrying
committed during the course of such activities. The court went on to say: 15
Page 481
"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
The P.&O . case thus laid down two propositions:
sovereign powers.
(2) The Secretary of State was not liable for anything done in the exercise of sovereign powers. 16
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. 17
It could also be argued that what the court said in P.&O . to be a 'clear' distinction between 'sovereign' and
(1) Hari Bhanji
The P.&O . case was considered by the Madras High Court in Hari Bhanji . 18 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," 19
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
is of the former only that in this country the municipal courts in British India cannot take cognizance." 20
At another place, the court observed:

Page 482
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." 21
As regards P.&O. , it was said that it was an authority for the proposition that the government was responsible for
respects. In Hari Bhanji , a broader view of government liability, and a narrower view of the P&O ruling, was adopted.
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. 22 Had the view propounded in Hari Bhanji found judicial acceptance in India, the position as regards the tortious
(2) Cockraft
This view was applied by the courts in a number of cases. Thus, in Secretary of State v. Cockraft , 23 the plaintiff
was injured by the negligent leaving of a heap of gravel on a military road maintained by the Public Works Department,
the government.
(3) McInerny
In McInerny v. Secretary of State , 24 the Calcutta High Court held that the government was not carrying on any
(4) Gurucharan
The High Court held in Gurucharan Kaur v. Madras Province , 25 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
Page 483
In Etti v. Secretary of State , 26 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. 27
(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. 28
(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. 29
(9) Srigobinda
sovereign function. 30
(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
powers, and so no action would lie. 31
(11) Ramnath
In Secretary of State for India v. Ramnath Bhatia , 32 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
Page 484
The government was however held liable for damages in certain situations. In Secretary of State v. Moment , 33 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. 34
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 35 and adopted the Hari
Bhanji view of the government liability. The Court restricted the observations in P.&O . only to an 'act of state' 36
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:
37
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
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: 38
"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
the courts."
When the case reached the Supreme Court (Which had just been started under the new Constitution) in appeal, 39
Page 485
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: 40
"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."
illegally exercised could certainly have been brought against the Secretary of State," if the Government of India Act ,
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
(1) Maharaja Bose
exercise of sovereign powers." 41
(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. 42
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.
Page 486
view that it forms an important part of the governance of the state." 43
undertakings. 44
(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. 45
(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." 46
(5) District Board
In District Board, Bhagalpur v. State of Bihar , 47 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
(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 , 48 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, 49 it was held that the State
was not liable even if revenue officials acted in a high handed and malicious manner.
Page 487
(8) Chetti
was not liable for the tort committed by the tehsildar as the act was done in the discharge of sovereign function. 50
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." 51
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 of "act
of state." 52 But "act of state" is justifiable only when committed in a foreign land towards a foreign national; it is
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. 53 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.
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
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
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." 54
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 .
Page 488
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." 55
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." 56
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. 57
Act , 1947, changing the old law. The colonial law in India was based on the common law principles which prevailed in
It is hightime that Parliament puts the law of government tortious liability on a rational basis in line with. Britain
The 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.
(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 . 58
The driver of a jeep, owned and maintained by the State of Rajasthan for the official use of the collector, drove it
Page 489
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
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." 59
Referring to the P.&O . case, the Court derived the proposition that the government would be liable for damages
emerge from the following statement: 60
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
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
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 . 61 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
Page 490
The appellant argued, on the basis of Vidhyawati , that once negligence of the police officers was established, there
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.
argument but the Court went back to the P & O . case. It held that the police officers were grossly negligent in taking
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
might have been employed by a private individual for the same purpose." 62
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.
at all." 63 On the other hand, the power to arrest a person, to search him and to seize the property found with him, was a
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
Page 491
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."
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. 64
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, 65 i.e . keeping the goods of another safely for a period--an
activity capable of being undertaken by a private individual? 66 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.
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
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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.
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.
restrictively interpret the concept of 'sovereign' functions and not to expand it unduly. 67 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: 68
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"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 : 69
"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 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, 70 the Supreme Court has observed that sovereign functions essentially are "primary inalienable
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 , 71 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."
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
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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 . 72
(c) Article 21 of the Constitution runs as follows:
Article 21 has played a tremendous role in shaping the law of government's tortious liability.
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. 73 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.

(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 , 74 the
(2) Hindustan Lever
In State of Uttar Pradesh v. Hindustan Lever , 75 the Government of Uttar Pradesh was running a sub-treasury
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which received moneys from private individuals for being credited to the account of the departments of the Central
(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 76 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.
77
(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. 78
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.
taken by the Department in the instant case, the Court awarded Compensation to the parents of the deceased. 79
person due to negligence in the maintenance of roads by the State. 80
(6) Janamohan
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In Janamohan Das v. State of Orissa 81 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." 82
(b) Transportation
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. 83
(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. 84
(2) Amulya Patnaik
Again, in Amulya Patnaik v. State of Orissa , 85 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
(3) Ram Pratap
In State v. Ram Pratap , 86 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. 87
(4) Shyam Sunder

Page 497
In Shyam Sunder v. State of Rajasthan , 88 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 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.
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
(5) Radhabai
In Indian Insurance Co. Ass. Pool v. Radhabai , 89 a motor vehicle belonging to the State of Madhya Pradesh and
health centre could not be regarded as a "sovereign function in the traditional sense." 90
(6) Padma Rani
In State of Sau v. K. Padma Rani , 91 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 92 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 93 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."
(7) Cheru Babu

Page 498
In State of Kerala v. K. Cheru Babu , 94 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
(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. 95 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. 96
(9) Amruta
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. 1
(10) Satya Narain
Since Independence, the bulk of the road transportation has been taken over by the States. 2 The Supreme Court
ruled in Satya Narain v. District Engineer, P.W.D . 3 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:
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"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, 4 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
(11) Narain Shankar
For example, in Rajasthan State Road Transport Corporation, Jaipur v. Narain Shankar , 5 KRISHNA IYER J.
in the Supreme Court adversely commented on the social consciousness and sense of responsibility displayed by public
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 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.
Page 500
injury to, the travelling public and the pedestrian users of highways. The Court observed:
(12) Darshana
In Darshana Devi , 6 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
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. 7
(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
driver.
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. 8 No instruction had been issued to the driver not to hand over the jeep to any
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other government employee while on official duty. The Court explained the law of vicarious liability as follows: 9
"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
The Court observed further: 10
"... 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
(c) Railways
(1) Chandrima
power. 11

(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
Page 502
employee. 12
(2) Sugrabai
When a military truck was carrying record sound ranging machine and other equipment from the military
workshop 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: 13
"... 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." 14
(3) Jasso
In Union of India v. Jasso , 15 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. 16
(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. 17
(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. 18
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
Page 503
such functions could be characterised as 'sovereign' as could not be performed by private individuals. In all these cases,
vehicle.
(6) Iqbal Kaur
In Iqbal Kaur v. Chief of Army Staff , 19 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. 20
(8) Sadashiv
A military crane belonging to the defence department having developed some trouble was being towed away for
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. 21 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 22 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
Page 504
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. 23 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 ,
left the vehicle on the road without taking any precautions for the safety of the road users. 24
(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: 25
"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."
(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. 26
(14) Raya
In M.S. Raya v. Gowrawwa , 27 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"
Page 505
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
rejected.

(1) Kazi
In Mohd. Shafi Suleman Kazi v. Dr. Villas Dhondu Kavishwar , 28 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, 29 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 30 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 31 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, 32 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 , 33 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 , 34 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
sterilisation operation. She died after the operation because of the negligence of the doctors who operated upon her. The
Page 506
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 , 35 Kasturilal , 36 Nagendra Rao 37 and Kanchanmal , 38 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." 39
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: 40
"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." 41
After a review of the evidence on record and the law regarding negligence on the part of the doctors, 42 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. 43
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.
Page 507
(4) Vijaya
hospital. 44
(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. 45
(6) Santra
To the same effect is State of Haryana v. Santra . 46 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
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.

(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. 47
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. 48
(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. 49
(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. 50
Page 508
(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
of India. The court stated: 51
"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
was not a direct consequence of the grant of the licence. 52
(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. 53 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 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.
Page 509
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. 54
(8) Basava Patil
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 , 55 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
Explosives Act , 1884. The reason to suspend the license was that the appellant refused to comply with the district
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. 56
(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 , 57 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
Page 510
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. 58 Thus, the Court held the
plaintiff entitled to receive from the State Rs. 10,000/- along with interest. 59
(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
tantamounts to conversion, again being actionable in tort." 60
(12) Oswal
In Oswal , 61 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
(13) Jaya Laxmi
In Jaya Laxmi , 62 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
therewith. But, the Court dismissed his case on the ground that it was barred by limitation. 63
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: 64
Page 511
" the axis around which the law of negligence revolves is duty, duty to take care, duty to take reasonable care. But concept of
At another place, the Court observed: 65
"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
compensated."
discharge of public duty and mistake at various stages." 66 Said the Court on this point: 67
"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." 68
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. 69 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
Government of Sau . 70 A person having an orchard suffered extensive damage due to percolation of water in a canal
Page 512
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
In this area, Art. 21 of the Constitution plays a very important role. Art. 21 runs as follows:
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, 71 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." 72
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 , 73 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. 74
Page 513
(h) Law and Order
(1) Dattamal
In State v. Dattamal , 75 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 , 76 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. 77 The
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. 78
(3) Chironjilal
Similarly, in State of Madhya Pradesh v. Chironjilal , 79 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 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. 80
(4) Nanik Sewa
announced ex gratia compensation of Rs. one lakh for the death of a student and Rs. 25,000/- for the death of a
government relented and agreed to pay Rs. one lac for the death of every person, student or non-student alike. 81
(5) PUDR
Page 514
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 , 82 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
person.
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
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 ; 83
(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 . 84
(1) Reddy
C. Ramakonda Reddy v. State 85 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
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
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: 86
Page 515
"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 .
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: 87
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. 88 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." 89
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, 90 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
Page 516
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. 91 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. 92
(3) Inder Puri
government; it cannot abdicate this function and put the life and liberty of the citizens in jeopardy. 93
(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 94 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. 95 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." 96
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
(5) Jeet Stores
In State of J&K v. Jeet General Stores , 97 as a result of sudden flare of communal riots in Jammu, a particular
petitioners in Jeet . The Court said: "(I)t was the duty of the writ petitioners to have specifically alleged as to how, in
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".
Page 517
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
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. 1
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
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. 2 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. 3 The
Court has characterised custodial death as "perhaps one of the worst crimes in a civilised society governed by the rule of
law." 4
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 5 (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
Page 518
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." 6 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
his action and therefore there is no violation of Art 21 ." 7 In this case, however the Court did not award any
(2) Rudul Shah
In Rudul Shah v. State of Bihar , 8 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
CHANDRACHUD , C.J.) felt that if it refused to pass an order of compensation in favour of the petitioner, "it will be
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: 9
"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."
Page 519
dangerous situations, and not retreat behind the shelter of self-imposed limitations evolved by them for certain purposes.
10 Rudul Sah has become the basis of subsequent decisions awarding. compensation under Arts. 32 and 226 of
(2) Sebastian
In Sebastian M. Hongray v. Union of India , 11 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 , 12 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 . 13 A person died in 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 14 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."
Page 520
The Court observed on this point: 15
"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
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: 16
"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 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 Court then went on to observe: 17
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 , 18 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: 19
Page 521
"... 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
compensation to the victims of police torture or their family members in case of custodial death 20 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 . 21 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."
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." 22 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" 23
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), 24
(CBI). There are reports of torture and death in custody of these authorities as well. 25 Accordingly, the Supreme Court
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
jurisdiction is, thus, in addition to the traditional remedies and not in derogation of them. 26
Page 522
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. 27 In the case
noted below, 28 the Supreme Court awarded a sum of Rs. 1,50,000/- for a custodial death.
(7) Bhim Singh
In Bhim Singh v. Jammu & Kashmir , 29 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 30 and Sebastian , 31 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:
"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 , 32 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: 33
Page 523
"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,
(9) Patil
In Patil , 34 the Court directed the State to pay Rs. 10,000 as compensation to the petitioner for violation of his
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. 35
(10) PUCL
In People's Union for Civil Liberties v. Union of India , 36 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 226 ex 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 . 37 At an eye camp organised by a club,
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 the
maxim " respondent superior " is subject to the well recognised exception that a master is not liable for the acts of his
Page 524
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. 38
In a number of cases, the courts did exempt the state from liability on this account. 39 A few such cases are
mentioned below.
(1) Shivabhajan
In Shivabhajan v. Secretary of State , 40 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 . 41
(2) Ross
In Ross v. Secretary of State , 42 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 , 43 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. 44
(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. 45
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 46 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. 47 The Shivabhajan case 48 was cited
with approval by the court. The difficulty in regarding statutory functions as sovereign functions has already been
mentioned above. 49
Page 525
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." 50 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. 51
(6) Rikhabchand
Under the Rajasthan Public Safety Act , the Rajasthan Government conferred power on the commissioner to make
own and not that of the employer. 52
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 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.
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. 53 In India, the Law
Commission's recommendation on the point was also to the effect that government should be liable in such a case. 54
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 . 55 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.
Page 526
The fact situation in the case was as follows: The appellant carried on the business of fertilisers and foodgrains. On
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
immunity of the State, discharge of statutory duty by the officers in good faith etc . Rejecting the State arguments, the
Confiscation of an essential commodity is provided for in S. 6A of the Act. 56 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
seize the goods." 57
Under S. 6A , a report of seizure of the essential commodity is to be made without unreasonable delay to the
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." 58
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'. 59
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.
except to a very limited extent. The Court has observed on this point (per SAHAI , J.): 60
"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,
and repression of crime etc . which are among the primary and inalienable functions of a constitutional government, the State
Page 527
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
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." 61
Accordingly, the Court has ruled that the " ratio of Kasturi Lal 62 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
such functions is a different matter Maintenance of law and order or repression of crime may be inalienable function, for proper
unless it trenches into and encroaches on the fundamental rights of life and liberty guaranteed by the Constitution." 63
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 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.
Memon Mahomed Haji Hasan , 64 the Court ruled that where the goods confiscated or seized are required to be returned
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
Page 528
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 . 65 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
this area, the courts have awarded compensation on an ex gratia basis. 66
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, 67 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. 68
(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
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 , 69 following
several English cases, such as, Yuen Kun-yeu v. Alt. Gen. of HongKong , 70 and Davis v. Radcliffe . 71 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.
to protect the interests of the depositors and yet the law could not impose any liability on RBI for lack of accountability.
72

Page 529
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. 73 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. 74
(1) Jiwan Mal
This traditional judicial attitude is indicated in Jiwan Mal Kochar v. Union of India . 75 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
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
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. 76 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.
Starting in 1981, with Khatri v. State of Bihar , 77 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 , 78 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 ."
Page 530
In Nilabati Behera , 79 the Supreme Court has observed:
"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." 80
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. 81 In cases of riots, police firing etc. , the Court has ordered payment of ex gratia compensation to the
victims. 82
In D.K. Basu v. State of West Bengal , the Supreme Court awarded damages to the Victims of police torture. In the
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 . 83
Compensation has also been awarded for medical negligence. In the instant case, 84 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.
petitioner to take recourse to a civil suit for the purpose. Thus, in Deoki Nandan Prasad v. State of Bihar , 85 the
his pension. In the words of the Court during which abominably long period "the mandamus of... [the] court has been
In Assam Sillimanite Ltd. v. Union of India , 86 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.
Page 531
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. 87 Under Art. 226 , a High Court can exercise the power for a non-fundamental rights as well. 88
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 . 89 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.
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. 90 Art. 21
of the Constitution was pressed into service.
"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 . 91 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. 92
Page 532
(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 . 93 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.
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
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 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." 94
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. 95 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
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 .

Page 533
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 , 96 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 1 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. 2 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 3 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.
In Cooper v. Wandsworth Corporation , 4 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. 5
(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. 6
(4) Brahmkishore
Page 534
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. 7
(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. 8
In Bhiwandi Municipality v. K.S. Works , 9 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 , 10 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
seizure was not bona fide and awarded substantial damages to the plaintiff. 11
(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
discharge of this duty was actionable. 12
(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. 13
(11) Kumari
Page 535
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. 14
(12) Bishambar Nath
An important case in this series of cases is Lala Bishambar Nath v. The Agra Nagar Mahapalika, Agra . 15 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.
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,
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: 16
"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
corporation was negligent in discharging its duty. 17
The government sets up a number of statutory corporations or bodies incorporated under the Companies Act. 18
Most of these bodies are engaged in carrying commercial enterprises. Actions for damages against such bodies for
Page 536
tortious acts of their servants are not covered by Art. 300 of the Constitution , 19 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 , 20 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.
21
(1) Manoharlal
In Manoharlal v. Madhya Pradesh Electricity Board , 22 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.
(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 , 23 ruled that the accident occurred because of the Board's negligence and, accordingly, directed the board to pay
(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 , 24 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 , 25 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
Page 537
the negligence of the Delhi Electric Supply Undertaking. 26
(5) Thressia
An old agricultural labourer was electrocuted by a snapped wire. The incident took place in October, 1979. The
board to pay Rs. 72,000 as compensation to the widow. 27 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
not being aware of the leakage of electricity came in contact with the live wire, got electrocuted and died
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. 28
(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. 29
In Chairman, Grid Corp. v. Sukamani Das , 30 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. 31

(1) Nazim
Union of India v. Mohd. Nazim 32 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 33 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. 34
Page 538
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 of India was absolved from the liability under the proviso to S. 34 . 35
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
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
(1) G.M.S. Rly
The Supreme Court held in State of Kerala v. G.M.S. Rly , 37 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 juristic
(2) S.S. Works
In Union of India v. S.S. Works , 38 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
(3) Krishna Goods
Krishna Goods Carriers (P) Ltd. v. Union of India , 39 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.
Page 539
reasonably entitled to assume that no train is approaching and that the line may be crossed with safety. 40
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. 41
of contributory negligence raised by the railways with the following observation: 42
(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 . 43 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 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
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 . 44 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
Page 540
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." 45
(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
provision as there was no accident to the train. 46 When a heavy girder, loosely and carelessly fixed for electrification
that the case was covered under the above provision as it fell within the expression 'other accidents to a train.' 47
(8) Imaman
In Imaman v. Union of India , 48 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
certain precautions while starting or stopping trains. 49
Page 541
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." 50
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. 51 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; 52 in some, to any person for anything done under the statute 53
(it is doubtful whether any person would include the government also); and in some, to officers of the government only.
54
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.
55 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:

Page 542
done.
whatsoever, and (2) he was acting without good faith in believing himself to have jurisdiction. 56
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
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." 57
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." 58 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.
exercise of power out of dishonest intent or corrupt motive. 59 In Prem Lal v. U.P. Government , 60 the power of
Emergency Powers Act , 1947 not because the government genuinely needed the vehicles but "to teach him a lesson"
The Supreme Court in Bhiwandi Municipality v. K.S. Works 61 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 , 62 the Court stated: 63
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.
Page 543
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 , 64 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
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 , 65 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 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
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 66 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
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
in respect of an act done by the state against an alien outside its territory. 67
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.
In Nabob of Carnatic v. East India Co. , 68 a suit brought by the Nabab against the Company for an account under
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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 , 69 it was held that the
The most important case on 'act of state' is Secretary of State v. Kamachee Boye Sahaba , 70 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
(3) Raja of Coorg
In Raja of Coorg v. East India Co. , 71 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 must
be tested by the municipal law and in municipal courts. 72 The principle can be illustrated by reference to Forester v.
Secretary of State . 73
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
the new sovereign recognizes and the rights he had under the rule of the predecessors avail him nothing. 74 In State of
Saurashtra v. Memon Haji Ismail , 75 the administration of the princely State of Junagadh was taken over by the
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(6) Vora Fiddali
In State of Gujarat v. Vora Fiddali , 76 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
(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
, 77 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 may be express or may be implied from the circumstances. 78
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:
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(3) Judicial creativity in India which has liberalised the Indian law of compensation against government
over a period, especially Art. 21 of time.
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: 79
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 . 80 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 81 it has been held that an individual who relied to his
against both the official and his employing authority. 82 This tort can be useful in cases of misleading official advice--a
topic discussed earlier under Promissory Estoppel. 83
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
(2) Allen
If the loss caused to the individual is the inevitable result of the exercise of the statutory power, then there can be
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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 . 84 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. 85 The House of Lords basing itself on
statutory authority ruled: "Where Parliament by express direction or by necessary implication has authorised the
from any action based on nuisance." 86 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
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." 87
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. 88
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.
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(2) Dorset
discharging their functions is Dorset Yacht Co. Ltd . v. Home Office . 89 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: 90
(3) Dutton
Another case in the same line is Dutton . 91 The Council's building inspector had inspected the excavations for a
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. 92
(4) Anns
The most outstanding case in this series is the House of Lords decision in Anns . 93 It was observed there: 94
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"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." 95
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 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. 96 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." 97
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." 98 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. 1
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." 2
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failure to exercise a power was not actionable." 3 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
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... 4 If the action of the authority is deliberately wrongful or malicious, then there is no doubt that it
will be liable in damages." 5
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 , 6 negligence by a local authority in
compensable. In Fellowes , 7 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 plaintiff by reason of such act." 8
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 9 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
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distinguished in Peabosy .
(6) Yuen Kum Yen
In Yuen Kum Yen , 10 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
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. 11
social workers to name only a few." 12
(7) Murphy
At last, however, in Murphy v. Brentwood DC , 13 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.
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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: 14
"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
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. 15
(8) Davis
In Davis v. Radcliffe , 16 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
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, 17 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 wider
ramifications for the simple reason that a public authority armed with statutory powers is able to cause harm to a person
Page 553
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
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. 18
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,
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 , 19 the Court of Appeal unanimously agreed that a minister who in
(1) Dunlop
Reference may be made in this connection to Dunlop v. Woollahara Municipal Council , 20 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.
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
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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:
21
"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 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." 22
discussed earlier. 23 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. 24
(2) Rowling
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. 25 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
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by the Minister was not in itself a sufficient foundation for an action for damages. 26 The High Court then ruled 27 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."
'reversion factor' (an irrelevant consideration) ahead of all other factors, while making the decision. 28
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.
When there is a statutory duty, action may lie to enforce due performance thereof e.g . a writ, injunction, etc . 29 In
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), 30 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, 31 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. 32 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. 33
(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 , 34 the House of Lords ruled that
Page 556
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 , 35 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,
(3) De Falco
imposes burdensome duties on local authorities. As Lord DENNING has observed in De Falco : 36
"This is a statute which is passed for the protection of private persons, in their capacity as private persons. It is not passed 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. 37
(4) Cutler
In Cutler v. Wandsworth Stadium Ltd. , 38 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 , 39 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
Page 557
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
common law. 40
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. 41
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
duties." 42
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. 43
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 , 44 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.
when in his opinion an act of maladministration has caused injustice to the complainant, 45 but this is not a satisfactory
Page 558
referred to this defect in English Law when he pointed out in Hoffman La Roche 46 that in the law there was an
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
administrative acts or decisions," or "a direct remedy in damages for public law error." 47 It is argued that the
these mistakes be shared by the community as a whole in whose name they are made? 48 Surely it is preferable that the
result of invalid administrative acts. 49
provide an indirect way of challenging administrative action. 50
The lack of such a general remedy has been adversely criticised by several leading administrative lawyers. For
example, Schwartz says: 51
"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."
Another scholar observes: 52

Page 559
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?" 53 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. 54 In France, the conseil d'Etat has built a general principle of liability without fault based on the theory of risk. 55
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. 56 The principle of equality as applied to
the sharing of public burdens has been succinctly explained by Duguit as follows: 57
"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
In fact, LORD WILBERFORCE referred to this aspect of the matter when he pointed out in Hoffman La Roche ,
58 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'.

Page 560
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 59 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 , 60 several Law Lords put an expansionary gloss on this formulation,
i.e . the expression 'government servants' would include police personnel as well as local and other officials. As Lord
DIPLOCK clarified the position: 61
"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. , 62 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."
1 HARLOW , Compensation and Government Torts , (1982).
2 See, infra , Chapter, XXXI et. seq .
3 JAIN , Treatise , I, Chapter I.
4 For further discussion on tort of negligence and its application to administration, see, infra .
5 For discussion on the principle of vicarious liability, see, infra .

Page 561
6 Tamlin v. Hannaford, (1951) 1 KB 18 .
7 For comments on the Act see: GLANVILLE WILLIAMS , Crown Proceedings (1947); STREET , Governmental Liability , (1953);
HOGG , The Liability of the Crown , (1971).
8 See, infra .
9 (1963) 10 L ed 2d 805.
10 By 3 & 4 Will IV, C. 85, the East India Co. was made a trustee for the Crown in respect of all the property which it possessed in
India. The Act of 1858 transferred the Indian Territories to the Crown. As the Queen could not be sued in her own courts under the common
law prevailing at the time, the Act provided that the Secretary of State as a body corporate would have the same rights of suit as the
Company had and would be subject to the same liability of being sued as previously attached to the East India Company.
11 See M.P. JAIN , Outlines of Indian Legal History .
12 5 Bom HCR App. 1.
13 See M.P. JAIN , Outlines of Indian Legal History .
14 5 Bom HCR App, at 13.
15 5 Bom HCR App, at 15.
16 For comments on this case, see: ALICE JACOB , Vicarious Liability of government in Torts , 7 JILI 247 (1965) ;
BLACKSHIELD , Tortious Liability of Government: A Jurisprudential Case Note, 8 JILI 643 (1966) .
17 For discussion on 'Act of State,' see, infra , this Chapter.
18 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273 .
19 Infra .
20 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273, 279 .
21 Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273, 279 , supplied.
22 Forrester v. Secretary of State for India , IA, Suppl. Vol. 55, see, infra .
23 AIR 1915 Mad 993 .
24 (1911) 38 ILR Cal 797.
25 AIR 1942 Mad 539 .
26 AIR 1939 Mad 663 .

Page 562
27 Mata Prasad v. Secretary of State, AIR 1931 Oudh 29 .
28 Kessoram Poddar & Co, v. Secretary of State, (1927) 54 ILR 909 .
29 Purnendu Deb. v. Union of India, AIR 1956 Cal 66 .
30 Secretary of State v. Srigobinda Chaudhari, AIR 1932 Cal 834 .
31 Nobin Chunder Dey v. Secretary of State for India , ILR 1 Cal 11 (1875).
32 37 CWN 957 . Also see, Udey Chand Mahtab v. Province of Bengal , ILR (1947) 2 Cal 141.
33 40 IA 48 .
34 State of Bihar v. Sonabati, AIR 1954 Pat 513 ; Uday Chand v. Province of Bengal, 51 CWN 537 ; Union of India v.
Ram Kamal, AIR 1953 Ass 116 .
35 AIR 1949 Bom 277 : 51 Bom LR 342 .
36 See, infra .
37 P.V. Rao v. Khusaldas, AIR 1949 Bom 277 : 51 Bom LR 342 .
38 P.V. Rao v. Khusaldas, AIR 1949 Bom 277 : 51 Bom LR 342 .
39 Province of Bombay v. Khushaldas, AIR 1950 SC 222 : 1950 SCR 621 .
40 Province of Bombay v. Khusaldas, AIR 1950 SC 222 : 1950 SCR 621 .
41 Maharaja Bose v. Governor-General in Council, AIR 1952 Cal 242 .
42 Union of India v. Murlidhar, AIR 1952 Ass 141 .
43 Bata Shoe Co. v. Union of India, AIR 1954 Bom 129 . This judgment was delivered by GAJENDRAGADKAR , J. who
later delivered the judgment in the Supreme Court in Kasturilal Rallia Ram and rigidified the law in the are. See, infra . The Calcutta High
Court also agreed with this view in Calcutta Motor Cycle v. Union of India, AIR 1953 Cal 1 and K.G. Kalwani v. Union of India,
AIR 1960 Ass 85 .
44 Pratap Chandra Biswas v. Union of India, AIR 1956 Ass 85 .
45 Secretary of State v. Sheoramjee Hanumantrao, AIR 1952 Nag 213 .
46 K. Krishnamurthy v. State of Andhra Pradesh, AIR 1961 AP 283 .
47 AIR 1954 Pat 259 .

Page 563
48 AIR 1959 Punj 39 .
49 State of Andhra Pradesh v. Pini Setti Ankanna, AIR 1967 AP 41 .
50 J. Kuppanna Chetti Ambuti Ramayya Chetty & Co. v. Collector of Anantpur, AIR 1965 AP 457 .
51 First Report , 8 (1956). Also see, infra . For extracts from this report see, JAIN , Cases , IV, Chapter XXVIII.
52 See, infra ,
53 This is what was decided in Secretary of State v. Hari Bhanji, (1882) ILR 5 Mad 273 . See also, FRIEDMANN , Law and
Social Change , 273.
54 Law Commission of India, First Report ( Liability of the State in Tort ) 36 (1956).
55 Law Commission of India, First Report (Liability of State in Tort) , 37.
56 Law Commission of India, First Report (Liability of State in Tort) , 36.
57 Commenting on the 1965 Bill, the Bombay High Court observed in President, Union of India v. Sadashiv, AIR 1985 Bom
345 : "An abortive attempt was made by the Government to introduce a bill on the subject sometime in 1965. Numerous exceptions carved
out to the liability of the State for torts committed by its servants decinated the bill to such an extent that no tears need be shed that the bill
already bleeding copiously by these exceptions, was allowed to die its natural death."
58 AIR 1962 SC 933 : 1962 Supp (2) SCR 989 . For comments on Vidhyawati , see, C.P. GUPTA , A Comment on State
of Rajasthan v. Vidhyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989: 4 JILI 279 , 287 (1962).
59 State of Rajasthan v. Vidyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989 .
60 State of Rajasthan v. Vidyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989 .
61 AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1966 (2) LLJ 583 . For comments on the case see, ALICE JACOB ,
Vicarious Liability of Government in Torts , 7 JILI 247 (1965) .
62 Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh, AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1966 (2) LLJ
583 .
583 .
64 For The Crown Proceedings Act , see, supra , this chapter.
65 See, State of Gujarat v. Menon Mahomed Haji Hasan, AIR 1967 SC 1885 , 1889: 1967 (3) SCR 938 , infra .
66 See BLACKSHIELD , Tortious Liability of Government: A Jurisprudential Case Note 8 JILI 658 (1966); JACOB , Vicarious
Liability of Government in Torts , 7 JILI 247 (1965) .
Page 564
67 In this connection, GAJENDRAGADKAR , C.J., observed as follows: "It is not difficult to realize the significance and importance
of making such a distinction (sovereign v . non-sovereign functions) particularly at the present time when, in pursuit of their welfare ideal,
the Government of the States as well as the Government of India 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. It is necessary to limit the area of these affairs of the State in relation to the exercise of sovereign power, so that if acts are
committed by Government employees in relation to other activities which may be conveniently described as non-governmental or
non-sovereign, citizens who have a cause of action for damages should not be precluded from making their claim against the State. That is
the basis on which the area of the 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 ."
68 Association Pool v. Radhabai, AIR 1976 MP 164 .
69 AIR 2000 SC 988 : (2000) 2 SCC 465 : 2000 CrLJ 1473 . Also see, N. Nagendra Rao and Co. v. State of Andhra
Pradesh, (1994) 6 SCC 205 : AIR 1994 SC 2663 : 1994 (3) Scale 977 ; see, infra . Also see, infra , under "Statutory
Functions" for discussion on this case.
70 Agricultural Produce Market Committee v. Ashok Haribuni, (2000) 8 SCC 61 at 80-81: 2000 (2) LLJ 1382 :
AIR 1964 SC 1823 .
71 Chairman Railway Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465 : 2000
(2) Mad LJ 26.
72 For a full fledged discussion on Arts 32 and 226 of the Constitution , see, infra .
73 See, Chairman, Railway Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465 .
For full discussion on this constitutional provision, reference may be made to M.P. JAIN , Indian Constitutional Law ,Chapter XXVI.
74 AIR 1972 Bom 93 .
75 AIR 1972 All 486 .
76 AIR 1976 Pat 24 .
77 State v. Rameshwar Prasad, AIR 1980 Pat 267 .
78 Kumari v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : JT 1992 (2) SC 16 .
79 S. Vendantacharya v. Highways Dept. of South Arcot, (1987) 3 SCC 400 : 1987 (2) ACJ 783 .
80 Collector of South Arcot v. Vendanthachariar, AIR 1972 Mad 148 .
81 AIR 1993 Ori at 168. Also see, JAIN , Cases , III.
82 AIR 1993 Ori at 170.
83 State of Rajasthan v. Vidhyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989 .
Page 565
84 Annamalai v. Abithakujambal, AIR 1979 Mad 276 .
85 AIR 1967 Ori 116 .
86 AIR 1972 MP 219 .
87 Also see, on the same point, State v. Dole Ram, AIR 1981 HP 87 .
88 AIR 1974 SC 890 : (1974) 1 SCC 690 : 1974 LIC 598 .
89 AIR 1976 MP 164 .
90 Also see, State of Madhya Pradesh v. Prema Bai, AIR 1979 MP 85 .
91 AIR 1976 AP 122 .
92 Shyam Sunder v. State of Rajasthan, AIR 1974 SC 890 : (1974) 1 SCC 690 : 1974 LIC 598 .
93 Section 110(1) empowered the State Government to constitute accident claims tribunals for the purpose of adjudicating upon
claims for compensation in respect of accidents involving death of, or bodily injury to, persons arising out of the use of motor vehicles, or
damages to any property of a third party so arising or both. Section 110B provided, inter alia , that the claims tribunal shall hold an
inquiry into the claim and may make an award determining the amount of compensation which appears to be just. The parallel provision in
the newly enacted Motor Vehicles Act are Ss. 165-176. For discussions on Claims Tribunals, see, JAIN Treatise , I, Chapter XIII; JAIN ,
Cases , II, 1095-1104.
94 AIR 1978 Ker 43 .
95 State of Tamil Nadu v. M.N. Shamsudeen, (1981) 1 MLJ 17 .
96 State of Orissa v. Madhuwilata Ray, AIR 1981 NOC 104 . Also, Union of India v. Marcia E. Dutta, AIR 1982 Gau
4 ; Mariyam Jusab v. Hamatlal Ratilal, AIR 1982 Guj 23 .
1 Amruta Dei v. State, AIR 1982 Ori 12 . On appeal, State of Orissa v. Amruta Dei, AIR 1987 Ori 217 .
2 See, infra , under Public Sector Undertakings.
3 AIR 1962 SC 1161 : 1962 Supp (3) SCR 105 .
4 Shubhakar Sridhar Shastry v. Mysore State Road Transport Corporation, AIR 1975 Knt 73 ; Madhya Pradesh State Road
Transport Corp. v. Sudhakar, AIR 1968 MP 47 ; C.S.T. Corp. v. Kamal Prakash, AIR 1976 Cal 2 ; Rehana v. Ahmedabad
Municipal Transport Service, AIR 1976 Guj 37 ; Agya Kaur v. General Manager, Pepsu Road Transport Corp., AIR 1980
P&H 183 ; Sushma Mitra v. M.P. State R.T. Corp., AIR 1974 MP 68 ; Gujarat S.R.T., Ahmedabad v. Keshavlal, AIR
1981 Guj 205 ; Gen. Man., Karnataka S.R.T. Corp. v. Peerappa Parasappa, AIR 1979 Knt 154 ; Karnataka S.R.T. Corp. v.
Krishnan, AIR 1981 Knt 11 ; Delhi Transport Corp. v. Lalita, AIR 1982 Del 558 ; O.S.C.T. Corp. v. Dhumali Bewa,
AIR 1982 Ori 70 ; Himachal Road Transport Corporation v. Miss Neena, AIR 1987 HP 32 ; Himachal Road Transport Corpn. v.
Kaushalya Devi, AIR 1986 HP 21 ; Gujarat State Road Transport Corpn. v. Haribhai Vallabhbhai Darji, AIR 1983 Guj
210 ; State of Punjab v. Rajrani, AIR 1986 P&H 414 ; Sampath Reddy v. G.M.S. Venkatamma, AIR 1989 AP 337 .
5 AIR 1980 SC 695 : (1980) 2 SCC 180 : 1980 ACJ 411 .

Page 566
6 State of Haryana v. Darshana Devi, AIR 1979 SC 855 : (1979) 2 SCC 236 : 1979 ACJ 205 . Also see, JAIN ,
Treatise , I, Chapter XIII; JAIN , Cases , II, 1097.
Asstt. Engineer, P.W.D. (B. & R.) Jaipur v. Dhappo , (1980) Lab & Ind CASES 1202 (Raj). Also see, State of Gujarat v. Dushyantbhai,
AIR 1981 NOC 214 (Guj); R.S.R.T. Corporation v. Jhami Bhai, AIR 1987 Raj 68 .
8 State of Maharashtra v. Kanchanmal Vijaysing Shirke, (1995) 5 SCC 659 , 661: AIR 1995 SC 2499 : (1996) 85
Comp Cas 542 .
9 State of Maharashtra v. Kanchanmal Vijyasing Shirke, (1995) 5 SCC 659 , 661: AIR 1995 SC 2499 : (1996) 85
Comp Cas 542 .
10 State of Maharashtra v. Kanchanmal Vijyasing Shirke, (1995) 5 SCC 659 , 661: AIR 1995 SC 2499 : (1996) 85
Comp Cas 542 .
11 Chairman, Rly. Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : JT 2000 (1) SC 426 .
12 Satya Wati v. Union of India, AIR 1967 Del 98 . Also see, Union of India v. P.S. Mahal, AIR 1976 J&K 80 .
13 Union of India v. Sugrabhai, AIR 1969 Bom 13 .
14 Union of India v. Sugrabhai, AIR 1969 Bom 13 : 1968 Mah LJ 468 : 70 Bom LR 212 .
15 AIR 1962 Punj 315 .
16 Union of India v. Harban Singh, AIR 1959 Punj 39 : 61 Punj LR 30 .
17 Union of India v. Neelam Dayaram, 1979 MPLJ 732 .
18 Union of India v. Savita Sharma, AIR 1979 J&K 6 .
19 AIR 1978 All 417 .
20 Nandram Heeralal v. Union of India, AIR 1978 MP 209 .
21 President, Union of India, New Delhi v. Sadashiv, AIR 1985 Bom 345 .
22 AIR 1975 Mad 32 .
23 Union of India v. Hardeo Dutta, AIR 1986 Bom 350 .
24 Pushpinder Kaur v. Corporal Sharma, AIR 1985 P&H 81 .
25 Usha Aggarwal v. Union of India, AIR 1985 P&H 279 , 281.

Page 567
26 Pushpa Thakur v. Union of India, AIR 1986 SC 1199 : 1985 (1) ACC 76 .
27 AIR 1987 Kant 107 .
28 AIR 1982 Bom 27 .
29 State of Maharashtra v. A.H. Khodwe , ILR (1980) Bom 660. Also see, Etli v. Secretary of State, AIR 1939 Mad 663 :
1939 (1) Mad LJ 784: 49 Mad LW 679 .
30 AIR 1970 SC 1407 : 1970 (2) LLJ 266 : (1970) 1 SCC 735 .
31 Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548 : (1978) 2 SCC 213 : 1978 (1) LLJ 349 .
32 Also see, State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610 : 1960 (1) LLJ 251 : 1960 (2) SCR
866 , where a government hospital was held to be an 'industry'. The question was whether the Industrial Disputes Act , 1947, applied to
government hospitals and whether they were "industry" within the meaning of that Act. The Court said: "It is the character of the activity
which decides the question as to whether the activity in question attracts the provision of S. 2(j) ; who conducts the activity and whether it
is conducted for profit or not do not make a material difference." The activities carried on by the state to comply with the directive principles
or in pursuit of its welfare policies cannot be regarded as regal activities as they cannot be said to be "primary and inalienable functions of a
constitutional government" and they are not such that "no private citizen can undertake the same."
33 Kalawati v. State of Himachal Pradesh, AIR 1989 HP 5 . Also see, Pinnamaneni Narasimha Rao v. Gundavarapu
Jayaprakasu, AIR 1990 AP 207 . In this case was cited the following observation of Lord DENNING in Cassidy v. Minister of
Health, (1951) 1 KB 343 on the question of vicarious liability of the government for negligence of the doctors in a hospital
maintained by it:"... authorities who run a hospital, be they local authorities, government boards or any other corporation, are in law under
the self same duty as the humblest doctor; whenever they accept a patient for treatment, they must use reasonable care and skill to cure him
of his ailment. The hospital authorities cannot, of course, do it by themselves; they have no ears to listen through the stethoscope, and no
hands to hold the surgeon's knife. They must do it by the staff which they employ, and if their staff are negligent in giving the treatment, they
are just as liable for that negligence as is anyone else who employs others to do his duties for him. What possible difference in law, I ask can
there be between hospital authorities who accept a patient for treatment and railway or shipping authorities who accept a passenger for
carriage? None whatever. Once they undertake the task they come under a duty to use care in the doing of it, and that is so whether they do it
for reward or not. It is no answer for them to say that their staff are professional men and women who do not tolerate any interference by
their lay masters in the way they do their work. The reason why the employers are liable in such CASES is not because they can control the
way in which the work is done they often have not sufficient knowledge to do so but because they employ the staff and have chosen them for
the task and have in their hands the ultimate sanction for good conducts, the power of dismissal."
34 Achutrao Haribhau Khodwa v. State of Maharashtra, (1996) 2 SCC 634 : AIR 1964 SC 1823 .
35 State of Rajasthan v. Vidhyawati, AIR 1962 SC 933 : 1962 Supp (2) SCR 989 .
583 .
37 N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 : AIR 1994 SC 2663 : JT 1994 (5) SC
572 ; Infra .
38 State of Maharashtra v. Kanchanmal Vijaysingh Shirke, (1995) 5 SCC 659 : AIR 1995 SC 2499 : (1996) 85
Comp Cas 542 ; supra ,
Page 568
Khodwa v. State of Maharashtra, (1996) 2 SCC 634 : AIR 1964 SC 1823 .
44 M. Vijaya v. Chairman and Managing Director, Singrani Collieries Co. Ltd., AIR 2001 AP 502 . See, infra , for details of
the case.
45 Shakuntala Sharma v. State of Uttar Pradesh, AIR 2000 All 219 .
46 (2000) 5 SCC 182 : AIR 2000 SC 1888 : 2000 (3) Mad LJ 98. Also see, Legal Aid Committee v. State of Bihar,
(1991) 3 SCC 482 ; Jocob George (Dr.) v. State of Kerala, (1994) 3 SCC 430 : 1994 CrLJ 3851 : 1994 (2) Crimes
100 ; Paschim Banga Khet Mazdoor Samity v. State of West Bengal, AIR 1996 SC 2426 : (1996) 4 SCC 37 : JT 1996
(6) SC 43 .
47 Union of India v. Sat Pal, AIR 1969 J&K 128 .
48 State of Punjab v. Modern Cultivators, AIR 1965 SC 17 : 1964 (8) SCR 273 .
49 Rooplal v. Union of India, AIR 1972 J&K 23 .
50 Dhian Singh Sobha Singh v. Union of India, AIR 1958 SC 274 : 1958 SCR 781 .
51 Union of India v. Ram Kamal, AIR 1953 Ass. 116 .
52 Municipal Board, Khari v. Ram Bharosey, AIR 1961 All 430 .
53 On Seizure and Confiscation, see, JAIN , Treatise , I, Chapter XVI, Chapter XVI; JAIN , Cases , III, Chapter XVIII.
54 State of Gujarat v. Memon Mahomed Haji Hasan, AIR 1967 SC 1885 : 1967 (3) SCR 938 .
55 AIR 1977 SC 1749 : (1977) 4 SCC 358 : 1977 CrLJ 1141 .
56 Sunder Lal v. District Magistrate, Sagar , (1988) 21 Reports (MP) 587; I.L.I., Annual Survey of India Law , XXIV, 1,2 (1988).
57 AIR 1993 Raj 51 .
58 Hazur Singh v. Behari Lal, AIR 1993 Raj 51 : 1993 (1) Civ LJ 95: 1992 (2) Raj LW 49.
59 Also see, N. Nagendra Rao & Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 , 211: AIR 1994 SC 2663 : JT
1994 (5) SC 572 ; infra .
Page 569
60 M.S. Chokkalingam Chettiyar v. State, AIR 1991 Knt 116, 118 .
61 Oswal Spinning and Weaving Mills Ltd. v. Collector of Customs, (1988) 3 SCC 310 : JT 1988 2 SC 135 :
(1988) 35 ELT 244 .
62 Jay Laxmi Salt Works (P.) Ltd. v. State of Gujarat, (1994) 4 SCC 5 : JT 1994 (3) SC 492 .
63 The High Court took the view by majority that the case fell under Article 36 of the Limitation Act and, thus, the case ought to
have been filed within two years of the cause of action arising. The court held that Article 120 permitting a limitation period of six years
was not applicable to the fact situation.
64 Jay Laxmi Salt Work (P.) Ltd. v. State of Gujarat, (1994) 4 SCC 5 : JT 1994 (3) SC 492 : 1994 (3) Cur CC 8 (per
SAHAI , J.).
70 AIR 1982 AP 118 .
71 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248 ; Olga Tellis v. Bombay Municipal Corp.,
AIR 1986 SC 180 : (1985) 3 SCC 545 ; JAIN , Indian Constitution Law ,Chapter XXVI.
72 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 , at 617: 1997 CrLJ 743 : (1997) 1 SCC 416 .
73 AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465 .
74 For more case on Art. 21 , see, infra .
75 AIR 1967 MP 246 .
76 AIR 1975 Ori 41 .
78 JAIN , Treatise ,I, Chapter VII.
79 AIR 1981 MP 65 .
Page 570
80 Also see, State of Madhya Pradesh v. Premabai, AIR 1979 MP 85 ; Roop Lal v. Union of India, AIR 1972 J&K 22
.
81 Nanik Sewa v. State of Orissa, AIR 1996 Ori 131 .
82 AIR 1987 SC 355 : 1987 CrLJ 528 : (1987) 1 SCC 265 .
83 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248 .
84 See, infra , under 'Police Lawlessness'.
85 AIR 1989 AP 238 .
86 C. Ramakonda Reddy v. State, AIR 1989 AP 235 : 1989 (2) Andh LT 1 (per JEEVAN REDDY , J.).
88 State of Andhra Pradesh v. Challa Ramakrishna Reddy, AIR 2000 SC 2083 : (2000) 5 SCC 712 : JT 2000 (6)
SC 334 .
89 State of Andhra Pradesh v. Challa Ramkrishana Reddy, AIR 2000 SC 2083 , 2090: (2000) 5 SCC 712 : 2000 (3) Cur
CC 19.
91 On Public Interest Litigation, see, infra .
92 Peoples's Union of Democratic Rights v. State of Bihar, AIR 1987 SC 355 : (1987) 1 SCC 265 : 1987 CrLJ 528
.
93 Inder Puri General Store v. Union of India, AIR 1992 J&K 11 .
94 See, JAIN , Indian Constitutional Law ,
95 JAIN , Indian Constitutional Law , Ch. XXXII.
96 R. Gandhi v. Union of India, AIR 1989 Mad 205 .
97 AIR 1996 J&K 51.
1 S.S. Ahluwalia v. Union of India, AIR 2001 SC 1309 : (2001) 4 SCC 452 : JT 2001 (3) SC 523 .
2 Maneka Gandhi v. Union of India, AIR 1978 SC 597 : (1978) 1 SCC 248 . See, JAIN , Indian Constitutional Law ,
Chapter XXVI; JAIN , Cases , I, 522.
3 See, Raghubir Singh v. State of Haryana, AIR 1980 SC 1087 , at 1088: 1980 CrLJ 801 : (1980) 3 SCC 70 .
Page 571
4 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 , at 617: 1997 CrLJ 743 : 1996 (4) Crimes 233 .
5 AIR 1981 SC 928 : 1981 CrLJ 470 : (1981) 1 SCC 627 .
6 AIR 1981 SC 928 : 1981 CrLJ 470 .
7 Khatri v. State of Bihar, AIR 1981 SC 1068 , 1074: 1981 CrLJ 597 : (1981) 2 SCC 493 .
8 AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141 . For comments on this case, see S.N. JAIN , Money
Compensation for Administrative Wrongs through Art 32 , (1983) 25 JILI 118 .
9 AIR 1983 SC 1086 at 1089 : 1983 CrLJ 1644 : 1983 (2) Scale 103 ,
10 On 'Moulding of Relief', see, infra .
11 AIR 1984 SC 1026 : 1984 (2) Crimes 22 : 1984 CrLJ 830 : (1984) 3 SCC 82 .
12 AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141 .
13 AIR 1993 SC 1960 : (1993) 2 SCC 746 : 1993 CrLJ 2899 .
14 For discussion on Arts. 32 and 226 , see, infra , under Judicial Review of Administrative Action .
15 AIR 1993 SC 1960 at 1967 : JT 1993 (2) SC 503 (2): 1993 (2) Scale 309 .
16 AIR 1993 SC 1960 at 1966 : 1993 (2) CCR 107 . Emphasis has been added by the author.
17 AIR 1993 SC 1960 , at 1969-70: (1993) 2 SCC 746 : 1993 CrLJ 2899 .
18 Arvinder Singh Bagga v. State of U.P. 1994 6 SCC 565 : AIR 1995 SC 117 : 1994 (3) Crimes 694 .
19 Arvinder Singh Bagga v. State of U.P., (1994) 6 SCC 565 : AIR 1995 SC 117 : 1994 (3) Crimes 694 .
20 There has been a spate of CASES in this area where the High Courts and the Supreme Court have award compensation under Art
226 or 32 to the victims or their heirs in case of custodial violence or death. See, for example: Arvinder Singh Bagga v. State of U.P.,
(1994) 6 SCC 565 : JT 1994 (6) SC 478 : 1994 (4) Scale 466 ; Lalitha v. Director General of Police, Madras, (1989)
Cr LJ 1732 ; Civil Liberties v. Kukrety Assam Rifles, (1989) 1 Crimes 748 (Gau); Rajasthan Kisan Sangthan v. State, AIR
1989 Raj 10 ; Luithkula v. Risheang Keishing, AIR 1989 NOC 182 (Gau); Joginder Kumar v. State of Uttar Pradesh,
(1994) 4 SCC 260 : AIR 1994 SC 1349 : 1994 CrLJ 1981 . In Punjab & Haryana Bar Association v. State of Punjab,
(1996) 4 SCC 742 , 745: 1966 (4) Scale 416 , the Supreme Court awarded a sum of ten lacs to the parents of Kulwant Singh, an
advocate, who was allegedly abducted and killed by the police.
21 AIR 1997 SC 610 : 1997 CrLJ 743 : 1997 SCC 92 (Cri).
22 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : (1997) 1 SCC 416 : 1997 CrLJ 743 .
Page 572
23 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : 1996 (4) Crimes 233 : JT 1997 (1) SC 1 .
24 See, JAIN , Treatise , I. Also, J AIN , Cases , II, 1033-1035, 1159, 1163, 1295, 1301, 1419-1422, 1537-1543.
25 See, for example, Re Death of Sawinder Singh Grover , (1995) Supp (4) SCC 450 : 1992 (3) Scale 34 (2), who died in
the custody of Directorate of Enforcement, The Supreme Court awarded a sum of Rs. two lacs as compensation to his widow.
26 (1997) 1 SCC 416 at 443: AIR 1997 SC 610 : 1996 (4) Crimes 233 .
27 People's Union for Civil Liberties v. Union of India, AIR 1997 SC 1203, 1205 : (1997) 3 SCC 433 : 1997 (1)
Crimes 190 .
28 State of Maharashtra v. Christian Community Welfare Council of India, (2003) 8 SCC 546 : AIR 2004 SC 7 :
2004 CrLJ 14 : 2003 (4) Crimes 367 .
29 AIR 1986 SC 494 : (1985) 4 SCC 677 : 1986 CrLJ 192 .
30 Rudul Shah v. State of Bihar, AIR 1983 SC 1086 : 1983 CrLJ 1644 : (1983) 4 SCC 141 ; JAIN , Cases , IV.
31 Sebastian M. Hongray v. Union of India, AIR 1984 SC 1026 : (1984) 3 SCC 82 : 1984 CrLJ 830 .
32 Saheli, A Woman's Resources Centre v. Commissioner of Police, Delhi Police Head Quarters, AIR 1990 SC 513 :
(1990) 1 SCC 422 .
33 Saheli, A Woman's Resources Centre v. Commr. of Police, Delhi Police Head Quarters, AIR 1990 SC 513 : (1990) 1
SCC 422 : JT 1989 (4) SC 553 .
34 State of Maharashtra v. Ravikant S. Patil, (1991) 2 SCC 373 : (1991) (1) Crimes 810: JT 1991 (5) SC 442 .
35 See, ILI, Annual Survey of Indian Law , 6-7 (1988).
36 AIR 1997 SC 1203 : (1997) 3 SCC 433 : 1977 (1) Crimes 190 .
37 AIR 1989 SC 1570 : (1989) 3 SCC 223 : JT 1989 (2) SC 419 .
38 See, Street, Governmental Liability , 33-34 (1953). Also, Tobin v. The Queen, 143 ER 1148 ; Nireaha v. Baker, 1901
AC 561 ; Stanbury v. Exeter Corporation, (1905) 2 KB 839 .
39 See, Mohammad Murad v. Govt. of U.P., AIR 1956 All 75 . The Allahabad High Court observed in this case: "This
exemption of the State from liability to pay damages for the tortious acts of its servants, where a government servant is carrying out or
purporting to carry out duties imposed by the law, has also been justified on the ground that in such CASES the government servant
purports to carry out duties imposed by the letter of the law and is controlled by the law and not by the State Government. This as already
pointed out, still leaves the individual liability of the government servant committing the tortious act intact unless he is otherwise protected."
40 (1904) 28 ILR Bom 314.
41 Shivabhajan v. Secretary of State, (1904) 28 ILR Bom 314 .

Page 573
42 AIR 1915 Mad 434 .
43 AIR 1932 Cal 834 .
44 Secretary of State v. Ramnath, AIR 1934 Cal 128 .
45 Ram Ghulam v. U.P. Government, AIR 1950 All 206 . Other Cases to the same effect are: Ram Shanker v. Secretary of
State, AIR 1932 All 575 ; Uday Chand v. Province of Bengal, (1946) 51 CWN 537 ; State of Bihar v. Sonabati,
AIR 1954 Pat 513 ; Union of India v. Dhansa Coal Co., AIR 1959 Pat 347 ; State of Uttar Pradesh v. Chhotey Lal, AIR
1967 All 327 ; State v. Tulsi Ram, AIR 1971 All 162 .
46 Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (2) CrLJ 144 : 1965 (1) SCR 375 .
47 GAJENDRAGADKAR , C.J., observed on this point in Kasturilal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 :
1965 (1) SCR 375 : 1966 (2) LLJ 583 . "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 the 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 delegation of any sovereign power, an action for damages would lie."
48 Shivabhajan v. Secretary of State, (1904) 28 ILR Bom 314 .
49 Supra .
50 Abdul Kadir v. State of Saurashtra, AIR 1956 Sau 62, 65 .
51 Abdul Kadir v. State of Saurashtra, AIR 1956 Sau 62 , 65: 8 Sau LR 437 . Also, Uday Chand v. Province of Bengal,
(1949) 51 CWN 537 .
52 State of Rajasthan v. Rikhabchand, AIR 1961 Raj 64 .
53 Section 2(3) of this Act reads: "Where any functions are conferred or imposed upon an officer of the Crown as such either by any
rule of the common law or by statute, and that officer commits a tort while performing or purporting to perform those functions, the
liabilities of the Crown in respect of the tort shall be such as they would have been if those functions had been conferred or imposed solely
by instructions lawfully given by the Crown."
55 (1994) 6 SCC 205 : AIR 1994 SC 2663 : JT 1994 (5) SC 572 .
56 The Essential Commodities Act , 1955. For this provision, see, JAIN , Treatise , I, Chapter XVI; JAIN , Cases , III, 2772-2781,
2802 et seq .
59 See, supra , Chapter XX, Vol. I.

Page 574
61 N. Nagendra Rao & Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 : JT 1994 (5) SC 575 : 1994 (3) Scale
977 .
62 Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 : 1965 (1) SCR 375 .
63 N. Nagendra Rao & Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 : JT 1994 (5) SC 575 : 1994 (3) Scale
977 .
64 AIR 1967 SC 1885 : 1967 (3) SCR 938 .
65 Supra , this chapter.
fault on the part of the Administration, see, infra. Anns decision, see, infra , under "Position in Britain" also needs to be considered in this
respect. There also remains the question of ultra vires administrative action without negligence which may cause economic loss to the
individual. These questions are referred to in the Section under 'Position in Britain'.
69 (2004) 3 SCC 415 : AIR 2004 SC 3338 : (2004) 120 Comp Cas 137 .
70 (1987) 2 All ER 705; see, infra .
71 (1990) 2 All ER 536.
72 See, infra , for comments, on this aspect.
73 For discussion on these constitutional provisions, see, infra , under 'Writ Jurisdiction'.
74 See, infra .
75 AIR 1983 SC 1102, 1107 ,: (1983) 4 SCC 148 .
76 The reason given by the Law Commission to exclude Art. 32 from the scope of its recommendation was: "The remedy guaranteed
by article 32 to move the Supreme Court, though of basic importance in our constitutional scheme, is not so frequently resorted to." This
is not a correct assessment as a large number of CASES complaining violations of fundamental rights come before the Supreme Court
under Art. 32 . For discussion on Article 32 , see, infra .
77 AIR 1981 SC 928 : (1981) 1 SCC 627 : 1981 CrLJ 470 .
78 AIR 1983 SC 1086 : 1983 CrLJ 1644 : 1983 (2) Scale 103 .
79 Nilabati Bahera v. State of Orissa, AIR 1993 SC 1960 : (1993) 2 SCC 746 : 1993 CrLJ 2899 .
Page 575
80 Nilabati Behera v. State of Orissa, AIR 1993 SC 1960 : JT 1993 (2) SC 503 (2): 1993 (2) Scale 309 ; Rudul
Shah v. State of Bihar, AIR 1983 SC 1086 : (1983) 4 SCC 141 : 1983 CrLJ 1644 ; D.K. Basu v. State of West Bengal,
AIR 1997 SC 610 : 1997 CrLJ 743 : 1997 SCC 92 (Cri); Kumari (Smt .) v. State of Tamil Nadu , AIR 1992 SC 2069 :
(1992) 2 SCC 223 : JT 1992 (2) SC 16 ; Chairman, Rly. Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ
1473 : (2000) 2 SCC 465 ; People's Union for Civil Liberties v. Union of India, AIR 1997 SC 1203 : (1997) 3 SCC
433 : 1997 CrLJ 190 .
81 Shankuntala Devi v. Delhi Electricity Supply Undertaking, (1995) 2 SCC 369 : 1995 (1) Cur CC 302: JT 1995 (1) SC
547 .
82 Supra .
83 D.K. Basu v. State of West Bengal, AIR 1997 SC 610 : JT 1997 (1) SC 1 : 1996 (8) Supreme 581 .
84 Jacob George (Dr.) v. State of Kerala, (1994) 3 SCC 430 : 1994 CrLJ 3851 : 1994 (2) Crimes 100 . Also,
Paschim Banga Khet Mazdoor Samity v. State of West Bengal, AIR 1996 SC 2426 : (1996) 4 SCC 37 .
85 AIR 1983 SC 1134 : (1983) 4 SCC 20 ; for final decision in the case, see, AIR 1984 SC 1560 : 1984 (2)
LLJ 318 : 1984 Supp SCC 410 . Also, JAIN , Treatise , I, Chapter XIX. The mandamus was issued in 1971: For full history of the
case, see, JAIN , Cases , III,
86 AIR 1990 SC 1417 : (1990) 3 SCC 182 .
87 See, for example, R. Gandhi v. Union of India, AIR 1989 Med. 205 , where the Madras High Court ordered payment of ex
gratia compensation to the Sikh victims of a communal riot.
88 Also see, infra .
89 AIR 2001 AP 502 . Also see, State of Andhra Pradesh v. Challa Ramkrishna Reddy, AIR 2000 SC 2083 :
(2000) 5 SCC 712 : JT 2000 (6) JT SC 334.
90 Chairman, Rly. Board v. Chandrima Das, AIR 2000 SC 988 : 2000 CrLJ 1473 : (2000) 2 SCC 465 . On PIL
writ petitions, see, infra .
91 All India Lawyers Union v. Union of India, AIR 1999 Del 120 . For further discussion on this matter see, infra .
92 Marri Yadamma v. State of Andhra Pradesh, AIR 2002 AP 164 .
93 Rabindra Nath Ghosal v. University of Calcutta, AIR 1992 Cal 208 .
94 Rabindra Nath Ghoshal v. University of Calcutta, (2002) 7 SCC 478 : AIR 1964 SC 1823 .
95 For a full-fledged discussion on writs, see, infra , Chapters XXXIII to XXXVI.
96 AIR 1975 Knt 62 .
1 AIR 1975 All 132 .

Page 576
2 See, JAIN , Treatise , I, Chapter XIX; JAIN , Cases , III, Chapter XVI.
3 Prem Lal v. State of U.P. Government, AIR 1962 All 233 ; see, infra .
4 11 WR 646 ; YARDLEY , A Source Book of Administrative Law , 116 (1970) supra .
5 See, infra , next Chapter.
6 Shri Shivkor Mota Singh v. Ram Naresh Muni Singh, AIR 1978 Guj 115 .
7 Municipal Board, Jaunpur v. Brahmkishore, AIR 1978 All 168 .
8 Municipal Corp., Delhi v. Sobhagwati, AIR 1960 Punj 300 .
9 AIR 1975 SC 529 : (1974) 2 SCC 596 . Also see, supra .
10 AIR 1962 All 211 .
11 G. Sreedharamurthy v. Bellary Municipal Council, AIR 1982 Knt 287 .
12 Municipal Commissioner v. David J. Bhanu, (1988) 1 KLT 675 .
13 Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum, (1991) 1 GLR 650 .
14 Kumari v. State of Tamil Nadu, AIR 1992 SC 2069 : (1992) 2 SCC 223 : 1993 (1) ACC 80 .
15 AIR 1973 SC 1289 : (1973) 1 SCC 788 .
16 Lala Bishambar Nath v. The Agra Nagar Mahapalika, Agra, AIR 1973 SC 1289 : (1973) 1 SCC 788 .
17 Municipal Corp. of Delhi v. Sushila Devi, AIR 1999 SC 1929 : (1999) 4 SCC 317 .
18 See, infra .
19 For this Article, see, supra .
20 AIR 1979 All 35 .
21 See, supra , for CASES for compensation brought against State Transport Corporations. Also see, R.N. Ghosal v. Univ. of Calcutta,
AIR 1992 Cal 207 : 1992 (1) Cal HN 134: (2002) 7 SCC 478 : AIR 2002 SC 3560 ; also see for CASES against electricity
undertakings which are statutory bodies: infra .
22 AIR 1976 MP 38 .
Page 577
23 AIR 1986 Raj 176 . Also See, K.S.E. Board v. Kamalakshy Amma, AIR 1987 Ker 253 .
24 AIR 1986 Ker 72 .
26 Also see, Asa Ram v. M.C.D., AIR 1995 Del 168 .
27 Thressia v. Kerala State Electricity Board, AIR 1988 Ker 206 .
28 Shakuntala Devi v. Delhi Electric Supply Undertaking, (1995) 2 SCC 369 : JT 1995 (1) SC 547 .
29 Padma Beharilal v. Orissa Electricity Board, AIR 1992 Ori 68 .
30 AIR 1999 SC 3412 : (1999) 7 SCC 298 : JT 1999 (7) SC 109 . Also see, Tamil Nadu Electricity Board v.
Sunathi, AIR 2000 SC 1603 : (2000) 4 SCC 543 : 2000 (3) Mad LJ 124.
31 On Writs, see, infra .
32 AIR 1980 SC 431 : (1980) 1 SCC 284 .
33 The Post Office Act , 1898.
34 Triafus & Co. Ltd. ,v. Post Office , (1957) 2 QB 352 ; Cf. C.I.T. v. P.M. Rathod & Co., AIR 1959 SC 1394 :
1960 (1) SCR 401 ; Union of India v. Amar Singh, AIR 1960 SC 233 : 1960 (2) SCR 75 .
35 Section 191 of the Indian Contract Act , 1872.
36 Union of India v. Ladulal Jain, AIR 1963 SC 1681 : 1964 (3) SCR 628 . Also see, Union of India v. Murlidhar,
AIR 1952 Ass 141 .
37 AIR 1976 SC 2538 : (1976) 4 SCC 265 .
38 AIR 1976 SC 1414 : (1976) 3 SCC 32 .
39 AIR 1980 Del 92 .
40 Commissioners for Railways v. Mc Dermott, (1967) AC 169 .
crossing must be kept closed when the train is due to pass. In Union of India v. Hindustan Lever, AIR 1975 P&H 259 , the accident
occurred because the gates were left open at the time of the passing of the train. The Court characterised this as 'statutory negligence' on the
part of the railway employees and, on the principle of vicarious liability, the Union of India was held liable to pay damages to the plaintiff
due to the aforesaid negligence.
42 CHARLESWORTH , On Negligence , 825 (11th ed.).

Page 578
43 AIR 1980 All 168 .
44 AIR 1989 Cal 207 .
45 Nathulal Jain v. State, AIR 1993 Raj at 155 .
46 Union of India v. Sunil Kumar, AIR 1984 SC 1737 : (1984) 4 SCC 246 ; Ratnakar Tanbaje Itankar v. Union of India,
AIR 1994 Bom 133 ; see, JAIN , Treatise , I, Chapter XIII.
47 D. Srinivasa v. Union India, AIR 1995 Knt 223 . Also see, Ratnakar Tanbaji Itankar v. Union of India, AIR 1994
Bom 132 ; JAIN , Treatise , I, Chapter XIII; JAIN , Cases , II, 1077-1084.
48 AIR 1976 All 85 .
49 Ulhasamnan v. Union of India, (1992) ACJ 151 .
51 Supra .
52 For instance, S. 54 of the Banking Companies Act , 1949; S. 15 of the Essential Commodities Act , 1955.
53 For instance, S. 117 of the Factories Act , 1948; S. 155 of the Customs Act , 1962.
54 For instance, S. 19 of the Prize Competition Act , 1955; S. 293 of the Income Tax Act , 1961.
55 Supra ,this chapter.
56 R. Subha Rao v. Advocate-General, A.P., AIR 1981 SC 755 at 757 : (1981) 2 SCC 577 .
57 State v. Tulsi Ram, AIR 1971 All 162 .
58 Law Commission of India, First Report (Liability of the State in Tort) , 39 (1956).
59 See, infra , Chapter XXX under Misfeasance in Public office. For discussion on mala fide action on the part of the government, see,
JAIN , Treatise , I, Chapter XIX.
60 AIR 1962 All 233 .
61 AIR 1975 SC 529 : (1974) 2 SCC 596 See, infra .
62 (1877) 2 AC 616.
63 AIR 1975 SC 529 at 531 : (1974) 2 SCC 596 .
64 AIR 1975 SC 529 : (1974) 2 SCC 596 .

Page 579
65 AIR 1985 SC 285, 293 ,: (1985) 1 SCC 449 .
66 AIR 1975 SC 460 : (1974) 2 SCC 630 .
67 Eshugbayi Eleko v. Govt. of Nigeria, (1931) AC 692 ; WADE AND BRADLEY , Constitutional Law , 267 (1970).
68 30 ER 391 and 521 (1793).
69 7 MIA 555 (1827) .
70 7 MIA 476 (1859) . This case is also known as the Rajah of Tanjore case . Also see, JAIN , Cases , IV, Chapter XXVIII for
the text of this case.
71 54 ER 642 (1860) . Other old Cases on the act of state are: Raja Saligram v. Secy. of State , (1872) IA Suppl Vol. p. 119;
Sirdar Bhagwan Singh v. Secy. of State, (1872) 2 IA 38 ; Secy. of State v. Rustam Khan, (1941) 68 IA 109 ; Vaje Singhji
Joravar Singhji v. Secy. of State, 51 IA 357 .
72 P.V. Rao v. Khushaldas, AIR 1949 Bom 277, 278 .
73 (1872) IA Supp Vol., p. 10.
74 Promod v. State of Orissa, AIR 1962 SC 1288 : 1962 Supp (1) SCR 405 ; Virendra Singh v. State of Uttar Pradesh,
AIR 1954 SC 417 : 1955 (1) SCR 415 ; State of Madras v. Rajagopalan, AIR 1965 SC 817 : 1955 (2) SCR 541 ;
Dalmia Dadri Cement Co. v. Commr., Income-tax., AIR 1958 SC 816 : 1959 SCR 729 .
75 AIR 1959 SC 1383 : 1960 (1) SCR 537 . Also, Dalmia Dadri Cement Co. v. CIT, AIR 1958 SC 816 :
1959 SCR 729 : (1958) 34 ITR 514 .
76 AIR 1964 SC 1043 : 1964 (6) SCR 461 .
77 AIR 1967 SC 40 : 1966 Supp SCR 81 .
78 This principle has been applied by the Supreme Court in several earlier Cases , see, for example, Dalmia Dadri Cement Co. Ltd. v.
Commissioner of Income tax, AIR 1958 SC 816 , 818: (1958) 34 ITR 54 ; Maharaja Shree Umaid Mills Ltd. v. Union of
India, AIR 1963 SC 953 : (1963) 48 ITR 186 ; State of Gujarat v. Vohra Fiddali Badruddess Mithi Barwala, AIR
1964 SC 1043 : 1964 (6) SCR 461 .
79 Administrative Justice: Some Necessary Reforms , para 11.2 (1988).
80 (1964) AC 465.
81 (1970) 2 QB 223.
82 Also see, Meates v. Attorney General, (1983) NZLR 308 ; Clifford Metal Industries Ltd. v. Export Credit Guarantee Dept. ,
(1981) The Times 25 March; WADE , Administrative Law , 774-775 (1995).
Page 580
83 Supra .
84 (1980) QB 156.
85 (1981) 2 WLR 188.
86 Per Lord WILBERFORCE .
87 See the comment by JOHN MURDOCH NATES , STATUTORY AUTHORITY AND NUISANCE , 97 LQR 205 (1981) .
88 For comments on Allen , see, P.P. CRAIG , Administrative Law . Also, Manchester Corporation v. Farnworth, (1930) AC
171 ; Tate & Lyle Industries Ltd. v. Greater London Council, (1983) 2 WLR 649 .
89 (1970) AC 1004.
90 Dorset Yacht Co. Ltd. v. Home Office, (1970) AC 1004 at 1031 .
91 Dutton v. Bognor Regis Urban District Council, (1972) 1 QB 373 .
92 See, infra , under Breach of Statutory Duty.
93 Anns v. Merton London Borough Council, (1977) 2 All ER 492 .
94 Anns v. Merton London Borough Council, (1977) 2 All ER 492 .
95 WADE , Administrative Law , 658-9 (1982).
96 WADE , Administrative Law , 500 (1982).
1 Justice--All Souls, Report , 337.
2 Negligence in the Exercise of a Statutory Power. 94 LQR 428, 440 (1978). Also, CRAIG , Adm. Law , 539 (1983).
4 P.P. CRAIG , Administrative Law , (1994).
5 See GOULD , Damages as Remedy in Administrative Law , (1972) 5 NZULR 105 . Apart from the material referred to in the
earlier pages, supra , on damages for administrative wrongs, reference may also be made to the following materials: GANZ , Compensation
for Negligent Administrative Action , 1973 Pub Law 84; GANZ , Public Law and the Duty of Care , 1977 Pub Law 306; HENRY MOLOT
, Administrative Discretion and Current Judicial Activism , 11 Ottawa L.R . 337, 353 (1978); MICHAEL G. BRIDGE , Governmental
Liability, The Tort of Negligence , 24 McGill LJ 277 (1978); New Zealand Law Reform Committee, Damages in Administrative Law ,
Page 581
(1980); DE SMITH , Judicial Review of Administrative Action , 321-24, 337-39 (1980).
6 Dennis v. Charnwood Borough Council, (1983) QB 409 .
8 In Stovin v. Wise, (1994) 3 All ER 467 , the Highway Authority was held in breach of the common law duty of care. In Lewis
v. Kant LCC, (1992) 90 LGR 416 , the Highway Authority was held liable for non-feasance, i.e. , failure to exercise its statutory
power to erect warning signs resulting in physical injury to a motor cyclist.
9 Peabody Trust v. Sir Lindsay Parkinson Ltd., (1985) 1 AC 210 .
10 Yuen Kum Yen v. Att. Gen. of Hongkong, (1988) AC 175 .
11 Other Cases in the series are: Investors in Industry Commercial Properties Ltd. v. South Bedfordshire District Council, (1986)
1 All ER 787 ; Jones v. Dept. of Employment, (1988) All ER 725 ; Hill v. Chief Constable of West Yorkshire, (1989) AC
59 ; Davis v. Redcliffe, (1990) 1 WLR 821 .
12 (1988) AC 175 at 198.
13 (1990) 2 All ER 908.
15 For comments on Murphy see: (1991) CJ 58; 54 MLR 561; 1991 107 LQR 228 : (1992) 55 MLJ 619 .
16 (1990) 2 All ER 536.
17 See, Cooper v. Wandsworth Board of Works , JAIN , Treatise , I,
18 X (Minors), (1995) 2 AC 633 , at 730.
19 Bourgoin S.A. v. Ministry of Agriculture, (1985) 3 All ER 585 , at 618, 632. Also see, infra , under Misfeasance in Public
office.
20 (1981) 1 All ER 1202.
22 Also see, infra , on this point.
23 JAIN , Tratise , I, Chapter IX; JAIN , Cases , I, Chapter VIII, 466-640.
24 See, for comments on Dunlop : JUSTICE-ALL SOULS , Administrative Justice , 346 (1988).
25 Rowling v. Takaro Properties, (1975) 2 NZLR 62 .

Page 582
26 Takaro Properties v. Rowling, (1978) 2 NZLR 314 .
27 Takaro Properties v. Rowling, (1986) 1 NZLR 22 .
28 See, (1988) AC 473 ,, (1988) 1 All ER 163 (PC); infra , under Misfeasance in office.
29 Supra .
30 See the judgment of Lord BROWNE WILKINSON in X (minors) v. Bedfordshire CC, (1995) 3 All ER 360 , where he has
lucidly explained the law in this area. In this case, the House of Lords discussed the issue whether the careless performance by a local
authority of its statutory duties relating to education and welfare of children could found an action for negligence by children adversely
affected by the local authority's action.
31 See, Yuen Kun Yeu v. Att. Gen. of Hong Kong, (1988) AC 175 .
32 Street, Law of Torts , 270-71 (1963); GRIFFITH AND STREET , Principles of Administrative Law , 250-52 (1973). See Lord
WRIGHT in London Passenger Transport Board v. Upson, (1949) AC 155 , 168.
33 Also see, Barrett v. Enfield LBC, (2001) 2 AC 550 ; O Rourke v. Camden LBC, (1998) AC 188 ; Phelps v.
Hillingdon LBC, (2001) 2 AC 619 .
34 Pasmore v. The Oswald Twistle Urban District Council, (1898) HL 387 .
35 (1938) 4 All ER 631.
36 De Falco v. Crawley BC, (1980) QB 460 .
37 See, Meade v. London Borough of Haringey, (1979) 2 All ER 1016 , 033-1024; Thornton v. Kirklees Metropolitan Borough
Council, (1979) 2 All ER 349 .
38 (1949) 1 All ER 544. Also see Lonrho v. Shell, (1981) 2 All ER 456 .
39 Geddis v. Proprietors of Bann Reservoir, (1878) 3 AC 430 .
40 Lord BROWNE WILKINSON , X (Minors) v. Bedfordshire CC, (1995) 3 All ER 360 at 367.
41 X (Minors) v. Bedfordshihe CC, (1995) AC 633 , at 732-733.
43 Caparo , (1990) 1 All ER 568 .
44 Dunlop v. Woollahara Municipal Council, (1981) 1 All ER 1202 .
45 Even the Australian Ombudsman has recognised the need for ex gratia payments. In his annual Report 1987-1988, the
Page 583
Commonwealth Ombudsman has observed at p. 23: "...on occasions, the only remedy that will adequately compensate a person for defective
administration is an act of grace [ ex gratia ] payment. A person affected by defective action will not have a legal claim but the unfairness
discussion on the institution of Ombudsman, see, infra .
46 Hoffman La Roche and Co. v. Secretary of State for Trade and Industry, (1983) 1 All ER 513 at 522. See, JAIN , Treatise ,
I, Chapter XII.
47 H. Robertson SC, Remedies, Present and Future , (1995) Admin Review , No. 44; L. ROOTS , Damages for Wrongful
Administrative Action: A Future Remedy Needed Now ,(1995) 2 AJ Admin L, 129; DE SMITH WOOLF AND JOWELL , Judicial Review
of Adm. Action , 760 (1995); J.S. READ , Damages in Administrative Law , (1988) Commonwealth Law Bulletin , 428.
48 Public and Administrative Law Reform Committee, Report on Damages in Administrative Law , 2, (New Zealand, 1980, Minority
view). The majority favoured the evolution of any such remedy by the courts and piece-meal legislation by Parliament in specific Cases for
payment of damages, instead of enacting a general law. Also see, CRAIG , Compensation in Public Law , (1980) 96 LQR 413 ; MC
BRIDGE , Damages as Remedy for Unlawful Administrative Act ion , (1979) 38 CLJ 323 ; CRAIG , Administrative Law , 613-651
(1994); WOOLF, HARRY, SIR , Protection of the Public--A New Challenge , 56-62 (1990); J.S. READ , Damages in Administrative Law
, (1988) 14 Commonwealth Law Bulletin , 428; JUSTICE-ALL SOULS , Report on Administrative Justice , 361-362 (1989).
49 READ , Damages in Administrative Law , (1988), 440.
50 JUSTICE , Administration Under Law , 31 (1971); JUSTICE , Review of Adm. Law in U.K . 78 (1981); HARLOW , Compensation
and Government Torts , 89-101. For the present, as stated above, the gap in law is being filled in by awarding ex gratia payments to the
suffering individuals. The reports of the Ombudsman in Britain are replete with instances of ex gratia payments to concerned persons for
acts of administrative maladministration. See, HARLOW , Compensation and Government Torts , 117-143. For discussion on Ombudsman,
see, infra .
51 B. SCHWARTZ , Introduction to American Administrative Law , 207 (1958).
52 E.J. HAUGHEY , The Liability of Administrative Authorities , (1975).
53 See, supra .
54 BROWN & BELL , French Administrative Law , 174-183 (1993).
55 BROWN & BELL , French Administrative Law , 184-188.
56 Traite de Droit Constitutional , (3 ed.) 469.
58 F. Hoffman La Roche & Co. AG v. Secretary of State for Trade and Industry, (1975) AC 295 ; JAIN , Cases , I, 396.
59 (1964) 1 All ER 367.
60 (1972) 1 All ER 801.
61 Cassell & Co. Ltd. v. Broome, (1972) 1 All ER 801 , at 875. See, JAIN , Cases , IV.
Page 584
62 (1993) 1 All ER 609.
Ratanlal: Code of Criminal Procedure/CHAPTER XXIII EVIDENCE IN INQUIRIES AND TRIALS/B.--Commissions

for the examination of witnesses/S. 293. Reports of certain Government Scientific experts.
S. 293.
Reports of certain Government Scientific experts.
(1) Any document purporting to be a report under the hand of a Government scientific expert to
whom this section applies, upon any matter or thing duly submitted to him for examination or
analysis and report in the course of any proceeding under this Code, may be used as evidence in
any inquiry, trial or other proceedings under this Code.
(2) The Court may, if it thinks fit, summon and examine any such expert as to the subject-matter of
his report.
(3) Where any such expert is summoned by a Court and he is unable to attend personally, he may,
unless the Court has expressly directed him to appear personally, depute any responsible officer
working with him to attend the Court, if such officer is conversant with the facts of the case and
can satisfactorily depose in Court on his behalf.
**[(b) the Chief Controller of Explosives;]
(e) the Director, *[Deputy Director or Assistant Director] of a Central Forensic Science
(f) the Serologist to the Government.
+[(g) any other Government Scientific Expert specified by notification by the Central
Government for this purpose.]
1. Legislative changes.
See Synopsis No. 1. Legislative changes under Section 292 ante. The Law Commissioners in 41st Report observed:
"41.6. Section 510 will deal with other expert reports where security is not a consideration. We propose to add two more experts in
that list, namely:
(i) the Director of the Haffkeine Institute, Bombay, and

(ii) the Director of the Central Forensic Laboratory.
We are not convinced that handwriting experts employed by Government should be treated in the same way. Their evidence is
almost always subject to controversy and no special value can be attached to their reports merely because the expert is employed by
Government. Nor can we justify the extension of this provision to cover ordinary medical or veterinary experts. The procedure here
is very special and must be confined to special experts."
Page 585
In an earlier Report (14th Report, Vol. II, pages 848, 849, para 26), the Commission noted that Section 510(2), as
amended in 1955, makes it obligatory for the Court to summon the Chemical Examiner or other officer mentioned in
sub-section (1), if either party so desires. The Commission regarded this provision as unsatisfactory and recommended
that it should be left to the discretion of the Court to summon such officers. We agree with this recommendation and are
suggesting an amendment to implement it.20
CrPC, Amending Act, (45 of 1978).--Sub-section (4) has been amended to include Deputy Director and Assistant
Directors of Central and State Forensic Science Laboratories in the List of Government scientific experts.
CrPC (Amendment) Act, 2005 (25 of 2005).--In Section 293 of the principal Act, in sub-section (4),--
(a). for clause (b), the following clause shall be substituted, namely:--
"(b) the Chief Controller of Explosives,"

(b). after clause (f), the following clause shall be added, namely:--
"(g) any other Government Scientific Expert specified by notification by the Central Government for this
purpose."
Notes on Clauses
The designation "the Chief Inspector of Explosives" appearing in the Indian Explosives Act, 1884 has been changed to
"the Chief Controller of Explosives" by the Indian Explosives (Amendment) Act, 1978. The opportunity has therefore
been taken to make the consequential amendment to Section 293 where the expression the Chief Inspector of
Explosives occurs. ( Notes on Clauses, Clause 26)
This amendment in the section has come into force w.e.f. 23-6-2006 vide Notification No. S.O. 923(E), dt. 21-6-2006.
2. Scope and application.

This section makes provision for accepting in evidence reports made by certain Government Scientific Experts.
This section is not controlled or regulated by the provisions of S. 294. The section provides for reading in evidence
certain documents purported to be report under the hand of a Government Scientific Expert as enumerated in sub-s.(4)
which include Chemical Examiner or Assistant Chemical Examiner to Government. This section is intended to save
time and avoid needless examination of experts unless the Court finds it necessary to examine them or when the
accused requested for examination of such expert.21 It applies to the report of a "Chemical Examiner or Assistant
Chemical Examiner". It does not extend to the report made by an Additional Chemical Examiner,22 or the Professor of
Anatomy at the Government Medical College.23 Certificate of the Radiologist will not be admissible without the
examination of the Radiologist.24 A report made by a municipal analyst cannot be used as evidence unless the analyst is
called as a witness in order to prove that the contents of the report are true.25 In a case under the Prevention of Food
Adulteration Act, 1954 the accused has a right to call Public Analyst to be examined and cross-examined and the fact
that the Certificate of Director of Central Laboratory supersedes a report of Public Analyst and is conclusive and final
did not limit this right of the accused. If, however, the Court finds that such a prayer to examine the Public Analyst is
made for the purpose of vexation and delay or for defeating the ends of justice the Court can reject such a prayer.26
Similarly, as regard the report of Finger Prints Bureau as long as the report of the Director of the Finger Prints Bureau
shows that his opinion is based on observations which lead to a conclusion that his opinion can be accepted, there is no
necessity of examining the person making the report. But should there be any doubt it can always be decided by the
calling of the person making the report.27 Report on handwriting filed by Deputy Government Examiner who is not
included in S. 293 (4) (c) CrPC would require proof, the Deputy Government Examiner would be called to prove the
same.28 On the facts of each case the Court has to exercise the discretion whether expert has to be examined.29
Page 586
Where the evidence is wanting that the blood-stained clothes were sealed on the spot after recovery, and they were kept
in sealed condition till they were sent to the Chemical Examiner, the evidence of recovery has no value.30 Test
Certificate for analysis of cement singed by same person on behalf of the Joint Director (Chemicals) does not fall within
the category of Scientific Experts.31 Mere delay cannot impute any infirmity to it as each case has to be seen on its own
merits. When the lapse on the prosecution was only a technical one, inasmuch as, the document in question was already
on record and was also read in evidence by the trial Magistrate only formal permission to tender it in evidence cannot be
declined.32
3. Post-mortem report.
Postmortem report is not one of those documents which falls under sub-sec. (4) of S. 293, CrPC.33 Regarding
post-mortem examination, the doctor's testimony in Court is necessary.34 Even though the genuineness of the
documents viz injury report is not disputed, the Court can still call the doctor for examination/cross-examination.35
Where the doctor who conducted the postmortem was not examined in the case, the post-mortem report was exhibited
through compounder who admitted in his cross-examination that he was not present at the time of the post-mortem,
recourse to the provisions of S. 294 CrPC was also not taken, held the prosecution failed to prove that the death of the
deceased was due to homicidal violence; the conviction of the accused for offence under S. 302 IPC was found not
sustainable.36
4. Determination of age.
A finding as to the age of a person cannot be based merely on the certificate of the Radiologist. It is necessary to
examine the Radiologist for proving the Certificate.37
5. Sending of samples.
It is wholly unnecessary to send all the bottles recovered by the police in the presence of panchas and which contain the
same stuff for purpose of analysis.38
6. Report of Chemical Examiner.

The Chemical Examiner's duty is to indicate the number of blood stains found by him on each exhibit and the extent of
each stain unless they are two minute or too numerous to be described in detail. Merely to say that blood was detected
on an exhibit is not enough. It may well lead to a miscarriage of justice compelling judges to acquit when they would
have convicted had the report been more revealing.39 It was not obligatory on the part of the analyst to give the details
of the results of each test. He is a scientific expert. His report could be used as evidence even without his examination.40
This provision permits receipt of report of the State of Forensic Laboratory without the examination of the author of the
report concerned. But before that could be done, there must be proof that the chemical testing and analytical Laboratory
which has given the report is a State Forensic Science Laboratory.41
Accused has a right to call Public Analyst to be examined and cross examined.42 Report of Public Analyst is not
admissible under this section.43
Section 293 renders admissible the report of the chemical examiner as a whole including the averments with regard to
the condition of the sample and the seals thereon and the manner of its receipt.44 Where the opinion of the medical
officer is based on the report of the chemical examiner, and the report of the chemical examiner is on the record of the
case, such report of the chemical examiner is admissible in evidence.45
No hard and fast rule can be laid down as regards the value to be attached to the report of the chemical examiner.
Page 587
Section 293, CrPC provides that the report of scientific experts may be used as evidence in any inquiry, trial or other
proceedings of the Court. The chemical examiner does not, as rule, give an opinion as to the cause of death but merely
gives report of the chemical examination of the substance sent to him. The report does not require any formal proof.46
It is open to the Court if it thinks fit to call the chemical examiner and examine him as to the subject matter of the
report.47
7. Non-examination of officials.
It is not incumbent on the prosecution to examine any or every concerned official within the office of the Chemical
Examiner with regard to the safe custody of the sample therein and its failure to do so does not introduce any infirmity
in its case.48 The use of the word 'document ' in this section can lead to an inference that not only the opinion of the
chemical examiner but all that is stated in the report becomes admissible without formal proof.49 Report of F.S.L. is
admissible in evidence in view of the provisions of S. 293 CrPC.50 There is no necessity to examine any witness to
prove the Excise Control Laboratory Report.51 Report of Chemical Examiner to the effect that seals on the sample were
inact when it was examined by him is considered to be a sufficient safeguard against any mischief that could be
perpetrated in the office of the Chemical Examiner.52 Where it is not clear whether the office of the Assistant State
Examiner of the documents would fall within the purview of S. 293 Cr.P.C., without examining the expert as a witness
in the Court, no reliance can be placed on his report.53
The report given by Chemical Examiner of Government Opium and Alkaloid Factory is not admissible in evidence
under S. 293 Cr.P.C.54 The report of the Fertiliser Quality Control Laboratory Hyderabad is by one of the experts
mentioned in S. 293 Cr.P.C., hence is not admissible in evidence without examination of the author of the report.55
Public Analyst is not one of the experts mentioned in Ss. 291, 292 and 293 Cr.P.C., the accused has right to examine
and cross-examine him.56
8. Unsigned report.
When the report of Ballistic Expert is not signed by the Director of Deputy Director of State Forensic Science
Laboratory, the said report cannot be read in evidence without the examination of Ballistic expert.57 Serological test
reports are only corroborative piece of evidence.58
9. Court may summon and examine any expert (Sub-sec. (2)).

In the absence of any request from the accused for summoning the Chemical Analyser and unless he shows that the
report is deficient and needs personal elucidation, the trial Court can admit it in evidence and need not call the Analyser
for examination.59 Where report of a finger print expert is used as evidence against the accused, neitherthe Court feeling
it necessary to examine him nor the prosecution or the accused filing any applicationto summon him, an objection
cannot be taken at the appellate stage against non-examination of the expert.60
The section uses the word "may" and not "shall". On the facts of each case the Court has to exercise the discretion
whether expert has to be examined.61 Cases may arise in which it may be necessary in the interests of justice that the
Chemical Examiner be called and examined as a witness, e.g., in a matter of arsenic poisoning. It is not necessary to call
the Chemical Examiner in all cases in which a chemical analysis has been made and in which the result of such analysis
is a determining factor in the case.62
Under S. 293(3) Court has power to issue express direction for the presence of analyst. Whether an Analyst or official is
to be summoned, whether there is serious infirmity in not examining such witness etc. have to be decided on the facts of
each case.63
Page 588
10. Sub-sec.(4).
Sub-section (4) enumerates the Government Scientific Experts whose reports fall under the present section. Director
includes Joint Director. The report signed by the Joint Director of Forensic Science Laboratory is admissible in
evidence.64 The report of the Professor of Forensic Medicines is inadmissible in evidence under S. 293(4) Cr.P.C.65 In
prosecution under S. 8 of the NDPS Act for recovery of opium, the report of chemical examiner or FSL is admissible in
evidence; examination of the author of the report is not necessary.66 The CFSL report given by a non-scientific expert is
not admissible in evidence.67 The report of the ballistic expert submitted under the signatures of Junior Scientific
Officer (Ballistic) of Central Forensic Laboratory, falls under S. 293 (4 )( e) and can be read in evidence without any
formal proof.68 Report of DNA Finger Printing issued from D.N.A. Finger Printing and Diagnostic Centre, Hyderabad
which is a Central Government undertaking for conducting D.N.A. test can be admitted in evidence without
examination of the expert under of S. 293 CrPC.69 What sub-section (4) of S. 293 envisages is that the Court accept the
documents issued by any of six officers enumerated therein as valid evidence without examining the author of the
documents.70
11. Report of ballistic expert.

Where prayer for cross-examination of ballistic experts is made, report is admissible without examination of the
ballistic expert.71
12. Senior Scientific Assistant, Central Forensic Science Laboratory.

A Senior Scientific Assistant (Chemistry), Central Forensic Science Laboratory, is not one the officers mentioned in
Section 293 Cr.P.C., but he is an expert and his opinion is relevant piece of evidence under S. 45 Evidence Act.72
Where request is not made by the defence to summon expert of Forensic Science Laboratory, the report was also not
challenged when it was produced on record during examination by Investigating Officer, the Xerox copy of the report of
the Forensic Science Laboratory was held admissible in evidence, could be relied upon.73
13. Report of Chemical Examiner.

The Report of the chemical examiner even if not exhibited, is per se admissible in evidence.74 Where objection as to the
admissibility of the report of the chemical examiner to government is not taken before the trial Court, the report is
admissible in evidence.75 Where the accused does not exercise his option to summon chemical examiner, the Court 's
order admitting report of the chemical examiner in evidence is proper.76 The Report of the chemical examiner unless it
contains reasons has no value.77
14. Report of serologist.

The report of serologist is admissible in evidence in view of S. 293 (4), Cl. (f) even if serologist is not examined in the
case.78
15. Private goldsmith.

The report of a private goldsmith who is not a Government Scientific expert is not covered by S. 293 Cr.P.C., and is not
admissible in evidence unless author of the report is examined.79
** Substituted for cl. (b) by the CrPC (Amendment) Act, 2005 (25 of 2005), S. 26. Enforced w.e.f. 23-6-2006 vide Notification No. S.O.
Page 589
923(E), dt. 21-6-2006. Prior to its substitution read as under :
"(b) the Chief Inspector of Explosives;".
* [*] These words are inserted by Act No. 45 of 1978, S. 21.
+ Added by the CrPC (Amendment) Act, 2005 (25 of 2005),S. 26. Enforced w.e.f. 23-6-2006 vide Notification No. S.O. 923(E), dt.
21-6-2006.
20 VideLaw Commission's 41st Report, Vol. I, pp. 327, 328, para 41.6.
21 Md. Abdul Matlib v. State of Assam, 1990 CrLJ 2393, 2398 (Gau).
22 Queen Empress v. Atul Muchi, (1884) 10 Cal 1026.
23 Emperor v. Ahilya Manaji, (1922) 24 Bom LR 803: Emperor v. Ahilya Manaji, 47 Bom 74.
24 Ganesan v. Inspector of Police, 1990(2) Crimes 353 (Mad): Ganesan v. Inspector of Police, 1990 MLJ (Crl) 268.
25 Suleman Shamji, v (1943) 45 Bom LR 895.
26 Ram Dayal v. Municipal Corp. of Delhi, AIR 1970 SC 366: Ram Dayal v. Municipal Corp. of Delhi, (1969) 3 SCC 35: Ram Dayal v.
Municipal Corp. of Delhi, 1970 CrLJ 515.
27 Himachal Pradesh Administration v. Om Prakash, AIR 1972 SC 975: Himachal Pradesh Administration v. Om Prakash, (1972) 1 SCC
249: Himachal Pradesh Administration v. Om Prakash, 1972 CrLJ 606; Chauthu Ram v. State of Rajasthan, 2005 CrLJ 1051 (1054) (Raj).
28 Sonam Tshering Bhutia v. State of Sikkim, 2004 CrLJ 3136 (3137, 3138) (Sikk).
29 State of Kerala v. Arun Valenchery, 2002 CrLJ 2512: State of Kerala v. Arun Valenchery, 2001 (3) KLT 860 (866) (Ker).
30 State of Maharashtra v. Prabhu Barku Gade, 1995 CrLJ 1432 (1437) (Bom-DB): State of Maharashtra v. Prabhu Barku Gade, 1995 (2)
Bom CR 188.
31 Mariappan v. State, 1990 Mad LW (Crl) 190.
32 Surinder Singh v. State of Punjab, 1989(1) Crimes 138 (P&H).
33 Sowam Kisku v. State of Bihar, 2006 CrLJ 2526 (2527) (DB): Sowam Kisku v. State of Bihar, 2006 (2) AIR Jhar R 128 (Jhar).
34 Kudumula Pratap Reddy v. State of A.P., 1985 CrLJ 1446 (AP-DB); Sowam Kisku v. State of Bihar, 2006 CrLJ 2526 (2527) (DB):
Sowam Kisku v. State of Bihar, 2006 (2) AIR Jhar R 128 (Jhar).
35 Virisingh v. State of U.P., 1992 CrLJ 1383 (All).
36 Sowam Kisku v. State of Bihar, 2006 CrLJ 2526 (2527, 2528) (DB): Sowam Kisku v. State of Bihar, 2006 (2) AIR Jhar R 128 (Jhar).
37 Ganesan v. State, 1989 Mad LW (Crl) 530.
38 Vijendrajit Ayodhya Prasad v. State of Bombay, AIR 1953 SC 247: Vijendrajit Ayodhya Prasad v. State of Bombay, 1953 CrLJ 1097
(SC).
39 Prabhu Babaji Navle v. State of Bombay, AIR 1956 SC 51: Prabhu Babaji Navle v. State of Bombay, 1956 CrLJ 147, 149.
40 Ismail v. State of Kerala, 1991 CrLJ 2945 (Ker).
41 Subramaniam Chettiar v. State, 1989 Mad LW (Crl) 183.
42 Ram Dayal v. Delhi Corporation, AIR 1970 SC 366: Ram Dayal v. Delhi Corporation, (1969) 3 SCC 35: Ram Dayal v. Delhi
Corporation, 1970 CrLJ 515.
43 Champaklal v. Natwarlal, 1970 CrLJ 128 (Guj): Champaklal v. Natwarlal, (1968) GLR 317.
44 Bhagwan Dass v. State of Punjab, 1982 CrLJ 2138 (P&H-DB).
45 State of A.P. v. Gangula Satya Murthy, AIR 1997 SC 1588: State of A.P. v. Gangula Satya Murthy, (1997) 1 SCC 272: State of A.P. v.
Gangula Satya Murthy, 1997 CrLJ 774: State of A.P. v. Gangula Satya Murthy, 1997 SCC (Cri) 325.
Page 590
46 Bhupinder Singh v. State of Punjab, AIR 1988 SC 1011: Bhupinder Singh v. State of Punjab, (1988) 3 SCC 513: Bhupinder Singh v.
State of Punjab, 1988 CrLJ 1097 (1011).
47 Bhupinder Singh v. State of Punjab, AIR 1988 SC 1011: Bhupinder Singh v. State of Punjab, (1988) 3 SCC 513: Bhupinder Singh v.
State of Punjab, 1988 CrLJ 1097 (1011).
48 Bhagwan Dass v. State of Punjab, 1982 CrLJ 2138 (P&H-DB).
49 State of Punjab v. Nachattar Singh, 1982 CrLJ 1197, 1199 (P&H-DB).
50 Shyam Sunder v. State of Haryana, 2007 CrLJ (NOC) 507 (P&H-DB).
51 Rajesh Kumar v. State Govt. of NCT of Delhi, (2008) 4 SCC 493: Rajesh Kumar v. State Govt. of NCT of Delhi, (2008) 2 SCC (Cri) 366.
52 State of Punjab v. Nachhattar Singh, 1982 CrLJ 1197, 1201 (P&H-DB).
53 State of Maharashtra v. Danu, 2001 (1) Bom LR 34 (45) (SC): State of Maharashtra v. Danu, AIR 2000 SC 1691: State of Maharashtra
v. Danu, AIR 2000 SCW 1617: State of Maharashtra v. Danu, (2000) 6 SCC 269: State of Maharashtra v. Danu, 2000 CrLJ 2301; Nirmal
v. State of Punjab, (2001) 4 Rec Cri R 622: Nirmal v. State of Punjab, 2002 CrLJ 447 (449) (P&H); Kashi Kant Jha v. State of Sikkim, 2004
CrLJ 2159 (2161) (Sikk) (Trial pending for more than two years, summoning refused).
54 Kaniram v. State of M.P., 2000 (3) Crimes 329 (MP).
55 Visakha Agro Chemicals (P) Ltd. v. Fertiliser Inspector Cum-Asstt. Director, 1997 (2) Crimes 648 (AP).
56 Dilip Singh v. State of Rajasthan, 1997 (1) Crimes 425 (Raj).
57 Jai Mal Singh v. State, 1987(1) Crimes 760, 765 (All).
58 Sherappa v. State of Karnataka, 1991 CrLJ 2215: Sherappa v. State of Karnataka, 1990 (3) Crimes 645, 649 (Kant-DB).
59 Dasu v. Maharashtra, 1985 CrLJ 1933 (Bom).
60 Phool Kumar v. Delhi Administration, AIR 1975 SC 905: Phool Kumar v. Delhi Administration, (1975) 1 SCC 797.
61 State of Kerala v. Arun Valenchary, (2001) 2 Ker LJ 809: State of Kerala v. Arun Valenchary, (2001) 3 Ker LT 860: State of Kerala v.
Arun Valenchary, 2002 CrLJ 2512 (2516) (Ker-DB).
62 Bachha, v (1934) 57 All 256; disapproving Happu, v (1933) 56 All 228; Behram Irani, v (1944) 47 Bom LR 481.
63 State of Kerala v. Arun Valenchary, (2001) 2 Ker LJ 809: State of Kerala v. Arun Valenchary, (2001) 3 Ker LT 860: State of Kerala v.
Arun Valenchary, 2002 CrLJ 2512 (2516) (Ker-DB).
64 Ammini v. State of Kerala, AIR 1998 SC 260: Ammini v. State of Kerala, 1998 AIR SCW 4231: Ammini v. State of Kerala, (1998) 2 SCC
301: Ammini v. State of Kerala, 1998 CrLJ 481: Ammini v. State of Kerala, 1998 SCC (Cri) 618: Ammini v. State of Kerala, 1997 (4) Crimes
131; Yelachari Manohar v. State of A.P., 2005 CrLJ 4593 (AP-DB); Shyam Sunder v. State of Haryana, 2007 CrLJ (NOC) 507 (P&H-DB).
65 Satbir Singh v. State of Haryana, 1995 CrLJ 739 (P&H-DB).
66 State of M.P. v. Ghanshyam, 2008 CrLJ 107 (113) (MP).
67 Nizamuddin v. State, 1995 CrLJ 661 (Del); Shankara v. State (Delhi Admn.), 1995 (1) Crimes 112 (Del); Amarjit Singh v. State (Delhi
Admn.), 1995 CrLJ 1623: Amarjit Singh v. State (Delhi Admn.), 1995 (1) Crimes 777 (Del-DB); Heera Lal v. State, 1994 (3) Crimes 10
(Del).
68 State of Himachal Pradesh v. Mast Ram, (2004) 8 SCC 660: State of Himachal Pradesh v. Mast Ram, 2004 CrLJ 4973 (4976) (SC).
69 Geetha v. State of Kerala, 2005 CrLJ 2780 (2783) (Ker): Geetha v. State of Kerala, 2005 (2) KLT 407.
70 State of Himachal Pradesh v. Mast Ram, 2004 CrLJ 4973 (4976) (SC).
71 Balak Ram v. State of Rajasthan, 1994 CrLJ 2451, 2461, 2462 (Raj-DB): Balak Ram v. State of Rajasthan, 1994 (1) WLN 691.
72 Amarjit Singh v. State (Delhi Admn.), 1995 CrLJ 1623 (Del-DB): Amarjit Singh v. State (Delhi Admn.), 1995 (1) Crimes 777; State of
H.P. v. Edward Samuel Chareton, 2001 CrLJ 1356: State of H.P. v. Edward Samuel Chareton, 2001 (1) Crimes 50 (54) (HP) (The Report is
not admissible in evidence, unless the signatory of the report is examined to pure it.) Mizamuddin v. State, 1995 (1) Crimes 21 (Del) (The
examination of the author of the report is necessary).
Page 591
73 Dalwadi Govindbhai v. State of Gujarat, 2004 CrLJ 2767 (2772) (Guj-DB): Dalwadi Govindbhai v. State of Gujarat, (2004) 2 GLR
1285.
74 Hassan Murtaza v. State of Haryana, 1999 CrLJ 3446 (P&H-DB); Shatrughan v. State of M.P., 1993 CrLJ 120 (MP); see also Ruben
Joseph v. State, 1993 CrLJ 2138 (Ker); State of M.P. v. Ghanshyam, 2008 CrLJ 107 (113) (MP) (Report of FSL admissible in evidence,
examination of author of report not necessary).
75 Ishwar Singh v. State of M.P., 2000 (2) Crimes 50 (MP).
76 Parshotam Lal v. State, 2001 CrLJ 3378 (3389) (J&K).
77 Umakant Bajpayee v. State of U.P., 1993 (1) Crimes 1150 (All).
78 Rajesh Rai v. State of Sikkim, (2002) 3 Cur Cri R 95: Rajesh Rai v. State of Sikkim, 2002 CrLJ 1385 (1390) (Sikkim-DB).
79 Malchand Saraogi v. Assistant Collector of Customs & Central Excise, Gauhati, 1993 (2) Crimes 367 (Gau).
Ratanlal: Code of Criminal Procedure 21st Edition/CHAPTER XXIII Evidence in Inquiries and Trials/ S. 293.
CHAPTER XXIII
Evidence in Inquiries and Trials
S. 293.
Reports of certain Government Scientific experts.
(1) Any document purporting to be a report under the hand of a Government scientific expert
to whom this section applies, upon any matter or thing duly submitted to him for
examination or analysis and report in the course of any proceeding under this Code, may be
used as evidence in any inquiry, trial or other proceedings under this Code.1146
(2) The Court may, if it thinks fit, summon and examine any such expert as to the
subject-matter of his report.
(3) Where any such expert is summoned by a Court and he is unable to attend personally, he
may, unless the Court has expressly directed him to appear personally, depute any
responsible officer working with him to attend the Court, if such officer is conversant with
the facts of the case and can satisfactorily depose in Court on his behalf.
(b) 32[the Chief Controller of Explosives;]
(e) the Director, 33[Deputy Director or Assistant Director] of a Central Forensic Science
(f) the Serologist to the Government.
(g) 34[any other Government Scientific Expert specified by notification by the Central
Government for this purpose.]
Page 592
COMMENTS1150
1. Legislative changes.--See Synopsis No. 1. Legislative changes under Section 292ante. The Law
Commissioners in 41st Report observed :
"41.6. Section 510 will deal with other expert reports where security is not a consideration. We propose to add
two more experts in that list, namely :
(i) the Director of the Haffkeine Institute, Bombay, and
(ii) the Director of the Central Forensic Laboratory.
We are not convinced that handwriting experts employed by Government should be treated in the same way.
Their evidence is almost always subject to controversy and no special value can be 1147attached to their reports
merely because the expert is employed by Government. Nor can we justify the extension of this provision to
cover ordinary medical or veterinary experts. The procedure here is very special and must be confined to special
experts".
In an earlier Report (14th Report, Vol. II, pages 848, 849, para 26), the Commission noted that Section 510(2),
as amended in 1955, makes it obligatory for the Court to summon the Chemical Examiner or other officer
mentioned in sub-section (1), if either party so desires. The Commission regarded this provision as
unsatisfactory and recommended that it should be left to the discretion of the Court to summon such officers.
We agree with this recommendation and are suggesting an amendment to implement it.35
CrPC, Amending Act, (45 of 1978).--Sub-section (4) has been amended to include Deputy Director and
Assistant Directors of Central and State Forensic Science Laboratories in the List of Government scientific
experts.
CrPC (Amendment) Act , 2005 (25 of 2005).--In Section 293 of the principal Act, in sub-section (4),--
(a) for clause (b), the following clause shall be substituted, namely:?
"(b) the Chief Controller of Explosives,"
(b) after clause (f), the following clause shall be added, namely:?
"(g) any other Government Scientific Expert specified by notification by the Central Government for this
purpose."
Notes on Clauses
The designation "the Chief Inspector of Explosives" appearing in the Indian Explosives Act , 1884 has been
changed to "the Chief Controller of Explosives" by the Indian Explosives (Amendment) Act, 1978. The
opportunity has therefore been taken to make the consequential amendment to Section 293 where the expression
Page 593
"the Chief Inspector of Explosives" occurs. (Notes on Clauses, Clause 26)
This amendment in the section has come into force w.e.f. 23-6-2006 vide Notification No. S.O. 923(E), dt.
21-6-2006.
2. Scope and application.--This section makes provision for accepting in evidence reports made by
certain Government Scientific Experts.
This section is not controlled or regulated by the provisions of S. 294. The section provides for reading in
evidence certain documents purported to be report under the hand of a Government Scientific Expert as
enumerated in sub-s.(4) which include Chemical Examiner or Assistant Chemical Examiner to Government.
This section is intended to save time and avoid needless examination of experts unless the Court finds it
necessary to examine them or when the accused requested for examination of such expert.36 It applies to the
report of a "Chemical Examiner or Assistant Chemical Examiner". It does not extend to the report made by an
Additional Chemical Examiner,37 or the Professor of Anatomy at the Government Medical College.38
Certificate of the Radiologist will not be admissible without the examination of the Radiologist.39 A report made
by a municipal analyst cannot be used as evidence unless the analyst is called as a witness in order to prove that
the contents of the report are true.40In a case under the Prevention of Food Adulteration Act , 1954 the accused
has a right to call Public Analyst to be examined and cross-examined and the fact that the Certificate of Director
of Central Laboratory supersedes a report of Public Analyst and is conclusive and final did not limit this right of
the accused. If, however, the Court finds that such a prayer to examine the Public Analyst is made for the
purpose of vexation and delay or for defeating the ends of justice the Court can reject such a prayer.41 Similarly,
as 1148regard the report of Finger Prints Bureau as long as the report of the Director of the Finger Prints Bureau
shows that his opinion is based on observations which lead to a conclusion that his opinion can be accepted,
there is no necessity of examining the person making the report. But should there be any doubt it can always be
decided by the calling of the person making the report.42 Report on handwriting filed by Deputy Government
Examiner who is not included in S. 293 (4) (c) CrPC would require proof, the Deputy Government Examiner
would be called to prove the same.43 On the facts of each case the Court has to exercise the discretion whether
expert has to be examined.44
Where the evidence is wanting that the blood-stained clothes were sealed on the spot after recovery, and they
were kept in sealed condition till they were sent to the Chemical Examiner, the evidence of recovery has no
value.45 Test Certificate for analysis of cement singed by same person on behalf of the Joint Director
(Chemicals) does not fall within the category of Scientific Experts.46 Mere delay cannot impute any infirmity to
it as each case has to be seen on its own merits. When the lapse on the prosecution was only a technical one,
inasmuch as, the document in question was already on record and was also read in evidence by the trial
Magistrate only formal permission to tender it in evidence cannot be declined.47
3. Post-mortem report.--Postmortem report is not one of those documents which falls under
sub-sec. (4) of S. sec. 293 , CrPC .48 Regarding post-mortem examination, the doctor's
testimony in Court is necessary.49 Even though the genuineness of the documents viz injury
report is not disputed, the Court can still call the doctor for examination/cross-examination.50
Where the doctor who conducted the postmortem was not examined in the case, the post-mortem
report was exhibited through compounder who admitted in his cross-examination that he was not
present at the time of the post-mortem, recourse to the provisions of S. 294 CrPC was also not
taken, held the prosecution failed to prove that the death of the deceased was due to homicidal
violence; the conviction of the accused for offence under S. 302 IPC was found not sustainable.
Page 594
51
4. Determination of age.--A finding as to the age of a person cannot be based merely on the
certificate of the Radiologist. It is necessary to examine the Radiologist for proving the
Certificate.52
5. Sending of samples.--It is wholly unnecessary to send all the bottles recovered by the police in
the presence of panchas and which contain the same stuff for purpose of analysis.53
6. Report of Chemical Examiner.--The Chemical Examiner's duty is to indicate the number of

blood stains found by him on each exhibit and the extent of each stain unless they are two minute
or too numerous to be described in detail. Merely to say that blood was detected on an exhibit is
not enough. It may well lead to a miscarriage of justice compelling judges to acquit when they
would have convicted had the report been more revealing.54 It was not obligatory on the part of
the analyst to give the details of the results of each test. He is a scientific expert. His report could
be used as evidence even without his examination.55 This provision permits receipt of report of
the State of Forensic Laboratory without the examination of the author of the report concerned.
But before that could be done, there must be proof 1149that the chemical testing and analytical
Laboratory which has given the report is a State Forensic Science Laboratory.56
Accused has a right to call Public Analyst to be examined and cross examined.57 Report of Public Analyst is not
admissible under this section.58
Section 293 renders admissible the report of the chemical examiner as a whole including the averments with
regard to the condition of the sample and the seals thereon and the manner of its receipt.59 Where the opinion of
the medical officer is based on the report of the chemical examiner, and the report of the chemical examiner is
on the record of the case, such report of the chemical examiner is admissible in evidence.60
No hard and fast rule can be laid down as regards the value to be attached to the report of the chemical examiner.
Section 293 , CrPC provides that the report of scientific experts may be used as evidence in any inquiry, trial
or other proceedings of the Court. The chemical examiner does not, as rule, give an opinion as to the cause of
death but merely gives report of the chemical examination of the substance sent to him. The report does not
require any formal proof.61
It is open to the Court if it thinks fit to call the chemical examiner and examine him as to the subject matter of
the report.62
7. Non-examination of officials.--It is not incumbent on the prosecution to examine any or every

concerned official within the office of the Chemical Examiner with regard to the safe custody of
the sample therein and its failure to do so does not introduce any infirmity in its case.63 The use
of the word 'document' in this section can lead to an inference that not only the opinion of the
chemical examiner but all that is stated in the report becomes admissible without formal proof.64
Report of F.S.L. is admissible in evidence in view of the provisions of S. 293 CrPC .65 There is
no necessity to examine any witness to prove the Excise Control Laboratory Report.66Report of
Page 595
Chemical Examiner to the effect that seals on the sample were inact when it was examined by
him is considered to be a sufficient safeguard against any mischief that could be perpetrated in
the office of the Chemical Examiner.67 Where it is not clear whether the office of the Assistant
State Examiner of the documents would fall within the purview of S. 293 Cr.P.C., without
examining the expert as a witness in the Court, no reliance can be placed on his report.68
The report given by Chemical Examiner of Government Opium and Alkaloid Factory is not admissible in
evidence under S. 293 Cr.P.C.69 The report of the Fertiliser Quality Control Laboratory Hyderabad is by one of
the experts mentioned in S. 293 Cr.P.C., hence is not admissible in evidence without examination of the author
of the report.70 Public Analyst is not one of the experts mentioned in Ss. 291, 292 and 293 Cr.P.C., the accused
has right to examine and cross-examine him.71
8. Unsigned report.--When the report of Ballistic Expert is not signed by the Director of Deputy
Director of State Forensic Science Laboratory, the said report cannot be read in evidence without
the examination of Ballistic expert.72 Serological test reports are only corroborative piece of
evidence.73
9. Court may summon and examine any expert (Sub-sec. (2)).--In the absence of any request
from the accused for summoning the Chemical Analyser and unless he shows that the report is
deficient and needs personal elucidation, the trial Court can admit it in evidence and need not call
the Analyser for examination.74 Where report of a finger print expert is used as evidence against
the accused, neither the Court feeling it necessary to examine him nor the prosecution or the
accused filing any application to summon him, an objection cannot be taken at the appellate stage
against non-examination of the expert.75
The section uses the word "may" and not "shall". On the facts of each case the Court has to exercise the
discretion whether expert has to be examined.76 Cases may arise in which it may be necessary in the interests of
justice that the Chemical Examiner be called and examined as a witness, e.g., in a matter of arsenic poisoning. It
is not necessary to call the Chemical Examiner in all cases in which a chemical analysis has been made and in
which the result of such analysis is a determining factor in the case.77
Under S. 293(3) Court has power to issue express direction for the presence of analyst. Whether an Analyst or
official is to be summoned, whether there is serious infirmity in not examining such witness etc. have to be
decided on the facts of each case.78
10. Sub-sec. (4).--Sub-section (4) enumerates the Government Scientific Experts whose reports fall
under the present section. Director includes Joint Director. The report signed by the Joint Director
of Forensic Science Laboratory is admissible in evidence.79 The report of the Professor of
Forensic Medicines is inadmissible in evidence under S. 293(4) Cr.P.C.80 In prosecution under
S. 8 of the NDPS Act for recovery of opium, the report of chemical examiner or FSL is
admissible in evidence; examination of the author of the report is not necessary.81 The CFSL
report given by a non-scientific expert is not admissible in evidence.82 The report of the ballistic
expert submitted under the signatures of Junior Scientific Officer (Ballistic) of Central Forensic
Laboratory, falls under S. 293 (4)(e) and can be read in evidence without any formal proof.83
Report of DNA Finger Printing issued from D.N.A. Finger Printing and Diagnostic Centre,
Hyderabad which is a Central Government undertaking for conducting D.N.A. test can be
Page 596
admitted in evidence without examination of the expert under S. 293 of CrPC .84 What
sub-section (4) of S. 293 envisages is that the Court accept the documents issued by any of six
officers enumerated therein as valid evidence without examining the author of the documents.85
11. Report of ballistic expert.--Where prayer for cross-examination of ballistic experts is made,
report is admissible without examination of the ballistic expert.86
12. Senior Scientific Assistant, Central Forensic Science Laboratory.--A Senior Scientific
Assistant (Chemistry), Central Forensic Science Laboratory, is not one the officers mentioned in
Section 293 Cr.P.C., but he is an expert and his opinion is relevant piece of evidence under S. 45
Evidence Act .87
Where request is not made by the defence to summon expert of Forensic Science Laboratory, the report was also
not challenged when it was produced on record during examination by Investigating Officer, the Xerox copy of
the report of the Forensic Science Laboratory was held admissible in evidence, could be relied upon.88
13. Report of Chemical Examiner.--The Report of the chemical examiner even if not exhibited, is
per se admissible in evidence.89 Where objection as to the admissibility of the report of the
chemical examiner to government is not taken before the trial Court, the report is admissible in
evidence.90 Where the accused does not exercise his option to summon chemical examiner, the
Court's order admitting report of the chemical examiner in evidence is proper.91 The Report of
the chemical examiner unless it contains reasons has no value.92
14. Report of serologist.--The report of serologist is admissible in evidence in view of S. 293 (4),
Cl. (f) even if serologist is not examined in the case.93
15. Private goldsmith.--The report of a private goldsmith who is not a Government Scientific expert
is not covered by S. 293 Cr.P.C., and is not admissible in evidence unless author of the report is
examined.94
32 Substituted for cl. (b) by the CrPC (Amendment) Act, 2005 (25 of 2005), S. 26 . Enforced w.e.f. 23-6-2006 videNotification
No. S.O. 923(E), dt. 21-6-2006. Prior to its substitution read as under :"(b) the Chief Inspector of Explosives;".
33 Inserted by Act No. 45 of 1978, S. 21 (w.e.f. 18-12-1978).
34 Added by the CrPC (Amendment) Act, 2005 (25 of 2005), S. 26 . Enforced w.e.f. 23-6-2006 videNotification No. S.O.
923(E), dt. 21-6-2006.
35 VideLaw Commission's 41st Report, Vol. I, pp. 327, 328, para 41.6.
36 Md. Abdul Matlib v. State of Assam,1990 CrLJ 2393, 2398 (Gau).
37 Queen Empress v. Atul Muchi, (1884) 10 Cal 1026.
38 Emperor v. Ahilya Manaji, (1922) 24 BomLR 803: 47 Bom 74.

Page 597
39 Ganesan v.Inspector of Police, 1990 (2) Crimes 353(Mad) : 1990 MLJ(Crl) 268.
40 Suleman Shamji,(1943) 45 Bom LR 895.
41 Ram Dayal v.Municipal Corp. of Delhi, AIR 1970 SC 366 :(1969) 3 SCC 35 : 1970 CrLJ 515.
42 Himachal Pradesh Administration v. Om Prakash, AIR 1972 SC 975 :(1972) 1 SCC 249 : 1972 CrLJ 606; Chauthu Ram v.
State of Rajasthan , 2005 CrLJ 1051 (1054)(Raj) .
43 Sonam Tshering Bhutia v. State of Sikkim 2004 CrLJ 3136 (3137, 3138)(Sikk) .
44 State of Kerala v. Arun Valenchery, 2002 CrLJ 2512 : 2001 (3) KLT 860 (866)(Ker) .
45 State of Maharashtra v. Prabhu Barku Gade 1995 CrLJ 1432 (1437)(Bom-DB) : 1995 (2) BomCR 188.
46 Mariappan v.State, 1990 MadLW(Crl) 190.
47 Surinder Singh v. State of Punjab,1989(1) Crimes 138 (P&H).
48 Sowam Kisku v. State of Bihar 2006 CrLJ 2526 (2527)(DB) : 2006 (2) AIRJharR 128(Jhar) .
49 Kudumula Pratap Reddy v.., 1985 CrLJ 1446(AP-DB) ; Sowam Kisku v. State of Bihar 2006 CrLJ 2526 (2527)(DB) : 2006 (2)
AIRJharR 128(Jhar) .
50 Virisingh v. State of U.P. 1992 CrLJ 1383(All) .
51 Sowam Kisku v. State of Bihar , 2006 CrLJ 2526 (2527, 2528)(DB) : 2006 (2) AIRJharR 128(Jhar) .
52 Ganesan v. State,1989 Mad LW (Crl) 530.
53 Vijendrajit Ayodhya Prasad v. State of Bombay,AIR 1953 SC 247 : 1953 CrLJ 1097 (SC).
54 Prabhu Babaji Navle v. State of Bombay,AIR 1956 SC 51 : 1956 CrLJ 147, 149.
55 Ismail v. State of Kerala,1991 CrLJ 2945 (Ker).
56 Subramaniam Chettiar v. State,1989 Mad LW (Crl) 183.
57 Ram Dayal v. Delhi Corporation,AIR 1970 SC 366 : (1969) 3 SCC 35 : 1970 CrLJ 515.
58 Champaklal v. Natwarlal,1970 CrLJ 128 (Guj) : (1968) GLR 317.
59 Bhagwan Dass v. State of Punjab,1982 CrLJ 2138 (P&H-DB).
60 State of A.P. v. Gangula Satya Murthy AIR 1997 SC 1588 : (1997) 1 SCC 272 : 1997 CrLJ 774 : 1997 SCC(Cri) 325.
61 Bhupinder Singh v. State of Punjab , AIR 1988 SC 1011 :(1988) 3 SCC 513 : 1988 CrLJ 1097 (1011).
62 Bhupinder Singh v. State of Punjab AIR 1988 SC 1011: (1988) 3 SCC 513 : 1988 CrLJ 1097 (1011).
63 Bhagwan Dass v. State of Punjab,1982 CrLJ 2138 (P&H-DB).
64 State of Punjab v. Nachattar Singh,1982 CrLJ 1197, 1199 (P&H-DB).
65 Shyam Sunder v. State of Haryana 2007 CrLJ(NOC) 507(P&H-DB) .
66 Rajesh Kumar v. State Govt. of NCT of Delhi , (2008) 4 SCC 493 : (2008) 2 SCC(Cri) 366.
67 State of Punjab v. Nachhattar Singh,1982 CrLJ 1197, 1201 (P&H-DB).
68 State of Maharashtra v. Danu 2001 (1) BomLR 34 (45)(SC) : AIR 2000 SC 1691 :AIR 2000 SCW 1617 : (2000) 6 SCC 269 :
2000 CrLJ 2301; Nirmal v. State of Punjab (2001) 4 RecCriR 622: 2002 CrLJ 447 (449)(P&H) ; Kashi Kant Jha v. State of Sikkim
2004 CrLJ 2159 (2161)(Sikk) (Trial pending for more than two years, summoning refused).
69 Kaniram v. State of M.P. , 2000 (3) Crimes 329(MP) .
70 Visakha Agro Chemicals (P) Ltd. v. Fertiliser Inspector Cum-Asstt. Director 1997 (2) Crimes 648(AP) .
71 Dilip Singh v. State of Rajasthan 1997 (1) Crimes 425(Raj) .

Page 598
72 Jai Mal Singh v. State,1987(1) Crimes 760, 765 (All).
73 Sherappa v. State of Karnataka,1991 CrLJ 2215 : 1990 (3) Crimes 645, 649 (Kant-DB).
74 Dasu v. Maharashtra,1985 CrLJ 1933 (Bom).
75 Phool Kumar v. Delhi Administration, AIR 1975 SC 905 :(1975) 1 SCC 797.
76 State of Kerala v. Arun Valenchary (2001) 2 KerLJ 809 :(2001) 3 KerLT 860: 2002 CrLJ 2512 (2516)(Ker-DB).
77 Bachha,(1934) 57 All 256; disapprovingHappu, (1933) 56 All 228; Behram Irani,(1944) 47 Bom LR 481.
78 State of Kerala v. Arun Valenchary ,(2001) 2 KerLJ 809 : (2001) 3 KerLT 860: 2002 CrLJ 2512 (2516)(Ker-DB) .
79 Ammini v. State of Kerala AIR 1998 SC 260 : 1998 AIRSCW 4231 : (1998) 2 SCC 301 : 1998 CrLJ 481 : 1998 SCC(Cri) 618 :
1997 (4) Crimes 131; Yelachari Manohar v. State of A.P., 2005 CrLJ 4593(AP-DB) ; Shyam Sunder v. State of Haryana 2007
CrLJ(NOC) 507(P&H-DB) .
80 Satbir Singh v. State of Haryana 1995 CrLJ 739(P&H-DB) .
81 State of M.P. v. Ghanshyam , 2008 CrLJ 107 (113)(MP) .
82 Nizamuddin v. State , 1995 CrLJ 661(Del) ; Shankara v. State (Delhi Admn.) , 1995 (1) Crimes 112(Del) ; Amarjit Singh v. State
(Delhi Admn.) 1995 CrLJ 1623 : 1995 (1) Crimes 777(Del-DB) ; Heera Lal v. State 1994 (3) Crimes 10(Del) .
83 State of Himachal Pradesh v. Mast Ram (2004) 8 SCC 660 : 2004 CrLJ 4973(SC) .
84 Geetha v. State of Kerala, 2005 CrLJ 2780 (2783)(Ker) : 2005 (2) KLT 407.
85 State of Himachal Pradesh v. Mast Ram 2004 CrLJ 4973 (4976)(SC) .
86 Balak Ram v. State of Rajasthan 1994 CrLJ 2451, 2461, 2462(Raj-DB) : 1994 (1) WLN 691.
87 Amarjit Singh v. State (Delhi Admn.) 1995 CrLJ 1623(Del-DB) : 1995 (1) Crimes 777; State of H.P. v. Edward Samuel
Chareton 2001 CrLJ 1356 : 2001 (1) Crimes 50 (54)(HP) (The Report is not admissible in evidence, unless the signatory of the
report is examined to pure it.) Mizamuddin v. State 1995 (1) Crimes 21(Del) (The examination of the author of the report is
necessary).
88 Dalwadi Govindbhai v. State of Gujarat 2004 CrLJ 2767 (2772)(Guj-DB) :(2004) 2 GLR 1285.
89 Hassan Murtaza v. State of Haryana 1999 CrLJ 3446(P&H-DB) ; Shatrughan v. State of M.P. 1993 CrLJ 120(MP) ; see also
Ruben Joseph v. State 1993 CrLJ 2138(Ker) ; State of M.P. v. Ghanshyam 2008 CrLJ 107 (113)(MP) (Report of FSL admissible in
evidence, examination of author of report not necessary).
90 Ishwar Singh v. State of M.P. , 2000 (2) Crimes 50(MP) .
91 Parshotam Lal v. State, 2001 CrLJ 3378 (3389)(J&K) .
92 Umakant Bajpayee v. State of U.P. 1993 (1) Crimes 1150(All) .
93 Rajesh Rai v. State of Sikkim (2002) 3 CurCriR 95 : 2002 CrLJ 1385 (1390)(Sikkim-DB) .
94 Malchand Saraogi v. Assistant Collector of Customs & Central Excise, Gauhati , 1993 (2) Crimes 367(Gau) .
Ratanlal: Indian Penal Code/CHAPTER XVI OF OFFENCES AFFECTING THE HUMAN BODY/S. 337.
THE INDIAN PENAL CODE (ACT XLV OF 1860)
CHAPTER XVI
OF OFFENCES AFFECTING THE HUMAN BODY

Page 599
S. 337.
Causing hurt by act endangering life or personal safety of others.
Whoever causes hurt to any person by doing any act so rashly or negligently as to endanger human life, or
the personal safety of others, shall be punished with imprisonment of either description for a term which
may extend to six months, or with fine which may extend to five hundred rupees, or with both. 1918
COMMENTS
1. General Comments. -- Section 304-A deals with those cases where death is caused by a rash or
negligent act ; this section, where hurt is caused. This section further may be viewed as an
extension of offence envisaged in Section 336, I.P.C. A rash or negligent act that could have
endangered life or personal safety of a human being is punishable under Section 336, I.P.C. But
if hurt is caused in the process, the offence becomes one punishable under Section 337, I.P.C. On
the other hand offence defined by Sections 279, 380, 336 to 338 are minor offence in relation to
offence under Section 304-A, where death is caused negligent act . So, a person convicted under
Section 304-A cannot further be convicted under Section 336 or 337 or Section 338, I.P.C. 14
This section is invocable only to acts done without any criminal intent. Personal injury
intentionally caused is neither a rash nor a negligent act . Where the accused threw stones at the
complainant and one of them wounded her it was held that the accused was guilty under Section
323 and not under Section 337. 15
1919
2. Hurt. --See Section 319.
3. Rash or Negligent Act. --See Notes under Section 336.
This section applies only to act s done rashly or negligently but without any criminal intent. But such negligence
or rashness must be proved as would necessarily carry with it criminal liability. 16 Rash and Negligent Act of
driving when causes simple injuries, Section 338, I.P.C. is not attracted, Section 337 is attracted. 17
4. Rash and negligent driving : Burden of proof. --Merely because the driver was driving the
vehicle at a high speed does not lead to an inference that the vehicle was driven either negligently
or rashly. Burden lies on the prosecution to bring on record material to establish the negligent or
rash driving. In the absence of any material on record, no presumption of ''rashness'' or
''negligence'' can be drawn by invoking the maxim '' res ipsa loquitur '' to held the accused guilty.
18
5. Intentional act. --Personal injury if intentionally caused is neither a rash nor a negligent act and
constitutes an offence under Section 323, I.P.C. But a hurt may be caused involuntarily and yet
Page 600
culpably. There may have been no design to cause hurt and no expectation that hurt would be
caused, yet there may have been a want of due care not to cause hurt. Section 337 applies to
cases where hurt is caused involuntarily yet negligently or rashly. 19 This section has no
application to a case in which the act itself is unlawful and amounts to the voluntary commission
of an offence against the person. Personal injury intentionally caused is neither a rash nor a
negligent act . 20 (See also the heading "Deliberate act if rash act " under Section 336. A Gujarat
case having pointed out the word "voluntary" has not been used in Section 336 to 338, I.P.C.,
observes if a negligent driving leading to a collision causes hurt, proper section to invoke in
Section 337, I.P.C. not Section 427, I.P.C. 21
6. Offence under Section 279 vis-a-vis : offence under Section 337 and Section 338. --See
Notes under Section 279.
7. Offence under Section 279 and Section 337, I.P.C. : separate sentences. --See Notes under
Section 279.
8. Sections 279, 338 and 304-A : inter-relation. --See Notes under Section 279.
9. Endangers human life. --See Notes under Section 279.
10. Hurt and Rash or Negligent Act : direct nexus. --For application of Section 337, I.P.C. hurt
must be the direct result of the rash or negligent act . No conviction is permissible when rashness
or negligence of third party intervenes. 22
In a case the accused who posed himself as a snake-charmer, under the pretext of imparting training to his
disciples which would prevent them from being affected by snake-bite gave them some pills prepared from some
jungle herbs along with heated liver of the goat which was bitter to taste. After some time some of the disciples
died and the rest became sick. Neither the report of the Chemical Examiner nor that of the medical Officers
showed that death or sickness was due to poisoning. There was neither any evidence to show that during the
interval between the taking of the pills and their death or sickness the disciples had not taken anything else nor
was it proved that it was on account of the taking of those pills that the persons either died or became sick and
that the eating of the liver which was bitter to take was not the cause of the death or sickness. It was held that in
the absence of any connecting link to show that death and sickness were due to the pills administered by the
accused the accused was not guilty of charges under Sections 304-A and 337, I.P.C. 23
See also the heading "Death to be direct result of rash or negligent act" under Section 304-A.
11. Negligence with reference to gun. --The causing of hurt by negligence in the use of a gun was
held to fall within the purview of this section rather than of S. 286. But where all the evidence
against the accused was that he went out shooting when people were likely to be in fields and that
a single pellet from his gun struck a man who was sitting in a field, it was held that this was not
Page 601
sufficient evidence of rashness or negligence to support a conviction under this section. 24 If a

man with a shot gun indiscriminately fires in the dark in the direction from which he has heard
sounds coming from a distance away, it cannot be held that his act must, in all probability, cause
death or such bodily injury as was likely to cause death. Such a person cannot possibly be
convicted under Section 307, I.P.C., but he could be convicted under Section 337, I.P.C. 25
12. Negligence with reference to explosive. --In a case the factory that manufactured fireworks etc.
was standing near a residential quarters. There occurred an explosion in the factory and it resulted
in injuries to and death of some persons. The person who were employed, where the explosion
took place, were mostly women who brought their small children with them and young children
below the age of 18 had been employed in the work. It was found out that the explosives, which
were of highly hazardous and dangerous nature and the possession of which was prohibited under
the notifications issued under the Explosives Act (1884), were stored in the premises of the
factory at the time of explosion. It was held that the accused persons who were the licenceholders
for manufacturing explosives in the factory were liable to be convicted under Sections 304-A
and 337 although there was no direct evidence of the immediate cause of the explosion. The
manufactures undoubtedly displayed a high degree of negligence by allowing or causing to be
used explosives of sensitive compositions and substances in the manufacturing of fireworks,
which must be the efficient cause of explosion. 26 In this case Court observed that criminal
negligence can be found on varying sets of circumstances. The tests which have been applied
appear to be fully applicable to the facts of the present case including the one of direct and
efficient cause. The appellants had, undoubtedly displayed a high degree of negligence by
allowing or causing to be used dangerous and prohibited compositions and substances which
must be held to have been the efficient cause of the explosion.
13. Negligence with reference to masonary building. --When one ignorant about the architectural
technicalities get a building constructed through masons or like persons supposed to have an
expertise in the matter and if such a building collapses due to fault in building structure etc.,
whether the one who employed the masons etc. is liable to be convicted under Sections 336 to
338 or under Section 304-A (when death has been caused) cropped up in a Madras case.
It may be recalled that to rope one by Sections 337 to 338 or by Section 304-A, hurt, grievous hurt or death
must be the direct result of the rash or negligent act of accused and the act must be efficient cause without
intervention of another's negligence, and it must be the causa causans , and it is not enough that it may have
been the causa sine qua non . 27 In the Madras case the accused got a school building built by masons etc. but a
portion of the building collapsed while classes were being held in the school resulting in the death of 35 girl
students and a middle aged woman. Further, 16 students sustained grievous injuries and 142 students sustained
simple injuries. A cow and two calves died, and one cow was injured. It was urged that the act of the accused in
not having attended to immediate repairs by taking technical advice after having come to know that it required
such repairs should be held to be a rash and negligent act on his part. Repelling the contention the Court held
that it is not the case of the prosecution that the accused himself constructed the building. It is not disputed that
he sought the assistance of the masons and the masons constructed the building. If the masons had not done the
work properly and if they had been negligent in not mixing the lime mortar in proper proportions, the respondent
could not be made liable for the negligence of those persons who actually constructed the building, who are
supposed to be skilled. The respondent is a layman. He, therefore, cannot be held liable for the negligence of the
persons who act ually constructed the building which negligence is the causa causans for the collapse of the
building. 28
Page 602
14. Negligent operation. --A hakim (native physician) performed an operation of the eye with an
ordinary pair of scissors and sutured the wound with an ordinary thread and needle. The
instruments used were not disinfected and the complainant's eyesight was permanently damaged.
It was held that the hakim had acted rashly and negligently, and was guilty under this section, as
there was no permanent privation of the sight of the eye. 29 In a case a patient was operated on for
cataract with her consent. The accused performed the operation in good faith for her benefit and
according to the recognised method of treatment of cataract. The result of the operation was that
the woman lost her eyesight. It was held that accused was not guilty under Section 338, I.P.C.
because grievous hurt was caused, there was no rash or negligent act on the part of the operator.
30
15. Acquittal from a charge under Section 337 : subsequent trial under Section 307, I.P.C. :
principle of autre fois acquit . --When a criminal charge has once been adjudicated upon by a
competent Court and the accused is acquitted or convicted by a competent Court a finality
attaches itself to it and it can be pleaded as a bar to a subsequent prosecution for the same
offence. That is autre fois acquit and autre fois convict . They are founded on the principle that a
man should not be put in jeopardy twice for the same matter. This principle is embodied in
Section 330, Cr.P.C., 1973. The section incorporates principle of autre fois acquit as well as of
autre fois convict and embodies the maxim " nemo debet bis vexari pro eadem causa " (No
person shall be vexed twice over for the same cause). The provision is equivalent to the principle
of res judicata . But the scope of Section 300 Cr.P.C., 1973 is wider inasmuch as the identity of
the prosecutor in previous trial is not required to be the same as that in the subsequent
prosecution. Speaking about the pleas of autre fois acquit and autre fois convict Halsbury states
: The pleas aver respectively that the defendant has been previously convicted or acquitted on a
charge for the same offence as that in respect of which he is arraigned. If shown to be well
founded, such a plea operates as a bar to indictment, since a person cannot be tried for an offence
of which he has been previously convicted or acquitted, or for an offence of which he could have
been convicted on some previous indictment. 31 Thus, where the accused was previously
prosecuted by the State under Section 337, I.P.C. and on trial by a Court of competent
jurisdiction was acquitted, he could not be tried again under Section 307, I.P.C., on the same set
of facts on a private complaint. Prosecution by the State must be deemed to be on behalf of all the
citizens of the State including the aggrieved person, so that a private complainant cannot claim a
separate and independent locus standi . 32
16. Reduction of sentence. --The accused was charged and convicted u/ s. 337 and 338 of Penal
Code for causing an accident in which one person had died and two others were injured. On a
revision filed by the convicted person it was held that accident had taken place some 20 years
back and the accused had already served part sentence and was father of children of tender age,
hence no useful purpose was to be served by keeping the accused in jail. Hence the sentence of
the accused was reduced to period already undergone but amount of fine was enhanced from Rs.
500/- to Rs. 5000/- which was to be distributed amongst the victims. 33 The doctor was charged
for draining out urine from the bladder by old method of using catheter which according to
prosecution was old and crude method and suprapublic method which is proper was not used. It
was held that doctor adopting the normal method of treatment could not be said to have been
negligent in treating the patient. As such proceedings pending in Court below were quashed u/ s.
Page 603
482 Cr.P.C. 34 The accused driver caused accident due to his rash and negligent driving in which
4 persons lost their lives and 5 others sitting in trunk of truck were injured. It was held that
conviction of accused u/ s. 279, 304A, 337 and 338 was proper and keeping in view the gravity
of offence his request for releasing him on probation was rejected. 35 Three persons had died
when there was an impact of car with the truck driven by petitioner but eye witness testified that
he had seen the accident but come to know about it afterwards. No site plan was prepared and
photograph taken showed head on collision of two vehicles and possibility of truck going to
wrong side and causing accident could not be inferred. The accused was held entitled to the
acquittal. 36
The accused was charged to have caused injuries by pelting the brick bats but police officer did not find any
brick bats. The accused was acquitted on the ground of benefit of doubt. The accused had suffered ordeal of
protracted trial for about 15 years and sentence was reduced to the period already undergone. 37
17. Offence under Section 279 and Section 337, I.P.C. : separate sentences. --See heading No. 10
under Section 279.
18. Framing of charge.-- Injury was caused to the occupant of truck due to rash and negligent
driving by driver of truck by hitting intentionally a motorcyclist. Evidence showed that no
intention to 1922 cause injury to the occupant of truck on part of driver could be made out to
attract the provisions of Section 326. However driver cannot escape the liability of rash and
negligent driving and offence under Section 337 would be attracted. It was directed that charge
should be framed under Section 337 instead of Section 325. 38
19. Compounding of offence under Sections 337 & 338 : conviction for offence under Section
279. --It may be found from Schedule-II appended to Section 320 that offence under Sections
337 & 338 are compoundable by the permission of a Court. As held by a Bombay case
compounding of offence under Section 337 or 338 would not ipso facto entail acquittal on a
charge under Section 279, I.P.C. As held by the case, an offence under Section 279 is essentially
an offence against public safety. By Section 337, I.P.C. causing hurt by an act endangering life
or personal safety of others is penalised. By that section, whoever causes hurt to any person by
doing an act so rashly or negligently as to endanger human life or the personal safely of others is
liable to be punished in the manner provided thereby. This section occurs in Chapter XVI, which
deals with offences affecting the human body. Under Section 279, I.P.C. the maximum sentence
which may be imposed is rigorous imprisonment for a term which may extend to six months or
with fine which may extend to one thousand rupees, or with both. Under Section 337, I.P.C. the
maximum sentence which may be imposed is rigorous imprisonment for a term which may
extend to six months or with fine both. The offence punishable under Section 337 is the offence
of hurt committed in certain defined circumstances. Undoubtedly Section 279 penalises rash or
negligent driving which endangers human life or is likely to cause hurt or injury to any other
person, but on that account the offence under Section 337, I.P.C. and the offence under Section
279 are not of the same nature or character. By Section 336, I.P.C. an act, endangering life or
personal safety of others, which is done rashly or negligently is penalised, and evidently the
offence punishable under Section 337, I.P.C. is an aggravated form of the offence defined by
Section 336, I.P.C.
Page 604
The offences under Sections 279 and 337, I.P.C. are, however, offences of different nature and the conduct
referred to therein is panalised with different objects. An act , which is rash or negligent or is likely to endanger
human life, may be the result of driving any vehicle or riding on a public way. There is no dobut that the two
Sections overlap but that does not, make those offence of the same character. The offence under Section 279,
I.P.C. is non-compoundable; and the compounding of the offence under Section 337, I.P.C. will not prevent the
prosecution from being continued under Section 279, I.P.C. When compounding of an offence under Section
337, I.P.C. is permitted, the Court permits the aggrieved party to accept private satisfaction for the injury caused
to him, but thereby the Court is not seeking to permit composition of an act, which is dangerous to the public. 39
The glass pieces found in milk sold by the accused had caused injuries to a minor girl and accused seller was
prosecuted u/ s. 270, 273 and 337 of Penal Code. The accused's plea was that charges framed under Penal Code
be quashed and he may be proceeded against under the Food Adulteration Act . It was held that framing of
charge was legal and the same could not be quashed. 40
20. PRACTICE AND PROCEDURE
(a) Essential Ingredients. --An offence under this section has following essential ingredients :
(i) Some act was done rashly or negligently;
(ii) That the act endangered human life or the personal safety of others;
(iii) That hurt was cause to any person in the doing of such an act.
(b) Evidence. --To bring home an offence under Section 337, I.P.C. the prosecution is to prove that
(a ) the accused committed an act which is rash or negligent act ; (b ) that this rash or negligent
act was such that it could endanger human life or personal safety of others; (c ) that the rash and
negligent act caused hurt i.e. to say a bodily pain, or disease or infirmity to the victim.
(c) Procedure. --The offence under Section 337, is cognizable, bailable, compoundable with the
permission of Court and triable by Judicial Magistrate as a summons case. Being a summons case
no charge is required to be framed.
(d) Model charge. --I _______ (name and official designation of Magistrate) do hereby charge you
_______ (name of the accused) as follows :
That you, on or about the _______ day of _______ at _______ (specify place) within P.S. _______ Distt.
_______ caused hurt to AA _______ (give name) by doing an act _______ (specify the act) so rashly or
negligently as to endanger human life (or the personal safety of others) and thereby committed an offence
punishable under Section 337 of the Indian Penal Code and within the cognizance of this Court.
Page 605
And I do hereby direct that you be tried on the said charge.
14 Shiva Ram v. State of U.P. , AIR 1965 All 196 : (1965) 1 CrLJ 524.
15 King Emperor v. Nga Shwe Lu , 1 CrLJ 557.
16 Arumugham v. Gnanasoundara , AIR 1962 Mad 362.
17 Annasheb Bandhu Patil v. State of Maharashtra , 1991 CrLJ 814(Bom) . The car driver abruptly opened the door of the car and
knocked down cyclist with the result that lorry coming from the behind ran over him. In such situation the lorry driver will be
convicted under Section 304A and car driver u/ s. 337Penal Code . But due to special circumstances, that it was national that lorry
and its driver could not have stopped the vehicle instantly, he was acquitted but negligent car driver was convicted under Section
337,P.S. Jose v. State of Kerala , 1994 CrLJ 363(Ker) .
18 State of Karnataka v. Satish, (1998) 8 SCC 493 : 1998 SCC 1508(Cri) .
19 Wazir Kadar v. State of M.P. , AIR 1955 NUC 46 : 1955 CrLJ 173.
20 King Emperor v. Nga Shwe Lu , 1 CrLJ 557.
21 Fidahusen Abdulali v. State , AIR 1962 Guj 318 : (1962) 2 CrLJ 760.
22 I. Kishan Chand v. State of Haryana , 1971 CrLJ 7(N) (SC) .
23 Satya Mali v. State of Orissa , AIR 1964 Ori 173 : (1964) 2 CrLJ 42.
24 Abdus Sattar , (1906) 28 All 464. The accused and deceased were in a feast of marriage where suddenly quarrel errupted and in
stone throwing the stone hit the deceased on his intestines which resulted in his death. Since accused had no intention to cause such
injury and injury could not be called as injury endangering the human life, it was held that accused was liable to be convicted u/ s.
337 and not u/ s. 325,Ratan Singh v. State of M.P. , 1995 CrLJ 1840(MP) .
25 Mohammad Cassim v. King Emperor , AIR 1938 Rang 220 : 39 CrLJ 692.
26 Bhalchandra v. State of Maharashtra , AIR 1968 SC 1319 : 1968 CrLJ 1501.
27 Md. Rangawalla v. State of Maharashtra , AIR 1965 SC 1616 : (1965) 2 SCR 622.
28 Public Prosecutor v. P. Moopanar , 1970 CrLJ 705 (707).
29 Gulam Hyder Punjabi , AIR 1915 Bom 101 : 16 CrLJ 437 : (1915) 17 Bom LR 384 : 39 Bom 523.
30 Suraj Bali v. Emperor , 7 CrLJ 306 : 5 All LJ 155.
31 Halsbury's Laws of England , 4th Edn. Vol II, para 241, p. 146.
32 Piyare Lal v. Shankar Das , 1972 CrLJ 185(HP) .
33 Hari Ram v. State , 1995 CrLJ 3152(Del) .
34 Bhashkar Acharya (Dr.) v. Chandrashekhar Shervegar , 1998 CrLJ 1005(Kant) .
35 Chunni Lal v. State of Rajasthan , 2000 CrLJ 2499(Raj) .
36 Baldev Singh v. State of Haryana , 2000 CrLJ 2538(P&H) . The accused was thus not held rash and negligent in causing the
death. Also see Gopinath Pillai v. State of Kerala , 2000 CrLJ 3682(Ker) where Dr. was not held guilty for removing the right
ovary during the surgical operation for safety of the patient and criminal proceedings were quashed.
37 Gafoor Mian v. State, (2002) CrLJ 3842 (Pat) : 2002 (2) BLJ 753 : 2002 (4) Crimes 134.
38 Salinder Kumar v. State , 2008 CrLJ 602(P&H) .
39 State v. Kamalakar Probhakar Juvekar , AIR 1960 Bom 269 : 1960 CrLJ 814.
40 Mahesh Ramchandra Jadhav v. State , 1999 CrLJ 2310(Bom) : (2001) 1 MhLJ 648.
Page 606
Tannan: Bankers Manual/VOLUME 2/ BANKING & FINANCIAL INSTITUTIONS LAWS,

STATUTES,ACTS, RULES, REGULATIONS, ORDERS AND SCHEMES / PART XXVI
FEMA & MONEY-LAUNDERING ACTS & RULES /APPENDIX 109 THE PREVENTION OF
MONEY-LAUNDERING ACT, 2002
APPENDIX 109 THE PREVENTION OF MONEY-LAUNDERING

ACT, 2002
(ACT NO. 15 OF 2003)
[17 th January , 2003.]
LIST OF AMENDING ACTS

TANN.019.LN2
An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved
in, money-laundering and for matters connected therewith or incidental thereto.
WHEREAS the Political Declaration and Global Programme of Act ion, annexed to the resolution S-17/2
was adopted by the General Assembly of the United Nations at its seventeenth special session on the
twenty-third day of February, 1990;
AND WHEREAS the Political Declaration adopted by the Special Session of the United Nations General
CHAPTER I
PRELIMINARY
S. 1.
(1) This Act may be called THE PREVENTION OF MONEY-LAUNDERING ACT, 2002.
(3) It shall come into force on such date 1. as the Central Government may, by notification in the Official
Page 607
S. 2.
Definitions.--

(a)
means an Adjudicating Authority appointed under sub-section (1) of Section
6;
(b)
means the Appellate Tribunal established under Section 25;
(c)
means an Assistant Director appointed under sub-section (1) of Section 49;
(d)
"attachment"
means prohibition of transfer, conversion, disposition or movement of
property by an order issued under Chapter III;
2.Inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).[(da)
"authorised person"
means an authorised person as defined in clause (c) ofsection 2 of the Foreign
Exchange Management Act, 1999 (42 of 1999);]
(e)
Page 608
"banking company"
means a banking company or a co-operative bank to which the Banking
Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking
(f)
"Bench"
means a Bench of the Appellate Tribunal;
(g)
"Chairperson"
means the Chairperson of the Appellate Tribunal;
(h)
"chit fund company"

means a company managing, conducting or supervising, as foreman, agent or
in any other capacity, chits as defined inSection 2 of the Chit Funds Act, 1982
(40 of 1982);
(i)
"co-operative bank"
shall have the same meaning as assigned to it in Clause ( dd ) of Section 2 of
the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of
1961);
(j)
"Deputy Director"
means a Deputy Director appointed under sub-section (1) of Section 49;
3.Inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).[(ja)

means carrying on activities for playing games of chance for cash or kind, and
includes such activities associated with casino or such other activities as the
Page 609
(k)
"Director" or "Additional Director" or "Joint Director"

means a Director or Additional Director or Joint Director, as the case may be,
appointed under sub-section (1) of Section 49;
(l)
means a financial institution as defined in Clause ( c ) ofSection 45 -I of the
Reserve Bank of India Act, 1934 (2 of 1934) and includes a chit fund company,
a co-operative bank, a housing finance institution and 4. [an authorised person,
a payment system operator and a non-banking financial company];
(m)

shall have the meaning as assigned to it in Clause ( d ) ofSection 2 of the
National Housing Bank Act, 1987 (53 of 1987);
(n)
"intermediary"
means a stock-broker, sub-broker, share transfer agent, banker to an issue,
with securities market and registered underSection 12 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992);
5.Ins. by Act 20 of 2005, s. 2 (w.e.f. 1-7-2005).[(na)
"investigation"
includes all the proceedings under this Act conducted by the Director or by an
(o)
"Member"
Page 610
means a Member of the Appellate Tribunal and includes the Chairperson;
(p)
"money-laundering"
has the meaning assigned to it in Section 3;
(q)

shall have the same meaning as assigned to it in Clause ( f ) ofSection 45 -I of
the Reserve Bank of India Act, 1934 (2 of 1934) 6. [and includes a person
(r)
"notification"
means a notification published in the Official Gazette;
7.Clauses (ra) to (rc) inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).[(ra)
"offence of cross border

implications",
means--
(i) any conduct by a person at a place outside India which constitutes an offence at that
place and which would have constituted an offence specified in Part A, Part B or Part
C of the Schedule, had it been committed in India and if such person remits the
proceeds of such conduct or part thereof to India; or
(ii) any offence specified in Part A, Part B or Part C of the Schedule which has been
committed in India and the proceeds of crime, or part thereof have been transferred to a
place outside India or any attempt has been made to transfer the proceeds of crime, or
part thereof from India to a place outside India.
Explanation. --Nothing contained in this clause shall adversely affect any

commencement of the Prevention of Money-Laundering (Amendment) Act, 2009;
(rb)
"payment system"
Page 611
means a system that enables payment to be effected between a payer and a

Explanation.-- For the purposes of this clause, "payment system" includes the systems
enabling credit card operations, debit card operations, smart card operations, money transfer
operations or similar operations;
(rc)

means a person who operates a payment system and such person includes his
overseas principal.
Explanation.-- For the purposes of this clause, "overseas principal" means,--

(A) in the case of a person, being an individual, such individual residing outside India,
who owns or controls or manages, directly or indirectly, the activities or functions of
payment system in India;
(B) in the case of a Hindu undivided family, Karta of such Hindu undivided family
residing outside India who owns or controls or manages, directly or indirectly, the
activities or functions of payment system in India;
(s)
"person"
includes--
(i) an individual,
(t)
"prescribed"
(u)
"proceeds of crime"
means any property derived or obtained, directly or indirectly, by any person
as a result of criminal activity relating to a scheduled offence or the value of
any such property;
(v)
"property"
means any property or assets of every description, whether corporeal or
Page 612

wherever located;
(w)
"records"
include the records maintained in the form of books or stored in a computer or
(x)
"Schedule"
means the Schedule to this Act;
(y)
"scheduled offence"
means--

8.Sub-clauses (ii) and (iii) substituted for sub-clause (ii) by the Prevention of
Money-Laundering
the offences (Amendment)
specified underAct,
Part2009
B of(21
the of
Schedule
2009), if
s. the
2 (w.e.f.
total value
1-6-2009).[(ii)
involved in such
offences is thirty lakh rupees or more; or
(z)
"Special Court"
means a Court of Session designated as Special Court under sub-section (1) of
Section 43;
(za)
"transfer"
includes sale, purchase, mortgage, pledge, gift, loan or any other form of
(zb)
"value"
Page 613
means the fair market value of any property on the date of its acquisition by
any person, or if such date cannot be determined, the date on which such
property is possessed by such person.
CHAPTER II
S. 3.
involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall
S. 4.
Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term
which shall not be less than three years but which may extend to seven years and shall also be liable to fine which
may extend to five lakh rupees:
Provided that where the proceeds of crime involved in money-laundering relates to any offence specified
under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words
"which may extend to seven years", the words "which may extend to ten years" had been substituted.
CHAPTER III
S. 5.

Page 614
the purposes of this section, has reason to believe (the reason for such belief to be recorded in
( a ) any person is in possession of any proceeds of crime;
crime under this Chapter, he may, by order in writing, provisionally attach such property for a
period not exceeding 9. [one hundred and fifty days] from the date of the order, in the manner
provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or
the other officer so authorised by him, as the case may be, shall be deemed to be an officer
under sub-rule ( e ) of Rule 1 of that Schedule:
10. [Provided that no such order of attachment shall be made unless, in relation to the
scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code
of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised
to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking
cognizance of the scheduled offence, as the case may be:
Provided further that, notwithstanding anything contained in clause (b), any property of
any person may be attached under this section if the Director or any other officer not below the
rank of Deputy Director authorised by him for the purposes of this section has reason to
believe (the reasons for such belief to be recorded in writing), on the basis of material in his
possession, that if such property involved in money-laundering is not attached immediately
under this Chapter, the non-attachment of the property is likely to frustrate any proceeding
under this Act.]
attachment under sub-section (1), forward a copy of the order, along with the material in his
(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of
the period specified in that sub-section or on the date of an order made under sub-section (2) of
Section 8, whichever is earlier.
(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable
Explanation .--For the purposes of this sub-section, "person interested", in relation to any
immovable property, includes all persons claiming or entitled to claim any interest in the property.
S. 6.

Page 615
(1) The Central Government shall, by notification, appoint 11. [an Adjudicating Authority] to exercise
( a ) in the field of law, unless he--
service;
(4) The Central Government shall appoint a Member to be the Chairperson of the Adjudicating
Authority.
( a ) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof;
specify;
Provided that no Chairperson or other Member shall hold office as such after he has attained
the age of 12. [sixty-five] years.
Provided that neither the salary and allowances nor the other terms and conditions of service of
the Member shall be varied to his disadvantage after appointment.
Page 616
resignation or otherwise, the senior-most Member shall act as the Chairperson of the Adjudicating
Authority until the date on which a new Chairperson, appointed in accordance with the provisions of
this Act to fill such vacancy, enters upon his office.
other provisions of this Act, the Adjudicating Authority shall have powers to regulate its own
procedure.
S. 7.
S. 8.
Adjudication.--
(1) On receipt of a complaint under sub-section (5) of Section 5, or applications made under sub-section
(4) of Section 17 or under sub-section (10) of Section 18, if the Adjudicating Authority has reason to
believe that any person has committed an 13. [offence under section 3 or is in possession of proceeds
of crime], it may serve a notice of not less than thirty days on such person calling upon him to indicate
the sources of his income, earning or assets, out of which or by means of which he has acquired the
property attached under sub-section (1) of Section 5, or, seized under Section 17 or Section 18, the
evidence on which he relies and other relevant information and particulars, and to show cause why all
or any of such properties should not be declared to be the properties involved in money-laundering
and confiscated by the Central Government:
Page 617
Provided that where a notice under this sub-section specifies any property as being held by a
person on behalf of any other person, a copy of such notice shall also be served upon such other
person:
Provided further that where such property is held jointly by more than one person, such notice
shall be served to all persons holding such property.
( a ) considering the reply, if any, to the notice issued under sub-section (1);
(b) having the aggrieved person and the Director or any other officer authorised by him in this
behalf; and
by an order, record a finding whether all or any of the properties referred to in the notice
issued under sub-section (1) are involved in money-laundering:
notice had been issued, such person shall also be given an opportunity of being heard to prove
that the property is not involved in money-laundering.
record shall--
( a ) continue during the pendency of the proceedings relating to any scheduled offence before a
court; and
(b) become final after the guilt of the person is proved in the trial court and order of such trial
court becomes final.
under Clause ( b ) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of
being heard to the person concerned, make an order confiscating such property.
S. 9.
encumbrances:
Page 618
Provided that where the Adjudicating Authority, after giving an opportunity of being heard to any other person
interested in the property attached under this Chapter, or seized under Chapter V, is of the opinion that any
encumbrance on the property or lease-hold interest has been created with a view to defeat the provisions of this
Chapter, it may, by order, declare such encumbrance or lease-hold interest to be void and thereupon the aforesaid
property shall vest in the Central Government free from such encumbrances or lease-hold interest:
Provided further that nothing in this section shall operate to discharge any person from any liability in respect
of such encumbrances which may be enforced against such person by a suit for damages.
S. 10.
the property which is vested in the Central Government under Section 9.
S. 11.
(1) The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in
a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the
( a ) discovery and inspection;
(3) Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning
Page 619
CHAPTER IV

INTERMEDIARIES
S. 12.

( a ) maintain a record of all transactions, the nature and value of which may be prescribed,
whether such transactions comprise of a single transaction or a series of transactions integrally
(b) furnish information of transactions referred to in Clause ( a ) to the Director within such time
as may be prescribed;
prescribed:
or intermediary, as the case may be, has reason to believe that a single transaction or series of
transactions integrally connected to each other have been valued below the prescribed value so
as to defeat the provisions of this section, such officer shall furnish information in respect of
such transactions to the Director within the prescribed time.
14. [(2)(a) Therecords referred to in clause (a) of sub-section (1) shall be maintained for a period of ten years
from the date of transactions between the clients and the banking company or financial institution or
intermediary, as the case may be.
(b) The records referred to in clause (c) of sub-section (1) shall be maintained for a period of ten years
from the date of cessation of transactions between the clients and the banking company or financial
institution or intermediary, as the case may be.]
COMMENTS
Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and
Intermediaries) Rules, 2005. --In exercise of the powers conferred by sub-section (1) read with clauses (h), (i), (j)
and (k) of sub-section (2) of section 73 of the Prevention of Money-Laundering Act, 2002 (15 of 2003), the Central
Government has made the Prevention of Moneylaundering (Maintenance of Records of the Nature and Value of
Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and
Intermediaries) Rules, 2005 for the purposes of Section 12 of the Prevention of Money-Laundering Act, 2002.
Prevention of Money-Laundering (Maintenance of Records etc.) Amendment Rules, 2010. --The

foregoing Rules have been recently amended by the Prevention of Money-Laundering (Maintenance of Records of
the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing
Page 620
Financial Institutions and Intermediaries) Third Amendment Rules, 2010.
See RBI Circulars on Obligations of the Banking Companies, Financial Institutions and Intermediaries on the
Requirements of aforesaid Rules on the Reserve Bank of India website http://www.rbi.org.in .
S. 13.
intermediary or any of its officers has failed to comply with the provisions contained in Section 12,
then, without prejudice to any other action that may be taken under any other provisions of this Act,
sub-section.
S. 14.
Save as otherwise provided in Section 13, the banking companies, financial institutions, intermediaries and
their officers shall not be liable to any civil proceedings against them for furnishing information under Clause ( b ) of
sub-section (1) of Section 12.
S. 15.
intermediary.--
implementing the provisions of this Act.
CHAPTER V
Page 621
S. 16.
Power of survey.--
(ii) in respect of which he is authorised for the purposes of this section by such other authority,
relevant to, any proceedings under this Act.
Explanation .--For the purposes of this sub-section, a place, where an act which
constitutes the commission of the offence is carried on, shall also include any other place,
whether any activity is carried on therein or not, in which the person carrying on such activity
states that any of his records or any part of his property relating to such act are or is kept.
sub-section immediately after completion of survey, forward a copy of the reasons so recorded along
with material in his possession, referred to in that sub-section, to the Adjudicating Authority in a
(3) An authority acting under this section may--
(iii) record the statement of any person present in the place which may be useful for, or relevant
to, any proceeding under this Act.
S. 17.

Page 622
(1) Where 15. [the Director or any other officer not below the rank of Deputy Director authorised by him
for the purposes of this section], on the basis of information in his possession, has reason to believe
then, subject to the rules made in this behalf, he may authorise any officer subordinate to
him to--
the powers conferred by Clause ( a ) where the keys thereof are not available;
therefrom;
property, in respect of all matters relevant for the purposes of any investigation under this Act:
16. [ Provided that no search shall be conducted unless, in relation to the scheduled offence, a
report has been forwarded to a Magistrate under section 157 of the Code of Criminal Procedure, 1973
(2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned
in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the
case may be.]
seizure, forward copy of the reasons so recorded along with material in his possession, referred to in
may be prescribed.
(3) Where an authority, upon information obtained during survey under Section 16, is satisfied that any
Provided that no authorisation referred to in sub-section (1) shall be required for search under
this sub-section.
(4) The authority, seizing any record or property under this section, shall, within a period of thirty days
S. 18.
Page 623
under this Act.
17. [
Provided that no search of any person shall be made unless, in relation to the scheduled
offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal
Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the
offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the
scheduled offence, as the case may be.]
(2) The authority, who has been authorized under sub-section (1) shall, immediately after search and
seizure, forward a copy of the reasons so recorded along with material in his possession, referred to in
may be prescribed.
(3) Where an authority is about to search any person, he shall, if such person so requires, take such
person within twenty-four hours to the nearest Gazetted Officer, superior in rank to him, or a
Magistrate:
undertaken to take such person to the nearest Gazetted Officer, superior in rank to him, or Magistrate's
Court.
from the place of detention to the office of the Gazetted Officer, superior in rank to him, or the
Magistrate's Court.
made.
(6) Before making the search under sub-section (1) or sub-section (5), the authority shall call upon two
or more persons to attend and witness the search, and the search shall be made in the presence of such
persons.
(7) The authority shall prepare a list of record or property seized in the course of the search and obtain
the signatures of the witnesses on the list.
(9) The Authority shall record the statement of the person searched under sub-section (1) or subsection
(5) in respect of the records or proceeds of crime found or seized in the course of the search.
18. [
***]
(10) The authority, seizing any record or property under sub-section (1) shall, within a period of thirty
days from such seizure, file an application requesting for retention of such record or property, before
the Adjudicating Authority.
S. 19.
Power to arrest.--
Page 624
reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty
of an offence punishable under this Act, he may arrest such person and shall, as soon as may be,
of such person under sub-section (1), forward a copy of the order along with the material in his
(3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a judicial
from the place of arrest to the Magistrate's Court.
S. 20.
(1) Where any property has been seized under Section 17 or Section 18, and the officer authorised by
purposes of adjudication under Section 8, such property may be retained for a period not exceeding
(2) The officer authorized by the Director immediately after he has passed an order for retention of the
property for purposes of adjudication under Section 8 shall forward a copy of the order along with the
money-laundering and the property is required for the purposes of adjudication under Section 8.
(5) After passing the order of confiscation under sub-section (6) of Section 8, the Adjudicating
moneylaundering to the person from whom such properties were seized.
S. 21.
Page 625
(1) Where any records have been seized under Section 17 or Section 18, and the Investigating Officer
adjudication under Section 8.
(5) After passing of an order of confiscation under sub-section (6) of Section 8, the Adjudicating
S. 22.
the handwriting, of, any particular person, are in that person's handwriting, and in the case of a
Act, the Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be,
shall--
( a ) presume, that the signature and every other part of such record which purports to be in the
handwriting of any particular person or which the court may reasonably assume to have been
Page 626
S. 23.
Where money-laundering involves two or more inter-connected transactions and one or more such transactions
is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under
Section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the
remaining transactions form part of such inter-connected transactions.
S. 24.
Burden of proof.--
When a person is accused of having committed the offence under Section 3, the burden of proving that
proceeds of crime are untainted property shall be on the accused.
CHAPTER VI
APPELLATE TRIBUNAL
S. 25.
The Central Government shall, by notification, establish an Appellate Tribunal to hear appeals against the
orders of the Adjudicating Authority and the authorities under this Act.
S. 26.
by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal.
made under sub-section (2) of Section 13, may prefer an appeal to the Appellate Tribunal.
Page 627
prescribed:
Provided that the Appellate Tribunal may, after giving an opportunity of being heard entertain
an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient
cause for not filing it within that period.
S. 27.
( a ) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof;
may deem fit;
specify;
S. 28.
Supreme Court or of a 19. [High Court or is qualified to be a Judge of the High Court].
Page 628
20. [( a ) * * * ]
equivalent post in that Service for at least three years; or
Accountants Act, 1949 (38 of 1949) or as a registered accountant under any law for the time
least ten years:
Provided that one of the members of the Appellate Tribunal shall be from category mentioned in
Clause ( f ); or
(3) No sitting Judge of the Supreme Court or of a High Court shall be appointed under this section except
21. [(4) The Chairperson or a Member holding a post as such in any other Tribunal, established under any
law for the time being in force, in addition to his being the Chairperson or a Member of that Tribunal,
may be appointed as the Chairperson or a Member, as the case may be, of the Appellate Tribunal
under this Act.]
S. 29.
22. [ *****]
S. 30.
The salary and allowances payable to and the other 23. [terms and conditions of service (including tenure of
office)] of the Chairperson and other Members shall be such as may be prescribed:
Provided that neither the salary and allowances nor the other terms and conditions of service of the
Chairperson or any other Member shall be varied to his disadvantage after appointment.
S. 31.
Page 629
Vacancies.--
vacancy is filled.
S. 32.
24. [
Provided that the Chief Justice of India shall be consulted before removal of the
Chairperson or a Member who was appointed on the recommendation of the Chief Justice of India.]
S. 33.
S. 34.
Page 630
(2) The officers and employees of the Appellate Tribunal shall discharge their functions under the
general superintendence of the Chairperson.
S. 35.
other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own procedure.
(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the
same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while
trying a suit, in respect of the following matters, namely:--
( a ) summoning and enforcing the attendance of any person and examining him on oath;
(d) subject to the provisions ofSections 123 and 124 of the Indian Evidence Act, 1872 (1 of
any office;
(g) dismissing a representation for default or deciding it ex parte ;
ex parte ; and
Tribunal as a decree of civil court and, for this purpose, the Appellate Tribunal shall have all the
powers of a civil court.
(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any
order made by it to a civil court having local jurisdiction and such civil court shall execute the order
as if it were a decree made by that court.
meaning of Sections 193 and 228Indian Penal Code (45 of 1860) and the Appellate Tribunal shall be
deemed to be a civil court for the purposes of Sections 345 and 346Code of Criminal Procedure, 1973
(2 of 1974).
Page 631
S. 36.
Where any Benches are constituted, the Chairperson may, from time to time, by notification, make provisions
as to the distribution of the business of the Appellate Tribunal amongst the Benches and also provide for the matters
S. 37.
S. 38.
If the Members of a Bench consisting of two Members differ in opinion on any point, they shall state the point
or points on which they differ, and make a reference to the Chairperson who shall either hear the point or points
himself or refer the case for hearing on such point or points by 25. [third Member] of the Appellate Tribunal and such
point or points shall be decided according to the opinion of the majority of the Members of the Appellate Tribunal
who have heard the case, including those who first heard it.
S. 39.
officers.--
Appellate Tribunal.
Explanation .--For the purposes of this sub-section, the expression "authorised representative"
shall have the same meaning as assigned to it under sub-section (2) of Section 288 of the Incometax
Act , 1961 (43 of 1961).
Page 632
S. 40
The Chairperson, Members and other officers and employees of the Appellate Tribunal, the Adjudicating
Authority, Director and the officers subordinate to him shall be deemed to be public servants within the meaning of
Section 21 of the Indian Penal Code (45 of 1860).
S. 41.
No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the
Director, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine and
no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in
pursuance of any power conferred by or under this Act.
S. 42.
Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court
within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any
question of law or fact arising out of such order:
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.
Explanation .--For the purposes of this section, "High Court" means--
(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on
business or personally works for gain; and
( ii ) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which
the respondent, or in a case where there are more than one respondent, any of the respondents,
ordinarily resides or carries on business or personally works for gain.
CHAPTER VII
SPECIAL COURTS
Page 633
S. 43.
Special Courts.--
Explanation .--In this sub-section, "High Court" means the High Court of the State in which a
Sessions Court designated as Special Court was functioning immediately before such designation.
(2) While trying an offence under this Act, a Special Court shall also try an offence, other than an
Procedure, 1973 (2 of 1974), be charged at the same trial.
S. 44.
(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),--
( a ) the scheduled offence and offence punishable under Section 4 shall be triable only by the
Provided that the Special Court, trying a scheduled offence before the commencement
of this Act, shall continue to try such scheduled offence; or
(b) a Special Court may, 26. [* * *] upon a complaint made by an authority authorised in this
for trial.
(2) Nothing contained in this section shall be deemed to affect the special powers of the High Court
regarding bail under Section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High
Court may exercise such powers including the power under Clause ( b ) of sub-section (1) of that
section as if the reference to "Magistrate" in that section includes also a reference to a "Special Court"
designated under Section 43.
S. 45.
27. [(1)Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) no person
accused of an offence punishable for a term of imprisonment of more than three years under Part A of
the Schedule shall be released on bail or on his own bond unless,--]
Page 634
(i) the Public Prosecutor has been given an opportunity to oppose the application for such
release; and
(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are
Provided that a person, who, is under the age of sixteen years or is a woman or is sick or
infirm, may be released on bail, if the Special Court so directs:
(ii) any officer of the Central Government or State Government authorised in writing in this
behalf by the Central Government by a general or a special order made in this behalf by that
Government.
28. [(1A)Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) or any
other provisions of this Act, no police officer shall investigate into an offence under this Act unless
specifically authorised, by the Central Government by a general or special order, and, subject to such
conditions as may be prescribed.]
(2) The limitation on granting of bail specified in 29. [* * *] sub-section (1) is in addition to the
limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time
S. 46.
Application of the Code of Criminal Procedure, 1973 to proceedings before Special Court.--
(1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of
Public Prosecutor:
Provided that the Central Government may also appoint for any case or class or group of cases
a Special Public Prosecutor.
under this section unless he has been in practice as an Advocate for not less than seven years, under
(3) Every person appointed as a Public Prosecutor or a Special Public Prosecutor under this section shall
be deemed to be a Public Prosecutor within the meaning of Clause ( u ) of Section 2 of the Code of
Criminal Procedure, 1973 (2 of 1974) and the provisions of that Code shall have effect accordingly.
S. 47.
Page 635
The High Court may exercise, so far as may be applicable, all the powers conferred by Chapter XXIX or
Chapter XXX of the Code of Criminal Procedure, 1973 (2 of 1974), on a High Court, as if a Special Court within the
local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the
CHAPTER VIII
AUTHORITIES
S. 48.
There shall be the following classes of authorities for the purposes of this Act, namely:--

S. 49.
(1) The Central Government may appoint such persons as it thinks fit to be authorities for the purposes
of this Act.
S. 50.
(1) The Director shall, for the purposes of Section 12, have the same powers as are vested in a civil court
Page 636
under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following
matters, namely:--
( a) discovery and inspection;
produce any records during the course of any investigation or proceeding under this Act.

(b) retain in his custody any such records for a period exceeding three months, without obtaining
the previous approval of the Director.
S. 51.
( a ) territorial area;
S. 52.
Page 637
The Central Government may, from time to time, issue such orders, instructions and directions to the authorities
as it may deem fit for the proper administration of this Act and such authorities and all other persons employed in

S. 53.
The Central Government may, by a special or general order, empower an officer not below the rank of Director
of the Central Government or of a State Government to act as an authority under this Act:
Provided that the Central Government may empower an officer below the rank of Director if the officer of the
rank of the Director or above are not available in a particular area.
S. 54.
The following officers are hereby empowered and required to assist the authorities in the enforcement of this
Act, namely:--
( a) officers of the Customs and Central Excise Departments;

Substances Act, 1985 (61 of 1985);
(c) income-tax authorities under sub-section (1) of Section 117 of the Income-tax Act, 1961 (43 of
1961);
Act, 1956 (42 of 1956);
Bank of India Act, 1934 (2 of 1934);
Management Act, 1999 (40 of 1999);
(h) officers of the Securities and Exchange Board of India established underSection 3 of the Securities
and Exchange Board of India Act, 1992 (15 of 1992);
Page 638
CHAPTER IX

S. 55.
Definitions.--
(a)
"contracting State"
means any country or place outside India in respect of which arrangements have been
made by the Central Government with the Government of such country through a
treaty or otherwise;
(b)
"identifying"
includes establishment of a proof that the property was derived from, or used in the
commission of an offence under Section 3;
(c)
"tracing"
means determining the nature, source, disposition, movement, title or ownership of
property.
S. 56.
Page 639
India for--
( a ) enforcing the provisions of this Act;
under this Act,
implementing the agreement.
(2) The Central Government may, by notification in the Official Gazette, direct that the application of
this Chapter in relation to a contracting State with which reciprocal arrangements have been made,
shall be subject to such conditions, exceptions or qualifications as are specified in the said
notification.
S. 57.
Letters of request to a contracting State in certain cases.--
(1) Notwithstanding anything contained in this Act or the Code of Criminal Procedure, 1973 (2 of 1974)
request to a court or an authority in the contracting State competent to deal with such request to--
request.
this behalf.
S. 58.
Page 640
S. 59.
(1) Where a Special Court, in relation to an offence punishable under Section 4, desires that--
or execution--
produce it, or
(d) a search warrant,
issued by a Court, Judge or Magistrate in a contracting State, it shall cause the same to be served
or executed as if it were a summons or warrant received by it from another court in the said territories
with the procedure specified under Section 19;
Provided that in a case where a summons or search warrant received from a contracting State
has been executed, the documents or other things produced or things found in the search shall be
forwarded to the court issuing the summons or search-warrant through such authority as the Central
Special Court or the Central Government may impose such conditions as that court or Government
deems fit.
S. 60.

Page 641
under Section 8, and such property is suspected to be in a contracting State, the Special Court, on an
application by the Director or the Administrator appointed under sub-section (1) of Section 10, as the
(3) The Director shall, on receipt of a letter of request under Section 58 or Section 59, direct any
Chapter V shall apply to the property in respect of which letter of request is received from a court or
30. [(7) When any property in India is confiscated as a result of execution of a request from a contracting
State in accordance with the provisions of this Act, the Central Government may either return such
property to the requesting State or compensate that State by disposal of such property on mutually
agreed terms that would take into account deduction for reasonable expenses incurred in investigation,
prosecution or judicial proceedings leading to the return or disposal of confiscated property.]
S. 61.
Every letter of request, summons or warrant, received by the Central Government from, and every letter of
request, summons or warrant, to be transmitted to a contracting State under this Chapter shall be transmitted to a
contracting State or, as the case may be, sent to the concerned court in India and in such form and in such manner as
the Central Government may, by notification, specify in this behalf.
CHAPTER X
MISCELLANEOUS
S. 62.

Page 642

shall for every such offence be liable on conviction for imprisonment for a term which may
extend to two years or fine which may extend to fifty thousand rupees or both.
S. 63.
be made under this Act shall on conviction be liable for imprisonment for a term which may extend to
two years or with fine which may extend to fifty thousand rupees or both.
( a ) being legally bound to state the truth of any matter relating to an offence under Section 3,
this Act; or
(b) refuses to sign any statement made by him in the course of any proceedings under this Act,
he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but
which may extend to ten thousand rupees for each such default or failure.
(3) No order under this section shall be passed by an authority referred to in sub-section (2) unless the
S. 64.
(1) No court shall take cognizance of any offence under Section 62 or sub-section (1) of Section 63
S. 65.
Page 643
The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not
prosecution and all other proceedings under this Act.
S. 66.
The Director or any other authority specified by him by a general or special order in this behalf may furnish or
cause to be furnished to--
and psychotropic substances under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of
1985); or
( ii ) such other officer, authority or body performing functions under any other law as the Central
Director or any other authority, specified by him in the performance of their functions under this Act,
purpose of the officer, authority or body specified in Clause ( i ) or Clause ( ii ) to perform his or its
S. 67.
Bar of suits in Civil Courts.--
No suit shall be brought in any civil court to set aside or modify any proceeding taken or order made under this
Act and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government
for anything done or intended to be done in good faith under this Act.
S. 68.
No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to
have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or
shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order,
Page 644
document or other proceeding if such notice, summons, order, documents or other proceeding is in substance and
effect in conformity with or according to the intent and purpose of this Act.
S. 69.
Where any fine imposed on any person under Section 13 or Section 63 is not paid within six months from the
day of imposition of fine, the Director or any other officer authorised by him in this behalf may proceed to recover
the amount from the said person in the same manner as prescribed in Schedule II of the Income-tax Act, 1961 (43 of
S. 70.
Provided that nothing contained in this sub-section shall render any such person liable to
punishment if he proves that the contravention took place without his knowledge or that he exercised
all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the
provisions of this Act or of any rule, direction or order made thereunder has been committed by a
company and it is proved that the contravention has taken place with the consent or connivance of, or
is attributable to any neglect on the part of any director, manager, secretary or other officer of any
company, such director, manager, secretary or other officer shall also be deemed to be guilty of the
contravention and shall be liable to be proceeded against and punished accordingly.
Explanation .--For the purposes of this section,--

(i)
"company"
means any body corporate and includes a firm or other association of
individuals; and
(ii)
"director",
in relation to a firm, means a partner in the firm.
Page 645
S. 71.
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any
other law for the time being in force.
S. 72.
(1) Where--
( a ) any property of a person has been attached under Section 8 and no appeal against the order
(i) in a case referred to in Clause ( a ), such person dies or is adjudicated an insolvent
(ii) in a case referred to in Clause ( b ), such person dies or is adjudicated an insolvent
(2) Where--
( a ) after passing of a decision or order by the Appellate Tribunal, no appeal has been preferred to
the High Court under Section 42; or
then--
(i) in a case referred to in Clause ( a ), the person entitled to file the appeal dies or is adjudicated
an insolvent before preferring an appeal to the High Court, or
(ii) in a case referred to in Clause ( b ), the person who had filed the appeal dies or is adjudicated
an insolvent during the pendency of the appeal befor the High Court,
(3) The powers of the official assignee or the official receiver under sub-section (1) or subsection (2)
shall be exercised by him subject to the provisions of the Presidency-towns Insolvency Act, 1909 (3
Page 646
of 1909) or the Provincial Insolvency Act, 1920 (5 of 1920), as the case may be.
S. 73.
(1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.
( a ) the form in which records referred to in this Act may be maintained;
(b) the manner in which the order and the material referred to in sub-section (2) of Section 5 to
be maintained;
(c) matters in respect of experience of Members under the proviso to sub-section (3) of Section
6;
of the Adjudicating Authority under sub-section (9) of Section 6;
(e) the salaries and allowances payable to and other terms and conditions of service of the
officers and employees of the Adjudicating Authority under sub-section (3) of Section 7;
received and managed under sub-section (2) of Section 10;
of a civil court under Clause ( f ) of sub-section (1) of Section 11;
Clause ( a ) of sub-section (1) of Section 12;
(i) the time within which the information of transactions under Clause ( b ) of sub-section (1) of
institutions and intermediaries under Clause ( c ) of sub-section (1) of Section 12;
(k) the procedure and the manner of maintaining and furnishing information under subsection (1)
of Section 12 as required under Section 15;
(l) the manner in which the reasons and material referred to in sub-section (2) of Section 16
shall be mentioned;
(m) the rules relating to search and seizure under sub-section (1) of Section 17;
(q) the manner in which records authenticated outside India may be received under subsection (2)
of Section 22;
(r) the form of appeal and the fee for filing such appeal, under sub-section (3) of Section 26;
(s) the salary and allowances payable to and the other 31. [terms and conditions of service
under Section 30;
Page 647
Appellate Tribunal under sub-section (3) of Section 34;

Civil Court under Clause ( i ) of sub-section (2) of Section 35;
32.Ins. by Act 20 of 2005, s. 8 (w.e.f. 1-7-2005).(ua)
conditions subject to which a police officer may be
authorised to investigate into an offence under sub-section (1A) of section 45;]
(v) the additional matters in respect of which the authorities may exercise powers of a civil court
under Clause ( f ) of sub-section (1) of Section 50;
(w) the rules relating to impounding and custody of records under sub-section (5) of Section 50;
(x) any other matter which is required to be, or may be prescribed.
S. 74.
Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or
more successive sessions, and if, before the expiry of the session immediately following the session or the successive
S. 75.
Provided that no order shall be made under this section after the expiry of two years from the
commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each
THE SCHEDULE
[See Section 2 (y)]
PART A
Page 648

121 Waging, or attempting to wage war or abetting waging of war, against the Govern-
ment of India.
121-A Conspiracy to commit offences punishable by Section 121 against the State.
33. [489A Counterfeiting currency notes or bank notes.
489B Using as genuine, forged or counterfeit currency notes or bank notes.]
PARAGRAPH 2

34. [15 Contravention in relation to poppy straw.
21 Contravention in relation to manufactured drugs and preparations.]
23 Illegal import into India, export from India to transhipment of nar-
cotic drugs and psychotropic substances.
24 External dealings in narcotic drugs and psychotropic substances in
contravention ofSection 12 of the Narcotic Drugs and Psychotropic
Substances Act, 1985.
25-A Contravention of orders made underSection 9 -A of the Narcotic
Drugs and Psychotropic Substances Act, 1985.
35. [PARAGRAPH 3
Page 649
OFFENCES UNDER THE EXPLOSIVE SUBSTANCES ACT, 1908

4 Attempt to cause explosion, or for making or keeping explosives
with intent to endanger life or property.
5 Making or possessing explosives under suspicious circumstances.]
36. [PARAGRAPH 4

16A Punishment for making demands of radioactive substances,
nuclear devices, etc.
18A Punishment for organising of terrorist camps.
18B Punishment for recruiting of any person or persons for ter-
rorist act.
20 Punishment for being member of terrorist gang or organisa-
tion.
39 Offence relating to support given to a terrorist organisation.
PART B
Page 650
37.Paragraph 1 of Schedule, Part B, substituted by the Prevention of

1-6-2009).[PARAGRAPH 1

120B Criminal conspiracy.
257 Making or selling instrument for counterfeiting Government stamp.
260 Using as genuine a Government stamp known to be counterfeit.
302 Murder.
304 Punishment for culpable homicide not amounting to murder.
327 Voluntarily causing hurt to extort property, or to constrain to an il-
legal act.
329 Voluntarily causing grievous hurt to extort property, or to constrain
to an illegal act.
364A Kidnapping for ransom, etc.
412 Dishonestly receiving property stolen in the commission of a da-
coity.
418 Cheating with knowledge that wrongful loss may ensue to person
whose interest offender is bound to protect.
421 Dishonest or fraudulent removal or concealment of property to pre-
vent distribution among creditors.
422 Dishonestly or fraudulently preventing debt being available for
creditors.
Page 651
423 Dishonest or fraudulent execution of deed of transfer containing

false statement of consideration.
424 Dishonest or fraudulent removal or concealment of property.
472 and 473 Making or possessing counterfeit seal, etc., with intent to commit
forgery.
485 Making or possession of any instrument for counterfeiting a prop-
erty mark.
487 Making a false mark upon any receptacle containing goods.
488 Punishment for making use of any such false mark.
PARAGRAPH 2

transfer, conversion, repair, test or proof, any arms or ammunition in
contravention of Section 5 of the Arms Act, 1959.
To acquire, have in possession or carry any prohibited arms or prohib-
ited ammunition in contravention ofSection 7 of the Arms Act, 1959.
Contravention ofSection 24 -A of the Arms Act, 1959 relating to pro-
Contravention ofSection 24 -B of the Arms Act, 1959 relating to pro-
hibition as to carrying of notified arms in or through public places in
disturbed areas.
26 To do any act in contravention of any provisions ofSections 3, 4, 10 or
To do any act in contravention of any provisions ofSections 5, 6, 7 or
Page 652
27 Use of arms or ammunitions in contravention of Section 5 or use of

any arms or ammunition in contravention ofSection 7 of the Arms Act,
1959.
28 Use and possession of fire arms or imitation fire arms in certain cases.
29 Knowingly purchasing arms from unlicensed person or for delivering
arms, etc., to person not entitled to possess the same.
Arms Act, 1959 or any rule made thereunder.
PARAGRAPH 3

38. [51 read with Section 9 Hunting of wild animals.]
51 read with Section 17 A Contravention of provisions of Section 17 -A relating to prohibi-
tion of picking, uprooting, etc. of specified plants.
51 read with Section 39 Contravention of provisions of Section 39 relating to wild anim-
als, etc., to be Government property.
51 read with Section 44 Contravention of provisions of Section 44 relating to dealings in
trophy and animal articles without licence prohibited.
51 read with Section 48 Contravention of provisions of Section 48 relating to purchase of
animal, etc., by licensee.
51 read with Section 49 -B Contravention of provisions of Section 49 -B relating to prohibi-
tion of dealings in trophies, animal articles, etc., derived from
scheduled animals.
PARAGRAPH 4

5 Procuring, including or taking person for the sake of prostitu-
tion.
6 Detaining a person in premises where prostitution is carried
Page 653
on.
PARAGRAPH 5

7 Public servant taking gratification other than legal remuneration in
respect of an official Act.
8 Taking gratification in order, by corrupt or illegal means, to influ-
ence public servant.
9 Taking gratification for exercise of personal influence, with public
servant.
10 Abetment by public servant of offences defined inSection 8 or 9 of
the Prevention of Corruption Act, 1988.
39. [13 Criminal misconduct by a public servant.]
40. [PARAGRAPH 6
OFFENCES UNDER THE EXPLOSIVES ACT, 1884

PARAGRAPH 7

Page 654

ures.
28 Offences by companies.
PARAGRAPH 8

12A read with section 24 Prohibition of manipulative and deceptive devices, insider trading
and substantial acquisition of securities or control.
PARAGRAPH 9

PARAGRAPH 10

18 Punishment for extracting bonded labour under the bonded la-
bour system.
Page 655
PARAGRAPH 11

14 Punishment for employment of any child to work in contravention
of the provisions of section 3.
PARAGRAPH 12

Act.
PARAGRAPH 13

25 Penalty for giving intoxicating liquor or narcotic drug or psycho-
tropic substance to juvenile or child.
Page 656
PARAGRAPH 14

PARAGRAPH 15

12 Offences and penalties
PARAGRAPH 16

14B Penalty for using forged passport.
l4C Penalty for abetment.
PARAGRAPH 17

Page 657

by this Act.
63A Enhanced penalty on second and subsequent convictions.
63B Knowing use of infringing copy of computer programme.
68A Penalty for contravention of section 52 A.
PARAGRAPH 18

104 Penalty for selling goods or providing services to which false trade-
mark or false trade description is applied.
PARAGRAPH 19

75 Act to apply for offence or contravention committed outside
India.
PARAGRAPH 20
Page 658

55 read with section 6 Penalties for contravention of section 6, etc.
PARAGRAPH 21

70 read with section 68 Penalty for applying false denomination, etc.
71 read with section 68 Penalty for selling varieties to which false denomination
is applied.
72 read with section 68 Penalty for falsely representing a variety as registered.
73 read with section 68 Penalty for subsequent offence.
PARAGRAPH 22

15 read with section 7 Penalty for discharging environmental pollutants.
15 read with section 8 Penalty for handling hazardous substance.
PARAGRAPH 23

Page 659

PARAGRAPH 24

37 Failure to comply with the provisions for operating industrial
plant.
PARAGRAPH 25


3 Offences against ship, fixed platform, cargo of a ship, maritime
navigational facilities, etc.]
41.Part C of the Schedule, inserted by the Prevention of

1-6-2009).[PART C
(1) Part A; or
(3) the offences against property under Chapter XVII of the Indian Penal Code.]
Page 660
* As amended by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009) [(w.e.f. 1-6-2009) vide
Notification No. S.O. 1388(E), dated 1-6-2009).
1. 1-7-2005 vide Notification No. G.S.R. 436(E), dated 1-7-2005.
4. Substituted by Act 21 of 2009, s. 2, for "a non-banking financial company" (w.e.f. 1-6-2009).
5. Ins. by Act 20 of 2005, s. 2 (w.e.f. 1-7-2005).
7. Clauses (ra) to (rc) inserted by Act 21 of 2009, s. 2 (w.e.f. 1-6-2009).
8. Sub-clauses (ii) and (iii) substituted for sub-clause (ii) by the Prevention of Money-Laundering (Amendment) Act, 2009 (21
of 2009), s. 2 (w.e.f. 1-6-2009).
9. Substituted for the words "ninety days" by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 3
(w.e.f. 1-6-2009).
10. Provisos substituted for the existing proviso by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009),
s. 3 (w.e.f. 1-6-2009).
11. Substituted for "one or more Adjudicating Authorities" by the Prevention of Money-Laundering (Amendment) Act, 2009
(21 of 2009), s. 4 (w.e.f. 1-6-2009).
12. Substituted for "sixty-two" by the Act 21 of 2009, s. 4 (w.e.f. 1-6-2009).
13. Subs. for the words and figure "offence under Section 3 " by the Prevention of Money-Laundering (Amendment) Act, 2009
(21 of 2009), s. 5 (w.e.f. 1-6-2009).
14. Substituted by the Act 21 of 2009, s. 6 (w.e.f. 1-6-2009).
15. Substituted for the words "the Director" by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s.
7 (w.e.f. 1-6-2009).
16. Proviso substituted by Act 21 of 2009, s. 7 (w.e.f. 1-6-2009).
17. Proviso inserted by Act 21 of 2009, s. 8 (w.e.f. 1-6-2009).
18. Proviso omitted by Act 21 of 2009, s. 8 (w.e.f. 1-6-2009).

Page 661
19. Subs. by Act 20 of 2005, s. 3 for "High Court" (w.e.f. 1-7-2005).
20. Clause (a) "( a ) is or has been a Judge of a High Court; or" omitted by the Prevention of Money-Laundering (Amendment)
Act, 2009 (21 of 2009), s. 9 (w.e.f. 1-6-2009).
21. Ins. by Act 20 of 2005, s. 3 (w.e.f. 1-7-2005).
22. S. 29 [Term of office] omitted by Act 20 of 2005, s. 4 (w.e.f. 1-7-2005).
23. Subs. by Act 20 of 2005, s. 5, for terms and conditions of service" (w.e.f. 1-7-2005).
24. Proviso inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 10 (w.e.f. 1-6-2009).
25. Substituted for "one or more of the other Members" by the Prevention of Money-Laundering (Amendment) Act, 2009 (21
of 2009), s. 11 (w.e.f. 1-6-2009).
26. The words "upon perusal of police report of the facts which constitute an offence under this Act or" omitted by Act 20 of
2005, s. 6 (w.e.f. 1-7-2005).
29. Omitted by Act 20 of 2005, s. 7 (w.e.f. 1-7-2005).
30. Sub-section (7) of Section 60 inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 12
(w.e.f. 1-6-2009).
32. Ins. by Act 20 of 2005, s. 8 (w.e.f. 1-7-2005).
33. Sections and entries relating thereto inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009),
s. 13 (w.e.f. 1-6-2009).
34. Substituted for sections 15, 18 and 20 and the entries relating thereto by the Prevention of Money-Laundering
(Amendment) Act, 2009 (21 of 2009), s. 13 (w.e.f. 1-6-2009).
13 (w.e.f. 1-6-2009).
13 (w.e.f. 1-6-2009).
37. Paragraph 1 of Schedule, Part B, substituted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009),
s. 13 (w.e.f. 1-6-2009).
Page 662
40. Paragraphs 6 to 25 of Schedule, Part B, inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of
2009), s. 13 (w.e.f. 1-6-2009).
41. Part C of the Schedule, inserted by the Prevention of Money-Laundering (Amendment) Act, 2009 (21 of 2009), s. 13
(w.e.f. 1-6-2009).
Sarkar: Criminal Minor Acts/Sarkar Criminal Minor Acts/CHAPTER 109/CHAPTER 109 THE PREVENTION OF
MONEY-LAUNDERING ACT, 2002*Received the assent of the President on 17.1.2003 and published in the Gazette
of India, Ext., Pt. II, Section 1, dated 20.1.2003, pp. 1-29, No. 16.(Act No. 15 of 2003)
[17th January, 2003][17th January, 2003]
An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved in,
money-laundering and for matters connected therewith or incidental thereto.
WHEREAS the Political Declaration and Global Programme of Act ion, annexed to the resolution S-17/2 was
adopted by the General Assembly of the United Nations at its seventeenth special session on the twenty-third
day of February, 1990;
AND WHEREAS the Political Declaration adopted by the Special Session of THE UNITED NATIONS General
CHAPTER I
PRELIMINARY
S. 1.
(1) This Act may be called The Prevention of Money-Laundering Act , 2002.
(3) It shall come into force on such date1. as the Central Government may, by notification in the Official
Page 663
S. 2.
Definitions.--
(a) means an Adjudicating Authority appointed under sub-section (1) of Section 6

;
(b) means the Appellate Tribunal established under Section 25 ;
(c) means an Assistant Director appointed under sub-section (1) of Section 49 ;
"attachment"
(d) means prohibition of transfer, conversion, disposition or movement of property

by an order issued under Chapter III;
"authorised person"
2.[(da) means an authorised person as defined in Clause (c) of Section 2 of the

Foreign Exchange Management Act , 1999 (42 of 1999);]
"banking company"
(e) means a banking company or a co-operative bank to which the Banking

Regulation Act , 1949 (10 of 1949) applies and includes any bank or banking
"Bench"
(f) means a Bench of the Appellate Tribunal;
"Chairperson"
Page 664
(g) means the Chairperson of the Appellate Tribunal;
"chit fund company"
(h) means a company managing, conducting or supervising, as foreman, agent or in

any other capacity, chits as defined in Section 2 of the Chit Funds Act , 1982
(40 of 1982);
"co-operative bank"
(i) shall have the same meaning as assigned to it in Clause (dd) of Section 2 of
the Deposit Insurance and Credit Guarantee Corporation Act , 1961(47 of
1961);
"Deputy Director"
(j) means a Deputy Director appointed under sub-section (1) of Section 49 ;
3.[(ja) means carrying on act ivities for playing games of chance for cash or kind, and
includes such activities associated with casino or such other act ivities as the
"Director"
(k) or "Additional Director" or "Joint Director" means a Director or Additional

Director or Joint Director, as the case may be, appointed under sub-section (1)
of Section 49 ;
(l) means a financial institution as defined in Clause (c) of Section 45 -I of the

Reserve Bank of India Act , 1934 (2 of 1934) and includes a chit fund
company, a co-operative bank, a housing finance institution and 4.[an
authorised person, a payment system operator and a non-banking financial
company];
(m) shall have the meaning as assigned to it in Clause (d) of Section 2 of the
National Housing Bank Act , 1987 (53 of 1987);
Page 665
"intermediary"
(n) means a stock-broker, sub-broker, share transfer agent, banker to an issue,

with securities market and registered under Section 12 of the Securities and
Exchange Board of India Act , 1992 (15 of 1992);
"investigation"
5.[(na) includes all the proceedings under this Act conducted by the Director or by an
"Member"
(o) means a Member of the Appellate Tribunal and includes the Chairperson;
"money-laundering"
(p) has the meaning assigned to it in Section 3 ;
(q) shall have the same meaning as assigned to it in Clause (f) of Section 45 -I of
the Reserve Bank of India Act , 1934 (2 of 1934) 6.[and includes a person
"notification"
(r) means a notification published in the Official Gazette;
"offence of cross border implications"
7.[(ra) , means--
(i) any conduct by a person at a place outside India which constitutes an
offence at that place and which would have constituted an offence
specified in Part A, Part B or Part C of the Schedule, had it been
committed in India and if such person remits the proceeds of such
conduct or part thereof to India; or
(ii) any offence specified in Part A, Part B or Part C of the Schedule which
has been committed in India and the proceeds of crime, or part thereof
have been transferred to a place outside India or any attempt has been
made to transfer the proceeds of crime, or part thereof from India to a
place outside India.
Page 666
Explanation.--Nothing contained in this clause shall adversely affect any

commencement of the Prevention of Money-Laundering (Amendment) Act,
2009;
"payment system"
(rb) means a system that enables payment to be effected between a payer and a
Explanation.--For the purposes of this clause, "payment system" includes the

systems enabling credit card operations, debit card operations, smart card
operations, money transfer operations or similar operations;
(rc) means a person who operates a payment system and such person includes his
overseas principal.
Explanation.--For the purposes of this clause, "Overseas principal" means,--

(A) in the case of a person, being an individual, such individual residing
outside India, who owns or controls or manages, directly or indirectly,
the act ivities or functions of payment system in India;
(B) in the case of a Hindu undivided family, karta of such Hindu undivided
family residing outside India who owns or controls or manages, directly
or indirectly, the activities or functions of payment system in India;
(C) in the case of a company, a firm, an association of persons, a body of
individuals, an artificial juridical person, whether incorporated or not,
such company, firm, association of persons, body of individuals,
artificial juridical person incorporated or registered outside India or
existing as such and which owns or controls or manages, directly or
indirectly, the act ivities or functions of payment system in India;]
"person"
(s) includes--
(i) an individual,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated
or not,
(vi) every artificial juridical person not falling within any of the preceding
sub-clauses, and
(vii) any agency, office or branch owned or controlled by any of the above
persons mentioned in the preceding sub-clauses;
Page 667
"prescribed"
(t) means prescribed by rules made under this Act;
"proceeds of crime"
(u) means any property derived or obtained, directly or indirectly, by any person as
a result of criminal act ivity relating to a scheduled offence or the value of any
such property;
"property"
(v) means any property or assets of every description, whether corporeal or

wherever located;
"records"
(w) include the records maintained in the form of books or stored in a computer or
"Schedule"
(x) means the Schedule to this Act;
"scheduled offence"
(y) means--
8.[(ii)the offences specified under Part B of the Schedule if the total value
involved in such offences is thirty lakh rupees or more; or
(iii) the offences specified under Part C of the Schedule;]
"Special Court"
(z) means a Court of Session designated as Special Court under sub-section (1) of
Section 43 ;
"transfer"
Page 668
(za) includes sale, purchase, mortgage, pledge, gift, loan or any other form of
"value"
(zb) means the fair market value of any property on the date of its acquisition by any
person, or if such date cannot be determined, the date on which such property is
possessed by such person.
CHAPTER II
S. 3.
involved in any process or act ivity connected with the proceeds of crime and projecting it as untainted property shall
S. 4.
Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which
shall not be less than three years but which may extend to seven years and shall also be liable to fine which may
extend to five lakh rupees:
Provided that where the proceeds of crime involved in money-laundering relates to any offence
specified under paragraph 2 of Part A of the Schedule, the provisions of this Section shall have effect
as if for the words "which may extend to seven years", the words "which may extend to ten years" had
been substituted.
CHAPTER III
S. 5.

Page 669
the purposes of this Section, has reason to believe (the reason for such belief to be recorded in
(a) any person is in possession of any proceeds of crime;
crime under this Chapter,
he may, by order in writing, provisionally attach such property for a period not exceeding 9.[one
hundred and fifty days] from the date of the order, in the manner provided in the Second Schedule to
the Income-tax Act , 1961 (43 of 1961) and the Director or the other officer so authorised by him, as
the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule:
10.[Provided that no such order of attachment shall be made unless, in relation to the
scheduled offence, a report has been forwarded to a Magistrate under Section 173 of
the Code of Criminal Procedure , 1973 (2 of 1974), or a complaint has been filed by a
person authorised to investigate the offence mentioned in the Schedule, before a
Magistrate or Court for taking cognizance of the scheduled offence, as the case may
be:
Provided further that, notwithstanding anything contained in Clause (b), any property
of any person may be attached under this Section if the Director or any other officer
not below the rank of Deputy Director authorised by him for the purposes of this
Section has reason to believe (the reasons for such belief to be recorded in writing), on
the basis of material in his possession, that if such property involved in
money-laundering is not attached immediately under this Chapter, the non-attachment
of the property is likely to frustrate any proceeding under this Act .]
attachment under sub-section (1), forward a copy of the order, alongwith the material in his
(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the
period specified in that sub-section or on the date of an order made under sub-section (2) of Section 8
, whichever is earlier.
(4) Nothing in this Section shall prevent the person interested in the enjoyment of the immovable
Explanation.--For the purposes of this sub-section, "person interested", in relation to

any immovable property, includes all persons claiming or entitled to claim any interest
in the property.
Page 670
S. 6.
(1) The Central Government shall, by notification, appoint 11.[an Adjudicating Authority] to exercise
(a) in the field of law, unless he--
service;
(4) The Central Government shall appoint a Member to be the Chairperson of the Adjudicating Authority.
(5) Subject to the provisions of this Act ,--
(a) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof;
specify;
Provided that no Chairperson or other Member shall hold office as such after he has
attained the age of 12.[sixty-five] years.
Provided that neither the salary and allowances nor the other terms and conditions of
Page 671
service of the Member shall be varied to his disadvantage after appointment.
Provided that the Chairperson or any other Member shall, unless he is permitted by the
Central Government to relinquish his office sooner, continue to hold office until the
expiry of three months from the date of receipt of such notice or until a person duly
appointed as his successor enters upon his office or until the expiry of his term of
office, whichever is the earliest.
resignation or otherwise, the senior-most Member shall act as the Chairperson of the Adjudicating as
the Chairperson of the Adjudicating Authority until the date on which a new Chairperson, appointed
in accordance with the provisions of this Act to fill such vacancy, enters upon his office.
Procedure , 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to
the other provisions of this Act, the Adjudicating Authority shall have powers to regulate its own
procedure.
S. 7.
S. 8.
Adjudication.--
Page 672
(1) On receipt of a complaint under sub-section (5) of Section 5 , or applications made under sub-section
(4) of Section 17 or under sub-section (10) of Section 18 , if the Adjudicating Authority has reason
to believe that any person has committed an 13.[offence under Section 3 or is in possession of
proceeds of crime], it may serve a notice of not less than thirty days on such person calling upon him
to indicate the sources of his income, earning or assets, out of which or by means of which he has
acquired the property attached under sub-section (1) of Section 5 , or, seized under Section 17 or
Section 18 , the evidence on which he relies and other relevant information and particulars, and to
show cause why all or any of such properties should not be declared to be the properties involved in
money-laundering and confiscated by the Central Government:
Provided that where a notice under this sub-section specifies any property as being
held by a person on behalf of any other person, a copy of such notice shall also be
served upon such other person:
Provided further that where such property is held jointly by more than one person, such
notice shall be served to all persons holding such property.

(a) considering the reply, if any, to the notice issued under sub-section (1);
(b) hearing the aggrieved person and the Director or any other officer authorised by him in this
behalf; and
by an order, record a finding whether all or any of the properties referred to in the notice issued under
sub-section (1) are involved in money-laundering:
notice had been issued, such person shall also be given an opportunity of being heard
to prove that the property is not involved in money-laundering.
record shall--
(a) continue during the pendency of the proceedings relating to any scheduled offence before a
Court; and
(b) become final after the guilt of the person is proved in the trial Court and order of such trial
Court becomes final.
Page 673
under Clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity to
the person concerned, make an order confiscating such property.
S. 9.
encumbrances:
Provided that where the Adjudicating Authority, after giving an opportunity of being heard to any
other person interested in the property attached under this Chapter, or seized under Chapter V, is of
the opinion that any encumbrance on the property or lease-hold interest has been created with a view
to defeat the provisions of this Chapter, it may, by order, declare such encumbrance or lease-hold
interest to be void and thereupon the aforesaid property shall vest in the Central Government free
from such encumbrances or lease-hold interest:
Provided further that nothing in this Section shall operate to discharge any person from any liability in
respect of such encumbrances which may be enforced against such person by a suit for damages.
S. 10.
the property which is vested in the Central Government under Section 9 .
S. 11.
(1) The Adjudicating Authority shall, for the purposes of this Act , have the same powers as are vested in
a civil Court under the Code of Civil Procedure , 1908 (5 of 1908) while trying a suit in respect of the
(a) discovery and inspection;
Page 674

(3) Every proceeding under this Section shall be deemed to be a judicial proceeding within the meaning
CHAPTER IV

INTERMEDIARIES
S. 12.

(a) maintain a record of all transactions, the nature and value of which may be prescribed, whether
such transactions comprise of a single transaction or a series of transactions integrally
(b) furnish information of transactions referred to in Clause (a) to the Director within such time as
may be prescribed;
prescribed:
or intermediary, as the case may be, has reason to believe that a single transaction or
series of transactions integrally connected to each other have been valued below the
prescribed value so as to defeat the provisions of this Section, such officer shall furnish
information in respect of such transactions to the Director within the prescribed time.
14.Sub. by Act 21 of 2009, Section 6, for sub-section (2) (w.e.f. 1.6.2009).[(2)

(a) the records referred to in Clause (a) of sub-section (1) shall be maintained for a period of ten
years from the date of transactions between the clients and the banking company or financial
institution or intermediary, as the case may be;
(b) the records referred to in Clause (c) of sub-section (1) shall be maintained for a period of ten
years from the date of cessation of transactions between the to clients and the banking
company or financial institution or intermediary, as the case may be.]
S. 13.

Page 675
intermediary or any of its officers has failed to comply with the provisions contained in Section 12 ,
then, without prejudice to any other act ion that may be taken under any other provisions of this Act,
sub-section.
S. 14.
Save as otherwise provided in Section 13 , the banking companies, financial institutions, intermediaries and their
officers shall not be liable to any civil proceedings against them for furnishing information under Clause (b) of
sub-section (1) of Section 12 .
S. 15.
intermediary.--
implementing the provisions of this Act .
CHAPTER V
S. 16.
Power of survey.--
(ii) in respect of which he is authorised for the purposes of this Section by such other authority,
Page 676
relevant to, any proceedings under this Act .
Explanation.--For the purposes of this sub-section, a place, where an act which

constitutes the commission of the offence is carried on, shall also include any other
place, whether any act ivity is carried on therein or not, in which the person carrying
on such activity states that any of his records or any part of his property relating to
such act are or is kept.
sub-section immediately after completion of survey, forward a copy of the reasons so recorded
alongwith material in his possession, referred to in that sub-section, to the Adjudicating Authority in a
(3) An authority acting under this Section may--
(iii) record the statement of any person present in the place which may be useful for, or relevant to,
any proceeding under this Act .
S. 17.
(1) Where 15.[the Director or any other officer not below the rank of Deputy Director authorised by him
for the purposes of this Section,] on the basis of information in his possession, has reason to believe
then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to--
the powers conferred by Clause (a) where the keys thereof are not available;
therefrom;
Page 677

property, in respect of all matters relevant for the purposes of any investigation under this Act
:
16.[Provided that no search shall be conducted unless, in relation to the scheduled

offence, a report has been forwarded to a Magistrate under Section 157 of the Code
of Criminal Procedure , 1973 (2 of 1974), or a complaint has been filed by a person
authorised to investigate the offence mentioned in the Schedule before a Magistrate or
Court for taking cognizance of the scheduled offence, as the case may be.]
seizure, forward a copy of the reasons so recorded alongwith material in his possession, referred to in
may be prescribed.
(3) Where an authority, upon information obtained during survey under Section 16 , is satisfied that any
Provided that no authorisation referred to in sub-section (1) shall be required for search
under this sub-section.
(4) The authority, seizing any record or property under this Section, shall, within a period of thirty days
S. 18.
under this Act :
17.[Provided that no search of any person shall be made unless, in relation to the
scheduled offence, a report has been forwarded to a Magistrate under Section 173 of
the Code of Criminal Procedure , 1973 (2 of 1974), or a complaint has been filed by a
person authorised to investigate the offence mentioned in the Schedule, before a
Magistrate or Court for taking cognizance of the scheduled offence, as the case may
be.]
Page 678
seizure, forward a copy of the reasons so recorded alongwith material in his possession, referred to in
may be prescribed.
(3) Where an authority is about to search any person, he shall, if such person so requires, take such person
within twenty-four hours to the nearest Gazetted Officer, superior in rank to him, or a Magistrate:
Provided that the period of twenty-four hours shall exclude the time necessary for the
journey undertaken to take such person to the nearest Gazetted Officer, superior in
rank to him, or Magistrate's Court.
journey from the place of detention to the office of the Gazetted Officer, superior in
rank to him, or the Magistrate's Court.
made.
(6) Before making the search under sub-section (1) or sub-section (5), the authority shall call upon two or
more persons to attend and witness the search, and the search shall be made in the presence of such
persons.
(7) The authority shall prepare a list of record or property seized in the course of the search and obtain the
signatures of the witnesses on the list.
(9) The Authority shall record the statement of the person searched under sub-section (1) or sub-section
(5) in respect of the records or proceeds of crime found or seized in the course of the search:
18.Proviso omitted by Act 21 of 2009, Section 8, for (w.e.f. 1.6.2009).
[* * *]
(10) The authority, seizing any record or property under sub-section (1) shall, within a period of thirty days
from such seizure, file an application requesting for retention of such record or property, before the
S. 19.
Power to arrest.--
reason to believe (that reason for such belief to be recorded in writing) that any person has been guilty
of an offence punishable under this Act , he may arrest such person and shall, as soon as may be,
Page 679
of such person under sub-section (1), forward a copy of the order alongwith the material in his
(3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a Judicial
journey from the place of arrest to the Magistrate's Court.
S. 20.
(1) Where any property has been seized under Section 17 or Section 18 , and the officer authorised by
purposes of adjudication under Section 8 , such property may be retained for a period not exceeding
(2) The officer authorised by the Director immediately after he has passed an order for retention of the
property for purposes of adjudication under Section 8 shall forward a copy of the order alongwith the
money-laundering and the property is required for the purposes of adjudication under Section 8 .
(5) After passing the order of confiscation under sub-section (6) of Section 8 , the Adjudicating
money-laundering to the person from whom such properties were seized.
S. 21.
(1) Where any records have been seized under Section 17 or Section 18 , and the Investigating Officer
Page 680
adjudication under Section 8 .
(5) After passing of an order of confiscation under sub-section (6) of Section 8 , the Adjudicating
S. 22.
the handwriting of, any particular person, are in that person's handwriting, and in the case of a
Act , the Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be,
shall--
(a) presume, that the signature and every other part of such record which purports to be in the
handwriting of any particular person or which the Court may reasonably assume to have been
S. 23.
Page 681
Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or
are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under Section 8
, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining
transactions form part of such inter-connected transactions.
S. 24.
Burden of proof.--
When a person is accused of having committed the offence under Section 3 , the burden of proving that proceeds of
crime are untainted property shall be on the accused.
CHAPTER VI
APPELLATE TRIBUNAL
S. 25.
The Central Government shall, by notification, establish an Appellate Tribunal to hear appeals against the orders of
the Adjudicating Authority and the authorities under this Act.
S. 26.
by the Adjudicating Authority under this Act , may prefer an appeal to the Appellate Tribunal.
made under sub-section (2) of Section 13 , may prefer an appeal to the Appellate Tribunal.
prescribed:
Provided that the Appellate Tribunal after giving an opportunity of being heard
entertain an appeal after the expiry of the said period of forty-five days if it is satisfied
that there was sufficient cause for not filing it within that period.
Page 682
S. 27.
(a) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof;
may deem fit;
specify;
S. 28.
Supreme Court or of a 19.[High Court or is qualified to be a Judge of the High Court].
20.Clause (a) omitted by Act 21 of 2009, Section 9 (w.e.f. 1.6.2009).
[* * *]
equivalent post in that Service for at least three years;
Accountants Act , 1949 (38 of 1949) or as a registered accountant under any law for the time
Page 683
least ten years:
Provided that one of the members of the Appellate Tribunal shall be from
category mentioned in Clause (f); or
(3) No sitting Judge of the Supreme Court or of a High Court shall be appointed under this Section except
21.Ins. by Act 20 of 2005, Section 3 (w.e.f. 1.7.2005).[(4)
The Chairperson or a Member holding a post as such in
any other Tribunal, established under any law for the time being in force, in addition to his being the
Chairperson or a Member of that Tribunal, may be appointed as the Chairperson or a Member, as the
case may be, of the Appellate Tribunal under this Act .]
S. 29.
Term of office.--
[Omitted by the Prevention of Money-Laundering (Amendment) Act, 2005 (20 of 2005), Section 4 (w.e.f. 1.7.2005)].
S. 30.
The salary and allowances payable to and the other terms and conditions of service (including tenure of office) of the
Chairperson and other Members shall be such as may be prescribed:
Provided that neither the salary and allowances nor the other 22.[terms and conditions of service
(including tenure of office)] of the Chairperson or any other Member shall be varied to his
disadvantage after appointment.
S. 31.
Vacancies.--
vacancy is filled.
S. 32.
Page 684
Provided that the Chairperson or any other Member shall, unless he is permitted by the
Central Government to relinquish his office sooner, continue to hold office until the
expiry of three months from the date of receipt of such notice or until a person duly
appointed as his successor enters upon his office or until the expiry of his term of
office, whichever is the earliest.
23.[Provided that the Chief Justice of India shall be consulted before removal of the
Chairperson or a Member who was appointed on the recommendation of the Chief
Justice of India.]
S. 33.
S. 34.
(2) The officers and employees of the Appellate Tribunal shall discharge their functions under the general
superintendence of the Chairperson.
S. 35.
Page 685
Procedure , 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to
the other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own
procedure.
(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act , the
same powers as are vested in a civil Court under the Code of Civil Procedure , 1908 (5 of 1908)
while trying a suit, in respect of the following matters, namely:--
(d) subject to the provisions ofSections 123 and 124 of the Indian Evidence Act , 1872 (1 of
any office;
(g) dismissing a representation for default or deciding it ex parte;
ex parte; and
Tribunal as a decree of civil Court and, for this purpose, the Appellate Tribunal shall have all the
powers of a civil Court.
(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any order
made by it to a civil Court having local jurisdiction and such civil Court shall execute the order as if it
were a decree made by that Court.
meaning of Sections 193 and 228 Indian Penal Code (45 of 1860) and the Appellate Tribunal shall
be deemed to be a civil Court for the purposes of Sections 345 and 346 Code of Criminal Procedure
, 1973 (2 of 1974).
S. 36.
Where any Benches are constituted, the Chairperson may, from time to time, by notification, make provisions as to
the distribution of the business of the Appellate Tribunal amongst the Benches and also provide for the matters
S. 37.
Page 686
S. 38.
If the Members of a Bench consisting of two Members differ in opinion on any point, they shall state the point or
points on which they differ, and make a reference to the Chairperson who shall either hear the point or points himself
or refer the case for hearing on such point or points by 24.[third Member] of the Appellate Tribunal and such point or
points shall be decided according to the opinion of the majority of the Members of the Appellate Tribunal who have
heard the case, including those who first heard it.
S. 39.
officers.--
Appellate Tribunal.
Explanation.--For the purposes of this sub-section, the expression "authorised

representative" shall have the same meaning as assigned to it under sub-section (2) of
Section 288 of the Income-tax Act , 1961 (43 of 1961).
S. 40.
The Chairperson, Members and other officers and employees of the Appellate Tribunal, the Adjudicating Authority,
Director and the officers subordinate to him shall be deemed to be public servants within the meaning of Section 21
of the Indian Penal Code (45 of 1860).
S. 41.
No civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Director,
an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine and no
injunction shall be granted by any Court or other authority in respect of any act ion taken or to be taken in pursuance
of any power conferred by or under this Act.
Page 687
S. 42.
Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within
sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question
of law or fact arising out of such order:
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause
from filing the appeal within the said period, allow it to be filed within a further period not exceeding
sixty days.
Explanation.--For the purposes of this Section, "High Court" means--
(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides
or carries on business or personally works for gain; and
(ii) where the Central Government is the aggrieved party, the High Court within the
jurisdiction of which the respondent, or in a case where there are more than one
respondent, any of the respondents, ordinarily resides or carries on business or
personally works for gain.
CHAPTER VII
SPECIAL COURTS
S. 43.
Special Courts.--
Explanation.--In this sub-section, "High Court" means the High Court of the State in
which a Sessions Court designated as Special Court was functioning immediately
before such designation.
(2) While trying an offence under this Act , a Special Court shall also try an offence, other than an
Procedure , 1973 (2 of 1974), be charged at the same trial.
S. 44.

Page 688
(1) Notwithstanding anything contained in the Code of Criminal Procedure , 1973 (2 of 1974),--
(a) the scheduled offence and offence punishable under Section 4 shall be triable only by the
Provided that the Special Court, trying a scheduled offence before the
commencement of this Act, shall continue to try such scheduled offence; or
(b) a Special Court may, 25.[* * *] upon a complaint made by an authority authorised in this
for trial.
(2) Nothing contained in this Section shall be deemed to affect the special powers of the High Court
regarding bail under Section 439 of the Code of Criminal Procedure , 1973 (2 of 1974) and the High
Court may exercise such powers including the power under Clause (b) of sub-section (1) of that
Section as if the reference to "Magistrate" in that Section includes also a reference to a "Special
Court" designated under Section 43 .
S. 45.
(1) 26.[Notwithstanding anything contained in the Code of Criminal Procedure , 1973 (2 of 1974), no
person accused of an offence punishable for a term of imprisonment of more than three years under
Part A of the Schedule shall be released on bail or on his own bond unless--]
(i) the Public Prosecutor has been given an opportunity to oppose the application for such release;
and
(ii) where the Public Prosecutor opposes the application, the Court is satisfied that there are
Provided that a person, who is under the age of sixteen years or is a woman or is sick
or infirm, may be released on bail, if the Special Court so directs:
(ii) any officer of the Central Government or State Government authorised in
writing in this behalf by the Central Government by a general or a special order
made in this behalf by that Government.
27.Ins. by Act 20 of 2005, Section 7 (w.e.f. 1.7.2005).[(1-A)

Notwithstanding anything contained in the Code of
Criminal Procedure , 1973 (2 of 1974), or any other provision of this Act, no police officer shall
investigate into an offence under this Act unless specifically authorised, by the Central Government
by a general or special order, and, subject to such conditions as may be prescribed;]
Page 689
(2) The limitation on granting of bail specified in 28.[* * *] of sub-section (1) is in addition to the
limitations under the Code of Criminal Procedure , 1973 (2 of 1974) or any other law for the time
S. 46.
Application of the Code of Criminal Procedure , 1973 to proceedings before Special Court.--
(1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure , 1973 (2 of
Public Prosecutor:
Provided that the Central Government may also appoint for any case or class or group
of cases a Special Public Prosecutor.
under this Section unless he has been in practice as an Advocate for not less than seven years, under
(3) Every person appointed as a Public Prosecutor or a Special Public Prosecutor under this Section shall
be deemed to be a Public Prosecutor within the meaning of Clause (u) of Section 2 of the Code of
Criminal Procedure , 1973 (2 of 1974) and the provisions of that Code shall have effect accordingly.
S. 47.
The High Court may exercise, so far as may be applicable, all the powers conferred by Chapter XXIX or Chapter
XXX of the Code of Criminal Procedure , 1973 (2 of 1974), on a High Court, as if a Special Court within the local
limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the
CHAPTER VIII
AUTHORITIES
S. 48.
There shall be the following classes of authorities for the purposes of this Act , namely:--

Page 690
S. 49.
(1) The Central Government may appoint such persons as it thinks fit to be authorities for the purposes of
this Act .
S. 50.
(1) The Director shall, for the purposes of Section 12 , have the same powers as are vested in a civil
Court under the Code of Civil Procedure , 1908 (5 of 1908) while trying a suit in respect of the
(a) discovery and inspection;
produce any records during the course of any investigation or proceeding under this Act .

(b) retain in his custody any such records for a period exceeding three months,
without obtaining the previous approval of the Director.
Page 691
S. 51.
(a) territorial area;
S. 52.
The Central Government may, from time to time, issue such orders, instructions and directions to the authorities as it
may deem fit for the proper administration of this Act and such authorities and all other persons employed in

S. 53.
The Central Government may, by a special or general order, empower an officer not below the rank of Director of
the Central Government or of a State Government to act as an authority under this Act :
Provided that the Central Government may empower an officer below the rank of Director if the
officer of the rank of the Director or above are not available in a particular area.
S. 54.

Page 692
The following officers are hereby empowered and required to assist the authorities in the enforcement of this Act,
namely:--
(a) officers of the Customs and Central Excise Departments;

Substances Act , 1985 (61 of 1985);
(c) income-tax authorities under sub-section (1) of Section 117 of the Income-tax Act , 1961 (43 of
1961);
Act , 1956 (42 of 1956);
Bank of India Act , 1934 (2 of 1934);
Management Act , 1999 (40 of 1999);
(h) officers of the Securities and Exchange Board of India established under Section 3 of the Securities
and Exchange Board of India Act , 1992 (15 of 1992);
CHAPTER IX

S. 55.
Definitions.--
"contracting State"
means any country or place outside India in respect of which arrangements have been made by the
Central Government with the Government of such country through a treaty or otherwise;
"identifying"
includes establishment of a proof that the property was derived from, or used in the commission of an
offence under Section 3 ;
"tracing"
means determining the nature, source, disposition, movement, title or ownership of property.
S. 56.

Page 693
India for--
(a) enforcing the provisions of this Act ;
under this Act ,
mplementing the agreement.
(2) The Central Government may, by notification in the Official Gazette, direct that the application of this
Chapter in relation to a contracting State with which reciprocal arrangements have been made, shall
be subject to such conditions, exceptions or qualifications as are specified in the said notification.
S. 57.
Letter of request to a contracting State in certain cases.--
(1) Notwithstanding anything contained in this Act or the Code of Criminal Procedure , 1973 (2 of 1974)
request to a Court or an authority in the contracting State competent to deal with such request to--
request.
this behalf.
S. 58.
S. 59.
Page 694
(1) Where a Special Court, in relation to an offence punishable under Section 4 , desires that--
(a) a summons to an accused person, or
or execution--
(a) a summons to an accused person, or
produce it, or
issued by a Court, Judge or Magistrate in a contracting State, it shall cause the same to be served or
executed as if it were a summons or warrant received by it from another Court in the said territories
with the procedure specified under Section 19 ;
Provided that in a case where a summon or search warrant received from a contracting
State has been executed, the documents or other things produced or things found in the
search shall be forwarded to the Court issuing the summons or search-warrant through
such authority as the Central Government may, by notification, specify in this behalf.
Special Court or the Central Government may impose such conditions as that Court or Government
deems fit.
S. 60.

Page 695
under Section 8 , and such property is suspected to be in a contracting State, the Special Court, on an
application by the Director or the Administrator appointed under sub-section (1) of Section 10 , as the
(3) The Director shall, on receipt of a letter of request under Section 58 or Section 59 , direct any
Chapter V shall apply to the property in respect of which letter of request is received from a Court or
29.Ins. by Act 21 of 2009, Section 10 (w.e.f. 1.6.2009).[(7)
When any property in India is confiscated as a result of
execution of a request from a contracting State in accordance with the provisions of this Act , the
Central Government may either return such property to the requesting State or compensate that State
by disposal of such property on mutually agreed terms that would take into account deduction for
reasonable expenses incurred in investigation, prosecution or judicial proceedings leading to the
return or disposal of confiscated property.]
S. 61.
Every letter of request, summons or warrant, received by the Central Government from, and every letter of request,
summons or warrant, to be transmitted to a contracting State under this Chapter shall be transmitted to a contracting
State or, as the case may be, sent to the concerned Court in India and in such form and in such manner as the Central
CHAPTER X
MISCELLANEOUS
S. 62.
Page 696

shall for every such offence be liable on conviction for imprisonment for a term which may extend to two years or
fine which may extend to fifty thousand rupees or both.
S. 63.
be made under this Act shall on conviction be liable for imprisonment for a term which may extend
to two years or with fine which may extend to fifty thousand rupees or both.
(2) If any person,--
(a) being legally bound to state the truth of any matter relating to an offence under Section 3 ,
this Act; or
(b) refuses to sign any statement made by him in the course of any proceedings under this Act ,
he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may
extend to ten thousand rupees for each such default or failure.
(3) No order under this Section shall be passed by an authority referred to in sub-section (2) unless the
S. 64.
(1) No Court shall take cognizance of any offence under Section 62 or sub-section (1) of Section 63
S. 65.
The provisions of the Code of Criminal Procedure , 1973 (2 of 1974) shall apply, in so far as they are not
Page 697
prosecution and all other proceedings under this Act .
S. 66.
The Director or any other authority specified by him by a general or special order in this behalf may furnish or cause
to be furnished to--
and psychotropic substances under the Narcotic Drugs and Psychotropic Substances Act , 1985 (61 of
1985); or
(ii) such other officer, authority or body performing functions under any other law as the Central
Director or any other authority, specified by him in the performance of their functions under this Act ,
purpose of the officer, authority or body specified in Clause (i) or Clause (ii) to perform his or its
S. 67.
Bar of suits in civil Courts.--
No suit shall be brought in any civil Court to set aside or modify any proceeding taken or order made under this Act
and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government for
anything done or intended to be done in good faith under this Act .
S. 68.
No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have
been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or shall
be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order,
document or other proceeding if such notice, summons, order, document or other proceeding is in substance and
effect in conformity with or according to the intent and purpose of this Act .
S. 69.
Where any fine imposed on any person under Section 13 or Section 63 is not paid within six months from the day
of imposition of fine, the Director or any other officer authorised by him in this behalf may proceed to recover the
amount from the said person in the same manner as prescribed in Schedule II of the Income-tax Act , 1961 (43 of
Page 698
S. 70.
Provided that nothing contained in this sub-section shall render any such person liable
to punishment if he proves that the contravention took place without his knowledge or
that he exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions
of this Act or of any rule, direction or order made thereunder has been committed by a company and it
is proved that the contravention has taken place with the consent or connivance of, or is attributable to
any neglect on the part of any director, manager, secretary or other officer of any company, such
director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and
shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this Section,--
"company"
(i) means any body corporate and includes a firm or other association of
individuals; and
"director"
(ii) , in relation to a firm, means a partner in the firm.
S. 71.
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other
law for the time being in force.
S. 72.

Page 699
(1) Where--
(a) any property of a person has been attached under Section 8 and no appeal against the order
(i) in a case referred to in Clause (a), such person dies or is adjudicated an insolvent
(ii) in a case referred to in Clause (b), such person dies or is adjudicated an insolvent
(2) Where--
(a) after passing of a decision or order by the Appellate Tribunal, no appeal has been preferred to
the High Court under Section 42 ; or
then--
(i) in a case referred to in Clause (a), the person entitled to file the appeal dies or is
adjudicated an insolvent before preferring an appeal to the High Court, or
(ii) in a case referred to in Clause (b), the person who had filed the appeal dies or is
adjudicated an insolvent during the pendency of the appeal before the High Court,
(3) The powers of the official assignee or the official receiver under sub-section (1) or sub-section (2)
shall be exercised by him subject to the provisions of the Presidency-towns Insolvency Act , 1909 (3
of 1909) or the Provincial Insolvency Act , 1920 (5 of 1920), as the case may be.
S. 73.
(1) The Central Government may, by notification, make rules for carrying out the provisions of this Act .
(a) the form in which records referred to in this Act may be maintained;
(b) the manner in which the order and the material referred to in sub-section (2) of Section 5 to be
maintained;
(c) matters in respect of experience of Members under the proviso to sub-section (3) of Section 6
;
of the Adjudicating Authority under sub-section (9) of Section 6 ;
Page 700
(e) the salaries and allowances payable to the other terms and conditions of service of the officers
and employees of the Adjudicating Authority under sub-section (3) of Section 7 ;
received and managed under sub-section (2) of Section 10 ;
of a civil Court under Clause (f) of sub-section (1) of Section 11 ;
Clause (a) of sub-section (1) of Section 12 ;
(i) the time within which the information of transactions under Clause (b) of sub-section (1) of
institutions and intermediaries under Clause (c) of sub-section (1) of Section 12 ;
(k) the procedure and the manner of maintaining and furnishing information under sub-section (1)
of Section 11 as required under Section 15 ;
(l) the manner in which the reasons and material referred to in sub-section (2) of Section 16 shall
be mentioned;
(m) the rules relating to search and seizure under sub-section (1) of Section 17 ;
shall be maintained.
(q) the manner in which records authenticated outside India may be received under sub-section (2)
of Section 22 ;
(r) the form of appeal and the fee for filing such appeal, under sub-section (3) of Section 26 ;
(s) the salary and allowances payable to and the other 30.[terms and conditions of service
under Section 30 ;
Appellate Tribunal under sub-section (3) of Section 34 ;
civil Court under Clause (i) of sub-section (2) of Section 35 ;
31.Ins. by Act 20 of 2005, Section 8 (w.e.f. 1.7.2005).[(ua)
conditions subject to which a police officer may
be authorised to investigate into an offence under sub-section (1-A) of Section 45 ;]
(v) the additional matters in respect of which the authorities may exercise powers of a civil Court
under Clause (f) of sub-section (1) of Section 50 ;
(w) the rules relating to impounding and custody of records under sub-section (5) of Section 50 .
(x) any other matter which is required to be, or may be, prescribed.
S. 74.
Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament,
while it is in session, for a total period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately following the session or the successive
Page 701
S. 75.
Provided that no order shall be made under this Section after the expiry of two years
from the commencement of this Act.
(2) Every order made under this Section shall be laid, as soon as may be after it is made, before each
THE SCHEDULE
[See Section 2(y)]
PART A

121 Waging, or attempting to wage war or abetting waging of
war, against the Government of India.
121-A Conspiracy to commit offences punishable by Section
121 against the State.
[489-A Counterfeiting currency notes or bank notes.
bank notes.]
PARAGRAPH 2
OFFENCES UNDER THE NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES ACT , 1985

[15 Contravention in relation to poppy straw.
Page 702

21 Contravention in relation to manufactured drugs and pre-
parations.]
23 Illegal import into India, export from India to transship-
ment of narcotic drugs and psychotropic substances.
24 External dealings in narcotic drugs and psychotropic sub-
stances in contravention of Section 12 of the Narcotic
Drugs and Pyshotropic Substances Act , 1985.
25-A Contravention of orders made under Section 9 -A of the
Narcotic Drugs and Psychotropic Substances Act , 1985.
34.[PARAGRAPH 3
OFFENCES UNDER THE EXPLOSIVE SUBSTANCES ACT , 1908

4 Attempt to cause explosion, or for making or keeping ex-
plosives with intent to endanger life or property.
5 Making or possessing explosives under suspicious circum-
stances.
PARAGRAPH 4
OFFENCES UNDER THE UNLAWFUL ACTIVITIES (PREVENTION) ACT , 1967

10 read with Section 3 Penalty for being member of an unlawful associ-
ation, etc.
11 read with Section 3 and 7 Penalty for dealing with funds of an unlawful asso-
ciation.
13 read with Section 3 Punishment for unlawful activities.
16 read with Section 15 Punishment for terrorist act.
16-A Punishment for making demands of radioactive
substances, nuclear devices, etc.
18-A Punishment for organising of terrorist camps.
18-B Punishment for recruiting of any person or persons
Page 703
for terrorist act.

19 Punishment for harbouring etc.
20 Punishment for being member of terrorist gang or
organization.
38 Offence relating to membership of a terrorist or-
ganisation.
39 Offence relating to support given to a terrorist or-
ganisation.
40 Offence of raising fund for a terrorist organisa-
tion.]
PART B
35.Sub. by Act 21 of 2009, Section 13, for paragraph 1 (w.e.f.

1.6.2009).[PARAGRAPH 1OFFENCES UNDER THE INDIAN PENAL
CODE
120-B Criminal conspiracy.
257 Making or selling instrument for counterfeiting Gov-
ernment stamp.
260 Using as genuine a Government stamp known to be
counterfeit.
302 Murder.
304 Punishment for culpable homicide not amounting to
murder.
327 Voluntarily causing hurt to extort property, or to con-
strain to an illegal act.
329 Voluntarily causing grievous hurt to extort property, or
to constrain to an illegal act.
392 to 402 Offences relating to robbery and decoity.
Page 704
412 Dishonestly receiving property stolen in the commis-

sion of a decoity.
418 Cheating with knowledge that wrongful loss may en-
sure to person whose interest offender is bound to pro-
tect.
420 Cheating and dishonestly inducing delivery of proper-
ties.
421 Dishonest or fraudulent removal or concealment of
property to prevent distribution among creditors.
422 Dishonestly or fraudulently preventing debt being
available for creditors.
423 Dishonestly or fraudulently execution of deed of trans-
fer containing false statement of consideration.
424 Dishonestly or fraudulently removal or concealment of
property.
471 Using as genuine a forged document or electronic re-
cord.
472 and 473 Making or possessing counterfeit seal, etc., with intent
to commit forgery.
485 Making or possession of any instrument for counterfeit-
ing a property mark.
487 Making a false mark upon any receptacle containing
goods.
488 Punishment for making use of any such false mark.]
PARAGRAPH 2
OFFENCES UNDER THE ARMS ACT , 1959

Page 705
transfer, conversion, repair, test or proof, any arms or ammunition

in contravention of Section 5 of the Arms Act , 1959.
To acquire, have in possession or carry any prohibited arms or pro-
hibited ammunition in contravention of Section 7 of the Arms Act ,
1959.
Contravention of Section 24 -A of the Arms, 1959 relating to pro-
Contravention of Section 24 -B of the Arms, 1959 relating to pro-
hibition as to carrying of notified arms in or through public places
in disturbed areas.
Other offences specified in Section 25 .
26 To do any act in contravention of any provisions of Section 3 ,4,10
or 12 of the Arms Act , 1959 in such manner as specified in sub-
section (1) of Section 26 of the said Act.
To do any act in contravention of any provisions of Section 5 ,6,7
or 11 of the Arms Act , 1959 in such manner as specified in sub-
section (1) of Section 26 of the said Act.
27 Use of arms or ammunitions in contravention of Section 5 or use
of any arms or ammunition in contravention of Section 7 of the
Arms Act , 1959.
28 Use and possession of fire arms or imitation fire arms in certain
cases.
29 Knowingly purchasing arms from unlicensed person or for deliver-
ing arms, etc., to person not entitled to possess the same.
Arms Act , 1959 or any rule made thereunder.
PARAGRAPH 3
OFFENCES UNDER THE WILDLIFE (PROTECTION) ACT, 1972

[51 read with Section 9 Hunting of wild animals.]
51 read with Section 17 -A Contravention of provisions of Section 17 -A relating to
prohibition of picking, uprooting, etc., of specified plants.
51 read with Section 39 Contravention of provisions of Section 39 relating to wild
animals, etc., to be Government property.
51 read with Section 44 Contravention of provisions of Section 44 relating to
dealings in trophy and animal articles without licence pro-
hibited.
51 read with Section 48 Contravention of provisions of Section 48 relating to pur-
chase of animal, etc., by licenses.
51 read with Section 49 -B Contravention of provisions of Section 49 -B relating to
prohibition of dealings in trophies, animal articles, etc.,
derived from scheduled animals.
Page 706
PARAGRAPH 4

5 Procuring, inducing or taking person for the sake of prostitution.
6 Detaining a person in premises where prostitution is carried on.
PARAGRAPH 5
OFFENCES UNDER THE PREVENTION OF CORRUPTION ACT , 1988

7 Public servant taking grantification other than legal remuneration in respect of an
official Act.
8 Taking grantification in order, by corrupt or illegal means, to influence public
servant.
9 Taking grantification for exercise of personal influence, with public servant.
10 Abetment by public servant of offences defined in Section 8 or 9 of the Pre-
vention of corruption Act , 1988.
[13 Criminal misconduct by a public servant.]
38.PARAGRAPH 6
OFFENCES UNDER THE EXPLOSIVES ACT , 1884

9-C Offences by Companies.
PARAGRAPH 7

25 read with Section 3 Contravention of export trade in antiquities and art treasures.
28 Offences by Companies.
PARAGRAPH 8
OFFENCES UNDER THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT , 1992

12-A read with Section 24 Prohibition of manipulative and deceptive devices, insider
trading and substantial acquisition of securities or control.
Page 707
PARAGRAPH 9
OFFENCES UNDER THE CUSTOMS ACT , 1992

135 Evasion of duty or prohibition.
PARAGRAPH 10

18 Punishment for extracting bonded labour under the bonded labour system.
PARAGRAPH 11

14 Punishment for employment of any child to work in contraven-
tion of the provisions of Section 3 .
PARAGRAPH 12
OFFENCES UNDER THE TRANSPLANTATION OF HUMAN ORGANS ACT , 1972

19 Punishment for commercial dealings inhuman organs.
Act.
PARAGRAPH 13

23 Punishment for cruelty to juvenile of child.
25 Penalty for giving intoxicating liquor or narcotic drug or psy-
chotropic substance to juvenile or child.
PARAGRAPH 14
Page 708
OFFENCES UNDER THE EMIGRATION ACT , 1983

PARAGRAPH 15
OFFENCES UNDER THE PASSPORTS ACT , 1983

PARAGRAPH 16
OFFENCES UNDER THE FOREIGNERS ACT , 1946

14-B Penalty for using forged passport.
14-C Penalty for abetment.
PARAGRAPH 17
OFFENCES UNDER THE COPYRIGHT ACT , 1957

by this Act.
63-A Enhanced penalty on second and subsequent convictions.
63-B Knowing use of infringing copy of computer programme.
68-A Penalty for contravention of Section 52 -A.
PARAGRAPH 18
OFFENCES UNDER THE TRADE MARKS ACT , 1957

104 Penalty for selling goods or providing services to which raise
trademark or false trade description is applied.
PARAGRAPH 19
OFFENCES UNDER THE INFORMATION TECHNOLOGY ACT , 2000

Page 709

75 Act to apply for offence or contravention committed outside In-
dia.
PARAGRAPH 20

55 read with 6 Penalties for contravention of Section 6 , etc.
PARAGRAPH 21

70 read with 68 Penalty for applying false denomination, etc.
71 read with 68 Penalty for selling varieties to which false denomination is applied.
72 read with 68 Penalty for falsely representing a variety as registered.
73 read with 68 Penalty for subsequent offence.
PARAGRAPH 22
OFFENCES UNDER THE ENVIRONMENT PROTECTION ACT , 1986

15 read with 7 Penalty for discharging environmental pollutants.
15 read with 8 Penalty for handling hazardous substance.
PARAGRAPH 23
OFFENCES UNDER THE WATER (PREVENTION AND CONTROL OF POLLUTION) ACT , 1974

43 Penalty for contravention of provisions of Section 24 .
PARAGRAPH 24

37 Failure to comply with the provisions for operating industrial plant.
PARAGRAPH 25
Page 710


3 Offences against sharp, fixed platform, cargo of a ship,
maritime navigational facilities, etc.]
39.Ins. by Act 21 of 2009, Section 13 (iii) (w.e.f. 1.6.2009).[PART C
(1) Part A; or
(3) the offences against property under Chapter XVII of the Indian Penal Code .]
* Received the assent of the President on 17.1.2003 and published in the Gazette of India, Ext., Pt. II, Section 1, dated 20.1.2003,
pp. 1-29, No. 16.
1. Brought into force on 1.7.2005.
2. Ins. by Act 21 of 2009, Section 2 (w.e.f. 1.6.2009).
4. Subs. by Act 21 of 2009, Section 2 for "a non-banking financial company" (w.e.f. 1.6.2009).
8. Sub. by Act 21 of 2009, Section 2, for sub-Clause (ii) (w.e.f. 1.6.2009).
9. Sub. by Act 21 of 2009, Section 3, for "ninety days"(w.e.f. 1.6.2009).
10. Sub. by Act 21 of 2009, Section 3, for the proviso (w.e.f. 1.6.2009).
11. Sub. by Act 21 of 2009, Section 4, for "one or more Adjudicating Authorities" (w.e.f. 1.6.2009).
12. Sub. by Act 21 of 2009, Section 4, for "sixty-two" (w.e.f. 1.6.2009).
13. Sub. by Act 21 of 2009, Section 5, for "offence under section 3" (w.e.f. 1.6.2009).
14. Sub. by Act 21 of 2009, Section 6, for sub-section (2) (w.e.f. 1.6.2009).
15. Sub. by Act 21 of 2009, Section 7, for "the Director" (w.e.f. 1.6.2009).
16. Sub. by Act 21 of 2009, Section 7, for the proviso (w.e.f. 1.6.2009).
18. Proviso omitted by Act 21 of 2009, Section 8, for (w.e.f. 1.6.2009).

Page 711
19. Sub. by Act 20 of 2005, Section 3, for "High Court" (w.e.f. 1.7.2005).
20. Clause (a) omitted by Act 21 of 2009, Section 9 (w.e.f. 1.6.2009).
22. Sub. by Act 20 of 2005, Section 45, for "terms and conditions of service" (w.e.f. 1.7.2005).
24. Sub. by Act 21 of 2009, Section 11, for "one or more of the other Members" (w.e.f. 1.6.2009).
25. The words "upon perusal of police report of the facts which constitute an offence under this Act or" omitted by Act 20 of 2005,
Section 6 (w.e.f. 1.7.2005).
26. Sub. by Act 20 of 2005, Section 7, for certain words (w.e.f. 1.7.2005).
28. The words "Clause (b)" omitted by Act 20 of 2005, Section 7 (w.e.f. 1.7.2005).
30. Sub. by Act 20 of 2005, Section 8, for "terms and conditions of service" (w.e.f. 1.7.2005).
35. Sub. by Act 21 of 2009, Section 13, for paragraph 1 (w.e.f. 1.6.2009).
38. Ins. by Act 21 of 2009, Section 13 (ii) (d) (w.e.f. 1.6.2009).
39. Ins. by Act 21 of 2009, Section 13 (iii) (w.e.f. 1.6.2009).
Sarkar: Criminal Minor Acts/Sarkar Criminal Minor Acts/CHAPTER 129/CHAPTER 129 THE RAILWAYS ACT,
1989(Act No. 24 of 1989) *Published in the Gazette of India, Extraordinary, Pt. II, Section 1, dated 5th June, 1989 and
assented to by the President on 3rd June, 1989.
[3rd June, 1989][3rd June, 1989]
An Act to consolidate and amend the law relating to Railways.
BE it enacted by Parliament in the Fortieth Year of the Republic of India as follows:
CHAPTER I
PRELIMINARY
S. 1.
Short title and commencement.--
(1) This Act may be called the Railways Act , 1989.

(2) It shall come into force on such date1. as the Central Government may, by notification in the Official
Page 712
Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act , and
any reference in any such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.
S. 2.
Definitions.--
In this Act , unless the context otherwise, requires:
"authorised"
(1) means authorised by a railways administration;
"Authority"
2.[(1-A)means the Rail Land Development Authority constituted under Section 4 -A;]
"carriage"
(2) means the carriage of passengers or goods by a railway administration;
"Claims Tribunal"
(3) means the Railway Claims Tribunal established under Sections 3 of the Railway
Claims Tribunal Act , 1987 (54 of 1987);
"classification"
(4) means the classification of commodities made under Section 31 for the purpose of
determining the rates to be charged for carriage of such commodities;
"class rates"
(5) means the rate fixed for a class of commodity in the classification;
Page 713
"Commissioner"
(6) means the Chief Commissioner of Railway Safety or the Commissioner of Railway
Safety appointed under Section 5 ;
"commodity"
(7) means a specific item of goods;
"competent authority"
3.(7-A) means any person authorised by the Central Government, by notification, to perform
the functions of the competent authority for such area as may be specified in the
notification;]
"consignee"
(8) means the person named as consignee in a railway receipt;
"consignment"
(9) means goods entrusted to a railway administration for carriage;
"consignor"
(10) means the person, named in a railway receipt as consignor, by whom or on whose
behalf goods covered by the railway receipt are entrusted to a railway administration
for carriage;
"demurrage"
(11) means the charge levied for the detention of any rolling stock after the expiry of free
time, if any, allowed for such detention;
"endorsee"
(12) means the person in whose favour an endorsement is made, and in the case of
successive endorsements, the person in whose favour the last endorsement is made;
Page 714
"endorsement"
(13) means the signing by the consignee or the endorsee after adding a direction on a
railway receipt to pass the property in the goods mentioned in such receipt to a
specified person;
"fare"
(14) means the charge levied for the carriage of passengers;
"ferry"
(15) includes a bridge of boats, pontoons or rafts, a swing bridge, a fly-bridge and a
temporary bridge and the approaches to, and landing places of, a ferry;
"forwarding note"
(16) means the document executed under Section 64 ;
"freight"
(17) means the charge levied for the carriage of goods including transhipment charges, if
any;
"General Manager"
(18) means the General Manager of a Zonal Railway appointed under Section 4 ;
"goods"
(19) includes,--
(i) containers, pallets or similar articles of transport used to consolidate goods; and
(ii) animals;
"Government railway"
Page 715
(20) means a railway owned by the Central Government;
"in transit"
(21) , in relation to the carriage of goods by railway, means the period between the
commencement and the termination of transit of such goods, and unless otherwise
previously determined,--
(a) transit commences as soon as the railway receipt is issued or the consignment is
loaded, whichever is earlier;
(b) transit terminates on the expiry of the free time allowed for unloading of
consignment from any rolling stock and where such unloading has been
completed within such free time, transit terminates on the expiry of the free
time allowed, for the removal of the goods from the railway premises;
"level crossing"
(22) means an inter-section of a road with lines of rails at the same level;
"luggage"
(23) means the goods of a passenger either carried by him in his charge or entrusted to a
railway administration for carriage;
"lump sum rate"
(24) means the rate mutually agreed upon between a railway administration and a consignor
for the carriage of goods and for any service in relation to such carriage;
"non-Government Railway"
(25) means a railway other than a Government railway;
"notification"
(26) means a notification published in the Official Gazette;
"officer authorised"
Page 716
4.[(26-A)
means an officer authorised by the Central Government under sub-section (2) of
Section 179 ;]
"parcel"
(27) means goods entrusted to a railway administration for carriage by a passenger or a

parcel train;
"pass"
(28) means an authority given by the Central Government or a railway administration to a

person allowing him to travel as a passenger, but does not include a ticket;
"passenger"
(29) means a person travelling with a valid pass or ticket;
"person interested"
5.[(29-A)
includes, --
(i) all persons claiming an interest in compensation to be made on account of the
acquisition of land under this Act ;
(ii) tribals and other traditional forest dwellers, who have lost any traditional rights
recognised under the Scheduled Tribes and Other Traditional Forest Dwellers
(Recognition of Forest Rights) Act, 2006 (2 of 2007);
(iii) a person interested in an easement affecting the land; and
(iv) persons having tenancy rights under the relevant State laws;]
"prescribed"
(30) means prescribed by rules made under this Act ;
"railway"
(31) means a railway, or any portion of a railway, for the public carriage of passengers or
goods, and includes,--
(a) all lands within the fences or other boundary marks indicating the limits of the
land appurtenant to a railway;
(b) all lines of rails, sidings, or yards, or branches used for the purposes of, or in
Page 717
connection with, a railway;

(c) all electric traction equipments, power supply and distribution installations used
for the purposes of, or in connection with, a railway;
(d) all rolling stock, stations, offices warehouses, wharves, workshops,
manufactories, fixed plant and machinery, roads and streets, running rooms,
rest houses, institutes, hospitals, water works and water supply istallations, staff
dwellings and any other works constructed for the purpose of, or in connection
with, railway;
(e) all vehicles which are used on any road for the purposes of traffic of a railway
and owned, hired or worked by a railway; and
(f) all ferries, ships, boats and rafts which are used on any canal, river, lake or
other navigable inland waters for the purposes of the traffic of a railway and
owned, hired or worked by a railway administration,
but does not include,--
(i) a tramway wholly within a municipal area; and
(ii) lines of rails built in any exhibition ground, fair, park, or any other place solely
for the purpose of recreation;
"railway administration"
(32) in relation to,--

(a) a Government railway, means the General Manager of a Zonal railway; and
(b) a non-Government railway, means the person who is the owner or lessee of the
railway or the person working the railway under an agreement;
"railway land"
6.[(32-A)
means any land in which a Government railway has any right, title or interest;]
"railway receipt"
(33) means the receipt issued under Section 65 ;
"railway servant"
(34) means any person employed by the Central Government or by a railway administration
in connection with the service of a railway; 7.[including member of the Railway
Protection Force appointed under Clause (c) of sub-section (1) o2 of the Railway
Protection Force Act , 1957 (23 of 1957);]
"rate"
Page 718
(35) includes any fare, freight or any other charge for the carriage of any passenger or
goods;
"regulations"
(36) means the regulations made by the Railway Rates Tribunal under this Act ;
"rolling stock"
(37) includes locomotives, lenders, carriages, wagons rail-cars, containers, trucks, trolleys
and vehicles of all kinds moving on rails;
"special railway project"
8.[(37-A)
means a project, notified as such by the Central Government from time to time, for
providing national infrastructure for a public purpose in a specified time-frame,
covering one or more States or the Union Territories.]
"station to station rate"
(38) means a special reduced rate applicable to a specific commodity booked between
specified stations;
"traffic"
(39) includes rolling stock of every description, as well as passengers and goods;
"tribunal"
(40) means the Railway Rates Tribunal constituted under Section 33 ;
"wharfage"
(41) means the charge levied on goods for not removing them from the railway after the
expiry of the free time for such removal;
Page 719
"Zonal Railway"
(42) means a Zonal Railway constituted under Section 3 .
9.Chapter IIA (containing Sections 4-A to 4-I) ins. by Act 47 of 2005, Section 3 (w.e.f.
30.8.2006).[CHAPTER II-A
RAIL LAND DEVELOPMENT AUTHORITY
S. 4-A.
Establishment of Railway Land Development Authority.--
The Central Government may, by notification, establish an authority to be called the Rail Land Development
Authority to exercise the powers and discharge the functions conferred on it by or under this Act .
S. 4-D.
Functions of Authority.--
(1) The Authority shall discharge such functions and exercise such powers of the Central Government in
relation to the development of railway land and as are specifically assigned to it by the Central
Government.
(2) In particular, and without prejudice to the generality of the foregoing power, the Central Government
may assign to the Authority all or any of the following functions, namely:--
(i) to prepare scheme or schemes for use of railway land in conformity with the provisions of this
Act;
(ii) to develop railway land for commercial use as may be entrusted by the Central Government
for the purpose of generating revenue by non-tariff measures;
(iii) to develop and provide consultancy, construction or management services and undertake
operation in India in relation to the development of land and property;
(iv) to carry out any other work or function as may be entrusted to it by the Central Government,
by order in writing.
S. 4-E.
Powers of Authority to enter into agreements and execute contracts.--
Subject to such directions as may be given to it by the Central Government, the Authority shall be empowered to
enter into agreements on behalf of the Central Government and execute contracts.
S. 4-I.
Power of Authority to make regulations.--

Page 720
(1) The Authority may, with the previous approval of the Central Government, make regulations,
consistent with this Act and the rules made thereunder, for carrying out the provisions of this
Chapter.
(2) Every regulation made by the Authority under this Chapter shall be laid, as soon as may be after it is
made, before each House of Parliament, while it is in session for a total period of thirty days which
may be comprised in one session or in two or more successive sessions, and if before the expiry of the
session immediately following the session or the successive sessions aforesaid, both Houses agree in
making any modification in the regulation or both Houses agree that the regulation should not be
made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the
case may be; so, however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that regulation.]
CHAPTER III
COMMISSIONERS OF RAILWAY SAFETY
S. 5.
Appointment of Chief Commissioner of Railway Safety and Commissioners of Railway Safety.--
The Central Government may appoint a person to be the Chief Commissioner of Railway Safety and such other
persons as it may consider necessary to be the Commissioners of Railway Safety.
S. 6.
Duties of Commissioner.--
The Commissioner shall,--
(a) inspect any railway with a view to determine whether it is fit to be opened for the public carriage of
passengers and report thereon to the Central Government as required by or under this Act;
(b) make such periodical or other inspections of any railway or of any rolling stock used thereon as the
Central Government may direct;
(c) make an inquiry under this Act into the cause of any accident on a railway; and
(d) discharge such other duties as are conferred on him by or under this Act.
S. 7.
Powers of Commissioner.--
Subject to the control of the Central Government, the Commissioner, whenever it is necessary so to do for any of the
purposes of this Act , may,--
(a) enter upon and inspect any railway or any rolling stock used thereon;
(b) by order in writing addressed to a railway administration, require the attendance before him of any
railway servant and to require answers or returns to such inquiries as he thinks fit to make from such
Page 721
railway servant or from the railway administration; and

(c) require the production of any book, document or material object belonging to or in the possession or
control of any railway administration which appears to him to be necessary to inspect.
S. 8.
Commissioner to be public servant.--
The Commissioner shall be deemed to be a public servant within the meaning of Section 21 of the Indian Penal
Code (45 of 1860).
S. 9.
Facilities to be afforded to Commissioners.--
A railway administration shall afford to the Commissioner all reasonable facilities for the discharge of the duties or
for the exercise of the powers imposed or conferred on him by or under this Act.
S. 10.
Annual report of Commissioners.--
The Chief Commissioner of Railway Safety shall prepare in each financial year an annual report giving a full
account of the act ivities of the Commissioners during the financial year immediately preceding the financial year in
which such report is prepared and forward, before such date as may be specified by the Central Government, copies
thereof to the Central Government, and that Government shall cause that report to be laid, as soon as may be, after its
receipt before each House of Parliament.
10.CHAPTER IVA (CONTAINING SECTIONS 20-A TO 20-P) INS. BY ACT 11 OF 2008, SECTION 3
(W.E.F. 31.1.2008)[CHAPTER IV A
LAND ACQUISITION FOR A SPECIAL RAILWAY PROJECT
S. 20-A.
Power to acquire land, etc.--
(1) Where the Central Government is satisfied that for a public purpose any land is required for execution
of a special railway project, it may, by notification, declare its intention to acquire such land.
(2) Every notification under sub-section (1), shall give a brief description of the land and of the special
railway project for which the land is intended to be acquired.
(3) The State Government or the Union territory, as the case may be, shall for the purposes of this section,
provide the details of the land records to the competent authority, whenever required.
(4) The competent authority shall cause the substance of the notification to be published in two local
newspapers, one of which shall be in a vernacular language.
Page 722
S. 20-B.
Power to enter for survey, etc.--
On the issue of a notification under sub-section (1) of Section 20 -A, it shall be lawful for any person, authorised by
the competent authority in this behalf, to--
(a) make any inspection, survey, measurement, valuation or enquiry;

(b) take levels;
(c) dig or bore into sub-soil;
(d) set out boundaries and intended lines of work;
(e) mark such levels, boundaries and lines placing marks and cutting trenches; or
(f) do such other act s or things as may be considered necessary by the competent authority.
S. 20-C.
Evaluation of damages during survey, measurement, etc.--
The damages caused while carrying out works on land such as survey, digging or boring sub-soil, marking
boundaries or cutting trenches or clearing away any standing crop, fence or forest or doing such other acts or things
which may cause damages while act ing under Section 20 -B particularly relating to land which is excluded from
acquisition proceeding, shall be evaluated and compensation shall be paid to the persons having interest in that land,
within six months from the completion of the said works.
S. 20-D.
Hearing of objections, etc.--
(1) Any person interested in the land may, within a period of thirty days from the date of publication of
the notification under sub-section (1) of Section 20 -A, object to the acquisition of land for the
purpose mentioned in that sub-section.
(2) Every objection under sub-section (1), shall be made to the competent authority in writing, and shall
set out the grounds thereof and the competent authority shall give the objector an opportunity of being
heard, either in person or by a legal practitioner, and may, after hearing all such objections and after
making such further enquiry, if any; as the competent authority thinks necessary, by order, either
allow or disallow the objections.
Explanation.--For the purposes of this sub-section, "legal practitioner" has the same
meaning as in Clause (1) of sub-section (1) o2 of the Advocates Act , 1961(25 of
1961).
(3) Any order made by the competent authority under sub-section (2) shall be final.
S. 20-E.
Page 723
Declaration of acquisition.--
(1) Where no objection under sub-section (1) of Section 20 -D has been made to the competent authority
within the period specified therein or where the competent authority has disallowed the objections
under sub-section (2) of that section, the competent authority shall, as soon as may be, submit a report
accordingly to the Central Government and on receipt of such report, the Central Government shall
declare, by notification, that the land should be acquired for the purpose mentioned in sub-section (1)
of Section 20 -A.
(2) On the publication of the declaration under sub-section (1), the land shall vest absolutely in the
Central Government free from all encumbrances.
(3) Where in respect of any land, a notification has been published under sub-section (1) of Section 20
-A for its acquisition, but no declaration under sub-section (1) of this Section has been published
within a period of one year from the date of publication of that notification, the said notification shall
cease to have any effect:
Provided that in computing the said period of one year, the period during which any act
ion or proceedings to be taken in pursuance of the notification issued under sub-section
(1) of Section 20 -A is stayed by an order of a Court shall be excluded.
(4) A declaration made by the Central Government under sub-section (1) shall not be called in question in
any Court or by any other authority.
S. 20-F.
Determination of amount payable as compensation.--
(1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined
by an order of the competent authority.
(2) The competent authority shall make an award under this Section within a period of one year from the
date of the publication of the declaration and if no award is made within that period, the entire
proceedings for the acquisition of the land shall lapse:
Provided that the competent authority may, after the expiry of the period of limitation,
if he is satisfied that the delay has been caused due to unavoidable circumstances, and
for the reasons to be recorded in writing, he may make the award within an extended
period of six months:
Provided further that where an award is made within the extended period, the entitled
person shall, in the interest of justice, be paid an additional compensation for the delay
in making of the award, every month for the period so extended, at the rate of not less
than five per cent, of the value of the award, for each month of such delay.
(3) Where the right of user or any right in the nature of an easement on, any land is acquired under this
Act , there shall be paid an amount to the owner and any other person whose right of enjoyment in
that land has been affected in any manner whatsoever by reason of such acquisition, an amount
Page 724
calculated at ten per cent, of the amount determined under sub-section (1), for that land.
(4) Before proceeding to determine the amount under sub-section (1) or sub-section (3), as the case may
be, the competent authority shall give a public notice published in two local newspapers, one of which
shall be in a vernacular language inviting claims from all persons interested in the land to be acquired.
(5) Such notice shall state the particulars of the land and shall require all persons interested in such land
to appear in person or by an agent or by a legal practitioner referred to in sub-section (2) of Section
20 -D, before the competent authority, at a time and place and to state the nature of their respective
interest in such land.
(6) If the amount determined by the competent authority under sub-section (1) or as the case may be,
sub-section (3) is not acceptable to either of the parties, the amount shall, on an application by either
of the parties, be determined by the arbitrator to be appointed by the Central Government in such
(7) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act , 1996 (26
of 1996) shall apply to every arbitration under this Act.
(8) The competent authority or the arbitrator while determining the amount of compensation under
sub-section (1) or sub-section (6), as the case may be, shall take into consideration--
(a) the market value of the land on the date of publication of the notification under Section 20
-A--
(b) the damage, if any sustained by the person interested at the time of taking possession of the
land, by reason of the severing of such land from other land;
(c) the damage, if any, sustained by the person interested at the time of taking possession of the
land, by reason of the acquisition injuriously affecting his other immovable property in any
manner, or his earnings;
(d) if, in consequences of the acquisition of the land, the person interested is compelled to change
his residence or place of business, the reasonable expenses, if any, incidental to such change.
(9) In addition to the market-value of the land as above provided, the competent authority or the
arbitrator, as the case may be, shall in every case award a sum of sixty per centum on such
market-value, in consideration of the compulsory nature of the acquisition.
S. 20-G.
Criterion for determination of market-value of land.--
(1) The competent authority shall adopt the following criteria in assessing and determining the
market-value of the land,--
(i) the minimum land value, if any, specified in the Indian Stamp Act , 1899 (2 of 1899), for the
registration of sale deeds in the area, where the land is situated; or
(ii) the average of the sale price for similar type of land situated in the village or vicinity,
ascertained from not less than fifty per cent, of the sale deeds registered during the preceding
three years, where higher price has been paid,
whichever is higher.
(2) Where the provisions of sub-section (1) are not applicable for the reason that:-
(i) the land is situated in such area where the transactions in land are restricted by or under any
other law for the time being in force in that area; or
(ii) the registered sale deeds for similar land as mentioned in Clause (i) of sub-section (1) are not
available for the preceding three years; or
Page 725
(iii) the minimum land value has not been specified under the Indian Stamp Act , 1899 (2 of 1899)
by the appropriate authority,
the concerned State Government shall specify the floor price per unit area of the said land based on
the average higher prices paid for similar type of land situated in the adjoining areas or vicinity,
ascertained from not less than fifty per cent, of the sale deeds registered during the preceding three
years where higher price has been paid, and the competent authority may calculate the value of the
land accordingly.
(3) The competent authority shall, before assessing and determining the market-value of the land being
acquired under this Act ,--
(a) ascertain the intended land use category of such land; and
(b) take into account the value of the land of the intended category in the adjoining areas or
vicinity, for the purpose of determination of the market-value of the land being acquired.
(4) In determining the market-value of the building and other immovable property or assets attached to
the land or building which are to be acquired, the competent authority may use the services of a
competent engineer or any other specialist in the relevant field, as may be considered necessary by the
competent authority.
(5) The competent authority may, for the purpose of determining the value of trees and plants, use the
services of experienced persons in the field of agriculture, forestry, horticulture, sericulture, or any
other field, as may be considered necessary by him.
(6) For the purpose of assessing the value of the standing crops damaged during the process of land
acquisition proceedings, the competent authority may utilise the services of experienced persons in
the field of agriculture as he considers necessary.
20-H.
Deposit and payment of amount.--
(1) The amount determined under Section 20 -F shall be deposited by the Central Government, in such
manner as may be prescribed by that Government, with the competent authority before taking
possession of the land.
(2) As soon as may be after the amount has been deposited under sub-section (1), the competent authority
shall on behalf of the Central Government pay the amount to the person or persons entitled thereto.
(3) Where several persons claim to be interested in the amount deposited under sub-section (1), the
competent authority shall determine the persons who in its opinion are entitled to receive the amount
payable to each of them.
(4) If any dispute arises as to the apportionment of the amount or any part thereof or to any person to
whom the same or any part thereof is payable, the competent authority shall refer the dispute to the
decision of the principal civil Court of original jurisdiction within the limits of whose jurisdiction the
land is situated.
(5) Where the amount determined under Section 20 -F by the arbitrator is in excess of the amount
determined by the competent authority, the arbitrator may award interest at nine per cent, per annum
on such excess amount from the date of taking possession under Section 20 -1 till the date of actual
deposit thereof.
(6) Where the amount determined by the arbitrator is in excess of the amount determined by the
competent authority, the excess amount together with interest, if any, awarded under sub-section (5)
shall be deposited by the Central Government, in such manner as may be prescribed by that
Page 726
Government, with the competent authority and the provisions of sub-sections (2) to (4) shall apply to
such deposit.
S. 20-I.
Power to take Possession.--
(1) Where any land has vested in the Central Government under sub-section (2) of Section 20 -E, and the
amount determined by the competent authority under Section 20 -F with respect to such land has
been deposited under sub-section (1) of Section 20 -H with the competent authority by the Central
Government, the competent authority may, by notice in writing, direct the owner as well as any other
person who may be in possession of such land to surrender or deliver possession thereof to the
competent authority or any person duly authorised by it in this behalf within a period of sixty days of
the service of the notice.
(2) If any person refuses or fails to comply with any direction made under sub-section (1), the competent
authority shall apply--
(a) in case of any land situated in any area falling within the metropolitan area, to the
Commissioner of Police;
(b) in case of any land situated in any area other than the area referred to in Clause (a), to the
Collector of a district,
and such Commissioner or Collector, as the case may be, shall enforce the surrender of the
land, to the competent authority or to the person duly authorised by it.
S. 20-J.
Right to enter into land where land has vested in Central Government.--
Where the land has vested in the Central Government under Section 20 -E, it shall be lawful for any person
authorised by the Central Government in this behalf, to enter and do other act necessary upon the land for carrying
out the building, maintenance, management or operation of the special railway project or part thereof or any other
work connected therewith.
S. 20-K.
Competent authority to have certain powers of Civil Court.--
The competent authority shall have, for the purposes of this Act, all the powers of a civil Court while trying a suit
under the Code of Civil Procedure , 1908 (5 of 1908) in respect of the following matters, namely: --
(b) requiring the discovery and production of any document;
(c) reception of evidence on affidavits;
(d) requisitioning any public record from any Court or office;
(e) issuing commission for examination of witnesses.
Page 727
S. 20-L.
Utilisation of land for the purpose it is acquired.--
(1) The land acquired under this Act shall not be transferred to any other purpose except for a public
purpose, and after obtaining the prior approval of the Central Government.
(2) When any land or part thereof, acquired under this Act remains unutilised for a period of five years
from the date of taking over the possession, the same shall return to the Central Government by
reversion.
S. 20-M.
Sharing with landowners the difference in price of a land when transferred for a higher consideration.--
Whenever any land acquired under this Act is transferred to any person for a consideration, eighty per cent, of the
difference in the acquisition cost and the consideration received, which in no case shall be less than the acquisition
cost, shall be shared amongst the persons from whom the lands were acquired or their heirs, in proportion to the
value at which the lands were acquired, and for the purpose, a separate fund may be maintained which shall be
administered by the competent authority in such manner as may be prescribed by the Central Government.
S. 20-N.
Land Acquisition Act 1 of 1894 not to apply.--
Nothing in the Land Acquisition Act , 1894, (1of 1894) shall apply to an acquisition under this Act.
S. 20-O.
Application of the National Rehabilitation and Resettlement Policy, 2007 to persons affected due to land
acquisition.--
The provisions of the National Rehabilitation and Resettlement Policy, 2007 for project affected families, notified by
the Government of India in the Ministry of Rural Development vide number F.26011/4/2007-LRD, dated the 31st
October, 2007, shall apply in respect of acquisition of land by the Central Government under this Act.
S. 20-P.
(a) the manner of appointment of arbitrator under sub-section (6) of Section 20 -F;
Page 728
(b) the manner in which the amount shall be deposited with the competent authority under
sub-sections (1) and (6) of Section 20 -H;
(c) the manner of maintenance and administration of separate fund for the purposes of Section 20
-M.]
CHAPTER V
OPENING OF RAILWAYS
S. 21.
Sanction of the Central Government to the opening of railway.--
No railway shall be opened for the public carriage of passengers until the Central Government has, by order,
sanctioned the opening thereof for that purpose.
S. 22.
Formalities to be complied with before giving sanction to the opening of a railway.--
(1) The Central Government shall, before giving its sanction to the opening of a railway under Section
21 , obtain a report from the Commissioner that,--
(a) he has made a careful inspection of the railway and the rolling stock that may be used thereon;
(b) the moving and fixed dimensions as laid down by the Central Government have not been
infringed;
(c) the structure of lines of rails, strength of bridges, general structural character of the works and
the size of, and maximum gross load upon, the axles of any rolling stock, comply with the
requirements laid down by the Central Government; and
(d) in his opinion, the railway can be opened for the public carriage of passengers without any
danger to the public using it.
(2) If the Commissioner is of the opinion that the railway cannot be opened without any danger to the
public using it, he shall, in his report, state the grounds therefor, as also the requirements which, in his
opinion, are to be complied with before sanction is given by the Central Government.
(3) The Central Government, after considering the report of the Commissioner, may sanction the opening
of a railway under Section 21 as such or subject to such conditions as may be considered necessary
by it for the safety of the public.
S. 23.
Sections 21 and 22 to apply to the opening of certain works.--
The provisions of Sections 21 and 22 shall apply to the opening of the following works if they form part of, or are
directly connected with, a railway used for the public carriage of passengers and have been constructed subsequent to
the giving of a report by the Commissioner under Section 22 , namely,--
Page 729
(a) opening of additional lines of railway and deviation lines;

(b) opening of stations, junctions and level crossings;
(c) re-modelling of yards and re-building of bridges;
(d) introduction of electric traction; and
(e) any alteration or reconstruction materially affecting the structural character of any work to which the
provisions of Sections 21 and 22 apply or are extended by this section.
CASE NOTE
There is a common law duty of taking reasonable care which must be attached to all carriers including the railways.
In this case, there has been a breach of that duty and the negligence on the part of the railway staff is writ large. Had
the train been stopped and first-aid provided when the alarm chain was pulled, the possibility that the deceased may
not have met her death, even after the assault in the course of robbery, is a possibility which cannot be totally ruled
out. The manner in which the guard and the motorman act ed exposes a total casual approach on their part. Because
of the failure of those railway officials a precious life has been lost. P.A. Narayanan v. Union of India, AIR 1998 SC
1659.
S. 24.
Temporary suspension of traffic.--
When an accident has occurred on a railway resulting in a temporary suspension of traffic, and either the original
lines of rails and works have been restored to their original standard or a temporary diversion has been laid for the
purpose of restoring communication, the original lines of rails and works so restored, or the temporary diversion, as
the case may be, may, without prior inspection by the Commissioner, be opened for the public carriage of
passengers, subject to the following conditions, namely,--
(a) the railway servant incharge of the works undertaken by reason of the accident has certified in writing
that the opening of the restored lines of rails and works, or of the temporary diversion will not in his
opinion be attended with danger to the public; and
(b) a notice of the opening of the lines of rails and works or the diversion shall be sent immediately to the
Commissioner.
S. 25.
Power to close railway opened for the public carriage of passengers.--
Where, after the inspection of any railway opened and used for the public carriage of passengers or any rolling stock
used thereon, the Commissioner is of the opinion that the use of the railway or of any rolling stock will be attended
with danger to the public using it, the Commissioner shall send a report to the Central Government who may
thereupon direct that,--
(i) the railway be closed for the public carriage of passengers; or

(ii) the use of the rolling stock be discontinued; or
(iii) the railway or the rolling stock may be used for the public carriage of passengers subject to such
conditions as it may consider necessary for the safety of the public.
Page 730
S. 26.
Re-opening of closed railway.--
When the Central Government has, under Section 25 , directed the closure of a railway or the discontinuance of the
use of any rolling stock,--
(a) the railway shall not be re-opened for the public carriage of passengers until it has been inspected by
the Commissioner and its re-opening is sanctioned in accordance with the provisions of this Chapter;
and
(b) the rolling stock shall not be used until it has been inspected by the Commissioner and its re-use is
sanctioned in accordance with the provisions of this Chapter.
S. 27.
Use of rolling stock.--
A railway administration may use such rolling stock as it may consider necessary for the construction, operation and
working of a railway:
Provided that before using any rolling stock of a design or type different from that already running on
any Section of the railway, the previous sanction of the Central Government shall be obtained for such
use:
Provided further that before giving any such sanction, the Central Government shall obtain a report
from the Commissioner that he has made a careful inspection of the rolling stock and, in his opinion,
such rolling stock can be used.
S. 28.
Delegation of powers.--
The Central Government may, by notification, direct that any of its powers or functions under this Chapter, except
Section 29 , or the rules made thereunder shall, in relation to such matters and subject to such conditions, if any, as
may be specified in the notification, be exercised or discharged also by a Commissioner.
S. 29.
for all or any of the following matters, namely,--
(a) the duties of a railway administration and the Commissioner in regard to the opening of a
Page 731
(b) the arrangements to be made for and the formalities to be complied with before opening a
(c) for regulating the mode in which, and the speed at which rolling stock used on railways is to
be moved or propelled; and
(d) the case in which and the extent to which the procedure provided in this Chapter may be
dispensed with.
CHAPTER VI
FIXATION OF RATES
S. 30.
Power to fix rates.--
(1) The Central Government may, from time to time, by general or special order fix, for the carriage of
passengers and goods, rates for the whole or any part of the railway and different rates may be fixed
for different classes of goods and specify in such order the conditions subject to which such rates shall
apply.
(2) The Central Government may, by a like order, fix the rates of any other charges incidental to or
connected with such carriage including demurrage and wharfage for the whole or any part of the
railway and specify in the order the conditions subject to which such rates shall apply.
CASE NOTE
"Rate".-- The definition of the word "rate" cannot possibly be applied to sub-section (2). Union of India v. M.P.
Sugar Mills, AIR 1969 SC 630.
S. 31.
Power to classify commodities or alter rates.--
The Central Government shall have power to,--
(a) classify or re-classify any commodity for the purpose of determining the rates to be charged for the
carriage of such commodities; and
(b) increase or reduce the class rates and other charges
CASE NOTES
Page 732
Tribunal has no jurisdiction to investigate the reasonableness of the standardized terminal

charges.--Shahadara Saharanpur Light Railway Co. Ltd. v. U.D.S. Mills, AIR 1960 SC 695.
"Rates" merely means scale or amount of any other charges-- whether the definition of "rates" can be applied to
sub-section (2)?.--Union of India v. M/s Motilal Padampat Sugar Mills Co. (Private) Ltd., AIR 1969 SC 630,
following decision in Union of India v. Indian Sugar.
"Charging" and "levying"--meaning.--Upper Daob Sugar Mills Ltd. v. Shahadara (Delhi) Saharanpur Light Rly.
Co. Ltd., AIR 1963 SC 217.
Claiming refund of wharfage and demurrage charges.--M/s. Raichand Amulakh Shah v. Union of India, AIR
1964 SC 1268.
Allegations of unreasonable freight charges.--Raigarh Jute Mills v. Eastern Railway, AIR 1958 SC 525.
S. 32.
Power of railway administration to charge certain rates.--
Notwithstanding anything contained in this Chapter, a railway administration may, in respect of the carriage of any
commodity and subject to such conditions as may be specified,--
(a) quote a station to station rate;

(b) increase or reduce or cancel, after due notice in the manner determined by the Central Government, a
station to station rate, not being a station to station rate introduced in compliance with an order made
by the Tribunal;
(c) withdraw, alter or amend the conditions attached to a station to station rate other than conditions
introduced in compliance with an order made by the Tribunal; and
(d) charge any lump sum rate.
CHAPTER VII
RAILWAY RATES TRIBUNAL
S. 33.
Constitution of the Railway Rates Tribunal.--
(1) There shall be a Tribunal, to be called the Railway Rates Tribunal, for the purpose of discharging the
functions specified in this Chapter.
(2) The Tribunal shall consist of a Chairman and two other members to be appointed by the Central
Government.
Page 733
(3) A person shall not be qualified for appointment as the Chairman of the Tribunal unless he is, or has
been, a Judge of the Supreme Court or of a High Court and of the other two members, one shall be a
person, who, in the opinion of the Central Government, has special knowledge of the commercial,
industrial or economic conditions of the country, and the other shall be a person, who, in the opinion
of the Central Government, has special knowledge and experience of the commercial working of the
railways.
(4) The Chairman and the other members of the Tribunal shall hold office for such period, not exceeding
five years, as may be prescribed.
(5) In case the Chairman or any other member is, by infirmity or otherwise, rendered incapable of
carrying out his duties or is absent on leave or otherwise in circumstances not involving the vacation
of his office, the Central Government may appoint another person to act in his place during his
absence.
(6) A person who holds office as the Chairman or other member of the Tribunal shall, on the expiration of
the term of his office (not being an office to fill a casual vacancy), be ineligible for re-appointment to
that office.
(7) Subject to the provisions of sub-sections (5) and (6), the Chairman and other members of the Tribunal
shall hold office on such terms and conditions as may be prescribed.
(8) No act or proceeding of the Tribunal shall be invalidated merely by reason of,--
(a) any vacancy in, or any defect in the constitution of, the Tribunal; or
(b) any defect in the appointment of a person acting as a Chairman or other member of the
Tribunal.
CASE NOTES
Jurisdiction of Railways Rates Tribunal.--Union of India v. West Coast Paper Mills Ltd., AIR 1971 SC 349.
Cost of operation cannot by itself be the basis for judging the reasonableness of the rate charged.--Delhi Cloth
& General Mills Ltd. v. Union of India, AIR 1987 SC 2414.
Injunction against Railways for retrospective effect of increased freight.--Union of India v. Modi Industries Ltd.,
AIR 1973 SC 1281; Union of India v. Indian Sugar Mills Association, AIR 1968 SC 2; Raichand Amulakh Shah v.
Union of India, AIR 1964 SC 1268.
S. 34.
Staff of the Tribunal.--
(1) The Tribunal may, with the previous approval of the Central Government, appoint such officers and
employees as it considers necessary for the efficient discharge of its functions under this Chapter.
(2) The terms and conditions of service of the officers and employees of the Tribunal shall be such as
may be determined by regulations.
Page 734
S. 35.
Sittings of the Tribunal.--
The Tribunal may sit at such place or places as it may find convenient for the transaction of its business.
S. 36.
Complaints against a railway administration.--
Any complaint that a railway administration,--
(a) is contravening the provisions of Section 70 ; or

(b) is charging for the carriage of any commodity between two stations a rate which is unreasonable; or
(c) is levying any other charge which in unreasonable,
may be made to the Tribunal, and the Tribunal shall hear and decide any such complaint in
accordance with the provisions of this Chapter.
CASE NOTES
"Any other charge".-- The words "any other charge" in Clause (c) includes charges for service from station to any
other point over private siding lines to the company's factory. Union of India v. India Sugar Mills, AIR 1968 SC 22.
Unreasonableness of freight charges--onus is on the complainant to prove.--Raigarh Jute Mills Ltd. v. Eastern
Railway, AIR 1958 SC 525.
Undue preference--burden of proof.--Raigarh Jute Mills Ltd. v. Eastern Railway, AIR 1958 SC 525.
Tribunal has no jurisdiction to investigate the reasonableness of the standardized terminal

charges.--Shahadara Saharanpur Light Railways Co. Ltd. v. U.D.S. Mills, AIR 1960 SC 695. As held in Union of
India v. West Coast Paper Mills Ltd., AIR 1971 SC 349, it is within the jurisdiction of the Tribunal to give
declaration that the rates between the two stations are unreasonable. The powers of the Tribunal are to be read in
Section 37 .
Maintenance charges of Railway siding line.--Jaipur Udyog Ltd. v. Union of India, AIR 1975 SC 1056.
S. 37.
Page 735
Matters not within the jurisdiction of the Tribunal.--
Nothing in this Chapter shall confer jurisdiction on the Tribunal in respect of,--
(a) classification or re-classification of any commodity;

(b) fixation of wharfage and demurrage charges (including conditions attached to such charges);
(c) fixation of fares levied for the carriage of passengers and freight levied for the carriage of luggage,
parcels, railway material and military traffic; and
(d) fixation of lump sum rates.
S. 38.
Powers of the Tribunal.--
(1) The Tribunal shall have the powers of a Civil Court under the Code of Civil Procedure , 1908 (5 of
1908), for the purposes of taking evidence on oath, enforcing the attendance of witnesses, compelling
the discovery and production of documents, issuing commissions for the examination of witnesses
and of review and shall be deemed to be a Civil Court for all the purposes of Section 195 and
Chapter XXXV of the Code of Criminal Procedure , 1973 (2 of 1974) and any reference in such
Section or Chapter to the presiding officer of a Court shall be deemed to include a reference to the
Chairman of the Tribunal.
(2) The Tribunal shall also have power to pass such interim and final orders as the circumstances may
require, including orders for the payment of costs.
S. 39.
Reference to the Tribunal.--
Notwithstanding anything contained in Section 37 , the Central Government may make a reference to the Tribunal in
respect of any of the matter specified in that Section and where any such reference is made in respect of any such
matter, the Tribunal shall make an inquiry into that matter and submit its report thereon to the Central Government.
COMMENT
The Tribunal is conferred with the powers of a Civil Court, for the purposes specified and shall be deemed to be a
Civil Court. Tribunal has power to pass interim orders also.
S. 40.
Assistance by the Central Government.--
(1) The Central Government shall give to the Tribunal such assistance as it may require and shall also
place at its disposal any information in the possession of the Central Government which that
Page 736
Government may think relevant to any matter before the Tribunal.

(2) Any person duly authorised in this behalf by the Central Government shall be entitled to appear and
be heard in any proceedings before the Tribunal.
S. 41.
Burden of proof, etc.--
In the case of any complaint under Clause, (a) of Section 36 ,--
(a) whenever it is shown that a railway administration charges one trader or class of traders or the traders
in any local area, lower rates for the same or similar goods or lower charges for the same or similar
services than it charges to other traders in any other local area, the burden of proving that such lower
rate or charge does not amount to an undue preference, shall lie on the railway administration;
(b) in deciding whether a lower rate or charge does not amount to an undue preference, the Tribunal may,
in addition to any other considerations affecting the case, take into consideration whether such lower
rate or charge is necessary in the interests of the public.
CASE NOTES
Where the allegations are of unreasonableness of freight charges--the burden of proof is on the person
alleging.--Raigarh Jute Mills v. Eastern Railways, AIR 1985 SC 525.
Undue preference--burden of proof.--Raigarh Jute Mills v. Eastern Railways, AIR 1985 SC 525.
S. 42.
Decision, etc., of the Tribunal.--
The decision or orders of the Tribunal shall be by a majority of the members sitting and shall be final.
S. 43.
Bar of jurisdiction of Courts.--
No suit shall be instituted or proceeding taken in respect of any matter which the Tribunal is empowered to deal with,
or decide, under this Chapter.
COMMENT
The jurisdiction of the Civil Court has been specifically barred. Such powers have now been vested with the
Page 737
Tribunal, being in exclusive control of such matters which were earlier adjudicated upon by the Civil Court.
S. 44.
Reliefs which the Tribunal may grant.--
In the case of any complaint made under Clause (b) or Clause (c) of Section 36 , the Tribunal may,--
(i) fix such rate or charge as it considers reasonable from any date as it may deem proper, not being a
date earlier to the date of the filing of the complaint;
(ii) direct a refund of amount, if any, as being the excess of the rate or charge fixed by the Tribunal under
Clause (i).
S. 45.
Revision of decisions given by the Tribunal.--
Where a railway administration considers that since the date of decision by the Tribunal, there has been a material
change in the circumstances on which it was based, it may, after the expiry of one year from such date, make an
application to the Tribunal and the Tribunal may, after making such inquiry as it considers necessary, vary or revoke
the decision.
CASE NOTE
Scope.-- The Section does not confer jurisdiction but only provides for means for exercise of jurisdiction which the
Tribunal has got under other sections. U.D.S. Mills v. S.L. Railway, AIR 1963 SC 217.
S. 46.
Execution of decisions or orders of the Tribunal.--
The Tribunal may transmit any decision or order made by it to a Civil Court having local jurisdiction and such Civil
Court shall execute the decision or order as if it were a decree made by that Court.
CASE NOTE
It is not necessary to speculate as to what orders made by the Tribunal could require execution by Civil Courts.
Upper Daob Sugar Mills Ltd. v. Shahadara (Delhi) Shaharanpur Light Rly Co. Ltd., AIR 1963 SC 217. Now under
this Section any decision or order made by the Tribunal can be transmitted to a Civil Court having local jurisdiction
to execute such decision or order. The power of the Civil Court is only to execute the decision or order and it cannot
sit on appeal over such matter or re-open the same.
S. 47.
Page 738
Report of the Central Government.--
The Tribunal shall present annually a report to the Central Government of all its proceedings under this Chapter.
COMMENT
The functions of the Tribunal are controlled by the Central Government in the sense that an annual report of all its
proceedings are to be sent to the Central Government, so that the Government can have superivsory control over the
Tribunals.
S. 48.
Power of the Tribunal to make regulations.--
(1) The Tribunal may, with the previous approval of the Central Government, make regulations consistent
with this Act and rules generally to regulate its procedure for the effective discharge of its functions
under this Chapter.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may
provide for all or any of the following matters, namely,--
(a) the terms and conditions of service of the officers and employees of the Tribunal;
(b) the award of costs by the Tribunal in any proceedings before it;
(c) the reference of any question to a member or to an officer of the Tribunal or any other person
appointed by the Tribunal, for report after holding a local inquiry;
(d) the right of audience before the Tribunal, provided that any party shall be entitled to be heard
in person, or by a representative duly authorised in writing, or by a legal practitioner;
(e) the disposal by the Tribunal of any proceedings before it, notwithstanding that in the course
thereof there has been a change in the persons sitting as members of the Tribunal;
(f) a scale of fees for and in connection with the proceedings before the Tribunal.
CHAPTER VIII
CARRIAGE OF PASSENGERS
S. 53.
Prohibition against transfer of certain tickets.--
A ticket issued in the name of a person shall be used only by that person:
Provided that nothing contained in this Section shall prevent mutual transfer of a seat or berth by
passengers travelling by the same train:
Provided further that a railway servant authorised in this behalf may permit change of name of a
passenger having reserved a seat or Berth subject to such circumstances as may be prescribed.
Page 739
S. 54.
Exhibition and surrender of passes and tickets.--
Every passenger shall, on demand by any railway servant authorised in this behalf, present his pass or ticket to such
railway servant for examination during the journey or at the end of the journey and surrender such ticket,--
(a) at the end of the journey, or

(b) if such ticket is issued for a specified period, on the expiration of such period.
S. 55.
Prohibition against travelling without pass or ticket.--
(1) No person shall enter or remain in any carriage on a railway for the purpose of travelling therein as a
passenger unless he has with him a proper pass or ticket or obtained permission of a railway servant
authorised in this behalf for such travel.
(2) A person obtaining permission under sub-section (1) shall ordinarily get a certificate from the railway
servant referred to in that sub-section that he has been permitted to travel in such carriage on
condition that he subsequently pays the fare payable for the distance to be travelled.
COMMENT
Travelling without a ticket is not only an offence punishable but also it deprives the person of his rights and
privileges as a passenger. A bonafide passenger is one who is travelling with a ticket or a pass.
S. 56.
Power to refuse to carry persons suffering from infectious or contagious diseases.--
(1) A person suffering from such infectious or contagious diseases, as may be prescribed, shall not enter
or remain in any carriage on a railway or travel in a train without the permission of a railway servant
authorised in this behalf.
(2) The railway servant giving permission under sub-section (1), shall arrange for the separation of the
person suffering from such disease from other persons in the train and such person shall be carried in
the train subject to such other conditions as may be prescribed.
(3) Any person who enters or remains in any carriage or travels in a train without permission as required
under sub-section (1) or in contravention of any condition prescribed under sub-section (2), such
person and a person accompanying him shall be liable to the forfeiture of their passes or tickets and
removal from railway by any railway servant.
Page 740
COMMENT
Here is the restriction to the right to travel, but for the benefit of other passengers, so that spreading of infections or
contagious disease is controlled. It is not that such a person is not allowed to travel at all, the only condition is that he
is to take permission of a railway servant to so travel, so that he is able to take preacautions for other passengers if so
required.
S. 60.
(2) In particular, and without Prejudice to the generality of the foregoing power, such rules may provide
(a) the convenience and accommodation (including the reservation of seats or berths in trains) to
passengers;
(b) the amount of refund for the cancellation of a ticket;
(c) the circumstances under which change of names of passengers, having reserved seats or
berths, may be permitted;
(d) the carriage of luggage and the conditions subject to which luggage may be kept in the cloak
rooms at the stations;
(e) diseases which are infectious or contagious;
(f) the conditions subject to which a railway administration may carry passengers suffering from
infectious or contagious diseases and the manner in which carriages used by such passengers
may be disinfected;
(g) generally, for regulating the travelling upon, and the use, working and management of the
railways.
(3) Any rule made under this Section may provide that a contravention thereof shall be punishable with
fine which shall no exceed five hundred rupees.
(4) Every railway administration shall keep at every station on its railway a copy of all the rules made
under this Section and shall also allow any person to inspect it free of charge.
CHAPTER IX
CARRIAGE OF GOODS
S. 61.
Maintenance of rate-books, etc., for carriage of goods.--
Every railway administration shall maintain, at each station and at such other places where goods are received for
carriage, the rate-books or other documents which shall contain the rate authorised for the carriage of goods from one
station to another and make them available for the reference of any person during all reasonable hours without
payment of any fee.
S. 62.
Page 741
Conditions for receiving, etc., of goods.--
(1) A railway administration may impose conditions, not inconsistent with this Act or any rules made
thereunder, with respect to the receiving, forwarding, carrying or delivering of any goods.
(2) A railway administration shall maintain, at each station and at such other places where goods are
received for carriage, copy of the conditions for the time being in force under sub-section (1) and
make them available for the reference of any person during all reasonable hours without payment of
any fee.
S. 63.
Provision of risk rates.--
(1) Where any goods are entrusted to a railway administration for carriage, such carriage shall, except
where owner's risk rate is applicable in respect of such goods, be at railway risk rate.
(2) Any goods, for which owner's risk rate and railway risk rate are in force, may be entrusted for carriage
at either of the rates and if no rate is opted, the goods shall be deemed to have been entrusted at
owner's risk rate.
S. 64.
Forwarding note.--
(1) Every person entrusting any goods to a railway administration for carriage shall execute a forwarding
note in such form as may be specified by the Central Government:
Provided that no forwarding note shall be executed in the case of such goods as may be
prescribed.
(2) The consignor shall be responsible for the correctness of the particulars furnished by him in the
forwarding note.
(3) The consignor shall indemnify the railway administration against any damage suffered by it by reason
of the incorrectness or incompleteness of the particulars in the forwarding note.
CASE NOTES
The responsibility of the carrier comes to an end after the goods reach its destination but the responsibility as
warehouseman is that of a bailee.--Union of India v. The West Punjab Factories Ltd., AIR 1966 SC 395.
Page 742
Extent of duty of railway to disclose how the consignment was dealt with in transit.--Union of India v.
Mahadeolal, AIR 1965 SC 1755; Shiv Nath v. Union of India, AIR 1965 SC 1666.
S. 65.
Railway receipt.--
(1) A railway administration shall,--

(a) in a case where the goods are to be loaded by a person entrusting such goods, on the
completion of such loading; or
(b) in any other case, on the acceptance of the goods by it, issue a railway receipt in such form as
may be specified by the Central Government.
(2) A railway receipt shall be prima facie evidence of the weight and the number of packages stated
therein:
Provided that in the case of a consignment in wagon-load or train-load and the weight
or the number of packages is not checked by a railway servant authorised in this
behalf, and a statement to that effect is recorded in such railway receipt by him, the
burden of proving the weight or, as the case may be, the number of packages stated
therein, shall lie on the consignor, the consignee or the endorsee.
S. 66.
Power to require statement relating to the description of goods.--
(1) The owner or a person having charge of any goods which are brought upon a railway for the purposes
of carriage by railway, and the consignee or the endorsee of any consignment shall, on the request of
any railway servant authorised in this behalf, deliver to such railway servant a statement in writing
signed by such owner or person or by such consignee or endorsee, as the case may be, containing such
description of the goods as would enable the railway servant to determine the rate for such carriage.
(2) If such owner or person refuses or neglects to give the statement as required under sub-section (1) and
refuses to open the package containing the goods, if so required by the railway servant, it shall be
open to the railway administration to refuse to accept such goods for carriage unless such owner or
person pays for such carriage the highest rate for any class of goods;
(3) If the consignee or endorsee refuses or neglects to give the statement as required under sub-section (1)
and refuses to open the package containing the goods, if so required by the railway servant, it shall be
open to the railway administration to charge in respect of the carriage of the goods the highest rate for
any class of goods.
(4) If the statement delivered under sub-section (1) is materially false with respect to the description of
any goods to which it purports to relate, the railway administration may charge in respect of the
carriage of such goods such rate, not exceeding double the highest rate for any class of goods as may
be specified by the Central Government.
(5) If any difference arises between a railway servant and such owner or person, the consignee or the
Page 743
endorsee, as the case may be, in respect of the description of the goods for which a statement has been
delivered under sub-section (1), the railway servant may detain and examine the goods.
(6) Where any goods have been detained under sub-section (5) for examination and upon such
examination it is found that the description of the goods is different from that given in the statement
delivered under sub-section (1), the cost of such detention and examination shall be borne by such
owner or person, the consignee or the endorsee, as the case may be, and the railway administration
shall not be liable for any loss, damage or deterioration which may be caused by such detention or
examination.
S. 67.
Carriage of dangerous or offensive goods.--
(1) No person shall take with him on a railway, or require a railway administration to carry such
dangerous or offensive goods, as may be prescribed, except in accordance with the provisions of this
section.
behalf for carriage unless he distinctly marks on the outside of the package containing such goods
their dangerous or offensive nature and gives a notice in writing of their dangerous or offensive nature
to such railway servant.
offensive and notice as required under sub-section (2) or sub-section (3), as the case may be, in
respect of such goods is not given, he may cause such package to be opened for the purpose of
ascertaining its contents.
dangerous or offensive goods for carriage or stop, in transit, such goods or cause the same to be
removed, as the case may be, if he has reason to believe that the provisions of this Section for such
carriage are not complied with.
(6) Nothing in this Section shall be construed to derogate from the provisions of the Indian Explosives
Act , 1884 (4 of 1884), or any rule or order made under that Act, and nothing in sub-sections (4) and
(5) shall be construed to apply to any goods entrusted for carriage by order or on behalf of the
Government or to any goods which a solidier, sailor, airman or any other officer of the armed forces
of the Union or a police officer or a member of the Territorial Army or of the National Cadet Corps
may take with him on a railway in the course of his employment or duty as such.
S. 68.
Carriage of animals suffering from infectious or contagious diseases.--
A railway administration shall not be bound to carry any animal suffering from such infectious or contagious disease
S. 69.
Page 744
Deviation of route.--
Where due to any cause beyond the control of a railway administration or due to congestion in the yard or any other
operational reasons, goods are carried over a route other than the route by which such goods are booked, the railway
administration shall not be deemed to have committed a breach of the contract of carriage by reason only of the
deviation of the route.
S. 70.
Prohibition of undue preference.--
A railway administration shall not make or give any undue or unreasonable preference or advantage to, or in favour
of, any particular person or any particular description of traffic in the carriage of goods.
S. 71.
Power to give direction in regard to carriage of certain goods.--
(1) The Central Government may, if it is of the opinion that it is necessary in the public interest so to do,
by general or special order, direct any railway administration,--
(a) to give special facilities for, or preference to, the carriage of such goods or class of goods
consigned by or to the Central Government or the Government of any State or of such other
goods or class of goods;
(b) to carry any goods or class of goods by such route or routes and at such rates;
(c) to restrict or refuse acceptance of such goods or class of goods at or to such station for
carriage,
as may be specified in the order,
(2) Any order made under sub-section (1) shall cease to have effect after the expiration of a period of one
year from the date of such order, but may, by a like order, be renewed from time to time for such
period not exceeding one year at a time as may be specified in the order.
(3) Notwithstanding anything contained in this Act , every railway administration shall be bound to
comply with any order given under sub-section (1) and any action taken by a railway administration
in pursuance of any such order shall not be deemed to be a contravention of Section 70 .
S. 72.
Maximum carrying capacity for wagons and trucks.--
(1) The gross weight of every wagon or truck bearing on the axles when the wagon or truck is loaded to
its maximum carrying capacity shall not exceed such limit as may be fixed by the Central
Government for the class of axle under the wagon or truck.
(2) Subject to the limit fixed under sub-section (1), every railway administration shall determine the
normal carrying capacity for every wagon or truck in its possession and shall exhibit in words and
Page 745
figures the normal carrying capacity so determined in a conspicuous manner on the outside of every
such wagon or truck.
(3) Every person owning a wagon or truck which passes over a railway shall determine and exhibit the
normal carrying capacity for the wagon or truck in the manner specified in sub-section (2).
(4) Notwithstanding anything contained in sub-section (2) or sub-section (3), where a railway
administration considers it necessary or expedient so to do in respect of any wagon or truck carrying
any specified class of goods or any class of wagons or trucks of any specified type, it may vary the
normal carrying capacity for such wagon or truck or such class of wagons or trucks and subject to
such conditions as it may think fit to impose, determine for the wagon or truck or class of wagons or
trucks such carrying capacity as may be specified in the notification and it shall not be necessary to
exhibit the words and figures representing the carrying capacity so determined on the outside of such
wagon or truck or such class of wagons or trucks.
S. 73.
Punitive charge for over-loading a wagon.--
Where a person loads goods in a wagon beyond its permissible carrying capacity as exhibited under sub-section (2)
or sub-section (3), or notified under sub-section (4), of Section 72 , a railway administration may, in addition to the
freight and other charges, recover from the consignor, the consignee or the endorsee, as the case may be, charges by
way of penalty at such rates, as may be prescribed, before the delivery of the goods:
Provided that it shall be lawful for the railway administration to unload the goods loaded beyond the
capacity of the wagon, if detected at the forwarding station or at any place before the destination
station and to recover the cost of such unloading and any charge for the detention of any wagon on
this account.
S. 74.
Passing of property in the goods covered by railway receipt.--
The property in the consignment covered by a railway receipt shall pass to the consignee or the endorsee, as the case
may be, on the delivery of such railway receipt to him and he shall have all the rights and liabilities of the consignor.
S. 75.
Section 74 not to affect right of stoppage in transit or claims for freight.--
Nothing contained in Section 74 shall prejudice or affect,--
(a) any right of the consignor for stoppage of goods in transit as an unpaid vendor (as defined under the
Sale of Goods Act , 1930 (3 of 1930) on his written request to the railway administration;
(b) any right of the railway to claim freight from the consignor; or
(c) any liability of the consignee or the endorsee, referred to in that Section, by reason of his being such
consignee or endorsee.
S. 76.
Page 746
Surrender of railway receipt.--
The railway administration shall deliver the consignment under a railway receipt on the surrender of such railway
receipt:
Provided that in case the railway receipt is not forthcoming, the consignment may be delivered to the
person, entitled in the opinion of the railway administration to receive the goods, in such manner as
may be prescribed.
S. 77.
Power of railway administration to deliver goods or sale proceeds thereof in certain cases.--
Where no railway receipt is forthcoming and any consignment or the sale proceeds of any consignment are claimed
by two or more persons, the railway administration may withhold delivery of such consignment or sale proceeds, as
the case may be, and shall deliver such consignment or sale proceeds in such manner as may be prescribed.
S. 78.
Power to measure, weigh, etc.--
Notwithstanding anything contained in the railway receipt, the railway administration may, before the delivery of the
consignment, have the right to,--
(i) re-measure, re-weigh or re-classify any consignment;

(ii) re-calculate the freight and other charges; and
(iii) correct any other error or collect any amount that may have been omitted to be charged.
S. 79.
Weighment of consignment on request of the consignee or endorsee.--
A railway administration may, on the request made by the consignee or endorsee, allow weighment of the
consignment subject to such conditions and on payment of such charges as may be prescribed and the demurrage
charges if any:
Provided that except in cases where a railway servant authorised in this behalf considers it necessary
so to do, no weighment shall be allowed of goods booked at owner's risk rate or goods which are
perishable and are likely to lose weight in transit:
Provided further that no request for weighment of consignment in wagon-load or train-load shall be
allowed if the weighment is not feasible due to congestion in the yard or such other circumstances as
may be prescribed.
S. 80.
Liability of railway administration for wrong delivery.--

Page 747
Where a railway administration delivers the consignment to the person who produce's the railway receipt, it shall not
be responsible for any wrong delivery on the ground that such person is not entitled thereto or that the endorsement
on the railway receipt is forged or otherwise defective.
CASE NOTES
Failure to deliver in consequence of loss or destruction--non-delivery of goods is not a separate cause of

action.--Governor General in Council v. Musaddi Lal, AIR 1961 SC 725.
Negligence in carriage.--Union of India v. Shri Ramesh Cotton Mills Ltd., AIR 1978 SC 1491; Union of India v.
Brijlal Purshottamdas, AIR 1969 SC 817; Union of India v. Mahadeolal, AIR 1965 SC 1755; Union of India v. The
Steel Stock Holders Syndicate, AIR 1976 SC 879.
Responsibility of the Railways.--Union of India v. The West Punjab Factories Ltd., AIR 1966 SC 395.
Loss, destruction, damages during transit.--Union of India v. The Steel Stock Holders Syndicate, AIR 1976 SC 879.
Proof of negligence.--Union of India v. Brijlal Purshottamdas, AIR 1969 SC 817; Union of India v. Mahadeolal,
AIR 1965 SC 1755; Jetmull Bhojraj v. Darjeeling Himalayan Rly. Co. Ltd., AIR 1962 SC 1879.
Non-delivery of consignment.--Union of India v. Brijlal Purshottamdas, AIR 1969 SC 817; Shiv Nath v. Union of
India, AIR 1965 SC 1666.
Re-consignment of goods.--Jugilal Kamlapat Oil Mills v. Union of India, AIR 1976 SC 227.
Fraud of consignor.--Union of India v. M/s. Chaturbhuj M. Patel & Co., AIR 1976 SC 1414.
S. 81.
Open delivery of consignments.--
Where the consignment arrives in a damaged condition or shows signs of having been tampered with and the
consignee or the endorsee demands open delivery, the railway administration shall give open delivery in such
S. 82.
Partial delivery of consignments.--

Page 748
(1) The consignee or endorsee shall, as soon as the consignment or part thereof is ready for delivery, take
delivery of such consignment or part thereof notwithstanding that such consignment or part thereof is
damaged.
(2) In the case of partial delivery under sub-section (1), the railway administration shall furnish a partial
delivery certificate, in such form as may be prescribed.
(3) If the consignee or endorsee refuses to take delivery under sub-section (1), the consignment or part
thereof shall be subject to wharfage charges beyond the time allowed for removal.
S. 83.
Lien for freight or any other sum due.--
(1) If the consignor, the consignee or the endorsee fails to pay on demand any freight or other charges due
from him in respect of any consignment, the railway administration may detain such consignment or
part thereof or, if such consignment is delivered, it may detain any other consignment of such person
which is in, or thereafter comes into, its possession.
(2) The railway administration may, if the consignment detained under sub-section (1) is,--
(a) perishable in nature, sell at once; or
(b) not perishable in nature, sell, by public auction,
such consignment or part thereof, as may be necessary to realise a sum equal to the freight or
other charges:
Provided that where a railway administration for reasons to be recorded in writing is of

the opinion that it is not expedient to hold the auction, such consignment or part
thereof may be sold in such manner as may be prescribed.
(3) The railway administration shall give a notice of not less than seven days of the public auction under
Clause (b) of sub-section (2) in one or more local newspapers or where there are no such newspapers
in such manner as may be prescribed.
(4) The railway administration may, out of the sale proceeds received under sub-section (2), retain a sum
equal to the freight and other charges including expenses for the sale due to it and the surplus of such
proceeds and the part of the consignment, if any, shall be rendered to the person entitled thereto.
S. 84.
Unclaimed consignment.--
(1) If any person fails to take delivery of,--

(a) any consignment; or
(b) the consignment released from detention made under sub-section (1), of Section 83 ; or
(c) any remaining part of the consignment under sub-section (2) of Section 83 .
Page 749
such consignment shall be treated as unclaimed.
(2) The railway administration may,--

(a) in the case of an unclaimed consignment which is perishable in nature, sell such consignment
in the manner provided in Clause (a) of sub-section (2) of Section 83 ; or
(b) in the case of an unclaimed consignment which is not perishable in nature, cause a notice to be
served upon the consignee if his name and address are known, and upon the consignor if the
name and address of the consignee are not known, requiring him to remove the goods within a
period of seven days from the receipt thereof and if such notice cannot be served or there is a
failure to comply with the requisition in the notice, sell such consignment in the manner
provided in Clause (b) of sub-section (2) of Section 83 .
equal to the freight and other charges including expenses for the sale due to it and the surplus, if any,
of such sale proceeds, shall be rendered to the person entitled thereto.
S. 85.
Disposal of perishable consignments in certain circumstances.--
(1) Where by reason of any flood, land-silp, breach of any lines of rails, collision between trains,
derailment of, or other accident to a train or any other cause, traffic on any route is interrupted and
there is no likelihood of early resumption of such traffic, nor is there any other reasonable route
whereby traffic of perishable consignment may be diverted to prevent, loss or deterioration of, or
damage to, such consignment, the railway administration may sell them in the manner provided in
Clause (a) of sub-section (2) of Section 83 .
equal to the freight and other charges including expenses for the sale due to it and the surplus, if any,
of such sale proceeds, shall be rendered to the person entitled thereto.
S. 86.
Sales under Sections 83 to 85 not to affect the right to suit.--
Notwithstanding anything contained in this Chapter, the right of sale under Sections 83 to 85 shall be without
prejudice to the right of the railway administration to recover by suit, any freight, charge, amount or other expenses
due to it.
S. 87.
Page 750
(a) goods in respect of which no forwarding note shall be executed under proviso to sub-section
(1) of Section 64 ;
(b) dangerous and offensive goods for the purposes of sub-section (1) of Section 67 ;
(c) infectious or contagious diseases for the purposes of Section 68 ;
(d) rates of penalty charges under Section 73 ;
(e) the manner in which the consignment may be delivered without a railway receipt under
Section 76 ;
(f) the manner of delivery of consignment or the sale proceeds to the person entitled thereto under
Section 77 ;
(g) the conditions subject to which and charges payable for allowing weighment and
circumstances for not allowing weighment of consignment in wagon-load or train-load under
Section 79 ;
(h) the manner of giving open delivery under Section 81 ;
(i) the form of partial delivery certificate under sub-section (2) of Section 82 ;
(j) the manner of sale of consignment or part thereof under the proviso to sub-section (2) of
Section 83 ;
(k) the manner in which a notice under sub-section (3) of Section 83 may be given;
(l) generally, for regulating the carriage of goods by the railways.
(3) Any rule made under this Section may provide that a contravention thereof shall be punishable with
fine which may extend to one hundred and fifty rupees.
(4) Every railway administration shall keep at each station a copy of the rules for the time being in force
under this section, and shall allow any person to refer to it free of charge.
CHAPTER XI
RESPONSIBILITIES OF RAILWAY ADMINISTRATION AS CARRIERS
S. 93.
General responsibility of a railway administration as carrier of goods.--
Save as otherwise provided in this Act , a railway administration shall be responsible for the loss, destruction,
damage or deterioration in transit, or non-delivery of any consignment, arising from any cause except the following,
namely,--
(a) act of God;

(b) act of War;
(c) act of public enemies;
(d) arrest, restraint or seizure under legal process;
(e) orders or restrictions imposed by the Central Government or a State Government or by an officer or
authority subordinate to the Central Government or a State Government authorised by it in this behalf;
(f) act or omission or negligence of the consignor or the consignee or the endorsee or the agent or servant
of the consignor or the consignee or the endorsee;
(g) natural deterioration or wastage in bulk or weight due to inherent defect, quality or vice of the goods;
(h) latent defects;
(i) fire, explosion or any unforeseen risk:
Page 751
Provided that even where such loss, destruction, damage, deterioration or non-delivery is proved to
have arisen from any one or more of the aforesaid causes, the railway administration shall not be
relieved of its responsibility for the loss, destruction, damage, deterioration or non-delivery unless the
railway administration further proves that it has used reasonable foresight and care in the carriage of
the goods.
COMMENT
On certain specified contingencies the Railway administration shall not be liable or responsible for loss, destruction,
damage or deterioration of goods in transit. But where any of such contingency occasion due to negligence of the
Railway, then it may not be able to avoid the responsibility. Not only does such contigency need to occur but also
that the Railways should have no hand to it and could not have avoided it by any reasonable care.
S. 94.
Goods to be loaded or delivered at a siding not belonging to a railway administration.--
(1) Where goods are required to be loaded at a siding not belonging to a railway administration for
carriage by railway, the railway administration shall not be responsible for any loss, destruction,
damage or deterioration of such goods from whatever cause arising, until the wagon containing the
goods has been placed at the specified point of interchange of wagons between the siding and the
railway administration and a railway servant authorised in this behalf has been informed in writing
accordingly by the owner of the siding.
(2) Where any consignment is required to be delivered by a railway administration at a siding not
belonging to a railway administration, the railway administration shall not be responsible for any loss,
destruction damage or deterioration or non-delivery of such consignment from whatever cause arising
after the wagon containing the consignment has been placed at the specified point of interchange of
wagons between the railway and the siding and the owner of the siding has been informed in writing
accordingly by a railway servant authorised in this behalf.
S. 95.
Delay or retention in transit.--
A railway administration shall not be responsible for the loss, destruction, damage or deterioration of any
consignment proved by the owner to have been caused by the delay or detention in their carriage if the railway
administration proves that the delay or detention arose for reasons beyond its control or without negligence or
misconduct on its part or on the part of any of its servants.
COMMENT
The onus is on the owner to prove that the loss, destruction, damage or deterioration was occasioned by delay or
detention in transit.
S. 96.
Page 752
Traffic passing over railways in India and railways in foreign countries.--
Where in the course of carriage of any consignment from a place in India to a place outside India or from a place
outside India to a place in India or from one place outside to another place outside India or from one place in India to
another place in India, over any territory outside India, it is carried over the railways of any railway administration in
India the railway administration shall not be responsible under any of the provisions of this Chapter for the loss,
destruction. damage or deterioration of the goods, from whatever cause arising, unless it is proved by the owner of
the goods that such loss, destruction, damage or deterioration arose over the railway of the railway administration.
S. 97.
Goods carried at owner's risk rate.--
Notwithstanding anything contained in Section 93 , a railway administration shall not be responsible for any loss,
destruction, damage, deterioration or non-delivery in transit, of any consignment carried at owner's risk rate, from
whatever cause arising, except upon proof, that such loss, destruction, damage, deterioration or non-delivery was due
to negligence or misconduct on its part or on the part of any of its servants:
Provided that,--
(a) where the whole of such consignment or the whole of any package forming part of
such consignment is not delivered to the consignee or the endorsee and such
non-delivery is not proved by the railway administration to have been due to fire or to
any accident to the train; or
(b) where in respect of any such consignment or of any package forming part of such
consignment which had been so covered or protected that the covering or protection
was not readily removable by hand, it is pointed out to the railway administration on or
before delivery that any part of that consignment or package had been pilfered in
transit,
the railway administration shall be bound to disclose to the consignor, the consignee or the endorsee
how the consignment or the package was dealt with throughout the time it was in its possession or
control, but if negligence or misconduct on the part of the railway administration or of any of its
servants cannot be fairly inferred from such disclosure, the burden of proving such negligence or
misconduct shall lie on the consignor, the consignee or the endorsee.
S. 98.
Goods in defective condition or defectively packed.--
(1) Notwithstanding anything contained in the foregoing provisions of this Chapter, when any goods
entrusted to a railway administration for carriage,--
(a) are in a defective condition as a consequence of which they are liable to damage, deterioration,
leakage or wastage; or
(b) are either defectively packed or not packed in such manner as may be prescribed and as a
result of such defective or improper packing are liable to damage, deterioration, leakage or
wastage,
Page 753
and the fact or such condition or defective or improper packing has been recorded by the
consignor or his agent in the forwarding note, the railway administration shall not be
responsible for any damage, deterioration, leakage or wastage or for the condition in which
such goods are available for delivery at destination:
Provided that the railway administration shall be responsible for any such damage,
deterioration, leakage or wastage or for the condition in which such goods are available
for delivery at destination if negligence or misconduct on the part of the railway
administration or of any of its servants is proved.
(2) When any goods entrusted to a railway administration for carriage are found on arrival at the
destination station to have been damaged or to have suffered deterioration, leakage or wastage, the
railway administration shall not be responsible for the damage, deterioration, leakage or wastage of
the goods on proof by railway administration,--
(a) that the goods were, at the time of entrustment to the railway administration, in a defective
condition, or were at that time either defectively packed or not packed in such manner as may
be prescribed and as a result of which were liable to damage, deterioration, leakage or
wastage; and
(b) that such defective condition or defective or improper packing was not brought to the notice of
the railway administration or any of its servants at the time of entrustment of the goods to the
railway administration for carriage by railway:
Provided that the railway administration shall be responsible for any such damage,
deterioration, leakage or wastage if negligence or misconduct on the part of the railway
administration or of any of its servants is proved.
S. 99.
Responsibility of a railway administration after termination of transit.--
(1) A railway administration shall be responsible as a bailee underSections 151, 152 and 161 of the
Indian Contract Act , 1872 (9 of 1872), for the loss, destruction, damage, deterioration or non-delivery
of any consignment up to a period of seven days after the termination of transit:
Provided that where the consignment is at owner's risk rate, the railway administration
shall not be responsible as a bailee for such loss, destruction, damage, deterioration or
non-delivery except on proof of negligence or misconduct on the part of the railway
administration or of any of its servants.
(2) The railway administration shall not be responsible in any case for the loss, destruction, damage,
deterioration or non-delivery of any consignment arising after the expiry of a period of seven days
after the termination of transit.
(3) Notwithstanding anything contained in the foregoing provisions of this section, a railway
Page 754
administration shall not be responsible for the loss, destruction, damage, deterioration or non-delivery
of perishable goods, animals, explosives and such dangerous or other goods as may be prescribed,
after the termination of transit.
(4) Nothing in the foregoing provisions of this Section shall affect the liability of any person to pay any
demurrage or wharfage, as the case may be, for so long as the consignment is not unloaded from the
railway wagons or removed from the railway premises.
CASE NOTE
Scope of.-- Failure to deliver goods is the consequence of loss or destruction and the cause of act ion for it is not
distinct from the cause of action for loss or destruction and, therefore, notice under Section 77 (Now Section 99 )
is necessary in the case of non-delivery which arises from the loss of goods. Union of India v. Mahadeo Lal Probhu
Dayal, AIR 1965 SC 1755 : 1966 BLJR 91 : 1966 All LJ 74.
S. 100.
Responsibility as carrier of luggage.--
A railway administration shall not be responsible for the loss, destruction, damage, deterioration or non-delivery of
any luggage unless a railway servant has booked the luggage and given a receipt therefor and in the case of luggage
which is carried by the passenger in his charge, unless it is also proved that the loss, destruction, damage or
deterioration was due to the negligence or misconduct on its part or on the part of any of its servants.
S. 101.
Responsibility as a carrier of animals.--
A railway administration shall not be responsible for any loss or destruction of, or injuries to, any animal carried by
railway arising from fright or restiveness of the animal or from over-loading of wagons by the consignor.
S. 102.
Exoneration from liability in certain cases.--
Notwithstanding anything contained in the foregoing provisions of, this Chapter, a railway administration shall not
be responsible for the loss, destruction, damage, deterioration or non-delivery of any consignment,--
(a) when such loss, destruction, damage, deterioration or non-delivery is due to the fact that a materially
false description of the consignment is given in the statement delivered under sub-section (1) of
Section 66 ; or
(b) where a fraud has been practised by the consignor or the consignee or the endorsee or by an agent of
the consignor, consignee or the endorsee; or
(c) where it is proved by the railway administration to have been caused by, or to have arisen from,--
(i) improper loading or unloading by the consignor or the consignee or the endorsee or by an
agent of the consignor, consignee or the endorsee;
Page 755
(ii) riot, civil commotion, strike, lock-out, stoppage or restraint of labour from whatever cause
arising whether partial or general; or
(d) for any indirect or consequential loss or damage or for loss of particular market.
CASE NOTES
For carriage of goods, the Railway administration will not be liable in the following cases:
(a) Where the goods are at owner's risk;

(b) The forwarding note should be correctly filled;
(c) Statement relating to description of goods should be correct, where such statement is false;
(d) The goods should not be dangerous or offensive;
(e) act of God;
(f) act of war;
(g) act of public enemies;
(h) arrest, restrain or seizure under legal process;
(i) orders or restrictions imposed by Government;
(j) act or omission or negligence of the consignor or the consignee or the endorsee;
(k) natural deterioration or wastage in bulk or weight due to inherent defect, quality or vice of the goods;
(l) latent defects;
(m) fire, explosion or any unforeseen risk;
(n) where a fraud has been practised;
(o) improper loading or unloading.
(p) riot, civil commotion, strike, lockout, stoppage or restraint of labour from whatever cause arising
whether partial or general;
(q) indirect or consequential loss or damage or for loss of particular market;
Meaning of the word--"deterioration."--Union of India v. The Steel Stock Holders Syndicate, AIR 1976 SC 879.
"Compensation"--meaning.--Union of India v. Sunil Kumar Ghosh, AIR 1984 SC 1737.
The words "Loss, destruction, damage or deterioration" must be read as ejusdem generis so as to indicate the
actual and physical loss or change in the goods.--Union of India v. Sunil Kumar Ghosh, AIR 1976 SC 879.
S. 103.
Extent of monetary liability in respect of any consignment.--

Page 756
(1) Where any consignment is entrusted to a railway administration for carriage by railway and the value
of such consignment has not been declared as required under sub-section (2) by the consignor, the
amount of liability of the railway administration for the loss, destruction, damage, deterioration or
non-delivery of the consignment shall in no case exceed such amount calculated with reference to the
weight of the consignment as may be prescribed, and where such consignment consists of an animal,
the liability shall not exceed such amount as may be prescribed.
(2) Notwithstanding anything contained in sub-section (1), where the consignor declares the value of any
consignment at the time of its entrustment to a railway administration for carriage by railway, and
pays such percentage charge as may be prescribed on so much of the value of such consignment as is
in excess of the liability of the railway administration as calculated or specified, as the case may be,
under sub-section (1), the liability of the railway administration for the loss, destruction, damage,
deterioration or non-delivery of such consignment shall not exceed the value so declared.
(3) The Central Government may, from time to time, by notification, direct that such goods as may be
specified in the notification shall not be accepted for carriage by railway unless the value of such
goods is declared and percentage charge is paid as required under sub-section (2),
S. 104.
Extent of liability in respect of goods carried in open wagon.--
Where any goods, which, under ordinary circumstances, would be carried in covered wagon and would be liable to
damage, if carried otherwise, are with the consent of the consignor, recorded in the forwarding note, carried in open
wagon, the responsibility of railway administration for destruction, damage or deterioration which may arise only by
reason of the goods being so carried, shall be one-half of the amount of liability for such destruction, damage or
deterioration determined under this Chapter.
S. 105.
Right of railway administration to check contents of certain consignment or luggage.--
Where the value has been declared under Section 103 in respect of any consignment, a railway administration may
make it a condition of carrying such consignment that a railway servant authorised by it in this behalf has been
satisfied by examination or otherwise that the consignment tendered for carriage contain the articles declared.
S. 106.
Notice of claim for compensation and refund of overcharge.--
(1) A person shall not be entitled to claim compensation against a railway administration for the loss,
destruction, damage, deterioration or non-delivery of goods carried by railway, unless a notice thereof
is served by him or on his behalf,--
(a) to the railway administration to which the goods are entrusted for carriage; or
(b) to the railway administration on whose railway the destination station lies, or the loss,
destruction, damage or deterioration occurs,
within a period of six months from the date of entrustment of the goods.
Page 757
(2) Any information demanded or enquiry made in writing from, or any complaint made in writing to,
any of the railway administration mentioned in sub-section (1) by or on behalf of the persons within
the said period of six months regarding the non-delivery or delayed delivery of the goods with
particulars sufficient to identify the goods shall, for the purpose of this section, be deemed to be a
notice of claim for compensation.
(3) A person shall not be entitled to a refund of an overcharge in respect of goods carried by railway
unless a notice therefor has been served by him or on his behalf to the railway administration to which
the over-charge has been paid within six months from the date of such payment or the date of delivery
of such goods at the destination station, whichever is later.
CASE NOTE
Object of notice.-- Governor General in Council v. Musaddi Lal, AIR 1961 SC 725; Jetmull Bhojraj v. Darjeeling
Himalayan Railway Co. Ltd., AIR 1962 SC 1879; Niranjanlal Agarwalla v. Union of India, AIR 1969 SC 23.
S. 107.
Applications for compensation for loss, etc., of goods.--
An application for compensation for loss, destruction, damage, deterioration or non-delivery of goods shall be filed
against the railway administration on whom a notice under Section 106 has been served.
S. 108.
Person entitled to claim compensation.--
(1) If a railway administration pays compensation for the loss, destruction, damage, deterioration or
non-delivery of goods entrusted to it for carriage, to the consignee or the endorsee producing the
railway receipt, the railway administration shall be deemed to have discharged its liability and no
application before the Claims Tribunal or any other legal proceedings shall lie against the railway
administration on the ground that the consignee or the endorsee was not legally entitled to receive
such compensation.
(2) Nothing in sub-section (1) shall affect the right of any person having any interest in the goods to
enforce the same against the consignee or the endorsee receiving compensation under that
sub-section.
S. 109.
Railway administration against which application for compensation for personal injury is to be filed.--
An application before the Claims Tribunal for compensation for the loss of life or personal injury to a passenger,
may be instituted against,--
Page 758
(a) the railway administration from which the passenger obtained his pass or purchased his ticket, or
(b) the railway administration on whose railway the destination station lies or the loss or personal injury
occurred.
S. 110.
Burden of proof.--
In an application before the Claims Tribunal for compensation for loss, destruction, damage, deterioration or
non-delivery of any goods, the burden of proving,--
(a) the monetary loss act ually sustained; or

(b) where the value has been declared under sub-section (2) of Section 103 in respect of any consignment
that the value so declared is its true value,
shall lie on the person claiming compensation, but subject to the other provisions contained in this
Act, it shall not be necessary for him to prove how the loss, destruction, damage, deterioration or
non-delivery was caused.
S. 111.
Extent of liability of railway administration in respect of accidents at sea.--
(1) When a railway administration contracts to carry passengers or goods partly by railway and partly by
sea, a condition exempting the railway administration from responsibility for any loss of life, personal
injury or loss of or damage to goods which may happen during the carriage by sea from act of God,
public enemies, fire, accidents from machinery, boilers and steam and all and every other dangers and
accidents of the seas, rivers and navigation of whatever nature and kind shall, without being
expressed, be deemed to be part of the contract, and, subject to that condition, the railway
administration shall, irrespective of the nationality or ownership of the ship used for the carriage by
sea, be responsible for any loss of life, personal injury or loss of or damage to goods which may
happen during the carriage by sea, to the extent to which it would be responsible under the Merchant
Shipping Act , 1958 (44 of 1958), if the ships were registered under that Act and the railway
administration were owner of the ship and not to any greater extent.
(2) The burden of proving that any such loss, injury or damage as is mentioned in sub-section (1)
happened during the carriage by sea shall lie on the railway administration.
S. 112.
Page 759
(a) the manner of packing of goods entrusted to a railway administration under Clause (b) to
sub-section (1) of Section 98 ;
(b) the goods for the purposes of sub-section (3) of Section 99 ; and
(c) the maximum amount payable by the railway administration for the loss, destruction, damage,
deterioration or non-delivery of any consignment under sub-section (1) of Section 103 .
CHAPTER XII
ACCIDENTS
S. 113.
Notice of railway accident.--
(1) Where in the course of working a railway,--

(a) any accident attended with loss of any human life, or with grievous hurt, as defined in the
Indian Penal Code (45 of 1860), or with such serious injury to property as may be prescribed;
or
(b) any collision between trains of which one is a train carrying passengers; or
(c) the derailment of any train carrying passengers, or of any part of such train; or
(d) any accident of a description usually attended with loss of human life or with such grievous
hurt as aforesaid or with serious injury to property; or
(e) any accident, of any other description which the Central Government may notify in this behalf
in the Official Gazette,
occurs, the station master of the station nearest to the place at which the accident occurs or
where there is no station master, the railway servant in charge of the Section of the railway on
which the accident occurs, shall, without delay, give notice of the accident to the District
Magistrate and Superintendent of Police, within whose jurisdiction the accident occurs, the
officer in charge of the police station within the local limits of which the accident occurs and
to such other Magistrate or police officer as may be appointed in this behalf by the Central
Government.
(2) The railway administration within whose jurisdiction the accident occurs, as also the railway
administration to whom the train involved in the accident belongs, shall without delay, give notice of
the accident to the State Government and the Commissioner having jurisdiction over the place of the
accident.
S. 114.
Inquiry by Commissioner.--
(1) On the receipt of a notice under Section 113 , of the occurrence of an accident to a train carrying
passengers resulting in loss of human life or grievous hurt causing total or partial disablement of
permanent nature to a passenger or serious damage to railway property, the Commissioner shall, as
Page 760
soon as may be, notify the railway administration in whose jurisdiction the accident occurred of his
intention to hold an inquiry into the causes that led to the accident and shall at the same time fix and
communicate the date, time and place of inquiry:
Provided that it shall be open to the Commissioner to hold an inquiry into any other
accident which, in his opinion, requires the holding of such an inquiry.
(2) If for any reason, the Commissioner is not able to hold an inquiry as soon as may be after the
occurrence of the accident, he shall notify the railway administration accordingly.
S. 115.
Inquiry by railway administration.--
Where no inquiry is held by the Commissioner under sub-section (1) of Section 114 or where the Commissioner has
informed the railway administration under sub-section (2) of that Section that he is not able to hold an inquiry, the
railway administration within whose jurisdiction the accident occurs, shall cause an inquiry to be made in accordance
with the prescribed procedure.
S. 116.
Powers of Commissioner in relation to inquiries.--
(1) For the purpose of conducting an inquiry under this Chapter into the causes of any accident on a
railway, the Commissioner shall, in addition to the powers specified in Section 7 , have the powers as
are vested in a Civil Court while trying a suit under the Code of Civil Procedure , 1908 (5 of 1908),
in respect of the following matters, namely,--
(a) summoning and enforcing the attendance of persons and examining them on oath;
(d) requisitioning any public record or copies thereof from any Court or office;
(e) any other matter which may be prescribed.
(2) The Commissioner while conducting an inquiry under this Chapter shall be deemed to be a Civil
Court for the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure , 1973
(2 of 1974).
S. 117.
Statement made before Commissioner.--
No statement made by a person in the course of giving evidence in an inquiry before the Commissioner shall subject
him to, or be used against him in, any civil or criminal proceeding, except a prosecution for giving false evidence by
such statement:
Page 761
Provided that the statement is,--
(a) made in reply to a question which is required by the Commissioner to answer; or

(b) relevant to the subject-matter of the inquiry.
S. 118.
Procedure, etc.--
Any railway administration or the Commissioner conducting an inquiry under this Chapter may send notice of the
inquiry to such persons, follow such procedure, and prepare the report in such manner as may be prescribed.
S. 119.
No inquiry, investigation, etc., to be made if the Commission of Inquiry is appointed.--
Notwithstanding anything contained in the foregoing provisions of this Chapter, where a Commission of Inquiry is
appointed under the Commissions of Inquiry Act , 1952 (3 of 1952), to inquire into an accident, any inquiry,
investigation or other proceeding pending in relation to that accident shall not be proceeded with, and all records or
other documents relating to such inquiry shall be forwarded to such authority as may be specified by the Central
Government in this behalf.
S. 120.
Inquiry into accident not covered by Section 113 .--
Where any accident of the nature not specified in Section 113 occurs in the course of working a railway, the railway
administration within whose jurisdiction the accident occurs, may cause such inquiry to be made into the causes of
the accident, as may be prescribed.
S. 121.
Returns.--
Every railway administration shall send to the Central Government, a return of accidents occurring on its railway,
whether attended with injury to any person or not, in such form and manner and at such intervals as may be
prescribed.
S. 122.
(a) the injury to property which shall be considered serious under Clause (a) of sub-section (1) of
Page 762
Section 113 ;
(b) the forms of notice of accidents to be given under Section 113 and the particulars of the
accident such notices shall contain;
(c) the manner of sending the notices of accidents, including the class of accidents to be sent
immediately after the accident;
(d) the duties of the Commissioner, railway administration, railway servants, police officers and
Magistrate on the occurrence of an accident;
(e) the persons to whom notices in respect of any inquiry under this Chapter are to be sent, the
procedure to be followed in such inquiry and the manner in which a report of such inquiry
shall be prepared;
(f) the nature of inquiry to be made by a railway administration into the causes of an accident
under Section 120 ;
(g) the form and manner of sending a return of accidents by a railway administration under
Section 121 .
CHAPTER XIII
LIABILITY OF RAILWAY ADMINISTRATION FOR DEATH AND INJURY TO PASSENGERS DUE

TO ACCIDENTS
S. 123.
Definitions.--
"accident"
(a) means an accident of the nature described in Section 124 ;
"dependent"
(b) means any of the following relatives of a deceased passenger, namely,--

(i) the wife, husband, son and daughter, and in case the deceased passenger is
unmarried or is a minor, his parent;
(ii) the parent, minor brother or unmarried sister, widowed sister, widowed
daughter-in-law and a minor child of a predeceased son, if dependent wholly or
partly on the deceased passenger;
(iii) a minor child of a pre-deceased daughter, if wholly dependent on the deceased
passenger;
(iv) the paternal grand parent wholly dependent on the deceased passenger;
"untoward incident"
Page 763
11.[(c) means,--
(1)(i)the commission of a terrorist act within the meaning of sub-section (1) of

Section 3 of the Terrorist and Distruptive Act ivities (Prevention) Act , 1987 (28 of
1987), or
(ii) the making of a violent attack or the commission of robbery or dacoity; or
(iii) the indulging in rioting, shoot-out or arson.
by any person in or on any train carrying passengers, or in a waiting hall, cloak room
or reservation or booking office or on any platform or in any other place within the
precincts of a railway station; or
(2) the accidental falling of any passenger from a train carrying passengers.]
CASE NOTES
Determination of nature of death in case of claim of compensation--Accidental death of passenger from falling
from the train--Criminal act.-- In the present case, the manner in which the accident is sought to be reconstructed
by the Railway, the deceased-passenger was standing at the open door of the train compartment from where he fell
down, is called by the railway itself as negligence. Now negligence of this kind which is not very uncommon on
Indian trains is not the same thing as a criminal act mentioned in Clause (c) to the proviso toSection124-A 124-A of
the Railways Act , 1989. A criminal act envisaged under the said Clause (c) must have an element of malicious
intent or mens rea. Standing at the open doors of the compartment of running train may be a negligent act , even a
rash act but, without anything else, it is certainly not a criminal act on the part of the deceased-passenger. Thus, the
case of the railway must fail even after assuming everything in its favour. The Railway has not even contended that
the death was a case of suicide or a result of self-inflicted injury nor it has been pleaded that the deceased died due to
his own criminal act nor he was a in a state of intoxication or he was insane or he died due to any natural cause or
disease and as such it must be held that the falling of the deceased from the train compartment was clearly accidental
and, therefore, the heirs of the deceased are entitled to compensation from the Railway. Jammeela v. Union of India,
(2010) 8 SCALE 663 : (2010) 9 JT 138 : AIR 2010 SC 3705 : (2010) 12 SCC 443.
Award of compensation against Railways for negligence in causing death of passenger.-- In the present case,
there was a robbery in the train and the deceased passenger was seriously assaulted. From the evidence of the Guard
and the Motorman, it was quite obvious that despite the pulling of the alarm chain the train was not made to stop.
The whole purpose of providing an alarm chain in the compartments of a railway train was, thus, frustrated. The
Court can take judicial notice of the fact that if an alarm chain is wrongly pulled, the person responsible for pulling it
is liable to be fined. There is a common law duty of taking reasonable care which must be attached to all carriers
including the railways. In this case, there has been a breach of that duty and the negligence on the part of the railway
staff is writ large. Had the train been stopped and first-aid provided when the alarm chain was pulled, the possibility
that the deceased may not have met her death, even after assault in course of robbery, is a possibility which was not
totally ruled out. The manner in which the Guard and the Motorman act ed exposes a total casual approach on their
part. Because of the failure of those railway officials, a precious life was lost. The standard of care is high and strict.
It is not a case where the omission on the part of the railway officials can be said to be wholly unforeseen or beyond
their control. Here, there had been a complete dereliction of duty which resulted in a precious life been taken away,
rendering the guarantee under Article 21 of the Constitution illusory. Had the deceased not pulled the alarm chain
with a view to stop the train, the position might have been different. Liability in this case is fault based. Such a
Page 764
liability is not inconsistent with the scheme of the Railways Act of 1890 either (Refer Section 80 with advantage).
The proof of fault in this case is strong. In such facts and circumstances, the Supreme Court has awarded a sum of
Rupees two lakhs as compensation to the appellant for the death of his wife. This amount shall be in addition to Rs.
50, 000/- which had been given by the State Government in 1981 as ex gratia in favour of the son of the appellant. P.
A. Narayanan v. Union of India, (1998) 1 SCALE 657 : (1998) 1 JT 749 : AIR : (1998) 3 SCC 67 : AIR 1998
SC 1659.
Justifiability of awarding compensation for railway accident--Maintainability of Special leave petition against
award of compensation by Tribunal and High Court.-- In the present case, the railway accident was caused due to
the negligence of the Railway as the manned level crossing was not closed when the bus while crossing the same was
hit by the moving train. The Accident Claims Tribunal awarded compensation to the victims and the High Court also
found that the Railway was responsible for the accident. The victims have been rightly awarded compensation. It is
not a fit case for granting special leave under 136 of the Constitution of India for two reasons:--Firstly, the question
of awarding the jurisdiction of the MACT has been already settled by the Supreme Court in Union of India v. United
India Inssurance Co. Ltd., (1997) 8 SCC 683 : AIR 1998 SC 640, that the Tribunal has no jurisdiction if the
accident was solely attributable to the negligence of the Railways and secondly, the victims are entitled to
compensation from the Railways at any rate and compensation has been awarded to them. It is not proper to
disentitle them of the fruits on the ground that the victims should have approached a different venue altogether. G.
M., N.F., Raiway, Maligaon, Guwahati v. Jitendra Shah, (2000) 1 JT 189 : (2000) 9 SCC 58 : 2000 SCC (Cri)
1249 : AIR 2000 SC 3398.
In Union of India v. United India Insurance Co. Ltd., (1997) 6 SCALE 497 : (1997) 8 653 : (1997) 8 SCC 683 :
AIR 1998 SC 640, it has been held by the Supreme Court that the High Court has noticed that 300 vehicles pass the
level crossing point and six Express trains cut across the public road every day (obviously there must be other
non-Express or Passanger trains and Goods trains every day). The population is dense in Kerala and more so near
Kalady, the pilgrimage centre connected with Sri Jagadguru Adi Sankaracharya. The High Court rightly observed
that the bus driver was from TN and as such he was not familiar with this place in the State of Kerala where the
accident occurred. There was no caution board or other indication to show that the road was cutting across a railway
line, and there were no gates or hand-rails to alert the passers-by. The High Court rightly held that if the Railway had
taken adequate precautionary measures such as, erecting hand-rails or gats, a severe accident like this would not have
taken place. In the absence of gates and caution board, the level crossing was held to be in the nature of a trap.
Hence, no case is made out by the appellant for disturbing the finding of the High Court that applying common law
principles, the Railway must also be deemed to be negligent in not converting the unmanned level crossing into a
manned one with gates,--having regard to the volume of rail and road traffic at the concerned point.
S. 124.
Extent of liability.--
When in the course of working a railway, an accident occurs, being either a collision between trains of which one is a
train carrying passengers or the derailment of or other accident to train or any part of a train carrying passengers,
then whether or not there has been any wrongful act , neglect or default on the part of the railway administration such
as would entitle a passenger who has been injured or has suffered a loss to maintain an action and recover damages
in respect thereof, the railway administration shall, notwithstanding anything contained in any other law, be liable to
pay compensation to such extent as may be prescribed and to that extent only for loss occasioned by the death of a
passenger dying as a result of such accident, and for personal injury and loss, destruction, damage or deterioration of
goods owned by the passenger and accompanying him in his compartment or on the train, sustained as a result of
such accident.
Page 765
Explanation.--For the purpose of this Section "passenger" includes a railway servant on duty.
12.Ins. by Act 28 of 1994, Section 3 (w.e.f. 1.8.1994).[S. 124-A.
Compensation on account of untoward incidents.--
When in the course of working a railway an untoward incident occurs, then whether or not there has been any
wrongful act, neglect or default on the part of the railway administration such as would entitle a passenger who has
been injured or the dependant of a passenger who has been killed to maintain an act ion and recover damages in
respect thereof, the railway administration shall, notwithstanding anything contained in any other law, be liable to
pay compensation to such extent as may be prescribed and to that extent only for loss occasioned by the death of, or
injury to, a passenger as a result of such untoward incident:
Provided that no compensation shall be payable under this Section by the railway administration if the
passenger dies or suffers injury due to,--
(a) suicide or attempted suicide by him;

(b) self-inflicted injury;
(c) his own criminal act;
(d) any act committed by him in a state of intoxication or insanity;
(e) any natural cause or disease or medical or surgical treatment unless such treatment
becomes necessary due to injury caused by the said untoward incident.
Explanation.--For the purposes of this section, "passenger" includes,--
(i) a railway servant on duty; and

(ii) a person who has purchased a valid ticket for travelling, by a train carrying passengers,
on any date or a valid platform ticket and becomes a victim of an untoward incident.]
CASE NOTES
Scope of provisos (a) to (c) of Section 124 -A as to non-liability of Railway Administration to pay
compensation--Grant of compensation--Determination of criminal act--Liability of Railway to pay
compensation.-- See Jameela v. Union of India, (2010) 8 SCALE 663 : (2010) 9 JT 138 : AIR 2010 SC 3705 :
(2010) 12 SCC 443.
Claim of compensation along with interest in case of death of bona fide passenger-- Delay of non-payment of
compensation awarded by Tribunal.--In the instant case, there was admittedly a scuffle between the deceased
passenger and thieves and the deceased had been thrown from the running train resulting in his death. The wife of the
deceased. i.e., the appellant claimed compensation and the Trial Court awarded compensation of Rs. 4 lakhs to her
and directed the Railway to deposit the same within 45 days failing which the awarded sum would attract interest @
6.5%. The claim for compensation accrued on 13th November, 1998 when the husband of the appellant died on
account of being thrown out of the moving train. The claim before the Tribunal was filed immediately, thereafter, in
1999. There was no delay on the part of the appellant in making the claim, which was ultimately granted for the
maximum amount of Rs. 4 lakhs on 26th March, 2007. Even if, the appellant may not be entitled to claim interest
Page 766
from the date of the incident, the claim to interest on the award has to be allowed from the date of the application till
the date of recovery, since the appellant cannot be faulted for the delay of about 8 years in the making of the award
by the Railway Claims Tribunal. Where the is no specific provision for grant of interest on any amount due, the
Court and even the Tribunals are entitled to award interest in their discretion under the provision of the Interest Act,
1978 and Section 34 of CPC . Hence, both the Tribunal as well as the High Court were wrong in not granting any
interest whatsoever to the appellant, except by way of a default clause, which is contrary to the established principles
relating to payment of interest on money claims. Hence, the Supreme Court has affirmed the order of the Trial Court
and the award would carry interest @ 6% simple interest per annum from the date of the application till the date of
the Award and, thereafter, at the rate of 9% per annum till the date of actual payment of the same. Tahazhathe
Purayil Sarabi v. Union of India, (2009) 7 SCC 372 : (2009) 8 SCALE 545 : (2009) 8 JT 515 : AIR 2009 SC
3098.
S. 125.
Application for compensation.--
(1) An application for compensation under Section 12413.[or Section 124 -A] may be made to the
Claims Tribunal,--
(a) by the person who has sustained the injury or suffered any loss, or
(b) by any agent duly authorised by such person in this behalf, or
(c) where such person is monor, by his guardian, or
(d) where death has resulted from the accident 14.[or the untoward incident], by any dependant of
the deceased or where such a dependant is a minor, by his guardian.
(2) Every application by a dependant for compensation under this Section shall be for the benefit of every
other depandent.
S. 126.
Interim relief by railway administration.--
(1) Where a person who has made an application for compensation under Section 125 desires to be paid
interim relief, he may apply to the railway administration for payment of interim relief, along with a
copy of the application made under that section.
(2) Where, on the receipt of an application made under sub-section (1) and after making such inquiry as it
may deem fit, the railway administration is satisfied that circumstances exist which require relief to be
afforded to the applicant immediately, it may, pending determination by the Claims Tribunal of the
act ual amount of compensation payable under Section 12415.[or Section 124 -A] pay to any person
who has sustained the injury or suffered any loss, or where death has resulted from the accident, to
any dependant of the deceased, such sum as it considers reasonable for affording such relief, so
however, that the sum paid shall not exceed the amount of compensation payable at such rates as may
be prescribed.
(3) The railway administration shall, as soon as may be, after making an order regarding payment of
interim relief under sub-section (2), send a copy thereof to the Claims Tribunal.
(4) Any sum paid by the railway administration under sub-section (2) shall be taken into account by the
Claims Tribunal while determining the amount of compensation payable.
Page 767
S. 127.
Determination of compensation in respect of any injury or loss of goods.--
(1) Subject to such rules as may be made, the rates of compensation payable in respect of any injury shall
be determined by the Claims Tribunal.
(2) The compensation payable in respect of any loss of goods shall be such as the Claims Tribunal may,
having regard to the circumstances of the case, determine to be reasonable.
S. 128.
Saving as to certain rights.--
(1) The right of any person to claim compensation under Section 12416.[or Section 124 -A] shall not
affect the right of any such person to recover compensation payable under the Workmen's
Compensation Act , 1923 (8 of 1923), or any other law for the time being in force; but no person shall
be entitled to claim compensation more than once in respect of the same accident.
(2) Nothing in sub-section (1) shall affect the right of any person to claim compensation payable under
any contract or scheme providing for payment of compensation for death or personal injury or for
damage to property or any sum payable under any policy of insurance.
S. 129.
(a) the compensation payable for death;
(b) the nature of the injuries for which compensation shall be paid and the amount of such
compensation.
CHAPTER XIV
REGULATION OF HOURS OF WORK AND PERIOD OF REST
S. 130.
Definitions.--
Page 768
(a) the employment of a railway servant is said to be "continuous" except when it is excluded or has been
declared to be essentially intermittent or intensive;
(b) the employment of a railway servant is said to be "essentially intermittent" when it has been declared
to be so by the prescribed authority on the ground that the daily hours of duty of the railway servant
normally include periods of inaction aggregating to fifty per cent or more (including at least one such
period of not less than one hour or two such periods of not less than half an hour each) in a tour of
twelve hours duty (on the average over seventy-two consecutive hours), during which the railway
servant may be on duty, but is not called upon to display either physical act ivity or sustained
attention;
(c) the employment of a railway servant is said to be "excluded", if he belongs to any one of the
following categories, namely,--
(i) railway servant employed in a managerial or confidential capacity;
(ii) armed guards or other personnel subject to discipline similar to that of any of the armed police
forces;
(iii) staff of the railway schools imparting technical training or academic education;
(iv) such staff as may be specified as supervisory under the rules;
(v) such other categories of staff as may be prescribed;
(d) the employment of a railway servant is said to be "intensive" when it has been declared to be so by the
prescribed authority on the ground that it is of a strenuous nature involving continued concentration or
hard manual labour with little or no period of relaxation.
S. 131.
Chapter not to apply to certain railway servants.--
Nothing in this Chapter shall apply to any railway servant to whom the Factories Act , 1948 (63 of 1948) or the
Mines Act , 1952 (35 of 1952) or the Railway Protection Force Act , 1957 (23 of 1957) or the Merchant Shipping
Act , 1958 (44 of 1958), applies.
S. 132.
Limitation of hours of work.--
(1) A railway servant whose employment is essentially intermittent shall not be employed for more than
seventy-five hours in any week.
(2) A railway servant whose employment is continuous shall not be employed for more than fifty-four
(3) A railway servant whose employment is intensive shall not be employed for more than forty-five
(4) Subject to such rules as may be prescribed, temporary exemptions of railway servants from the
provisions of sub-section (1) of sub-section (2) or sub-section (3) may be made by the prescribed
authority if it is of opinion that such temporary exemptions are necessary to avoid serious interference
with the ordinary working of the railway or in cases of accident, act ual or threatened, or when urgent
work is required to be done to the railway or to rolling stock or in any emergency which could not
Page 769
have been foreseen or prevented, or in other cases of exceptional pressure of work:
Provided that where such exemption results in the increase of hours of employment of
a railway servant referred to in any of the sub-sections, he shall be paid overtime at not
less than two times his ordinary rate of pay for the excess hours of work.
S. 133.
Grant of periodical rest.--
(1) Subject to the provisions of this section, a railway servant,--

(a) whose employment is intensive or continuous shall, for every week commencing on a Sunday,
be granted a rest of not less than thirty consecutive hours;
(b) whose employment is essentially intermittent shall, for every week commencing on a Sunday,
be granted a rest of not less than twenty-four consecutive hours including a full night.
(2) Notwithstanding anything contained in sub-section (1),--

(i) any locomotive or traffic running staff shall be granted, each month, a rest of at least four
periods of not less than thirty consecutive hours each or at least five periods of not less than
twenty-two consecutive hours each, including a full night;
(ii) the Central Government may, by rules, specify the railway servants to whom periods of rest on
scales less than those laid down under sub-section (1) may be granted and the periods thereof.
(3) Subject to such rules as may be made in this behalf, if the prescribed authority is of the opinion that
such circumstances as are referred to in sub-section (4) of Section 132 are present, it may exempt any
railway servant from the provisions of sub-section (1) or Clause (i) of sub-section (2):
Provided that a railway servant so exempted shall, in such circumstances as may be

prescribed, be granted compensatory periods of rest for the periods he has foregone.
S. 134.
Railway servant to remain on duty.--
Nothing in this Chapter or the rules made thereunder shall, where due provision has been made for the relief of a
railway servant, authorise him to leave his duty until he has been relieved.
S. 135.
Supervisors of railway labour.--

Page 770
(1) Subject to such rules as may be made in this behalf, the Central Government may appoint supervisors
of railway labour.
(2) The duties of supervisors of railway labour shall be,--
(i) to inspect railways in order to determine whether the provisions of this Chapter or of the rules
made thereunder are duly observed; and
(ii) to perform such other functions as may be prescribed.
(3) A supervisor of railway labour shall be deemed to be a Commissioner for the purposes of Sections 7
and 9.
S. 136.
(a) the authoriies who may declare the employment of any railway servant essentially intermittent
or intensive;
(b) the appeals against any such declaration and the manner in which, and the conditions subject
to which any such appeal may be filed and heard;
(c) the categories of staff that may be specified under sub-clauses (iv) and (v) of Clause (c) of
Section 130 ;
(d) the authorities by whom exemptions under sub-section (4) of Section 132 or sub-section (3) of
Section 133 may be made;
(e) the delegation of power by the authorities referred to in Clause (d);
(f) the railway servants to whom Clause (ii) of sub-section (2) of Section 133 apply and the
periods of rest to be granted to them;
(g) the appointment of supervisors of railway labour and their functions.
CHAPTER XV
PENALTIES AND OFFENCES
S. 137.
Fraudulently travelling or attempting to travel without proper pass or ticket.--
(1) If any person, with intent to defraud a railway administration,--

(a) enters or remains in any carriage on a railway or travels in a train in contravention of Section
55 , or
(b) uses or attempts to use a single pass or a single ticket which has already been used on a
previous journey, or in the case of a return ticket, a half thereof which has already been so
used,
Page 771
he shall be punishable with imprisonment for a term which may extend to six months, or with fine
which may extend to one thousand rupees, or with both:
Provided that in the absence of special and adequate reasons to the contrary to be
mentioned in the judgment of the Court, such punishment shall not be less than a fine
of five hundred rupees.
(2) The person referred to in sub-section (1) shall also be liable to pay the excess charge mentioned in
sub-section (3) in addition to the ordinary single fare for the distance which he has travelled, or where
there is any doubt as to the station from which he started, the ordinary single fare from the station
from which the train originally started, or if the tickets of passengers travelling in the train have been
examined since the original starting of the train, the ordinary single fare from the place where the
tickets were so examined or, in case of their having been examined more than once, were last
examined.
(3) The excess charge referred to in sub-section (2) shall be a sum equal to the ordinary single fare
referred to in that sub-section or 17.[two hundred and fifty rupees], whichever is more.
(4) Notwithstanding anything contained in Section 65 of the Indian Penal Code (45 of 1860) the Court
convicting an offender may direct that the person in default of payment of any fine inflicted by the
Court shall suffer imprisonment for a term which may extend to six months.
S. 138.
Levy of excess charge and fare for travelling without proper pass or ticket or beyond authorised distance.--

(a) being in or having alighted from a train, fails or refuses to present for examination or to
deliver up his pass or ticket immediately on a demand being made therefor under Section 54 ,
or
(b) travels in a train in contravention of the provisions of Section 55 ,
he shall be liable to pay, on the demand of any railway servant authorised in this behalf, the excess
charge mentioned in sub-section (3) in addition to the ordinary single fare for the distance which he
has travelled or, where there is any doubt as to the station from which he started, the ordinary single
fare from the station from which the train originally started, or, if the tickets of passengers travelling
in the train have been examined since the original starting of the train, the ordinary single fare from
the place where the tickets were so examined or in the case of their having been examined more than
once, were last examined,
(a) travels or attempts to travel in or on a carriage, or by a train, of a higher class than that for
which he has obtained a pass or purchased a ticket; or
(b) travels in or on a carriage beyond the place authorised by his pass or ticket,
he shall be liable to pay, on the demand of any railway servant authorised in this behalf, any
difference between the fare paid by him and the fare payable in respect of the journey he has made
and the excess charge referred to in sub-section (3).
(3) The excess charge shall be a sum equal to the amount payable under sub-section (1) or sub-section
(2), as the case may be, or 18.[Two hundred and fifty rupees], whichever is more:
Provided that if the passenger has with him a certificate granted under sub-section (2)
Page 772
of Section 55 , no excess charge shall be payable.
(4) If any passenger liable to pay the excess charge and the fare mentioned in sub-section (1), or the
excess charge and any difference of fare mentioned in sub-section (2), fails or refuses to pay the same
on a demand being made therefor under one or other of these sub-sections, as the case may be, any
railway servant authorised by the railway administration in this behalf may apply to any Metropolitan
Magistrate or a Judicial Magistrate of the first or second class, as the case may be, for the recovery of
the sum payable as if it were a fine, and the Magistrate if satisfied that the sum is payable shall order
it to be so recovered, and may order that the person liable for the payment shall in default of payment
suffer imprisonment of either description for a term which may extend to one month but not less than
ten days.
(5) Any sum recovered under sub-section (4) shall, as and when it is recovered, be paid to the railway
administration.
CASE NOTE
Justifaibility of denial of title of railway administration by employee for property given during service.-- Once
it is admitted that the employee was given possession of the premises as he was entitled for the same while working
as Chief Public Relation Officer of the railway department, he cannot be permitted to deny the title of the railway
administration. The provisions of Sections 138 of the Railways Act , 1889 can be invoked upon on his retirement
even though the Railway administration has no proof that the property belonged to the said employee. The said
employee is estopped from challenging the title of the railway administration over the premises in question. S.K.
Sarma v. Mahesh Kumar Verma, (2002) 7 SCC 505 : AIR 2002 SC 3294 : 2002 Cr LJ 4318.
S. 139.
Power to remove persons.--
Any person failing or refusing to pay the fare and the excess charge referred to in Section 138 may be removed by
any railway servant authorised in this behalf who may call to his aid any other person to effect such removal:
Provided that nothing in this Section shall be deemed to prcelude a person removed from a carriage of
a higher class from continuing his journey in a carriage of a class for which he holds a pass or ticket:
Provided further that a woman or a child if unaccompanied by a male passenger, shall not be so
removed except either at the station from where she or he commences her or his journey or at a
junction or terminal station or station at the headquarters of a civil district and such removal shall be
made only during the day.
S. 140.
Security for good behaviour in certain cases.--
(1) When a Court convicting a person of an offence under Section 137 or Section 138 finds that he has
Page 773
been habitually committing or attempting to commit that offence and the Court is of the opinion that it
is necessary or desirable to require that person to execute a bond for good behaviour, such Court may
at the time of passing the sentence on the person, order him to execute a bond with or without sureties,
for such amount and for such period not exceeding three years as it deems fit.
(2) An order under sub-section (1) may also be made by an Appellate Court or by the High Court when
exercising its powers of revision.
S. 141.
Needlessly interfering with means of communication in a train.--
If any passenger or any other person, without reasonable and sufficient cause, makes use of, or interferes with, any
means provided by a railway administration in a train for communication between passengers and the railway servant
in charge of the train he shall be punishable with imprisonment for a term which may extend to one year, or with fine
which may extend to one thousand rupees, or with both:
judgment of the Court, where a passenger, without reasonable and sufficient cause, makes use of the
alarm chain provided by a railway administration, such punishment shall not be less than,--
(a) a fine of five hundred rupees, in the case of conviction for the first offence; and
(b) imprisonment for three months in case of conviction for the second or subsequent
offence.
S. 142.
Penalty for transfer of tickets.--
(1) If any person not being a railway servant or an agent authorised in this behalf,--
(a) sells or attempts to sell any ticket or any half of a return ticket; or
(b) parts or attempts to part with the possession of a return ticket against which reservation of a
seat or berth has been made or any half of a return ticket or a season ticket,
in order to enable any other person to travel therewith, he shall be punishable with imprisonment for a
term which may extend to three months, or with fine which may extend to five hundred rupees, or
with both, and shall also forfeit the ticket which he sells or attempts to sell or parts or attempts to part.
(2) If any person purchases any ticket referred to in Clause (a) of sub-section (1) or obtains the possession
of any ticket referred to in Clause (b) of that sub-section from any person other than a railway servant
or an agent authorised in this behalf, he shall be punishable with imprisonment for a term which may
extend to three months and with fine which may extend to five hundred rupees and if the purchaser or
holder of any ticket aforesaid travels or attempts to travel therewith, he shall forfeit the ticket which
he so purchased or obtained and shall be deemed to be travelling without a proper ticket and shall be
liable to be dealt with under Section 138 :
mentioned in the judgment of the Court, the punishment under sub-section (1) or
sub-section (2) shall not be less than a fine of two hundred and fifty rupees.
Page 774
S. 143.
Penalty for unauthorised carrying on of business of procuring and supplying of railway tickets.--
(1) If any person, not being a railway servant or an agent authorised in this behalf,--
(a) carries on the business of procuring and supplying tickets for travel on a railway or for
reserved accommodation for journey in a train; or
(b) purchases or sells or attempts to purchase or sell tickets with a view to carrying on any such
business either by himself or by any other person,
he shall be punishable with imprisonment for a term which may extend to three years or with fine
which may extend to ten thousand rupees, or with both, and shall also forfeit the tickets which he so
procures, supplies, purchases, sells or attempts to purchase or sell:
mentioned in the judgment of the Court, such punishment shall not be less than
imprisonment for a term of one month or a fine of five thousand rupees.
(2) Whoever abets any offence punishable under this Section shall, whether or not such offence is
committed, be punishable with the same punishment as is provided for the offence.
S. 144.
Prohibition on hawking, etc. and begging.--
(1) If any person canvasses for any custom or hawks or exposes for sale any article whatsoever in any
railway carriage or upon any part of a railway, except under and in accordance with the terms and
conditions of a licence granted by the railway administration in this behalf, he shall be punishable
with imprisonment for a term which may extend to one year, or with fine which may extend to two
thousand rupees, or with both:
Provided that, in the absence of special and adequate reasons to the contrary to be
of one thousand rupees.
(2) If any person begs in any railway carriage or upon a railway station, he shall be liable for punishment
as provided under sub-section (1).
(3) Any person referred to in sub-section (1) or sub-section (2) may be removed from the railway carriage
or any part of the railway or railway station, as the case may be, by any railway servant authorised in
this behalf or by any other person whom such railway servant may call to his aid.
S. 145.
Page 775
Drunkenness or nuisance.--
If any person in any railway carriage or upon any part of a railway,--
(a) is in a state of intoxication; or

(b) commits any nuisance or act of indecency or uses abusive or obscene language; or
(c) wilfully or without excuse interferes with any amenity provided by the railway administration so as to
affect the comfortable travel of any passenger,
he may be removed from the railway by any railway servant and shall, in addition to the forfeiture of his pass or
ticket, be punishable with imprisonment which may extend to six months and with fine which may extend to five
hundred rupees:
judgment of the Court, such punishment shall not be less than,--
(a) a fine of one hundred rupees in the case of conviction for the first offence; and
(b) imprisonment of one month and a fine of two hundred and fifty rupees, in the case of
conviction for second or subsequent offence.
CASE NOTE
Scope of.-- When accident takes place outside the precincts of the railway station, petitioner/offender is not liable to
be convicted. Sita Ram v. State, 1994 (1) Crimes 848 (Del).
S. 146.
Obstructing railway servant in his duties.--
It any person wilfully obstructs or prevents any railway servant in the discharge of his duties, he shall be punishable
with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand
rupees, or with both.
CASE NOTE
Applicability.-- Grant of permission to compound offence under Sections 370 Cr PC does not affect the conviction
underSection 120 and 145) of the o121 of the o146) of the Railways Act and the sentence of fine in that behalf.
Abdul Sattar v. State of M.P., AIR 1981 SC 1775 : (1981) 3 SCC 73 : 1982 Cr LR (SC) 7.
S. 147.
Trespass and refusal to desist from trespass.--

Page 776
(1) If any person enters upon or into any part of a railway without lawful authority, or having lawfully
entered upon or into such part misuses such property or refuses to leave, he shall be punishable with
imprisonment for a term which may extend to six months, or with fine which may extend to one
thousand rupees, or with both:
of five hundred rupees.
(2) Any person referred to in sub-section (1) may be removed from the railway by any railway servant or
by any other person whom such railway servant may call to his aid.
S. 148.
Penalty for making a false statement in an application for compensation.--
If in any application for compensation under Section 125 , any person makes a statement which is false or which he
knows or believes to be false or does not believe to be true, he shall be punishable with imprisonment for a term
which may extend to three years, or with fine, or with both.
S. 149.
Making a false claim for compensation.--
If any person requiring compensation from a railway administration for loss, destruction, damage, deterioration or
non-delivery of any consignment makes a claim which is false or which he knows or believes to be false or does not
believe to be true, he shall be punishable with imprisonment for a term which may extend to three years, or with fine,
or with both.
S. 150.
Maliciously wrecking or attempting to wreck a train.--
(1) Subject to the provisions of sub-section (2), if any person unlawfully,--

(a) puts or throws upon or across any railways, any wood, stone or other matter or thing; or
(b) takes up, removes, loosens or displaces any rail, sleeper or other matter or things belonging to
any railway; or
(c) turns, moves, unlocks or diverts any points or other machinery belonging to any railway; or
(d) makes or shows, or hides or removes, any signal or light upon or near to any railway; or
(e) does or causes to be done or attempts to do any other act or thing in relation to any railway,
with intent or with knowledge that he is likely to endanger the safety of any person travelling on or
being upon the railway, he shall be punishable with imprisonment for life, or with rigorous
imprisonment for a term which may extend to ten years:
Page 777
mentioned in the judgment of the Court, where a person is punishable with rigorous
imprisonment such imprisonment shall not be less than,--
(a) three years, in the case of a conviction for the first offence; and
(b) seven years, in the case of conviction for the second or subsequent offence.
(2) If any person unlawfully does any act or thing referred to in any of the clauses of sub-section (1)--
(a) with intent to cause the death of any person and the doing of such act or thing causes the
death of any person; or
(b) with knowledge that such act or thing is so imminently dangerous that it must in all probability
cause the death of any person or such bodily injury to any person as is likely to cause the death
of such person,
he shall be punishable with death or imprisonment for life.
S. 151.
Damage to or destruction of certain railway properties.--
(1) If any person, with intent to cause, or knowing that he is likely to cause damage or destruction to any
property of a railway referred to in sub-section (2), causes by fire, explosive substance or otherwise,
damage to such property or destruction of such property, he shall be punishable with imprisonment
for a term which may extend to five years, or with fine, or with both.
(2) The properties of a railway referred to in sub-section (1) are railway track, bridges, station buildings
and installations, carriages or wagons, locomotives, signalling, telecommunications, electric traction
and block equipments and such other properties as the Central Government being of the opinion that
damage thereto or destruction thereof is likely to endanger the operation of a railway, may, by
notification, specify.
S. 152.
Maliciously hurting or attempting to hurt persons travelling by railway.--
If any person unlawfully throws or causes to fall or strike at, against, into or upon any rolling stock forming part of a
train, any wood, stone or other matter or thing with intent, or with knowledge that he is likely to endanger the safety
of any person being in or upon such rolling stock or in or upon any other rolling stock forming part of the same train,
he shall be punishable with imprisonment for life, or with imprisonment for a term which may extend to ten years.
S. 153.
Endangering safety of persons travelling by railway by wilful act or omission.--
If any person by any unlawful act or by any wilful omission or neglect, endangers or causes to be endangered the
safety of any person travelling on or being upon any railway, or obstructs or causes to be obstructed or attempts to
obstruct any rolling stock upon any railway, he shall be punishable with imprisonment for a term which may extend
Page 778
to five years.
S. 154.
Endangering safety of persons travelling by railway by rash or negligent act or omission.--
If any person in a rash and negligent manner does any act , or omits to do what he is legally bound to do, and the act
or omission is likely to endanger the safety of any person travelling or being upon any railway, he shall be
punishable with imprisonment for a term which may extend to one year, or with fine, or with both.
S. 155.
Entering into a compartment reserved or resisting entry into a compartment not reserved.--
(1) If any passenger--

(a) having entered a compartment wherein no berth or seat has been reserved by a railway
administration for his use, or
(b) having unauthorisedly occupied a berth or seat reserved by a railway administration for the use
of another passenger,
refuses to leave it when required to do so by any railway servant authorised in this behalf, such
railway servant may remove him or cause him to be removed, with the aid of any other person, from
the compartment, berth or seat, as the case may be, and he shall also be punishable with fine which
may extend to five hundred rupees.
(2) If any passenger resists the lawful entry of another passenger into a compartment not reserved for the
use of the passenger resisting, he shall be punishable with fine which may extend to two hundred
rupees.
S. 156.
Travelling on roof, step or engine of a train.--
If any passenger or any other person, after being warned by a railway servant to desist, persists in travelling on the
roof, step or footboard of any carriage or on an engine, or in any other part of a train not intended for the use of
passengers, he shall be punishable with imprisonment for a term which may extend to three months, or with fine
which may extend to five hundred rupees, or with both and may be removed from the railway by any railway
servant.
S. 157.
Altering or defacing pass or ticket.--
If any passenger wilfully alters or defaces his pass or ticket so as to render the date, number or any material portion
thereof illegible, he shall be punishable with imprisonment for a term which may extend to three months, or with fine
which may extend to five hundred rupees, or with both.
S. 158.
Page 779
Penalty for contravention of any of the provisions of Chapter XIV.--
Any person under whose authority any railway servant is employed in contravention of any of the provisions of
Chapter XIV or of the rules made thereunder shall be punishable with fine which may extend to five hundred rupees.
S. 159.
Disobedience of drivers or conductors of vehicles to directions of railway servant, etc.--
If any driver or conductor of any vehicle while upon the premises of a railway disobeys the reasonable directions of
any railway servant or police officer, he shall be punishable with imprisonment for a term which may extend to one
month, or with fine which may extend to five hundred rupees, or with both.
S. 160.
Opening or breaking a level crossing gate.--
(1) If any person, other than a railway servant or a person authorised in this behalf, opens any gate or
chain or barrier set up on either side of a level crossing which is closed to road traffic, he shall be
punishable with imprisonment for a term which may extend to three years.
(2) If any person breaks any gate or chain or barrier set up on either side of a level crossing which is
closed to road traffic, he shall be punishable with imprisonment for a term which may extend to five
years.
S. 161.
Negligently crossing unmanned level crossing.--
If any person driving or leading a vehicle is negligent in crossing an unmanned level crossing, he shall be punishable
with imprisonment which may extend to one year.
Explanation.--For the purposes of this section, "negligence" in relation to any person driving or
leading a vehicle in crossing an unmanned level crossing means the crossing of such level crossing by
such person--
(a) without stopping or caring to stop the vehicle near such level crossing to observe
whether any approaching rolling stock is in sight, or
(b) even while an approaching rolling stock is in sight.
S. 162.
Entering carriage or other place reserved for females.--
If a male person knowing or having reason to believe that a carriage compartment, berth or seat in a train or room or
other place is reserved by a railway administration for the exclusive use of females, without lawful excuse,--
Page 780
(a) enters such carriage, compartment, room or other place, or having entered such carriage,
compartment, room or place, remains therein; or
(b) occupies any such berth or seat having been required by any railway servant to vacate it,
he shall, in addition to being liable to forfeiture of his pass or ticket, be punishable with fine which may extend to
five hundred rupees and may also be removed by any railway servant.
S. 163.
Giving false account of goods.--
If any person required to furnish an account of goods under Section 66 , gives an account which is materially false,
he and, if he is not the owner of the goods, the owner also shall, without prejudice to his liability to pay any freight or
other charge under any provision of this Act , be punishable with fine which may extend to five hundred rupees for
every quintal or part thereof of such goods.
S. 164.
Unlawfully bringing dangerous goods on a railway.--
If any person, in contravention of Section 67 , takes with him any dangerous goods or entrusts such goods for
carriage to the railway administration, he shall be punishable with imprisonment for a term which may extend to
three years, or with fine which may extend to one thousand rupees or with both and shall also be liable for any loss,
injury or damage which may be caused by reason of bringing such goods on the railway.
S. 165.
Unlawfully bringing offensive goods on a railway.--
If any person, in contravention of Section 67 , takes with him any offensive goods or entrusts such goods for
carriage to the railway administration, he shall be punishable with fine which may extend to five hundred rupees and
shall also be liable for any loss, injury or damage which may be caused by reason of bringing such goods on the
railway.
S. 166.
Defacing public notices.--
If any person without lawful authority--
(a) pulls down or wilfully damages any board or document set up or posted by the order of a railway
administration on a railway or any rolling stock; or
(b) obliterates or alters any letters or figures upon any such board or document or upon any rolling stock,
he shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend
to five hundred rupees, or with both.
S. 167.
Page 781
Smoking.--
No person in any compartment of a train shall, if objected to by any other passenger in that compartment, smoke
therein.
(2) Notwithstanding anything contained in sub-section (1), a railway administration may prohibit
smoking in any train or part of a train.
(3) Whosoever contravenes the provisions of sub-section (1) or sub-section (2) shall be punishable with
fine which may extend to one hundred rupees.
S. 168.
Provision with respect to commission of offence by the children of acts endangering safety of person travelling
on railway.--
(1) If a person under the age of twelve years is guilty of any of the offences under Sections 150 to 154,
the Court convicting him may require the father or guardian of such person to execute, within such
time as the Court may fix, a bond for such amount and for such period as the Court may direct for the
good conduct of such person.
(2) The amount of the bond, if forfeited, shall be recoverable by the Court as if it were a fine imposed by
itself.
(3) If a father or guardian fails to execute a bond under sub-section (1) within the time fixed by the Court,
he shall be punishable with fine which may extend to fifty rupees.
S. 169.
Levy of penalty on non-Government railway.--
If a non-Government railway fails to comply with, any requisition made, decision or direction given, by the Central
Government, under any of the provisions of this Act , or otherwise contravenes any of the provisions of this Act, it
shall be open to the Central Government, by order, to levy a penalty not exceeding two hundred and fifty rupees and
a further penalty not exceeding one hundred and fifty rupees for every day during which the contravention continues:
Provided that no such penalty shall be levied except after giving a reasonable opportunity to the
non-Government railway to make such representation as it deems fit.
S. 170.
Recovery of penalty.--
Any penalty imposed by the Central Government under Section 169 , shall be recoverable by a suit in the District
Court having jurisdiction in the place where the head office of the non-Government railway is situated.
S. 171.
Section 169 or 170 not to preclude Central Government from taking any other action.--
Page 782
Nothing in Section 169 or 170 shall preclude the Central Government from resorting to any other act ion to compel a
non-Government railway to discharge any obligation imposed upon it by or under this Act.
S. 172.
Penalty for intoxication.--
If any railway servant is in a state of intoxication while on duty, he shall be punishable with fine which may extend
to five hundred rupees and when the performance of any duty in such state is likely to endanger the safety of any
person travelling on or being upon a railway, such railway servant shall be punishable with imprisonment for a term
which may extend to one year, or with fine, or with both.
S. 173.
Abandoning train, etc., without authority.--
If any railway servant, when on duty, is entrusted with any responsibility connected with the running of a train, or of
any other rolling stock from one station or place to another station or place, and he abandons his duty before reaching
such station or place without authority or without properly handing over such train or rolling stock to another
authorised railway servant, he shall be punishable with imprisonment for a term which may extend to two years, or
with fine which may extend to one thousand rupees, or with both.
S. 174.
Obstructing running of train, etc.--
If any railway servant (whether on duty or otherwise) or any other person obstructs or causes to be obstructed or
attempts to obstruct any train or other rolling stock upon a railway,--
(a) by squatting or picketing or during any rail roko agitation or bandh; or

(b) by keeping without authority any rolling stock on the railway; or
(c) by tampering with, disconnecting or interfering in any other manner with its hose pipe or tampering
with signal gear or otherwise,
he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend
to two thousand rupees, or with both.
S. 175.
Endangering the safety or persons.--
If any railway servant, when on duty, endangers the safety of any person--
(a) by disobeying any rule made under this Act ; or

(b) by disobeying any instruction, direction or order under this Act or the rules made thereunder; or
(c) by any rash or negligent act or omission,
Page 783
he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend
to one thousand rupees, or with both.
CASE NOTES
Scope of.-- Engine driver disobeying signal, held guilty of endangering safety under Section 101 (now Section 175
). A.V. Raju v. State of Orissa, AIR 1974 SC 1350 1974 Cr LJ 611.
Sub-section(c).--Scope of.-- In a case, the deceased while crossing the railway line was crushed to death by a fast
train. Deceased himself being negligent, acquittal of the accused under sub-section (c) cannot be successfully
assailed. Chamelia v. Roopchand, 1984 All LJ 590 : (1984) 1 Crimes 505 (All).
S. 176.
Obstructing level crossing.--
If any railway servant unnecessarily--
(a) allows any rolling stock to stand across a place where the railway crosses a public road on the level;
or
(b) keeps a level crossing closed against the public,
he shall be punishable with the fine which may extend to one hundred rupees.
S. 177.
False returns.--
If any railway servant required to furnish a return by or under this Act, signs and furnishes a return which is false in
any material particular or which he knows or believes to be false, or does not believe to be true, he shall be
punishable with imprisonment which may extend to one year, or with fine which may extend to five hundred rupees,
or with both.
S. 178.
Making a false report by a railway servant.--
If any railway servant who is required by a railway administration to inquire into a claim for loss, destruction,
damage, deterioration or non-delivery of any consignment makes a report which is false or which he knows or
believes to be false or does not believe to be true, he shall be punishable with imprisonment for a term which may
extend to two years, or with fine which may extend to one thousand rupees, or with both.
19.Subs, by Act 51 of 2003, Section 3 for Section 179 (w.e.f. 1.7.2004).[179.
Arrest for offences under certain sections.--

Page 784
(1) If any person commits any offence mentioned in Sections 150 to 152, he may be arrested without
warrant or other written authority by any railway servant or police officer not below the rank of a
head constable.
(2) If any person commits any offence mentioned in Sections 137 to 139, 141 to 147, 153 to 157, 159 to
167 and 172 to 176, he may be arrested, without warrant or other written authority, by the officer
authorised by a notified order of the Central Government.
(3) The railway servant or the police officer or the officer authorised, as the case may be, may call to his
aid any other person to effect the arrest under sub-section (1) or sub-section (2), as the case may be.
(4) Any person so arrested wnder this Section shall be produced before the nearest Magistrate within a
period of twenty-four hours of such arrest excluding the time necessary for the journey from the place
of arrest to the Court of the Magistrate.]
S. 180.
Arrest of persons likely to abscond, etc.--
(1) If any person who commits any offence under this Act, other than an offence mentioned in
20.[sub-section 2 of Section 179 ], or is liable to pay any excess charge or other sum demanded under
Section 138 , fails or refuses to give his name and address or there is reason to believe that the name
and address given by him are fictitious or that he will abscond, 21.[the officer authorised] may arrest
him without warrant or written authority.
(2) 22.[The officer authorised] may call to his aid any other person to effect the arrest under sub-section
(1).
(3) Any person arrested under this Section shall be produced before the nearest Magistrate within a period
of twenty-four hours of such arrest excluding the time necessary for the journey from the place of
arrest to the Court of the Magistrate unless he is released earlier on giving bail or if his true name and
address are ascertained before on executing a bond without sureties for his appearance before the
Magistrate having jurisdiction to try him for the offence.
(4) The provisions of Chapter XXIII of the Code of Criminal Procedure , 1973 (2 of 1974), shall so far as
may be, apply to the giving of bail and the execution of bonds under this section.
23.Ins. by Act 51 of 2003, Section 5 (w.e.f. 1.7.2004).[S. 180-A.
Inquiry by officer authorized to ascertain commission of offences.--
For ascertaining facts and circumstances of a case, the officer authorised may make an inquiry into the commission
of an offence mentioned in sub-section (2) of Section 179 and may file a complaint in the competent Court if the
offence is found to have been committed.
S.180-B.
Power of officer authorized to inquire.--

Page 785
While making an inquiry, the officer authorised shall have power to,--
(i) summon and enforce the attendance of any person and record his statement;
(ii) require the discovery and production of any document;
(iii) requisition any public record or copy thereof from any office, authority or person;
(iv) enter and search any premises or person and seize any property or document which may be relevant to
the subject-matter of the inquiry.
S. 180-C.
Disposal of persons arrested.--
Every person arrested for an offence punishable under sub-section (2) of Section 179 shall, if the arrest was made by
a person other than the officer authorised, be forwarded, without delay, to such officer.
S. 180-D.
Inquiry how to be made against arrested person.--
(1) When any person is arrested by the officer authorised for an offence punishable under this Act, such
officer shall proceed to inquire into the charge against such person.
(2) For this purpose, the officer authorized may exercise the same powers and shall be subject to the same
provisions as the officer in charge of a police station may exercise and is subject to the provisions of
the Code of Criminal Procedure , 1973 (2 of 1974), when investigating a cognizable case;
Provided that--
(a) if the officer authorised is of the opinion that there is sufficient evidence or
reasonable ground of suspicion against the accused person, he shall either admit
him to bail to appear before a Magistrate having jurisdiction in the case, or
forward him in custody to such Magistrate;
(b) if it appears to the officer authorised that there is not sufficient evidence or
reasonable ground of suspicion against the accused person, he shall release the
accused person on his executing a bond, with or without sureties as the officer
authorised may direct, to appear, if and when so required, before the Magistrate
having jurisdiction.
S. 180-E.
Search, seizure and arrest how to be made.--
All searches, seizures and arrests made under this Act shall be carried out in accordance with the provisions of the
Code of Criminal Procedure , 1973, relating respectively to searches and arrests made under that Code.
Page 786
S.180-F.
Cognizance by Court on a complaint made by officer authorised.--
No Court shall take cognizance of an offence mentioned in sub-section (2) of Section 179 except on a complaint
made by the officer authorised.
S.180-G.
Punishment for certain offences in relation to inquiry.--
Whoever intentionally insults or causes any interruption in the inquiry proceedings or deliberately makes a false
statement before the inquiring officer shall be punished with simple imprisonment for a term which may extend to
six months, or with fine which may extend to one thousand rupees, or with both.]
S. 181.
Magistrate having jurisdiction under the Act.--
Notwithstanding anything contained in the Code of Criminal Procedure , 1973 (2 of 1974), no Court inferior to that
of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try an offence under this Act.
S. 182.
Place of trial.--
(1) Any person committing an offence under this Act or any rule made thereunder shall be triable for
such offence in any place in which he may be or which the State Government may notify in this
behalf, as well as in any other place in which he is liable to be tried under any law for the time being
in force.
(2) Every notification under sub-section (1) shall be published in the Official Gazette, and a copy thereof
shall be exhibited for the information of the public in some conspicuous place at such railway stations
as the State Government may direct.
COMMENT
The following offences invite penalty or removal from the train, while travelling,--
(a) Fraudulent travelling or attempting to travel without proper pass or ticket;

(b) Travelling beyond authorised distance;
(c) Interference with means of communication in a train;
(d) Transfer of tickets;
(e) Unauthorised carrying on business of supplying or procuring railway tickets;
Page 787
(f) Hawing or exposing for sale any article except under licence;
(g) Drunkenness or nuisance;
(h) Obstructing railway servant in his duties;
(i) Trespass or refusal to desist from trespass;
(j) False claim of compensation or false statement in an application for compensation;
(k) Maliciously wrecking or attempting to wreck a train;
(l) Damage or destruction of any property of railways;
(m) Hurting or attempting to hurt persons travelling by railways;
(n) Endangering safety of persons travelling by train;
(o) Entering into a reserved compartment or resisting entry into such compartment;
(p) Travelling on roof, step or engine of a train;
(q) Altering or defacing a pass or ticket;
(r) Contravention of any of the provisions of Chapter XIV or Rules made thereunder;
(s) Disobedience of reasonable directions of any railway servant or police officer;
(t) Opening or breaking a level crossing gate;
(u) Negligently crossing unmanned level crossing;
(v) Entering carriage or other places reserved for females;
(w) Giving false accounts of goods;
(x) Bringing dangerous or offensive goods in contravention of Section 67 ;
(y) Defacting public notices;
(z) Smoking in a compartment, if objected to by any other passenger;
There are also offences by railway servants inviting penal provisions;
(a) Intoxication;
(b) Abandoning train, without authority;
(c) Obstructing running of train;
(d) Endangering safety of persons;
(e) Obstructing level crossing;
(f) Submission or making of false return;
All these offences are triable by a Magistrate having jurisdiction under this Act notwithstanding anything contained
in the Code of Criminal Procedure .
CHAPTER XVI
MISCELLANEOUS
S. 186.
No suit, prosecution or other legal proceeding shall lie against the Central Government, any railway administration, a
railway servant or any other person for anything which is in good faith done or intended to be done in pursuance of
this Act or any rules or orders made thereunder.
S. 187.
Restriction on execution against railway property.--

Page 788
(1) No rolling stock, machinery, plant, tools, fittings, materials or effects used or provided by a railway
administration for the purpose of traffic on its railway, or of its stations or workshops, shall be liable
to be taken in execution of any decree or order of any Court or of any local authority or person having
by law the power to attach or distrain property or otherwise to cause property to be taken in execution,
without the previous sanction of the Central Government.
(2) Nothing in sub-section (1) shall be construed to affect the authority of any Court to attach the earnings
of a railway in execution of a decree or order.
S. 188.
Railway servants to be public servants for the purposes of Chapter IX and Section 409 of the Indian Penal
Code .--
(1) Any railway servant, who is not a public servant within the meaning of Section 21 of the Indian
Penal Code (45 of 1860), shall be deemed to be a public servant for the purposes of Chapter IX and
Section 409 of that Code.
(2) In the definition of "legal remuneration" in Section 161 of the Indian Penal Code (45 of 1860), the
word "Government" shall, for purposes of sub-section (1), be deemed to include any employer of a
railway servant as such.
S. 189.
Railway servants not to engage in trade.--
A railway servant shall not,--
(a) purchase or bid for, either in person or by an agent, in his own name or in that of another, or jointly or
in shares with others, any property put to auction under Section 83 or Section 84 or Section 85 or
Section 90 ; or
(b) in contravention of any direction of the railway administration in this behalf, engage in trade.
S. 190.
Procedure of delivery to railway administration of property detained by a railway servant.--
If a railway servant is discharged from service or is suspended, or dies or absoconds or absents himself, and he or his
wife or widow or any member of his family or his representative refuses or neglects, after notice in writing for that
purpose, to deliver up to the railway administration or to a person appointed by the railway administration, in this
behalf any station, office or other building with its appurtenances, or any books, papers, keys, equipment or other
matters, belonging to the railway administration and in the possession or custody of such railway servant at the
occurrence of any such event as aforesaid, any Metropolitan Magistrate or Judicial Magistrate of the first class may,
on application made by or on behalf of the railway administration, order any police officer, with proper assistance, to
Page 789
enter upon the station, office or other building and remove any person found therein and take possession thereof, or
to take possession of the books, papers or other matters, and to deliver the same to the railway administration or to a
person appointed by the railway administration in that behalf.
CASE NOTES
"Discharge", connotation of.-- The meaning of the word "discharge" occurring in this Section is of wide amplitude
and has to be interpreted so as to include in it "discharge" on "requirement", so that even if a railway servant who has
been relived from his service after retirement he would come within the mischief of this section. Aryun Bobloo v.
G.V. Javelkar, 1981 Mah LJ 525 (Bom).
Scope of.-- (i) It is not necessary for the Magistrate to provide an opportunity to the railway servant concerned, of
being heard before making an order under Section 138 (now Section 190 ). A.C. Bose State of W.B., (1982) 86 Cal
WN 661 .
(ii) A close persual of this Section clearly reveals that the provisions have widest amplitude and takes
within its fold not only a railway servant but even a contractor who is engaged for performing services
to the railway and the termination of his contract by the railway amounts to his discharge, as
mentioned in Section 138 . Union of India v. B.N. Prasad, AIR 1971 SC 411.
(iii) As the provision is in public interest, meant to avoid inconvenience and expense for the travelling
public and gear up the efficiency of the railway administration, it must be construed liberally, broadly
and meaningfully so as to advance the object sought to be achieved by the Railways Act . Union of
India v. B.N. Prasad, AIR 1978 SC 411.
Requirement of.-- The Section only requires that an application should be made by or on behalf of the railway
administration. The Section does not require that any particular person holding a particular post, should be authorised
to file a complaint. Union of India v. B.N. Prasad, AIR 1978 SC 411.
S. 191.
Proof of entries in records and documents.--
Entries made in records or other documents of a railway administration shall be admitted in evidence in all
proceedings by or against the railway administration, and all such entries may be proved either by the production of
the records or other documents of the railway administration containing such entries or by production of a copy of
the entries certified by the officer having custody of the records or other documents under his signature and stating
that it is a true copy of the original entries and that such original entries are contained in the records or other
documents of the railway administration in his possession.
S. 192.
Service of notice etc., on railway administration.--

Page 790
Any notice or other document required or authorised by this Act to be served on a railway administration may be
served, in the case of a Zonal Railway, on the General Manager or any of the railway servant authorised by the
General Manager, and in the case of any other railway, on the owner or lessee of the railway or the person working
the railway under an agreement,--
(a) by delivering it to him; or

(b) by leaving at his office; or
(c) by registered post to his office address.
S. 193.
Service of notice by railway administration.--
Unless otherwise provided in this Act or the rules framed thereunder, any notice or other document required or
authorised by this Act to be served on any person by a railway administration may be served,--
(a) by delivering it to the person; or

(b) by leaving it at the usual or last known place of abode of the person; or
(c) by registered post addressed to the person at his usual or last known place of abode.
S. 194.
Presumption where notice is served by post.--
Where a notice or other document is served by post, it shall be deemed to have been served at the time when the
letter containing it would be delivered in the ordinary course of post, and in proving such service, it shall be
sufficient to prove that the letter containing the notice or other document was properly addressed and registered.
S. 195.
Representation of railway administration.--
(1) A railway administration may, by order in writing authorise any railway servant or other person to act
for, or represent it, as the case may be, in any proceeding before any civil, criminal or other Court.
(2) A person authorised by a railway administration to conduct prosecutions on its behalf shall,
notwithstanding anything in Section 302 of the Code of Criminal Procedure , 1973 (2 of 1974), be
entitled to conduct such prosecutions without the permission of the Magistrate.
S. 196.
Power to exempt railway from Act.--

Page 791
(1) The Central Government may, by notification, exempt any railway from all or any of the provisions of
this Act .
(2) Every notification issued under sub-section (1) shall be laid as soon as may be after it is issued before
each House of Parliament.
S. 197.
Matters supplemental to the definitions of "railway" and "railway servant".--
(1) For the purposes of Sections 67, 113, 121, 123, 147, 151 to 154, 160, 164, 166, 168, 170, 171, 173 to
176, 179, 180, 184, 185, 187 to 190, 192, 193, 195 and of this section, the word "railway" whether it
occurs alone or as a prefix to another word, has reference to a railway or portion of a railway under
construction and to a railway or portion of a railway not used for the public carriage of passengers,
animals or goods as well as to a railway falling within the definition of that word in Clause (31) of
Section 2 .
(2) For the purposes of Sections 7, 24, 113, 146, 172 to 176 and 188 to 190, the expression "railway
servant" includes a person employed under a railway in connection with the service thereof by a
person fulfilling a contact with the railway administration.
S. 198.
General power to make rules.--
Without prejudice to any power to make rules contained elsewhere in this Act, the Central Government may make
rules generally to carry out the purposes of this Act .
* Published in the Gazette of India, Extraordinary, Pt. II, Section 1, dated 5th June, 1989 and assented to by the President on 3rd
June, 1989.
1. The whole Act enforced from 1.7.1990, vide S.O. 475 (E), dated 12.6.1990.
3. Ins. by Act 11 of 2008, Section 2(a) (w.e.f. 31.1.2008).
5. Ins. by Act 11 of 2008, Section 2(b) (w.e.f 31.1.2008).
7. Ins. by Act 51 of 2003, (w.e.f. 1.7.2004).
8. Ins. by Act 11 of 2008, Section 2(c) (w.e.f. 31.1.2008).
9. Chapter IIA (containing Sections 4-A to 4-I) ins. by Act 47 of 2005, Section 3 (w.e.f. 30.8.2006).
10. CHAPTER IVA (CONTAINING SECTIONS 20-A TO 20-P) INS. BY ACT 11 OF 2008, SECTION 3 (W.E.F. 31.1.2008)

Page 792
13. Ins. by Act 28 of 1994, Sections 4 (w.e.f. 1.8.1994).
15. Ins. by Act 28 of 1994, Sections 5 (w.e.f. 1.8.1994).
17. Subs. by Act 56 of 2003, Section 3 for "fifty rupees" (w.e.f. 1.7. 2004).
18. Subs. by Act 56 of 2003, Section 3, for "fifty rupees" (w.e.f. 1.7.2004).
19. Subs, by Act 51 of 2003, Section 3 for Section 179 (w.e.f. 1.7.2004).
20. Subs. by Act 51 of 2003 (w.e.f. 1.7.2004).
21. Subs. by Act 51 of 2003 (w.e.f. 1.7.2004).
22. Subs. by Act 51 of 2003 (w.e.f. 1.7.2004).
Sarkar: Criminal Minor Acts/Sarkar Criminal Minor Acts/CHAPTER 151/CHAPTER 151 THE UNLAWFUL
ACTIVITIES (PREVENTION) ACT, 1967(Act No. 37 of 1967)
[30th December, 1967][30th December, 1967]
An Act to provide for the more effective prevention of certain unlawful act ivities of individuals and associations
1.[, and for dealing with terrorist activities,] and for matters connected therewith.
2.[WHEREAS the Security Council of THE UNITED NATIONS in its 4385th meeting adopted Resolution 1373
(2001) on 28th September, 2001, under Chapter VII of the Charter of THE UNITED NATIONS requiring all the
States to take measures to combat international terrorism;]
AND WHEREAS Resolutions 1267 (1999), 1333 (2000), 1363 (2001), 1390 (2002), 1455 (2003), 1526 (2004),
1566 (2004), 1617 (2005), 1735 (2006) and 1822 (2008) of the Security Council of THE UNITED NATIONS
require the States to take act ion against certain terrorists and terrorist organisations, to freeze the assets and
other economic resources, to prevent the entry into or the transit through their territory, and prevent the direct or
indirect supply, sale or transfer of arms and ammunitions to the individuals or entities listed in the Schedule;
AND WHEREAS the Central Government, in exercise of the powers conferred by Section 2 of THE UNITED
NATIONS (Security Council) Act, 1947 (43 of 1947) has made the Prevention and Suppression of Terrorism
(Implementation of Security Council Resolutions) Order, 2007;
AND WHEREAS it is considered necessary to give effect to the said Resolutions and the Order and to make
special provisions for the prevention of, and for coping with, terrorist act ivities and for matters connected
therewith or incidental thereto:]
BE it enacted by Parliament in the Eighteenth Year of the Republic of India as follows:--
CHAPTER I
PRELIMINARY
Page 793
3.Subs. by Act 29 of 2004 Section 4, for Sections 2 and 2-A (w.e.f. 21.9.2004).[S. 1.
Short title, extent and application.--
(1) This Act may be called The Unlawful Activities (Prevention) Act , 1967.
(3) Every person shall be liable to punishment under this Act for every act or omission contrary to the
provisions thereof, of which he is held guilty in India.
(4) Any person, who commits an offence beyond India, which is punishable under this Act, shall be dealt
with according to the provisions of this Act in the same manner as if such act had been committed in
India.
(5) The provisions of this Act apply also to--
(a) citizens of India outside India;
(b) persons in the service of the Government, wherever they may be; and
(c) persons on ships and aircrafts, registered in India, wherever they maybe.
S. 2.
Definitions.--
"association"
(a) means any combination or body of individuals;
"cession of a part of the territory of India"
(b) includes admission of the ; claim of any foreign country to any such part;
"Code"
(c) means the Code of Criminal Procedure , 1973 (2 of 1974);
"Court"
(d) means a Criminal Court having jurisdiction, under the Code, to try offences under this
Act 4.[and includes a Special Court constituted under Sections 11 or underSection 21
Page 794
of the National Investigation Agency Act , 2008];
"Designated Authority"
(e) means such officer of the Central Government not below the rank of Joint Secretary to
that Government, or such officer of the State Government not below the rank of
Secretary to that Government, as the case may be, as may be specified by the Central
Government or the State Government, by notification published in the Official Gazette;
"Order"
5.[(ea) means the Prevention and Suppression of Terrorism (Implementation of Security

Council Resolutions) Order, 2007, as may be amended from time to time;]
"prescribed"
(f) means prescribed by rules made under this Act ;
"proceeds of terrorism"
(g) means all kinds of properties which have been derived or obtained from commission of
any terrorist act or have been acquired through funds traceable to a terrorist act ,
irrespective of person in whose name such proceeds are standing or in whose
possession they are found, and includes any property which is being used, or is
intended to be used, for the purpose of a terrorist organisation 6.[or terrorist gang];
"property"
7.[(h) means property and assets of every description whether corporeal or incorporeal,
movable or immovable, tangible or intangible and legal documents, deeds and
instruments in any form including electronic or digital, evidencing title to, or interest
in, such property or assets by means of bank credits, travellers' cheques, bank cheques,
money orders, shares, securities, bonds, drafts, letters of credit, cash and bank account
including fund, however acquired;
"Schedule"
(ha) means the Schedule to this Act;]

Page 795
"secession of a part of the territory of India from the Union"
(i) includes the assertion of any claim to determine whether such part will remain a part of
the territory of India;
"State Government"
(j) , in relation to a Union territory, means the Administrator thereof;
"terrorist act"
(k) has the meaning assigned to it in Section 15 , and the expressions "terrorism" and
"terrorist" shall be construed accordingly;
"terrorist gang"
(l) means any association, other than terrorist organisation, whether systematic or
otherwise, which is concerned with, or involved in, terrorist act ;
"terrorist organisation"
(m) means an organisation listed in the Schedule or an organisation operating under the
same name as an organisation so listed;
"Tribunal"
(n) means the Tribunal constituted under Section 5 ;
"unlawful activity"
(o) , in relation to an individual or association, means any act ion taken by such individual
or association (whether by committing an act or by words, either spoken or written, or
by signs or by visible representation or otherwise),--
(i) which is intended, or supports any claim, to bring about, on any ground
whatsoever, the cession of a part of the territory of India or the secession of a
part of the territory of India from the Union, or which incites any individual or
group of individuals to bring about such cession or secession; or
(ii) which disclaims, questions, disrupts or is intended to disrupt the sovereignty
and territorial integrity of India; or
Page 796
(iii) which causes or is intended to cause disaffection against India;
"unlawful association"
(p) means any association,--

(i) which has for its object any unlawful act ivity, or which encourages or aids
persons to undertake any unlawful activity, or of which the members undertake
such act ivity; or
(ii) which has for its object any activity which is punishable under Section 153 -A
or Section 153 -B of the Indian Penal Code (45 of 1860), or which
encourages or aids persons to undertake any such activity, or of which the
members undertake any such act ivity:
Provided that nothing contained in sub-clause (if) shall apply to the State of Jammu
and Kashmir;
(q) words and expressions used but not defined in this Act and defined in the Code shall
have the meanings respectively assigned to them in the Code.
(2) Any reference in this Act to any enactment or any provision thereof shall, in relation to an area in
which such enactment or such provision is not in force, be construed as a reference to the
corresponding law or the relevant provision of the corresponding law, if any, in force in that area.]
CHAPTER II
UNLAWFUL ASSOCIATIONS
S. 3.
Declaration of an association as unlawful.--
(1) If the Central Government is of opinion that any association is, or has become, an unlawful
association, it may, by notification in the Official Gazette, declare such association to be unlawful.
(2) Every such notification shall specify the grounds on which it is issued and such other particulars as
the Central Government may consider necessary:
Provided that nothing in this sub-section shall require the Central Government to
disclose any fact which it considers to be against the public interest to disclose.
(3) No such notification shall have effect until the Tribunal has, by an order made under Section 4 ,
Page 797
confirmed the declaration made therein and the order is published in the Official Gazette:
Provided that if the Central Government is of opinion that circumstances exist which
render it necessary for that Government to declare an association to be unlawful with
immediate effect, it may, for reasons to be stated in writing, direct that the notification
shall, subject to any order that may be made under Section 4 , have effect from the
date of its publication in the Official Gazette.
(4) Every such notification shall, in addition to its publication in the Official Gazette, be published in not
less than one daily newspaper having circulation in the State in which the principal office, if any, of
the association affected is situated, and shall be served on such association in such manner as the
Central Government may think fit and all or any of the following modes may be followed in effecting
such service, namely:--
(a) by affixing a copy of the notification to some conspicuous part of the-office, if any, of the
association; or
(b) by serving a copy of the notification, where possible, on the principal office-bearers, if any, of
the association; or
(c) by proclaiming by beat of drum or by means of loudspeakers, the contents of the notification
in the area in which the activities of the association are ordinarily carried on; or
(d) in such other manner as may be prescribed.
S. 4.
Reference to Tribunal.--
(1) Where any association has been declared unlawful by a notification issued under sub-section (1) of
Section 3 , the Central Government shall, within thirty days from the date of the publication of the
notification under the said sub-section, refer the notification to the Tribunal for the purpose of
adjudicating whether or not there is sufficient cause for declaring the association unlawful.
(2) On receipt of a reference under sub-section (1), the Tribunal shall call upon the association affected
by notice in writing to show cause, within thirty days from the date of the service of such notice, why
the association should not be declared unlawful.
(3) After considering the cause, if any, shown by the association or the office-bearers or members thereof,
the Tribunal shall hold an inquiry in the manner specified in Section 9 and after calling for such
further information as it may consider necessary from the Central Government or from any
office-bearer or member of the association, it shall decide whether or not there is sufficient cause for
declaring the association to be unlawful and make, as expeditiously as possible and in any case within
a period of six months from the date of the issue of the notification under sub-section (1) of Section 3
, such order as it may deem fit either confirming the declaration made in the notification or cancelling
the same.
(4) The order of the Tribunal made under sub-section (3) shall be published in the Official Gazette.
S. 5.
Tribunal.--
Page 798
(1) The Central Government may, by notification in the Official Gazette, constitute, as and when
necessary, a Tribunal to be known as the "Unlawful Act ivities (Prevention) Tribunal" consisting of
one person, to be appointed by the Central Government:
Provided that no person shall be so appointed unless he is a Judge of a High Court.
(2) If, for any reason, a vacancy (other than a temporary absence) occurs in the office of the presiding
officer of the Tribunal, then, the Central Government shall appoint another person in accordance with
the provisions of this Section to fill the vacancy and the proceedings may be continued before the
Tribunal from the stage at which the vacancy is filled.
(3) The Central Government shall make available to the Tribunal such staff as may be necessary for the
discharge of its functions under this Act.
(4) All expenses incurred in connection with the Tribunal shall be defrayed out of the Consolidated Fund
of India.
(5) Subject to the provisions of Section 9 , the Tribunal shall have power to regulate its own procedure in
all matters arising out of the discharge of its functions including the place or places at which it will
hold its sittings.
(6) The Tribunal shall, for the purpose of making an inquiry under this Act , have the same powers as are
vested in a Civil Court under the Code of Civil Procedure , 1908 (5 of 1908), while trying a suit, in
respect of the following matters, namely:--
(a) the summoning and enforcing the attendance of any witness and examining him on oath;
(b) the discovery and production of any document or other material object producible as evidence;
(c) the reception of evidence on affidavits;
(d) the requisitioning of any public record from any Court or office;
(e) the issuing of any commission for the examination of witnesses.
(7) Any proceeding before the Tribunal shall be deemed to be a judicial proceeding within the meaning of
Sections 193 and 228 Indian Penal Code (45 of 1860) and the Tribunal shall be deemed to be a Civil
Court for the purposes of Section 195 and 8.[Chapter XXVI] of the 9.[Code].
S. 6.
Period of operation and cancellation of notification.--
(1) Subject to the provisions of sub-section (2), a notification issued under Section 3 shall, if the
declaration made therein is confirmed by the Tribunal by an order made under Section 4 , remain in
force for a period of two years from the date on which the notification becomes effective.
(2) Notwithstanding anything contained in sub-section (1), the Central Government may, either on its
own motion or on the application of any person aggrieved, at any time, cancel the notification issued
under Section 3 whether or not the declaration made therein has been confirmed by the Tribunal.
S. 7.
Page 799
Power to prohibit the use of funds of an unlawful association.--
(1) Where an association has been declared unlawful by a notification issued under Section 3 which has
become effective under sub-section (3) of that section and the Central Government is satisfied, after
such inquiry as it may think fit, that any person has custody of any moneys, securities or credits which
are being used or are intended to be used for the purpose of the unlawful association, the Central
Government may, by order in writing prohibit such person from paying, delivering, transferring or
otherwise dealing in any manner whatsoever with such moneys, securities or credits or with any other
moneys, securities or credits which may come into his custody after the making of the order save in
accordance with the written orders of the Central Government and a copy of such order shall be
served upon the person so prohibited in the manner specified in sub-section (3).
(2) The Central Government may endorse a copy of the prohibitory order made under sub-section (1) for
investigation to any Gazetted Officer of the Government it may select, and such copy shall be a
warrant whereunder such officer may enter in or upon any premises of the person to whom the order
is directed, examine the books of such person, search for moneys, securities or credits, and make
inquiries from such person or any officer, agent or servant of such person, touching the origin of any
dealings in any moneys, securities or credits which the Investigating Officer may suspect are being
used or are intended to be used for the purpose of the unlawful association.
(3) A copy of an order made under this section shall be served in the manner provided in the 10.[Code],
for the service of a summons, or, where the person to be served is a corporation, company, bank or
other association, it shall be served on any secretary, director or other officer or person concerned
with the management thereof; or by leaving it or sending it by post addressed to the corporation,
company, bank or other association at its registered office, or where there is no registered office, at
the place where it carries on business.
(4) Any person aggrieved by a prohibitory order made under sub-section (1) may, within fifteen days
from the date of the service of such order, make an application to the Court of the District Judge
within the local limits of whose jurisdiction such person voluntarily resides or carries on business or
personally works for gain, to establish that the moneys, securities or credits in respect of which the
prohibitory order has been made are not being used or are not intended to be used for the purpose of
the unlawful association and the Court of the District Judge shall decide the question.
(5) Except so far as is necessary for the purposes of any proceedings under this section, no information
obtained in the course of any investigation made under sub-section (2) shall be divulged by any
Gazetted Officer of the Government, without the consent of the Central Government.
(6) In this section "security" includes a document whereby any person acknowledges that he is under a
legal liability to pay money, or whereunder any person obtains a legal right to the payment of money.
S. 8.
Power to notify places used for the purpose of an unlawful association.--
(1) Where an association has been declared unlawful by a notification issued under Section 3 which has
become effective under sub-section (3) of that section, the Central Government may, by notification
in the Official Gazette, notify any place which in its opinion is used for the purpose of such unlawful
association.
Explanation.--For the purposes of this sub-section "place" includes a house or building

Page 800
or part thereof, or a tent or vessel.
(2) On the issue of a notification under sub-section (1), the District Magistrate within the local limits of
whose jurisdiction such notified place is situate or any officer authorised by him in writing in this
behalf shall make a list of all movable properties (other than wearing apparel, cooking vessels, beds
and beddings, tools of artisans, implements of husbandry, cattle, grain and food-stuffs and such other
articles as he considers to be a trivial nature) found in the notified place in the presence of two
respectable witnesses.
(3) If, in the opinion of the District Magistrate, any articles specified in the list are or may be used for the
purpose of the unlawful association, he may make an order prohibiting any person from using the
articles save in accordance with the written orders of the District Magistrate.
(4) The District Magistrate may, thereupon make an order that no person who at the date of the
notification was not a resident in the notified place shall, without the permission of the District
Magistrate, enter, or be on or in, the notified place:
Provided that nothing in this sub-section shall apply to any near relative of any person
who was a resident in the notified place at the date of the notification.
(5) Where in pursuance of sub-section (4), any person is granted permission to enter, or to be on or in, the
notified place, that person shall, while acting under such permission, comply with such orders for
regulating his conduct as may be given by the District Magistrate.
(6) Any police officer, not below the rank of a Sub-Inspector, or any other person authorised in this
behalf by the Central Government may search any person entering, or seeking to enter, or being on or
in the notified place and may detain any such person for the purpose of searching him:
Provided that no female shall be searched in pursuance of this sub-section except by a

female.
(7) If any person is in the notified place in contravention of an order made under sub-section (4), then,
without prejudice to any other proceedings which may be taken against him, he may be removed
therefrom by any officer or by any other person authorised in this behalf by the Central Government.
(8) Any person aggrieved by a notification issued in respect of a place under sub-section (1) or by an
order made under sub-section (3) or sub-section (4) may, within thirty days from the date of the
notification or order, as the case may be, make an application to the Court of the District Judge within
the local limits of whose jurisdiction such notified place is situate--
(a) for declaration that the place has not been used for the purpose of the unlawful association; or
(b) for setting aside the order made under sub-section (3) or sub-section (4), and on receipt of the
application the Court of the District Judge shall, after giving the parties an opportunity of
being heard, decide the question.
S. 9.
Procedure to be followed in the disposal of applications under this Act.--
Subject to any rules that may be made under this Act , the procedure to be followed by the Tribunal in holding any
Page 801
inquiry under sub-section (3) of Section 4 or by a Court of the District Judge in disposing of any application under
sub-section (4) of Section 7 or sub-section (8) of Section 8 shall, so far as may be, be the procedure laid down in the
Code of Civil Procedure , 1908 (5 of 1908); for the investigation of claims and the decision of the Tribunal or the
Court of the District Judge, as the case may be, shall be final.
CHAPTER III
OFFENCES AND PENALTIES
11.Subs. by Act 29 of 2004 Section 6, for Section 10 (w.e.f.21.9.2004).[S. 10.
Penalty for being member of an unlawful association, etc.--
Where an association is declared unlawful by a notification issued under Section 3 which has become effective
under sub-section (3) of that section,--
(a) a person, who--

(i) is and continues to be a member of such association; or
(ii) takes part in meetings of such association; or
(iii) contributes to, or receives or solicits any contribution for the purpose of, such association; or
(iv) in any way assists the operations of such association, shall be punishable with imprisonment
for a term which may extend to two years, and shall also be liable to fine; and
(b) a person, who is or continues to be a member of such association, or voluntarily does an act aiding or
promoting in any manner the objects of such association and in either case is in possession of any
unlicensed firearms, ammunition, explosive or other instrument or substance capable of causing mass
destruction and commits any act resulting in loss of human life or grievous injury to any person or
causes significant damage to any property,--
(i) and if such act has resulted in the death of any person, shall be punishable with death or
imprisonment for life, and shall also be liable to fine;
(ii) in any other case, shall be punishable with imprisonment for a term which shall not be less
than five years but which may extend to imprisonment for life, and shall also be liable to fine.]
CASE NOTES
Applicability of the Act.--Membership of banned organization.-- Mere membership of a banned organization

cannot incriminate a person unless it is proved to have resorted to act s of violence or incited people to imminent
violence, or does an act intended to create disorder or disturbance of public peace by resorting to imminent violence
under Section 3(5) of TADA or Section 10 of UA (P) Act , 1967. The sections make mere membership illegal and
cannot be read in isolation, but have to be in consonance with the Fundamental Rights guaranteed by the
Constitution of India . Unless it is proved that the accused who is a member of a banned organization has resorted to
acts of violence or has incited people to imminent violence, he cannot be convicted under Section 3(5) of the
TADA. Indra Das v. State of Assam, 2011 Cr LJ 1646 (SC) : (2011) 2 Crimes 20 : (2011) 3 SCC 380.
Mere membership of a banned organization will not make a person criminal unless he resorts to violence or incites
Page 802
the people to violence or creates public disorder by violence or incitement to violence. Besides, a person cannot be
convicted for offences under UA (P) Act (1967) on basis of the alleged confession made to the police officers in
absence of any independent witness. Arup Bhuyan v. State of Assam, (2011) 1 Crimes 26 (SC) : 2011 Cr LJ 1455 :
AIR 2011 SC 957 : (2011) 3 SCC 377.
Justifiability of rejection of bail application.-- In the present case, it is mentioned that the names of the
accused-petitioner comes in various Naxalite literatures during the course of investigation of the Naxalities cases in
several districts and the prima facie case against the accused-petitioner shows that he was associated with the
Naxalite organization and was indulged in helping and supporting the said organization, Hence, the
accused-petitioner is entitled to be released on bail and his application for bail is liable to be rejected. Vinayak Sen v.
State of Chhattisgarh, 2007 Cr LJ 4736 (Chh).
S. 11.
Penalty for dealing with funds of an unlawful association.--
If any person on whom a prohibitory order has been served under sub-section (1) of Section 7 in respect of any
moneys, securities or credits pays, delivers, transfers or otherwise deals in any manner whatsoever with the same in
contravention of the prohibitory order, he shall be punishable with imprisonment for a term which may extend to
three years, or with fine, or with both, and notwithstanding mything contained in the 12.[Code], the Court trying such
contravention may also impose on the person convicted an additional fine to recover from him the amount of the
moneys or credits or the market value of the securities in respect of which the prohibitory order has been contravened
or such part thereof as the Court may deem fit.
S. 12.
Penalty for contravention of an order made in respect of a notified place.--
(1) Whoever uses any article in contravention of a prohibitory order in respect thereof made under
sub-section (3) of Section 8 shall be punishable with imprisonment for a term which may extend to
one year, and shall also be liable to fine.
(2) Whoever, knowingly and wilfully is in, or effects or attempts to effect entry into, a notified place in
contravention of an order made under sub-section (4) of Section 8 shall be punishable with
imprisonment for a term which may extend to one year, and shall also be liable to fine.
S. 13.
Punishment for unlawful activities.--
(1) Whoever--
(a) takes part in or commits, or
(b) advocates, abets, advices or incites the commission of, any unlawful act ivity, shall be
punishable with imprisonment for a term which may extend to seven years, and shall also be
liable to fine.
Page 803
(2) Whoever, in any way, assists any unlawful activity of any association, declared unlawful under
Section 3 , after the notification by which it has been so declared has become effective under
sub-section (3) of that section, shall be punishable with imprisonment for a term which may extend to
five years, or with fine, or with both.
(3) Nothing in this section shall apply to any treaty, agreement or convention entered into between the
Government of India and the Government of any other country or to any negotiations therefor carried
on by any person authorised in this behalf by the Government of India.
S. 14.
Offences to be cognizable.--
Notwithstanding anything contained in the 13.[Code], an offence punishable under this Act shall be cognizable.
14.Subs. by Act 29 of 2004, Section 7, for Chapter IV (w.e.f. 21.9.2004).[CHAPTER IV
PUNISHMENT FOR TERRORIST ACT IVITIES
15.Subs. by Act 35 of 2008 Section 4, for Section 15.[15.
Terrorist act.--
Whoever does any act with intent to threaten or likely to threaten the unity, integrity, security or sovereignty of India
or with intent to strike terror or likely to strike terror in the people or any section of the people in India or in any
foreign country,--
(a) by using bombs, dynamite or other explosive substances or inflammable substances or firearms or
other lethal weapons or poisonous or noxious gases or other chemicals or by any other substances
(whether biological radioactive, nuclear or otherwise) of a hazardous nature or by any other means of
whatever nature to cause or likely to cause--
(i) death of, or injuries to, any person or persons; or
(ii) loss of, or damage to, or destruction of, property; or
(iii) disruption of any supplies or services essential to the life of the community in India or in any
foreign country; or
(iv) damage or destruction of any property in India or in a foreign country used or intended to be
used for the defence of India or in connection with any other purposes of the Government of
India, any State Government or any of their agencies; or
(b) overawes by means of criminal force or the show of criminal force or attempts to do so or causes
death of any public functionary or attempts to cause death of any public functionary; or
(c) detains, kidnaps or abducts any person and threatens to kill or injure such person or does any other act
in order to compel the Government of India, any State Government or the Government of a foreign
country or any other person to do or abstain from doing any act , commits a terrorist act.
Explanation.--For the purpose of this section, public functionary means the

constitutional authorities and any other functionary notified in the Official Gazette by
the Central Government as a public functionary.]
Page 804
S. 16.
Punishment for terrorist act.--
(1) Whoever commits a terrorist act shall,--

(a) if such act has resulted in the death of any person, be punishable with death or imprisonment
for life, and shall also be liable to fine;
(b) in any other case, be punishable with imprisonment for a term which shall not be less than five
years but which may extend to imprisonment for life, and shall also be liable to fine.
CASE NOTE
Proof of terrorist act within meaning of the Unlawful Act ivities (Prevention) Act.-- In the present case, the
allegation against the accused persons would show that they along with others hatched a conspiracy pursuant to
which the seven accused formed an unlawful assembly armed with lethal weapons like hatchet, chopper explosive
substance etc. and with the weapons in their hands they caused bodily injury to the victim-Professor and his right
hand had to be amputed. The motive was that the victim had prepared a question paper for students allegedly
ridiculing Prophet Mohammad. Though the aggrieved did not choose to assault the so-called ridiculing of Prophet
Mohammad through procedure established by law but they took law in their hands and chopped away the hand with
which the question paper was drafted. The offences were committed in broad light on the public road giving a feeling
of insecurity amongst the public at large and thereby striking terror in the mind of the people. Having due regard to
the nature of the brutal crime, it has a terrorizing effect on those who had witnessed the incident. The crime had
created far- reaching consequences and would affect the society at large. It may even disturb the harmony in the
society and even public life. In these circumstances, the offences alleged against the accused would come within the
definition of "terrorist act " under Section 15 of UA (P) Act, 1967 which is punishable under Section 16 of the said
Act . Kamarudheen v. S.H.O., Movattupuzha Police Station, 2011 Cr LJ 1938 (Ker).
16.Ins. by Act 35 of 2008, Section 5.[S. 16-A.
Punishment for making demands of radioactive substances, nuclear devices, etc.--
Whoever intentionally, by use of force or threat of use of force or by any other means, demands any bomb, dynamite
or other explosive substance or inflammable substances or firearms or other lethal weapons or poisonous or noxious
or other chemicals or any biological, radiological, nuclear material or device, with the intention of aiding, abetting or
committing a terrorist act , shall be punishable with imprisonment for a term which may extend to ten years, and
shall also be liable to fine.]
17.Subs. by Act 35 of 2008, Section 6, for Section 17.[S. 17.
Punishment for raising funds for terrorist act.--

Page 805
Whoever, in India or in a foreign country, directly or indirectly, raises or collects funds or provides funds to any
person or persons or attempts to provide funds to any person or persons, knowing that such funds are likely to be
used by such person or persons to commit a terrorist act , notwithstanding whether such funds were actually used or
not for commission of such act , shall be punishable with imprisonment for a term which shall not be less than five
years but which may extend to imprisonment for life, and shall also be liable to fine.]
S. 18.
Punishment for conspiracy, etc.--
Whoever conspires or attempts to commit, or advocates, abets, advises or 18.[incites, directs or knowingly facilitates]
the commission of, a terrorist act or any act preparatory to the commission of a terrorist act, shall be punishable with
imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and
shall also be liable to fine.
Punishment for organising of terrorist camps.--
Whoever organises or causes to be organised any camp or camps for imparting framing in terrorism shall be
punishable with imprisonment for a term which shall not be less than five years but which may extend to
imprisonment for life, and shall also be liable to fine.
S. 18-B.
Punishment for recruiting of any person or persons for terrorist act.--
Whoever recruits or causes to be recruited any person or persons for commission of a terrorist act shall be
punishable with imprisonment for a term which shall not be less than five years but which may extend to
imprisonment for life, and shall also be liable to fine.]
S. 19.
Punishment for harbouring, etc.--
Whoever voluntarily harbours or conceals, or attempts to harbour or conceal any person knowing that such person is
a terrorist shall be punishable with imprisonment for a term which shall not be less than three years but which may
extend to imprisonment for life, and shall also be liable to fine:
Provided that this section shall not apply to any case in which the harbour or concealment is by the
spouse of the offender.
S. 20.
Punishment for being member of terrorist gang or organisation.--
Any person who is a member of a terrorist gang or a terrorist organisation, which is involved in terrorist act, shall be
punishable with imprisonment for a term which may extend to imprisonment for life, and shall also be liable to fine.
Page 806
S. 21.
Punishment for holding proceeds of terrorism.--
Whoever knowingly holds any property derived or obtained from commission of any terrorist act or acquired
through the terrorist fund shall be punishable with imprisonment for a term which may extend to imprisonment for
life, and shall also be liable to fine.
S. 22.
Punishment for threatening witness.--
Whoever threatens any person who is a witness or any other person in whom such witness may be interested, with
violence, or wrongfully restrains or confines the witness, or any other person in whom the witness may be interested,
or does any other unlawful act with intent to cause any of the said act s, shall be punishable with imprisonment
which may extend to three years, and shall also be liable to fine.
S. 23.
Enhanced penalties.--
(1) 20.[Ifany person with intent to aid any terrorist or a terrorist organisation or a terrorist gang
contravenes] any provision of, or any rule made under the Explosives Act , 1884 (4 of 1884) or the
Explosive Substances Act , 1908 (6 of 1908) or the Inflammable Substances Act , 1952 (20 of 1952)
or the Arms Act , 1959 (54 of 1959), or is in unauthorised possession of any bomb, dynamite or
hazardous explosive substance or other lethal weapon or substance capable of mass destruction or
biological or chemical substance of warfare, he shall, notwithstanding anything contained in any of
the aforesaid Acts or the rules made thereunder, be punishable with imprisonment for a term which
shall not be less than five years but which may extend to imprisonment for life, and shall also be
liable to fine.
(2) 21.[Any person who with the intent to aid any terrorist, or a terrorist organisation or a terrorist gang],
attempts to contravene or abets, or does any act preparatory to contravention of any provision of any
law or rule specified in sub-section (1), shall be deemed to have contravened that provision under
sub-section (1) and the provisions of that sub-section in relation to such person, have effect subject to
the modification that the reference to "imprisonment for life" therein shall be construed as a reference
to "imprisonment for ten years".
CHAPTER V
FORFEITURE OF PROCEEDS OF TERRORISM
S. 24.
Forfeiture of proceeds of terrorism.--

Page 807
(1) No person shall hold or be in possession of any proceeds of terrorism.

(2) Proceeds of terrorism whether held by a terrorist or 22.[terrorist organisation or terrorist gang or] by
any other person and whether or not such terrorist or other person is prosecuted or convicted for any
offence under Chapter IV or Chapter VI, shall be liable to be forfeited to the Central Government or
the State Government, as the case may be, in the manner provided under this Chapter.
S. 25.
Powers of investigating officer and Designated Authority and appeal against order of Designated Authority.--
(1) If an officer investigating an offence committed under Chapter IV or Chapter VI, has reason to
believe that any property in relation to which an investigation is being conducted, represents proceeds
of terrorism, he shall, with the prior approval in writing of the Director General of the Police of the
State in which such property is situated, make an order seizing such property and where it is not
practicable to seize such property, make an order of attachment directing that such property shall not
be transferred or otherwise dealt with except with the prior permission of the officer making such
order, or of the Designated Authority before whom the property seized or attached is produced and a
copy of such order shall be served on the person concerned.
(2) The investigating officer shall duly inform the Designated Authority within forty-eight hours of the
seizure or attachment of such property.
(3) The Designated Authority before whom the seized or attached property is produced shall either
confirm or revoke the order of seizure or attachment so issued within a period of sixty days from the
date of such production:
Provided that an opportunity of making a representation by the person whose property

is being seized or attached shall be given.
(4) In the case of immovable property attached by the investigating officer, it shall be deemed to have
been produced before the Designated Authority, when the investigating officer notifies his report and
places it at the disposal of the Designated Authority.
(5) The investigating officer may seize and detain any cash to which this Chapter applies if he has
reasonable grounds for suspecting that--
(a) it is intended to be used for the purposes of terrorism; or
(b) it forms the whole or part of the resources of a terrorist organisation:
Provided that the cash seized under this sub-section by the investigating officer shall be
released within a period of forty-eight hours beginning with the time when it is seized
unless the matter involving the cash is before the Designated Authority and such
Authority passes an order allowing its retention beyond forty-eight hours.
Explanation.--For the purposes of this sub-section, "cash" means--

(a) coins or notes in any currency;
(b) postal orders;
(c) traveller's cheques;
23.[(ca) credit or debit cards or cards that serve a similar purpose;]
(d) banker's drafts; and
Page 808
(e) such other monetary instruments as the Central Government or, as the case may
be, the State Government may specify by an order made in writing.
(6) Any person aggrieved by an order made by the Designated Authority may prefer an appeal to the
Court within a period of thirty days from the date of receipt of the order, and the Court may either
confirm the order of attachment of property or seizure so made or revoke such order and release the
property.
S. 26.
Court to order forfeiture of proceeds of terrorism.--
Where-any property is seized or attached on the ground that it constitutes proceeds of terrorism and the Court
confirms the order in this regard under sub-section (6) of Section 25 ; it may order forfeiture of such property,
whether or not the person from whose possession it is seized or attached, is prosecuted in a Court for an offence
under Chapter IV or Chapter VI.
S. 27.
Issue of show cause notice before forfeiture of proceeds, of terrorism.--
(1) No order forfeiting any proceeds of terrorism shall be made under Section 26 unless the person
holding or in possession of such proceeds is given a notice in writing informing him of the grounds on
which it is proposed to forfeit the proceeds of terrorism and such person is given an opportunity of
making a representation in writing within such reasonable time as may be specified in the notice
against the grounds of forfeiture and is also given a reasonable opportunity of being heard in the
matter.
(2) No order of forfeiture shall be made under sub-section (1), if such person establishes that he is a bona
fide transferee of such proceeds for value without knowing that they represent proceeds of terrorism.
(3) It shall be competent for the Court to make an order in respect of the property seized or attached,--
(a) directing it to be sold if it is a perishable property and the provisions of Section 459 of the
Code shall, as nearly as may be practicable, apply to the net proceeds of such sale;
(b) nominating any officer of the Central Government or the State Government, in the case of any
other property, to perform the function of the administrator of such property subject to such
conditions as may be specified by the Court.
S. 28.
Appeal.--
(1) Any person aggrieved by an order of forfeiture under Section 26 may, within one month from the
date of the receipt of such order, appeal to the High Court within whose jurisdiction, the Court, which
Page 809
passed the order appealed against, is situated.

(2) Where an order under Section 26 is modified or annulled by the High Court or where in a prosecution
instituted for any offence under Chapter IV or Chapter VI, the person against whom an order of
forfeiture has been made under Section 26 is acquitted, such property shall be returned to him and in
either case if it is not possible for any reason to return the forfeited property, such person shall be paid
the price therefor as if the property had been sold to the Central Government with reasonable interest
calculated from the day of seizure of the property and such price shall be determined in the manner
prescribed.
S. 29.
Order of forfeiture not to interfere with other punishments.--
The order of forfeiture made under this Chapter by the Court, shall not prevent the infliction of any other punishment
to which the person affected thereby is liable under Chapter TV or Chapter VI.
S. 30.
Claims by third party.--
(1) Where any claim is preferred or any objection is made to the seizure or attachment of any property
under Section 25 on the ground that such property is not liable to seizure or attachment, the
Designated Authority before whom such property is produced, shall proceed to investigate the claim
or objection:
Provided that no such investigation shall be made where the Designated Authority
considers that the claim or objection is designed to cause unnecessary delay.
(2) Where an appeal has been preferred under sub-section (6) of Section 25 and any claimant or objector
establishes that the property specified in the notice issued under Section 27 is not liable to be
forfeited under this Chapter, the said notice shall be withdrawn or modified accordingly.
S. 31.
Powers of Designated Authority.--
The Designated Authority, acting under the provisions of this Chapter, shall have all the powers of a Civil Court
required for making a full and fair inquiry into the matter before it.
S. 32.
Certain transfers to be null and void.--
Where, after the issue of an order under Section 25 or issue of a notice under Section 27 , any property referred to in
the said order or notice is transferred by any mode whatsoever, such transfer shall, for the purpose of the proceedings
Page 810
under this Chapter, be ignored and if such property is subsequently forfeited, the transfer of such property shall be
deemed to be null and void.
S. 33.
Forfeiture of property of certain persons.--
(1) Where any person is accused of an offence under Chapter IV or Chapter VI, it shall be open to the
Court to pass an order that all or any of the properties, movable or immovable or both, belonging to
him, shall, during the period of such trial, be attached, if not already attached under this Chapter.
(2) Where a person has been convicted of any offence punishable under Chapter IV or Chapter VI, the
Court may, in addition to awarding any punishment, by order in writing, declare that any property,
movable or immovable or both, belonging to the accused and specified in the order, shall stand
forfeited to the Central Government or the State Government, as the case may be, free from all
encumbrances.
S. 34.
Company to transfer shares to Government.--
Where any share in a company stand forfeited to the Central Government or the State Government, as the case may
be, under this Chapter, then, the company shall, on receipt of the order of the Court, notwithstanding anything
contained in the Companies Act , 1956 (1 of 1956), or the articles of association of the company, forthwith register
the Central Government or the State Government, as the case may be, as the transferee of such share.
CHAPTER VI
TERRORIST ORGANISATIONS
S. 35.
Amendment of Schedule, etc.--
(1) The Central Government may, by order, in the Official Gazette,--

(a) add an organisation in the Schedule;
(b) add also an organisation in the Schedule, which is identified as a terrorist organisation in a
resolution adopted by the Security Council under Chapter VII of the Charter of THE UNITED
NATIONS, to combat international terrorism;
(c) remove an organisation from the Schedule;
(d) amend the Schedule in some other way.
(2) The Central Government shall exercise its power under Clause (a) of sub-section (1) in respect of an
organisation only if it believes that it is involved in terrorism.
(3) For the purposes of sub-section (2), an organisation shall be deemed to be involved in terrorism if it--
(a) commits or participates in act s of terrorism, or
(b) prepares for terrorism, or
Page 811
(c) promotes or encourages terrorism, or

(d) is otherwise involved in terrorism.
S. 36.
Denotification of a terrorist organisation
(1) An application may be made to the Central Government for the exercise of its power under Clause (c)
of sub-section (1) of Section 35 to remove an organisation from the Schedule.
(2) An application under sub-section (1) may be made by--
(a) the organisation, or
(b) any person affected by inclusion of the organisation in the Schedule as a terrorist organisation.
(3) The Central Government may prescribe the procedure for admission and disposal of an application
made under this section.
(4) Where an application under sub-section (1) has been rejected, the applicant may apply for a review to
the Review Committee constituted by the Central Government under sub-section (1) of Section 37
within one month from the date of receipt of the order of such refusal by the applicant.
(5) The Review Committee may allow an application for review against rejection to remove an
organisation from the Schedule, if it considers that the decision to reject was flawed when considered
in the light of the principles applicable on an application for judicial review.
(6) Where the Review Committee allows review under sub-section (5) by or in respect of an organisation,
it may make an order to such effect.
(7) Where an order is made under sub-section (6), the Central Government shall, as soon as the certified
copy of the order is received by it, make an order removing the organisation from the Schedule.
S. 37.
Review Committees.--
(1) The Central Government shall constitute one or more Review Committees for the purposes of Section
36 .
(2) Every such Committee shall consist of a Chairperson and such other members not exceeding three and
possessing such qualifications as may be prescribed.
(3) A Chairperson of the Committee shall be a person who is, or has been, a Judge of a High Court, who
shall be appointed by the Central Government and in the case of appointment of a sitting Judge, the
concurrence of the Chief Justice of the concerned High Court shall be obtained.
S. 38.
Offence relating to membership of a terrorist organisation.--

Page 812
(1) A person, who associates himself, or professes to be associated, with a terrorist organisation with
intention to further its activities, commits an offence relating to membership of a terrorist
organisation:
Provided that this sub-section shall not apply where the person charged is able to
prove--
(a) that the organisation was not declared as a terrorist organisation at the time
when he became a member or began to profess to be a member; and
(b) that he has not taken part in the act ivities of the organisation at any time during
its inclusion in the Schedule as a terrorist organisation.
(2) A person, who commits the offence relating to membership of a terrorist organisation under
sub-section (1), shall be punishable with imprisonment for a term not exceeding ten years, or with
fine, or with both.
S. 39.
Offence relating to support given to a terrorist organisation.--
(1) A person commits the offence relating to support given to a terrorist organisation,--
(a) who, with intention to further the activity of a terrorist organisation,--
(i) invites support for the terrorist organisation, and
(ii) the support is not or is not restricted to provide money or other property within the
meaning of Section 40 ; or
(b) who, with intention to further the act ivity of a terrorist organisation, arranges, manages or
assists in arranging or managing a meeting which he knows is--
(i) to support the terrorist organisation, or
(ii) to further the activity of the terrorist organisation, or
(c) who, with intention to further the act ivity of a terrorist organisation, addresses a meeting for
the purpose of encouraging support for the terrorist organisation or to further its activity.
(2) A person, who commits the offence relating to support given to a terrorist organisation under
sub-section (1), shall be punishable with imprisonment for a term not exceeding ten years, or with
fine, or with both.
S. 40.
Offence of raising fund for a terrorist organisation.--
(1) A person commits the offence of raising fund for a terrorist organisation, who, with intention to
further the act ivity of a terrorist organisation,--
Page 813
(a) invites another person to provide money or other property, and intends that it should be used,
or has reasonable cause to suspect that it might be used, for the purposes of terrorism; or
(b) receives money or other property, and intends that it should be used, or has reasonable cause
to suspect that it might be used, for the purposes of terrorism; or
(c) provides money or other property, and knows, or has reasonable cause to suspect, that it would
or might be used for the purposes of terrorism.
Explanation.--For the purposes of this sub-section, a reference to provide money or

other property includes of its being given, lent or otherwise made available, whether or
not for consideration.
(2) A person, who commits the offence of raising fund for a terrorist organisation under sub-section (1),
shall be punishable with imprisonment for a term not exceeding fourteen years, or with fine, or with
both.
CHAPTER VII
MISCELLANEOUS
S. 41.
Continuance of association.--
An association shall not be deemed to have ceased to exist by reason only of any formal act of its dissolution or
change of name but shall be deemed to continue so long as any act ual combination for the purposes of such
association continues between, any members thereof.
S. 42.
Power to delegate.--
The Central Government may, by notification in the Official Gazette, direct that all or any of the powers which may
be exercised by it under Section 7 , or Section 8 , or both, shall, in such circumstances and under such conditions, if
any, as may be specified in the notification, be exercised also by any State Government and the State Government
may, with the previous approval of the Central Government, by order in writing, direct that any power which has
been directed to be exercised by it shall, in such circumstances and under such conditions, if any, as may be specified
in the direction, be exercised by any person subordinate to the State Government as may be specified therein.
S. 43.
Officers competent to investigate offences under Chapters IV and VI.--
Notwithstanding anything contained in the Code, no police officer,--
(a) in the case of the Delhi Special Police Establishment, constituted under sub-section (1) of Sections 2
of the Delhi Special Police Establishment Act , 1946 (25 of 1946), below the rank of a Deputy
Superintendent of Police or a police officer of equivalent rank;
Page 814
(b) in the metropolitan areas of Mumbai, Kolkata, Chennai and Ahmedabad and any other metropolitan
area notified as such under sub-section (1) of Section 8 of the Code, below the rank of an Assistant
Commissioner of Police;
(c) in any case not relatable to Clause (a) or Clause (b), below the rank of a Deputy Superintendent of
Police or a police officer of an equivalent rank,
shall investigate any offence punishable under Chapter IV or VI.
Power to arrest, search, etc.--
Any officer of the Designated Authority empowered in this behalf, by general or special order of the Central
Government or the State Government, as the case may be, knowing of a design to commit any offence under this Act
or has reason to believe from personal knowledge or information given by any person and taken in writing that any
person has committed an offence punishable under this Act or from any document, article or any other thing which
may furnish evidence of the commission of such offence or from any illegally acquired property or any document or
other article which may furnish evidence of holding any illegally acquired property which is liable for seizure or
freezing or forfeiture under this Chapter is kept or concealed in any building, conveyance or place, may authorise
any officer subordinate to him to arrest such a person or search such building, conveyance or place whether by day or
by night or himself arrest such a person or search a such building, conveyance or place.
S. 43-B.
Procedure of arrest, seizure, etc.--
(1) Any officer arresting a person under Section 43 -A shall, as soon as may be, inform him of the
grounds for such arrest.
(2) Every person arrested and article seized under Section 43 -A shall be forwarded without unnecessary
delay to the officer in charge of the nearest police station.
(3) The authority or officer to whom any person or article is forwarded under sub-section (2) shall, with
all convenient dispatch, take such measures as may be necessary in accordance with the provisions of
the Code.
S. 43-C.
Application of provisions of Code
The provisions of the Code shall apply, insofar as they are not inconsistent with the provisions of this Act, to all
arrests, searches and seizures made under this Act .
S. 43-D.
Modified application of certain provisions of the Code.--

Page 815
(1) Notwithstanding anything contained in the Code or any other law, every offence punishable under this
Act shall be deemed to be a cognizable offence within the meaning of Clause (c) of Section 2 of the
Code, and "cognizable case" as defined in that clause shall be construed accordingly.
(2) Section 167 of the Code shall apply in relation to a. case involving an offence punishable under this
Act subject to the modification that in sub-section (2),--
(a) the references to "fifteen days", "ninety days" and "sixty days", wherever they occur, shall be
construed as references to "thirty days", "ninety days" and "ninety days" respectively; and
(b) after the proviso, the following provisos shall be inserted, namely:--
;Provided further that if it is not possible to complete the investigation within the said
period of ninety days, the Court may if it is satisfied with the report of the Public
Prosecutor indicating the progress of the investigation and the specific reasons for the
detention of the accused beyond the said period of ninety days, extend the said period
up to one hundred and eighty days:
Provided also that if the police officer making the investigation under this Act,
requests, for the purposes of investigation, for police custody from judicial custody of
any person in judicial custody, he shall file an affidavit stating the reasons for doing so
and shall also explain the delay, if any, for requesting such police custody."
(3) Section 268 of the Code shall apply in relation to a case involving ah offence punishable under this
Act subject to the modification that--
(a) the reference in sub-section (1) thereof--
(i) to "the State Government" shall be construed as a reference to "the Central
Government or the State Government",
(ii) to "order of the State Government" shall be construed as a reference to "order of the
Central Government or the State Government, as the case may be"; and
(b) the reference in sub-section (2) thereof, to "the State Government" shall be construed as a
reference to "the Central Government or the State Government, as the case may be".
(4) Nothing in Section 438 of the Code shall apply in relation to any case involving the arrest of any
person accused of having committed an offence punishable under this Act.
(5) Notwithstanding anything contained in the Code, no person accused of an offence punishable under
Chapters IV and VI of this Act shall, if in custody, be released on bail or on his own bond unless the
Public Prosecutor has been given an opportunity of being heard on the application for such release:
Provided that such accused person shall not be released on bail or on his own bond if
the Court, on a perusal of the case diary or the report made under Section 173 of the
Code is of the opinion that there are reasonable grounds for believing that the
accusation against such person is prima facie true.
(6) The restrictions on granting of bail specified in sub-section (5) is in addition to the restrictions under
the Code or any other law for the time being in force on granting of bail.
(7) Notwithstanding anything contained in sub-sections (5) and (6), no bail shall be granted to a person
accused of an offence punishable under this Act, if he is not an Indian citizen and has entered the
country unauthorisedly or illegally except in very exceptional circumstances and for reasons to be
recorded in writing.
Page 816
CASE NOTES
Claim of statutory default bail for offence under Section 167 Cr PC in case of offence under Sections 13, 15
and 17 of 1967 Act.-- In the present case, the issue in consideration was regarding grant of statutory bail to the
accused-petitioner under Section 167 Cr PC who had been arrested along with another person for abetting terrorist
act ivities of an organization known as DHD (J) which is an extremist organization. It is contended on behalf of the
accused-petitioner that since, at the point of time when, the offence under Section 17 was alleged to have been
committed, the DHD (J) was declared an "unlawful association and as such it is not possible for the
accused-petitioner to have knowledge that DHD(J) was indulging in unlawful terrorist activities, cannot be sustained
in view of the fact and circumstances of the case. Accordingly, the application is liable to be rejected for the grant of
statutory bail under Section 167 Cr PC. The Sessions Judge (Special Court) has jurisdiction to extend the time for
completion of the investigation. Further, the recovery of Rs. 4 lakhs from the accused-petitioner's custody would
require further investigation in allegation not only against him but also the other accused persons. Redual Hussain
Khan v. National Investigation Agency, (2009) 4 Crimes 249 (SC) : 2010 Cr LJ 1413 : (2010) 1 SCC 521.
Power of Special Court in respect of extension of period for completion of investigation--Requirement of

hearing of parties--Claim of default bail.-- While considering the application of the Public Prosecutor for
extension of period of detention of accused beyond what is prescribed by law, that issuance of notice to the accused
is not an obligation on the part of the Special Court under Section 45 -D(2)(b) of the 1967 Act . At the same time,
there is no obligation on the Special Court to issue notice to the Public Prosecutor for extending the period for
detention of the accused beyond 60 days or 180 days, as the case may be. Ashruff v. State, 2011 Cr LJ 1021 (Ker).
Grant of bail--Applicability of Section 43 -D(5) of the Unlawful Act ivities (Prevention) Act , 1967.-- In the
present case, there is no evidence as yet to prove that Popular Front of India is a terrorist organization and hence the
accused cannot be penalized for belonging to the said organization and moreover, even assuming that the said
organization is an illegal organization, the Court has yet to consider whether all the members of the organization can
be automatically held guilty. In such facts and circumstances, wheal the accused has already spent 66 days in
custody, the Supreme Court has held that there would be no reason why he should be denied bail. A Doctor
incarcerated for a long period may end up like Dr. Manette in Charles Dicken's novel--"A Tale of Two Cities". State
of Kerala v. Raneef, (2011) 1 Crimes 177 (SC) : 2011 Cr LJ 982 : AIR 2011 SC 340 : (2011) 1 SCC 784.
Proof of offence of having membership with banned terrorist organization.--Violation of proviso to Section 43
-D(5) of the Unlawful Act ivities (Prevention) Act , 1967--Grant of bail.-- In the present case, the accused
respondent, being a doctor, was under the Hippocratic oath to heal a patient. Just as it is the duty of a lawyer to
defend an accused, so also it is the duty of a doctor to heal. Even a dentist can apply stitches in an emergency. Prima
facie the only offence that can be leveled against the respondent is that under Section 202 IPC , omission to give
information of the crime to the police has also to be proved beyond reasonable doubt. Section 202 IPC is a bailable
offence. Hence, the accused/respondent is entitled to be released on bail. State of Kerala v. Raneef, (2011) 1 Crimes
177 (SC) : 2011 Cr LJ 982 : AIR 2011 SC 340 : (2011) 1 SCC 784.
Page 817
Propreioty of rejection of bail application occused charged with offences under the Unlawful Act ivities
(Prevention) Act , 1967).-- Where the statements of the witnesses showing that the accused persons have joined as
members in conspiracy with others to arrange for facilitating terrorism thereby, they were trying to wage war against
the Nation are found to be prima facie true and believable. The alleged terrorist activities would affect the security,
unity and integrity of the Nation and therefore the Special Court has rightly rejected the bail application of the
accused in view of the proviso to Section 43 -D(2) of 1967 Act . Mohammed Nainar v. State of Kerala, 2011 Cr LJ
1729 (Ker) : (2011) KLJ 68.
Procedure for hearing appeal against order of Special Court granting or rejecting bail application.-- An appeal
against the order of the Special Court granting or rejecting bail under the UA (P) Act, 1967 is to be heard by Bench
of two Judges of the High Court. Such appeal shall not be heard by a Single Judge of the High Court. Mohammed
Nainar v. State of Kerala, 2011 Cr LJ 1729 (Ker) : (2011) KLJ 68.
S. 43-E.
Presumption as to offences under Section 15 .--
In a prosecution for an offence under Section 15 , if it is proved--
(a) that the arms or explosives or any other substances specified in the said section were recovered from
the possession of the accused and there is reason to believe that such arms or explosives or other
substances of a similar nature were used in the commission of such offence; or
(b) that by the evidence of the expert the finger-prints of the accused or any other definitive evidence
suggesting the involvement of the accused in the offence were found at the site of the offence or on
anything including arms and vehicles used in connection with the commission of such offence, the
Court shall presume, unless the contrary is shown, that the accused has committed such offence.
S. 43-F.
Obligation to furnish information.--
(1) Notwithstanding anything contained in any other law, the officer investigating any offence under this
Act , with the prior approval in writing of an officer not below the rank of a Superintendent of Police,
may require any officer or authority of the Central Government or a State Government or a local
authority or a bank, or a company, or a firm or any other institution, establishment, organisation or
any individual to furnish information in his or their possession in relation to such offence, on points or
matters, where the investigating officer has reason to believe that such information will be useful for,
or relevant to, the purposes of this Act.
(2) The failure to furnish the information called for under sub-section (1), or deliberately furnishing false
information shall be punishable with imprisonment for a term which may extend to three years or with
fine or with both.
(3) Notwithstanding anything contained in the Code, an offence under sub-section (2) shall be tried as a
summary case and the procedure prescribed in Chapter XXI of the said Code [except sub-section (2)
of Section 262 ] shall be applicable thereto.]
Page 818
S. 44.
Protection of witnesses.--
(1) Notwithstanding anything contained in the Code, the proceedings under this Act may, for reasons to
be recorded in writing, be held in camera, if the Court so desires.
(2) A Court, if on an application made by a witness in any proceeding before it or by the Public
Prosecutor in relation to such witness or on its own motion, is satisfied that the life of such witness is
in danger, it may, for reasons to be recorded in writing, take such measures as it deems fit for keeping
the identity and address of such witness secret.
(3) In particular, and without prejudice to the generality of the provisions of sub-section (2), the measures
which a Court may take under that sub-section may include--
(a) the holding of the proceedings at a place to be decided by the Court;
(b) the avoiding of the mention of the name and address of the witness in its orders or judgments
or in any records of the case accessible to public;
(c) the issuing of any directions for securing that the identity and address of the witness are not
disclosed;
(d) a decision that it is in the public interest to order that all or any of the proceedings pending
before such a Court shall not be published in any manner.
(4) Any person, who contravenes any decision or direction issued under sub-section (3), shall be
punishable with imprisonment for a term which may extend to three years, and shall also be liable to
fine.
S. 45.
25.Section 45 renumbered as sub-S. (1) thereof and sub-sec. (2) inserted by Act 35 of 2008, No
Section
Court13.[(1)]
shall
take cognizance of any offence--
(i) under Chapter III without the previous sanction of the Central Government or any officer
authorised by the Central Government in this behalf;
(ii) under Chapters IV and VI without the previous sanction of the Central Government or, as the
case may be, the State Government, and where such offence is committed against the
Government of a foreign country without the previous sanction of the Central Government.
25.Section 45 renumbered as sub-S. (1) thereof and sub-sec. (2) inserted by Act 35 of 2008,Sanction
Section for
13.[(2)
prosecution under sub-section (1) shall be given within such time as may be prescribed only after
considering the report of such authority appointed by the Central Government or, as the case may be,
the State Government which shall make an independent review of the evidence gathered in the course
of investigation and make a recommendation within such time as may be prescribed to the Central
Government or, as the case may be, the State Government.]
Page 819
CASE NOTES
Legality of taking cognizance of offence Section 13 of 1967 Act.-- Section 17 of Criminal Law Amendment Act
, 1908.-- In the instant case, materials were alleged to have been seized from the possession of the accused-petitioner
for use by extremists for strengthening their communication system. It appears that the police after investigating the
case found the allegations as leveled in the FIR to be true and hence, submitted a charge-sheet upon which
cognizance was taken by the Chief Judicial Magistrate under Section 13(2) of the 1967 Act as well as under Section
17 of Criminal Law Amendment Act , 1908 (CLA) but admittedly, sanction required for the prosecution of the
accused persons for the offence under the 1967 Act was not there before the Court taking cognizance, though the
same in terms of the provisions, as contained in Section 45 of the 1967 Act , was a condition precedent for taking
cognizance of the offence under the said Act. Therefore, order taking cognizance under Section 13(2) of the 1967
Act is quite bad in law. However, there is no illegality in the order taking cognizance so far as the offence under
Section 17 of the CLA is concerned as the act allegedly done by the accused-petitioner is fully covered under
Section 17 of the CLA. While going through the FIR, it is found that the co-accused has confessed before the police
that this petitioner was knowing fully well that the materials, which he had received, had been brought for the use of
the extremist group members associated with the extremist group and as such there is no illegality in the order taking
cognizance of the offence under CLA against the accused-petitioner. Ashish Sharma v. State, (2010) 2 Crimes (SN)
871 (Jhar) : 2010 Cr LJ 1553 (Jhar).
Legality of rejection of bail application on basis of report of Public Prosecutor appointed under Section 24(3)
of Cr PC.-- The Public Prosecutor mentioned in proviso to Section 43 -D(2) of the UAP Act (1967) would include
Public Prosecutor appointed under Section 24(3) of the Cr PC as well as the Public Prosecutor or Special Public
Prosecutor appointed under Section 15 or 22 of Nation Investigation (2008). Hence where the report of the Public
Prosecutor shows that the accusations made against the accused persons for commission of offences under the IPC
as well as offences under Sections 15 read with Sections 16/18/18B/19/20 and also Scheduled offences under the
NIA Act (2008) are made out, the Sessions Court can be said to be act ed illegally in rejecting the bail applications of
the accused persons. Kamarudheen v. S.H.O., Muvattupuzha Police Station, 2011 Cr LJ 1938 (Ker) : (2011) 1
KLT 342.
S. 46.
Admissibility of evidence collected through the interception of communications.--
Notwithstanding anything contained in the Indian Evidence Act , 1872 (1 of 1872) or any other law for the time
being in force, the evidence collected through the interception of wire, electronic or oral communication under the
provisions of the Indian Telegraph Act , 1885 (13 of 1885) or the Information Technology Act , 2000 (21 of 2000)
or any other law for the time being in force, shall be admissible as evidence against the accused In the Court during
the trial of a case:
Provided that the contents of any wire, electronic or oral communication intercepted or evidence
derived therefrom shall not be received in evidence or otherwise disclosed in any trial, hearing or
other proceeding in any Court unless each accused has been furnished with a copy of the order of the
competent authority under the aforesaid law, under which the interception was directed, not less than
ten days before trial, hearing or proceeding:
Provided further that the period of ten days may be waived by the Judge trying the matter, if he comes
to the conclusion that it was not possible to furnish the accused with such order ten days before the
Page 820
trial, hearing or proceeding and that the accused shall not be prejudiced by the delay in receiving such
order.
S. 47.
Bar of jurisdiction.--
(1) Save as otherwise expressly provided in this Act , no proceeding taken under this Act by the Central
Government or the District Magistrate or any officer authorised in this behalf by the Central
Government or the District Magistrate, shall be called in question in any Civil Court in any suit or
application or by way of appeal or revision, and no injunction shall be granted by any Civil Court or
other authority in respect of any act ion taken or to be taken in pursuance of any power conferred by
or under this Act.
(2) Notwithstanding anything contained in sub-section (1), no Civil Court or other authority shall have, or
be entitled to exercise, any jurisdiction, powers or authority in relation to the matters referred to in
Section 36 .
S. 48.
Effect of Act and rules, etc., inconsistent with other enactments.--
The provisions of this Act or any rule or order made thereunder shall have effect notwithstanding anything
inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of
any enactment other than this Act .
S. 49.
No suit, prosecution or other legal proceeding shall lie against--
(a) the Central Government or a State Government or any officer or authority of the Central Government
or State Government or District Magistrate or any officer authorised in this behalf by the Government
or the District Magistrate or any other authority on whom powers have been conferred under this Act ,
for anything which is in good faith done or purported to be done in pursuance of this Act or any rule
or order made thereunder; and
(b) any serving or retired member of the armed forces or para-military forces in respect of any act ion
taken or purported to be taken by him in good faith, in the course of any operation directed towards
combating terrorism.
S. 50.
Saving.--
Nothing in this Act shall affect the jurisdiction exercisable by, or the procedure applicable to, any Court or other
Page 821
authority under any law relating to the navy, army or air force or other armed forces of the Union.
S. 51.
Impounding of passport and arms licence of person charge-sheeted under the Act.--
Notwithstanding anything contained in any other law for the time being in force, the passport and the arms licence of
a person, who is charge-sheeted for having committed any offence under this Act , shall be deemed to have been
impounded for such period as the Court may deem fit.
Certain powers of the Central Government.--
For the prevention of, and for coping with terrorist act ivities, the Central Government shall have power to--
(a) freeze, seize or attach funds and other financial assets or economic resources held by, on behalf of or
at the direction of the individuals or entities listed in the Schedule to the Order, or any other person
engaged in or suspected to be engaged in terrorism;
(b) prohibit any individual or entity from making any funds, financial assets or economic resources or
related services available for the benefit of the individuals or entities listed in the Schedule to the
Order, or any other person engaged in or suspected to be engaged in terrorism;
(c) prevent the entry into or the transit through India of individuals listed in the Schedule to the Order or
any other person engaged in or suspected to be engaged in terrorism.]
S. 52.
(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the
(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may provide
(a) the service of notices or orders issued or made under this Act and the manner in which such
notices or orders may be served, where the person to be served is a corporation, company,
bank or other association;
(b) the procedure to be followed by the Tribunal or a District Judge in holding any inquiry or
disposing of any application under this Act;
(c) determination of the price of the forfeited property under sub-section (2) of Section 28 ;
(d) the procedure for admission and disposal of an application under sub-section (3) of Section 36
;
(e) the qualifications of the members of the Review Committee under sub-section (2) of Section
37 ; and
27.Ins. by Act 35 of 2008, Section 15.[(ee)
the time within which sanction for prosecution and
recommendation to the Central Government shall be given under sub-section (2) of Section
45 , and;]
(f) any other matter which is required to be, or may be, prescribed.
Page 822
S. 53.
Orders and rules to be laid before both Houses of Parliament.--
28. Section 53 renumbered as sub-sec. (1) thereof and sub-sec (2) inserted by Act 35 of 2008,Every Section
order and
16.[(1)]every rule made by the Central Government under this Act shall be laid, as soon as may be after it is
made, before each House of Parliament, while it is in session, for a total period of thirty days which
may be comprised in one session or in two or more successive sessions, and if, before the expiry of
the session immediately following the session or the successive sessions aforesaid, both Houses agree
in making any modification in the order or rule or both Houses agree that the order or rule should not
be made, the order or rule shall thereafter have effect only in such modified form or be of no effect, as
the case may be; so, however, that any such modification or annulment shall be without prejudice to
the validity of anything previously done under that order or rule.
28[(2) The Order referred to in entry 33 of the Schedule and every amendment made to that Order shall be
laid as soon as may be after it is made before each House of Parliament while it is in session for a
total period of 30 days which may be comprised in one session or in two or more successive sessions.]
THE SCHEDULE(See Sections 2(1)(m) and 35)TERRORIST ORGANISATION
1. Babbar Khalsa International.

2. Khalistan Commando Force.
3. Khalistan Zindabad Force.
4. International Sikh Youth Federation.
5. Lashkar-E-Taiba/Pasban-E-Ahle Hadis.
6. Jaish-E-Mohammed/Tahrik-E-Furqan.
7. Harkat-Ul-Mujahideen/Harkat-Ul-Ansar/Harkat-Ul-Jehad-E-Islami.
8. Hizb-Ul-Mujahideen/Hizb-Ul-Mujahideen Pir Panjal Regiment.
9. Al-Umar-Mujahideen.
10. Jammu And Kashmir Islamic Front.
11. United Liberation Front of Assam (ULFA).
12. National Democratic Front of Bodoland (NDFB).
13. People's Liberation Army (PLA).
14. United National Liberation Front (UNLF).
15. People's Revolutionary Party of Kangleipak (PREPAK).
16. Kangleipak Communist Party (KCP).
17. Kanglei Yaol Kanba Lup (KYKL).
18. Manipur People's Liberation Front (MPLF).
19. All Tripura Tiger Force.
20. National Liberation Front of Tripura.
21. Liberation Tigers of Tamil Eelam (LTTE).
22. Students Islamic Movement of India.
23. Deendar Anjuman.
24. Communist Party of India (Marxist-Leninist)--People's War, All. Its Formations and Front
Page 823
Organisations.
25. Maoist Communist Centre (Mcc), All Its Formations and Front Organisations.
26. Albadr.
27. Jamiat-Ul-Mujahideen.
28. Al-Qaida.
29. Dukhtaran-E-Millat (DEM).
30. Tamil Nadu Liberation Army (TNLA).
31. Tamil National Retrieval Troops (TNRT).
32. Akhil Bharat Nepali Ekta Samaj (ABNES).]
29.[33. Organisations listed in the Schedule to the U.N. Prevention and Suppression of Terrorism
(Implementation of Security Council Resolutions) Order, 2007 made under Section 2 of THE
UNITED NATIONS (Security Council) Act, 1947 (47 of 1947) and amended from time to time.]
2. Ins. by Act 35 of 2008 Section 2.
3. Subs. by Act 29 of 2004 Section 4, for Sections 2 and 2-A (w.e.f. 21.9.2004).
4. Ins. by Act 35 of 2008, Section 3(i).
5. Ins. by Act 35 of 2008, Section 3(ii).
6. Ins. by Act 35 of 2008, Section 3(iii).
7. Subs. by Act 35 of 2008 Section 3(iii), for Clause (h).
8. Subs. by Act 29 of 2004 Section 5, for "Chapter XXXV" (w.e.f. 21.9.2004).
9. Subs. by Act 29 of 2004 Section 2 , for " Code of Criminal Procedure , 1898 (5 of 1898)" (w.e.f. 21.9.2004).
10. Subs. by Act 29 of 2004 Section 2 , for " Code of Criminal Procedure , 1898 (5 of 1898)" (w.e.f. 21.9.2004).
11. Subs. by Act 29 of 2004 Section 6, for Section 10 (w.e.f.21.9.2004).
12. Subs. by Act 29 of 2004, Section 2 , for " Code of Criminal Procedure , 1898 (5 of 1898)" (w.e.f. 21.9.2004).
13. Subs. by Act 29 of 2004, Section 2 , for " Code of Criminal Procedure , 1898 (5 of 1898)" (w.e.f. 21.9.2004).
14. Subs. by Act 29 of 2004, Section 7, for Chapter IV (w.e.f. 21.9.2004).
15. Subs. by Act 35 of 2008 Section 4, for Section 15.
16. Ins. by Act 35 of 2008, Section 5.
17. Subs. by Act 35 of 2008, Section 6, for Section 17.
18. Subs. Act 35 of 2008, Section 7, for "incites or knowingly facilitates".
20. Subs. by Act 35 of 2008, Section 9(a), for "If any person with intent to aid any terrorist contravenes".
21. Subs. by Act 35 of 2008, Section 9(b), for "Any person who, with intent to aid any terrorist".
23. Ins. by Act 35 of 2008 Section 11.

Page 824
25. Section 45 renumbered as sub-S. (1) thereof and sub-sec. (2) inserted by Act 35 of 2008, Section 13.
25. Section 45 renumbered as sub-S. (1) thereof and sub-sec. (2) inserted by Act 35 of 2008, Section 13.
28. Section 53 renumbered as sub-sec. (1) thereof and sub-sec (2) inserted by Act 35 of 2008, Section 16.
Central Administrative Tribunal, Principal Bench, New Delhi/2014/September/Sh.Devi Dayal, versus Sandeep Kumar -
LNINDORD 2014 CATND 858
LNINDORD 2014 CATND 858
Sh.Devi Dayal,
versus
Sandeep Kumar
Central Administrative Tribunal, Principal Bench, New Delhi

SHRI ASHOK KUMAR, SHRI RAJ VIR SHARMA
O.A.NO.544 OF 2013
18 September 2014
CASES CITED/REFERRED TO:
Commissioner of Police vs. Sandeep Kumar, (2011) 4 SCC 644
(2010) DLT 705
LEGISLATION CITED/REFERRED TO:
Section Section 19 of the Administrative Tribunals Act
Sections 323 , 341 506 read with Section 34 IPC
National Security Act
Code of Criminal Procedure
INDIAN PENAL CODE
Indian Penal Code
Dowry Prohibition Act
Arms Act
Electricity Act
Essential Commodities Act

Page 825
Explosive Substances Act
Explosives Act
Motor Vehicles Act
Shri S.C.Saxena Shri R.N.Singh
........ORDER Raj Vir Sharma, Member(J): ..In this Original Application filed under Section Section 19 of the
Administrative Tribunals Act , 1985, the applicant has prayed for the following relief: ..(i)..quash and set aside the
impugned order dt.31.1.2013 issued by respondent No.2. issue direction to the respondent no.2 to give appointment to
the applicant on the post of vehicle mechanic for which he has been finally selected. Award the cost of the litigation.
Pass any order or direction as this Hon..ble Tribunal may deem fit and proper in the facts and circumstances of the
case... 2...Brief facts of the applicant..s case are as follows: 2.1..In response to advertisement dated 18.2.2012, the
applicant applied for the post of Vehicle Mechanic (AFV) in 505, Army Base Workshop. Respondent no.2,vide letter
dated 9.8.2012 (Annexure B), intimated the applicant that he was provisionally selected against the post of Vehicle
Mechanic (AFV), and called upon the applicant to report to his office, along with the requisite documents. Accordingly,
the applicant reported and submitted the required documents. He also submitted the duly filled in Attestation Form. In
the Attestation Form the applicant mentioned that a criminal case had been registered against him under Sections 323 ,
341 506 read with Section 34 IPC , vide FIR 10/09 at PS Bawana, which was pending before the court for trial.
2.2..Respondent no.2, vide letter dated 31.1.2013 (Annexure A), intimated the applicant that during verification of his
character and antecedent by the Deputy Commissioner of Police (Special Branch), it was found that a case under
Sections 323 , 341 506 read with Section 34 IPC had been registered against him, vide FIR 10/09 at PS Bawana and
he was under trial in court, and that in accordance with the Government of India, Ministry of Home Affairs, Department
of Personnel & Administrative Reforms.. O.M. No.15014/1(S)/83-ESTT.B, dated 7th June 1983, it would not be
possible to entertain his candidature for the said post in the said circumstances. Respondent no.2 also enclosed a copy of
the O.M. dated 7.6.1983 (ibid) with the letter dated 31.1.2013 (Annexure A). 2.3..In the O.A. it is contended by the
applicant that the instructions contained in the O.M. dated 7.6.1983 (ibid) have already been superseded; that the
offences under Sections 323 , 341 506 read with Section 34 IPC alleged to have been committed by him are not of
so serious nature as to reject his candidature; and that rejection of his candidature on the basis of the O.M. dated
7.6.1983(ibid) is bad and unsustainable. 2.4..In support of his contentions, the applicant has relied upon the decisions in
Commissioner of Police vs. Sandeep Kumar, (2011) 4 SCC 644; Ram Het Meena vs. Union of Inida and others, W.P. (C
) No.9314 of 2009, decided on 15.3.2011; Rajesh Kumar vs. Commissioner of Police & another, W.P. (C ) No.8223 of
2011, decided on 22.11.2011; Commissioner of Police vs. Naveen Kumar Nandiwal, W.P.(C ) No.7808 of 2011,
decided on 2.11.2011; and Anoop Kumar vs. Government of NCT of Delhi & another, O.A.No.178 of 2008, decided on
22.7.2008. The applicant has filed copies of the said decisions along with the O.A. 3...In the counter reply, the
..respondent(s) have not denied the averments made by the applicant that he was provisionally selected for the post of
Vehicle Mechanic (AFV) in 505, Army Base Workshop and that in the Attestation Form he had disclosed about his
involvement in the aforesaid criminal case pending for trial in the court. It is stated by the ..respondent(s) that the
Attestation Form filled in by the applicant was referred to the Deputy Commissioner of Police (Special Branch), New
Delhi, for verification and that the office of the Deputy Commissioner of Police (Special Branch), New Delhi, vide
letter dated 6.9.2012, informed that a case vide FIR 10/09 under Sections 323 , 341 506 read with Section 34 IPC
had been registered against the applicant at PS Bawana, and that the applicant was under trial in the court. It is also
stated that the offer of appointment was rejected as the applicant was involved in criminal act ivity and was, therefore,
unfit to be appointed to Government service. In support of their decision, the ..respondent(s) have referred to the
Ministry of Home Affairs, Department of Personnel & Administrative Reforms.. O.M. dated 7.6.1983(ibid), which
stipulates that substantial evidence of criminal activity of any individual may render his/her candidature unsuitable for
public employment. The applicant was accordingly informed of the same, vide letter dated 31.1.2013. As regards the
decisions cited by the applicant in support of his claim, the ..respondent(s) have submitted that those decisions are out of
context and inapplicable to the facts and circumstances of the applicant..s case. 4...By filing a rejoinder reply, the
Page 826
applicant has controverted the stand taken by the ..respondent(s). 5...We have perused the pleadings and heard Shri
S.C.Saxena, learned counsel appearing for the applicant, and Shri R.N.Singh, learned counsel appearing for the
..respondent(s). Shri Saxena filed a copy of the order No.F.No.I-45020/6/2010-Pers.II, dated , issued by the Government
of India, Ministry of Home Affairs (Police-II Division). 6...Before proceeding further, we would like to refer to and
quote the Government of India, Ministry of Home Affairs (Police-II Division)..s order No. F.No.I-45020/6/2010-Pers.II,
dated , as under: ......F.No.I-45020/6/2010-Pers.II....................CONFIDENTIAL ....Government of India/Bharat Sarkar
....Ministry of Home Affairs, Grih Mantralaya ....(Police-II Division) ............North Block, New Delhi ............February
1st, 2012 Subject: Policy Guidelines for Considering cases of candidates for appointment in CAPFs-pendency of
criminal cases against candidates .. the effect of. Hon..ble High Court of Delhi in W.P. No.2930/2011 titled Het Ram
Meena Vs Union of India and Others directed the Union of India to formulate guidelines for considering the cases of the
candidates against whom the criminal cases were registered before applying for the various posts in CAPFs.
2...Accordingly, the matter has been considered in this Ministry in consultation with CAPFs, and it has been decided as
follows: I...A candidate is required to declare in the application form, whether he has been arrested, prosecuted or
convicted by a court for any criminal offence. If a candidate does not disclose the fact of his/her involvement and/or
arrest in criminal case(s), complaint case(s), preventive proceedings etc. Under IPC or any other Act of the Central or
State Government in the application form, during medical examination as well as in the attestation/verification form and
the fact subsequently comes to the notice of recruiting authorities/is found out from the verification report received from
the District authorities or otherwise, his candidature/appointment will be cancelled. However, in case the candidate has
already been appointed, while canceling/terminating the appointment, the principle of natural justice shall be followed
and opportunity of being heard would be accorded to the candidate. .. If a candidate does not disclose his/her
involvement and/or arrest in criminal case(s), complaint case(s), preventive proceedings etc. under IPC or any other
Act of the Central or State Government in the application form but discloses the same during medical examination/PET
and/or in the attestation/verification form, in writing, the candidature will not be cancelled on this ground alone. The
candidate will not be considered for recruitment if: a)..Such involvement/case/arrest is concerned with an offence
mentioned in Annexure A; b)..Such arrest/detention is made under any of the Act s which are concerned with security
and integrity of the country, terrorist and disruptive activities, act s against the State, insurgency, etc.; c)..The candidate
has been detained under the National Security Act /Crime Control Act /any similar legislation, and the same is
confirmed by the Reviewing Authority; d)..Such involvement/case/arrest is concerned with an offence involving moral
turpitude; e)..He/she has been convicted by a Court in any case whether or not an appeal is pending against such
conviction. Provided that the candidate shall not be barred in the above cases, if only an FIR has been registered/case is
under investigation and no charges have been framed either on FIR or on the complaint in any Court of Law. Provided
further that the candidate shall not be debarred if he/she has been finally acquitted/discharged by a Court, whether an
appeal is pending or not against such acquittal. Provided further that the candidate shall not be debarred if the
proceedings are withdrawn by the Central/State Government. Provided further that the candidate shall not be debarred if
he/she has been involved/convicted/ concerned with minor offences mentioned in Annexure B or those mentioned in
Chapter VIII & X of Code of Criminal Procedure , 1973. Where a candidate has been convicted and awarded a
jail-term of more than six months, he/she will generally not be considered suitable for appointment in the CAPF.
Notwithstanding the provisions of 3 (III) above, such candidates against whom chargesheet in a criminal case has been
filed in the court and the charges fall in the category of serious offences or moral turpitude, though later on acquitted by
extending benefit of doubt or acquitted for the reasons that the witnesses have turned hostile due to fear or reprisal by
the accused person(s), he/she will generally not be considered suitable for appointment in the CAPF. The details of
crimes which are serious offences or involve moral turpitude are at Annexure ..A... However, cases in which the
criminal court, while acquitting, has categorically mentioned that the criminal case would not be a bar on appointment
in Government Services, the candidate shall be considered for appointment in the concerned CAPF. Involvement in
minor offences, traffic violations, juvenile in conflict with law (tried in open courts/Juvenile Justice Boards) and
accident cases will not debar an individual for appointment in CAPFs & ARs provided that appointments for the post of
Driver and those related to driving will not be offered to the individuals, punished for serious traffic offences. If a
candidate is discharged by extending the benefit under the Probation of Offender Act, 1958, the suitability of such
candidates shall be put up for consideration of the selection committee as constituted by the DGs of CAPFs & ARs from
time to time for assessing his/her suitability for appointment in the concerned CAPF. 3...Furthermore, the following
Page 827
may be considered undesirable for employment under CAPFs: a)..Those who are, or have been, members of or
associated with anybody or association declared unlawful after it was so declared, provided the body or association
continues to be declared unlawful at the time of the verification. b)..Those who have been charged with, or against
whom there is substantial evidence of, participation in or association with any act ivity or programme which is aimed at:
..i...Subversion of the Constitution; ..ii...Overawing or overthrowing by force or by unconstitutional means the
Government established by law in India; Causing organized breach or defiance of law involving violence; Bringing
about, on any ground whatsoever, the cession of a part of the territory of India or the secession of a part of the territory
of India from the Union, or which supports any claim for cession or which supports any claim for cession or secession,
or which incites any individual or group of individuals to bring about such cession or secession; Disclaiming,
questioning or disrupting the sovereignty and territorial integrity of India or being prejudicial to the security of the
State; Promoting, or propagating or attempting to create, on grounds of religion, race, language, caste, language, caste
or community feelings of enmity or hatred or disharmony between different sections of the people. Those against whom
there is substantial evidence of, participation in or association with, any subversive or criminal activity or such act
ivities as may render them unsuitable for public employment, or are considered likely to affect their integrity and
efficiency in service. Those who have been associated with foreign powers or their agents in a manner which may give
rise to a reasonable presumption of activities prejudicial to the national interest. 4...Where the Appointing Authority is
of opinion that it is necessary or expedient to do so, it may after consultation with the Ministry of Home Affairs, by
order, for reasons to be recorded in writing, relax any of the provisions of this Policy with respect to any individual,
class or category of individuals. ..............ANNEXURE A SECTIONS OF THE INDIAN PENAL CODE
CONCERNING SERIOUS OFFENCES/MORAL TURPITUDE 1... Indian Penal Code Chapter-5(A) ..Criminal
Conspiracy .. To commit heinous offences ..Section 120B 2... Indian Penal Code Chapter-6 ..Offences against the State
.. ..Sections 121 to 130 3... Indian Penal Code Chapter-7 ..Offences relating to the Army, Navy & Air Force ..
..Sections 131 to 136. 4... Indian Penal Code Chapter-B ..Offences against the Public Tranquility ..Sections 153-A & B.
5... Indian Penal Code Chapter 11 ..False Evidence and Offences against Public Justice .. ..Sections 193 to 216-A. 6...
Indian Penal Code Chapter-12, ..Offences relating to Coin and Government Stamps ..Sections 231 to 263-A. 7... Indian
Penal Code Chapter 15 ..Offences relating to Religion ..Sections 295 to 297 8... Indian Penal Code Chapter - 16
..Offences Affecting the Human Body Sections 302 to 304, 304-B, 305, 306, 307, 308,311, 312, 313, 314, 315, 316,
317,325, 326, 327, 328, 329, 330, 331, 332, 333, 335, 347, 348, 354, 363 to 373, 376 to 376-A, 376-B, 376-C, 376-D,
377. ....9... Indian Penal Code Chapter-17 ......Offences against property .. ......Sections 379 to 462 ....10... Indian Penal
Code Chapter-18 Offences relating to Documents and to Property Marks ......Sections 465 to 489 ....11... Indian Penal
Code Chapter - 20 Offences relating to Marriage and Dowry Prohibition Act . ......Section 498-A In cases relating to
marriage i.e. Section 498 -A/406 IPC and Dowry Prohibition Act . The candidate may be debarred if he is main
accused and not collateral accused such as Devar, Jeth etc. if the offence of 304B etc. is committed with 498-A he may
be debarred. ....OFFENCES UNDER SPECIAL ACTS ....1...N.D.P.S.Act ....2...Sections 25, 27 of Arms Act , 1959
....3...Section 13, 14-A of Gambling Act . ....4...Section 39, 39-A of Indian Electricity Act ....5...Offences under
Essential Commodities Act . ....6...Offences under Food Adulteration Act ....7...Offences under Official Secret Act,
1923 ....8...Offences under the Explosive Substances Act , 1908 ....9...Unlawful Act ivities (Prevention) Act, 1967
....10...P.O.T.A., 2002 ....11... Explosives Act , 1884 ....12...Offences regarding terrorist act ivities. ....13...Offences
under ITP Act and MCOCA ....14...All offences prescribing conviction of minimum 3 years ......and above. 15...Such
cases which are registered for abetment and conspiracy to commit above mentioned offences. ..MORAL TURPITUDE
Moral turpitude refers to conduct that shocks the public conscience and a crime of moral turpitude is inherently base,
vile or depraved, contrary to social standards of morality and done with reckless, malicious or evil intent. The following
crimes shall definitely be construed as act s of moral turpitude: ....a)..Murder ....b)..Voluntary man slaughter ....c)..Rape
....d)..Domestic violence ....e)..Prostitution ....f)..Blackmail ....g)..Malicious destruction of property ....h)..Arson
....i)..Alien smuggling ....j)..Harbouring a fugitive ....k)..Bribery ....l)..Perjury. ..................Annexure B ....MINOR
OFFENCES ....1...The offences as defined under IPC or any other act of Central Government or State Government and
are defined as non-cognizable and compoundable. 2...Any offence as defined under the IPC or any other act of Central
Government or State Government which is punishable only with fine without any imprisonment. 3...Any offences as
defined under the IPC or any other act of Central Government or State Government which is punishable only with
simple imprisonment for a period up to six months. 4...Traffic violation offences or any offence as defined under Motor
Page 828
Vehicles Act , 1988... 5...Offences which are covered under Probation of Offender Act , 1958. 6...Offences which are
covered under Juvenile Justice Act 2000 .. As per Section 1(1) of the Juvenile Justice (Care and Protection of Children)
Act , 2000, a juvenile who has come in conflict with law and has been dealt with under the provisions of the Juvenile
Justice Act, he/she shall not suffer any disqualification on account of conviction in an offence under the said law...
7...Referring to the above quoted Government of India, Ministry of Home Affairs (Police-II Division), order
No.F.No.1-45020/6/2010-Pers.II, dated , the learned counsel appearing for the applicant contended that the Government
of India, Ministry of Home Affairs, Department of Personnel & Administrative Reforms.. O.M.
No.15014/1(S)/83-Estt.B., dated 7.6.1983 (Annexure R-I) has already been superseded by the order dated (ibid) and
therefore, the ..respondent(s) should not have rejected the applicant..s candidature in accordance with the O.M. dated
7.6.1983 (ibid) inasmuch as the applicant being allegedly involved in commission of offences of minor nature cannot be
debarred from being appointed to Government service. 7.1....On perusal of the aforesaid Ministry of Home Affairs..
order dated (ibid), we do not find any mention of the O.M. dated 7.6.1983 (ibid) therein. It has also not been stated in
the order dated (ibid) that the O.M. dated 7.6.1983 (ibid) has been superseded thereby. It is found that the Government
of India, Ministry of Home Affairs, have formulated guidelines for considering the cases of candidates against whom
the criminal cases were registered before applying for various posts in Central Armed Police Forces, vide the order
dated 1.2.2012 (ibid), in compliance with the direction issued by the Hon..ble High Court of Delhi in W.P. No.2930 of
2011, Het Ram Meena vs. Union of India and others. Though the policy guidelines have been framed by the
Government of India, Ministry of Home Affairs, vide order dated (ibid) for considering the candidates against whom
criminal cases were registered before applying for various posts in CAPFs, yet, in our considered view, the guidelines
contained therein cannot be completely lost sight of by the Tribunal while considering the rival contentions of the
parties inasmuch as both appointment to posts in Central Armed Police Forces (CAPFs) and appointment to posts in
other Departments of the Government, including the one involved in the present case, are appointments to Government
service. 7.3....Paragraph III (a) stipulates that a candidate will not be considered for recruitment if such
involvement/case/arrest is concerned with an offence mentioned in Annexure A to the order dated (ibid). The said
Annexure A describes different Sections of the Indian Penal Code concerning serious offences and moral turpitude.
The offences under Sections 323 , 341 506 IPC are not included in Annexure A. The fourth proviso to paragraph III
of the order dated (ibid) states that a candidate shall not be debarred if he/she has been involved/convicted/concerned
with minor offences mentioned in Annexure-B or those mentioned in Chapter VIII and X of Code of Criminal
Procedure , 1973. Annexure B describes minor offences. As per serial no.1 of Annexure B, a candidate shall not be
debarred if he/she has been involved/convicted/concerned with ..offences as defined under IPC or any other Act of
Central Government or State Government and are defined as non-cognizable and compoundable... Assuming for a
moment that the Ministry of Home Affairs.. order dated (ibid) is applicable to the case of the applicant, it is found that
the offences under Sections 341 , 323 506 IPC , which are alleged to have been committed by the applicant, being
not mentioned in Annexure A to the said order dated (ibid), the applicant cannot be said to have been debarred from
being appointed to Government service. The said offences alleged against the applicant being non-cognizable and
compoundable, there is also no bar for his appointment to Government service in terms of the fourth proviso to
Paragraph III of the order dated (ibid) read with Annexure B thereto. 7.4....At this stage, it is also necessary to refer to
and quote the O.M. dated 7.6.1983 (ibid)(Annexure R-I): ..COPY OF GOVERNMENT OF INDIA MINISTRY OF
HOME AFFAIRS DEPARTMENT OF PERSONNEL AND ADMINISTRATIVE REFORMS OFFICE
MEMORANDUM NO.15014/1(S)/83-ESTT. B., THE 7TH JUNE, 1983. ....SUBJECT:-Verification of character and
antecedents of candidate selected for appointment to civil posts under the Government of India-Review of the procedure
and revision of instructions regarding. Attention of the various Ministries is invited to this Department..s O.M.
No.18011/9(S)/78-Estt.(B), dated the 2nd July, 1982, laying down the revised criteria for determination of suitability of
a person for appointment to Government service and to say that it has been decided to incorporate the following
changes in the said O.M:- 1...The following sub-clause may be added as sub-clause (c) in paragraph 3.1(A) after
sub-clause (b) thereof: ....(c) ..Those against whom there is substantial evidence of, participation in or association with,
any subversive or criminal activity or such act ivities as may render them unsuitable for public employment, or are
considered likely to affect their integrity and efficiency in service... 2...The present sub-clause (c ) in this para may be
re-numbered as sub-clause (d). 3.....Note (i).. under para 3.1 (C ) may be deleted. 4...Note (ii) may be renumbered as (i)
and the expression ..or other body or association.. may be inserted between the expression ..at some stage of a political
Page 829
party.. and ..which is not banned... 2...The various Ministries/Departments are advised to take action accordingly.
3...While circulating these instructions to the various Heads of Departments etc., the Ministries/Departments are
requested to maintain confidentiality of the same by keeping a proper account of the copies distributed and ensuring
their safe custody at appropriate levels. 4...Receipt of this communication may please be acknowledged in the enclosed
format... 7.5....The O.M. No.18011/9(S)/78-Estt. (B), dated the 2nd July, 1982, which has been referred to in the O.M.
dated 7.6.1983 (ibid), reads thus: ..Copy of Ministry of Home Affairs (Department of Personnel and Admn. Reform)..s
O.M No.18011/9(S)/78-Estt.(B) dated 2.07.82, addressed to the Secretaries of the various Ministries/Departments. Sub:
.. Verification of character and antecedents of candidates selected for appointment to civil posts under the Government
of India .. Review of the procedure and revision of instructions regarding. ***
1. ..Attention is invited to the instructions contained in Home Department..s O.M.No.20/58/45-Estt.(S), dated the 7th
February, 1947, and Ministry of Home Affairs O.M.No.3/8(S)/67-Estt.(B), dated the 27th September, 1967 which lay
down the broad principles behind the practice of verification of character and antecedents of candidates selected for
appointment under the Government of India.
2. The Government have reviewed the orders issued from time to time on the above subject and it has been decided that
in respect of the verification of the character and antecedents of candidates for appointment to civil posts, the procedure
explained below should be adopted in future.
3. Determination of suitability of a person for appointment to Government service: Pre-enrolment verification, whether
simple or detailed, is a pre-requisite for appointment. It will be the responsibility of the appointing authority to satisfy
itself about the identity and suitability of the candidate according to the prescribed criteria before making any
appointment. 3.1 Criteria: (A) While there is no change in the guiding principles laid down in the circular dated
7.02.1947, referred to above, specifically the following may be considered undesirable for employment under
Government: (a) those who are, or have been, members of or associated with any body or association declared unlawful
after it was so declared, provided the body or association continues to be declared unlawful at the time of the
verification; (b) those who have been charged with, or against whom there is substantial evidence of, participation in or
association with any act ivity or programme which is aimed at: (i) ..subversion of the Constitution; (ii) ..overawing or
overthrowing by force or by unconstitutional means the Government established by law in India; (iii)..causing
organized breach or defiance of law involving violence; (iv) bringing about, on any ground whatsoever, the cession of a
part of the territory of Indian or the secession of a part of the territory of India from the Union, or which supports any
claim for cession or which supports any claim for cession or secession, or which incites any individual or group of
individuals to bring about such cession or secession.. (v)..disclaiming, questioning or disrupting the sovereignty and
territorial integrity of India or being prejudicial to the security of state; (vi) ..Promoting or propagating or attempting to
create on grounds of religion, race, language, caste or community, feelings of enmity or hatred or disharmony between
different sections of the people. (c) Those who have been associated with foreign powers or their agents in a manner
which may give rise to a reasonable presumption of activities prejudicial to the national interest. (B) Participation in any
such act ivities, particularly within 3 years of the date of enquiry, should be considered as evidence that the person is
unsuitable for Government employment unless there is, in the interval, positive evidence of a change of attitude. (C)
Normally a person convicted of an offence involving moral turpitude should be regarded as ineligible for Government
service: Provided in cases where the appointing authority feels that there are redeeming features and reasons to believe
that such a person has cured himself of the weakness, specific approval of Government may be obtained for his
employment. NOTE: .. (i) Participation in the activities of communal organizations (including their front organizations)
will also be covered by A(b)(vi). (ii) Mere membership at some stage of a political party which is not banned by the
Government during the period of such membership cannot be deemed to ipso facto disqualify a person from
Government service except where such membership has resulted in his taking part in anti-national or communal or
similar act ivities. (iii) Participation in student politics or students organizations in the University will not be a bar
unless it involves participation in extremist activities involving violence, subversion, etc. In such cases, the verification
report will be considered on the basis of the facts revealed therein.
4. Existing procedure for verification of character and antecedents: At present, Government are following 2 procedures
Page 830
for verification of character and antecedents, viz. 1) Detailed verification in respect of :- ..........(a) Group ..A.. posts;
(b)..Group ..B.. posts; (c)..Ministerial posts in Government of India Secretariat and attached offices; (d)..Group ..C.. and
..D.. posts of all other offices in which detailed verification is considered particularly necessary in the interest of
security by the administrative Ministry or office; (e)..Cases in which simple verification cannot be done because of the
candidate..s inability to produce a certificate of character. 2) Simple verification in respect of all Group ..C.. and ..D..
posts, not included in (c), (d) & (e) above, i.e. in subordinate and other offices. 4.1 Detailed verification consists of
getting an attestation form filled by the candidate and getting the entries verified by the district authorities. 4.2. (1) In
simple verification, the candidate is required to furnish .. (i) An attestation form duly filled in without the identity
certificate. (ii) (a) In respect of Group ..C.. posts, a certificate of character in the form prescribed duly attested by a
District Magistrate or a sub-Divisional Magistrate or their superior officers. (b)In regard to Group ..D.. posts, a
certificate of character from a gazetted officer or a Magistrate in the prescribed form without attestation by District
Magistrate or Sub-Divisional Magistrate.
5. Revised procedure for verification of character and antecedents. The following changes have been made in the above
procedure with immediate effect: a. In respect of candidates for the post of Lower Division Clerk or posts of equivalent
grade in the Secretariat and attached offices, simple verification would be adopted instead of detailed verification as at
present. b. In respect of other Group ..C.. employees in the Secretariat and attached offices, the attestation forms may be
sent directly to the Superintendent of Police of the district, who may be requested to make a ..record check.. of the
entries in the form and then send it back to the appointing authority through the District Magistrate with his attestation.
In such cases, field enquiries may not be necessary. c. As an exception to the general procedure, in case of persons
appointed to certain posts or services or departments, detailed verification may be necessary for all levels. Such
posts/services/departments may be identified by the respective Ministries and persons to be appointed at all levels to
these posts/services/departments may be subjected to detailed verification. The responsibility for identification of the
posts, the appointments to which are to be subjected to detailed verification will be that of the Head of the
Organization/Department/Ministry. d. The detailed verification in respect of Group ..B.. and Group ..A.. posts would
continue to be carried out as at present. e. Simple verification for other categories as mentioned in para 4 (2) will
continue as before.
6. With the coming into force of the modifications outlined in para 5 above, the types of verification now proposed for
the various categories would be as under. 6.1 Detailed verification. ....Detailed verification would be applicable to
appointment to: a. Group ..A.. Posts; b. Group ..B.. posts; c. Group ..C.. and ..D.. posts of all those offices in which
detailed verification is considered particularly necessary in the interest of security by the Administrative Ministry of
office. d. Cases in which simple verification cannot be done because of the candidate..s inability to produce a certificate
of character. 6.2 Record Check 6.2.1 Record Check .. What it is.. Record Check involves looking into adverse reports in
respect of any matter including criminal cases, arrests, debarment by Union Public Service Commission, etc. as may be
revealed by the Police records. 6.2.2 Record Check .. Persons to whom applicable. Record check would be applicable to
Group ..C.. posts above the level of Lower Division Clerk in the Government of India Secretariat and its attached
offices. 6.3 Simple Verification. Simple verification would be applicable to appointments to all other posts viz: (a) Posts
of LDC and posts of equivalent grade and all Group ..D.. posts in the Government of India Secretariat and its attached
offices; and (b) Group ..C.. & ..D.. posts under the Government of India in subordinate offices. 6.4 As mentioned in
para 6.1(c) above, as an exception to the general procedure in case of persons in categories mentioned in paras 6.2 and
6.3 above, and appointed to certain posts or services or departments, detailed verification may be necessary for all
levels. Such posts/services/departments may be identified and persons appointed at all levels to these
posts/services/departments may be subjected to detailed verification. 6.4.1. To cite an example, persons appointed at all
levels who may have to handle Top Secret/Secret/Sensitive matters should be subjected to detailed verification. This
category would necessarily include LDCs, Gestetner Operators, Messengers/Peons attached to: Secret Sections, Secret
R&I, Offices of Joint Secretaries, Secretaries and Ministers, and those employed in the budget Sections of the Ministry
of Finance/Railways/Defence.
7. A specimen of the attestation form to be used for the purpose of verification of character and antecedents is at
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Annexure-I. 7.1. All appointing authorities should clearly indicate at the top of the attestation forms the type of
verification required to be done, i.e., Detailed Verification, Record Check or Simple Verification.
8. INITIATION OF VERIFICATION ROLLS: 8.1 A list of authorities to whom the attestation forms are to be
forwarded by the various appointing authorities has already been forwarded to the various Ministries/Departments vide
O.M.No.3/20(S)/72-Estt.(B), dated the 5th August, 1974, and O.M.No.18011/3(S)/80-Estt.(B), dated the 20th June,
1980. The Ministries, etc. would hereafter refer the attestation form in respect of the various categories of posts as
under:
1)..Cases covered by para 6.1..District Magistrate or the Commissioner of Police as the case may be... 2)..Cases covered
by para 6.2..Superintendent of Police of the district. Return to appointing authority through the District Magistrate with
his attestation... 3)..Cases of additional verification through I.B., wherever prescribed..I.B. through the Ministry
concerned...
9. It is specifically clarified for the information of the various Ministries etc. that apart from the above, there is no
change in the various other instructions that have been issued by this Department from time to time on the subject of
verification of character and antecedents of candidates for appointment to civil posts under the Government of India.
10. Instructions dealing with re-verification would be issued separately.
11. It is expected that the various appointing authorities, unless otherwise specified in any other circular should be able
to determine, on their own, the suitability of the candidates on the basis of the revised criteria mentioned in paragraph
3.1. above. However, those cases in which it is felt that clarifications should be sought from this Department, may
continue to be sent to us; while referring such cases, a self-contained note bringing out the facts of the case together
with the comments of the administrative Department may be sent to us with the approval of the Joint Secretary
concerned.
12. While on the subject, the policy that would govern appointments in public sector undertakings is also explained
below. 12.1.. The criteria regarding suitability for appointment in public sector undertakings would be the same as in
Government. 12.2. ..For all Group ..C.. and ..D.. posts in public sector enterprises, the procedure of simple verification
would be adopted. However, in the case of such Group ..C.. and ..D.. posts which are identified to be of sensitive nature
by the Head of the Department, detailed verification procedure would be adopted. In the case of Group ..A.. and Group
..B.. posts, the normal procedure for getting verification as applicable to Government servants would continue as at
present.
13. The various Ministries are requested to bring these instructions to the notice of all Heads of the Departments under
their control, including Heads of quasi-Government organizations, public sector undertakings, autonomous bodies etc.
where the scheme of verification has been extended and instruct all appointing authorities to scrupulously observe the
laid down principles in making appointments in their respective offices... In the instant case, admittedly, the applicant is
not involved in any of the act ivities mentioned in clause (A) of Paragraph 3.1 of the O.M. dated 2.7.1982(ibid). There
is also no allegation of his involvement in any of the said activities made against him within three years of the date of
enquiry as mentioned in clause (B). He is also not involved in commission of offences of moral turpitude as mentioned
in clause (C) of Paragraph 3.1 of the O.M. dated 2.7.1982. Thus, in terms of the above O.M. dated 2.7.1982(ibid) and
O.M. dated 7.6.1983 (ibid), quoted above, the applicant cannot also be said to be debarred from being appointed to
Government service. 8.....In Sandeep Kumar..s case(supra), the respondent and some of his family members were
involved in a criminal case, being FIR No. 362 under Section 325 read with Section 34 IPC , which was admittedly
compromised on 18.1.1998, and the respondent and his family members were acquitted on 18.1.1998. In response to the
advertisement issued in January 1999, the respondent applied for the post of Head Constable (Ministerial) on 24.2.1999
but did not mention in his application form that he was involved in the aforesaid criminal case. He qualified in all the
tests for selection to the post of Head Constable (Ministerial). On 3.4.2001 he filled in the attestation form wherein he,
for the first time, disclosed that he had been involved in a criminal case with his tenant, which, later on, had been
Page 832
compromised in 1998 and he had been acquitted. On 2.8.2001 a show-cause notice was issued asking him to show cause
why his candidature for the post should not be cancelled because he had concealed the fact of his involvement in the
aforesaid criminal case and had made a wrong statement in his application form. The respondent submitted his reply on
17.8.2001 and an additional reply, but the authorities were not satisfied with the same, and on 29.5.2003 they cancelled
his candidature. The O.A. filed by the respondent was dismissed by the Tribunal, and the writ petition filed against the
Tribunal..s order was allowed by the Hon..ble High Court of Delhi. Hence, the Civil Appeal was filed before the
Hon..ble Supreme Court. Dismissing the Civil Appeal, the Hon..ble Supreme Court passed the following judgment:
..Heard learned counsel for the parties.This Appeal has been filed against the impugned judgment of the High Court of
Delhi dated 31.07.2006.The facts have been given in the impugned judgment and hence we are not repeating the same
here, except wherever necessary. 2...The respondent herein-Sandeep Kumar applied for the post of Head Constable
(Ministerial) in 1999. In the application form it was printed : "12(a) Have you ever been arrested, prosecuted kept under
detention or bound down/fined, convicted by a court of law for any offence debarred/disqualified by any Public Service
Commission from appearing at its examination/selection or debarred from any Examination, rusticated by any
university or any other education authority/Institution." Against that column the respondent wrote : 'No'. 3...It is alleged
that this is a false statement made by the respondent because he and some of his family members were involved in a
criminal case being FIR 362 under Section 325 /34 IPC . This case was admittedly compromised on 18.01.1998 and
the respondent and his family members were acquitted on 18.01.1998. 4...In response to the advertisement issued in
January 1999 for filing up of certain posts of Head Constables (Ministerial), the respondent applied on 24.02.1999 but
did not mention in his application form that he was involved in the aforesaid criminal case. The respondent qualified in
all the tests for selection to the post of temporary Head Constable (Ministerial). On 03.04.2001 he filled the attestation
form wherein for the first time he disclosed that he had been involved in a criminal case with his tenant which, later on,
had been compromised in 1998 and he had been acquitted. 5...On 02.08.2001 a show cause notice was issued to him
asking the respondent to show cause why his candidature for the post should not be cancelled because he had concealed
the fact of his involvement in the aforesaid criminal case and had made a wrong statement in his application form. The
respondent submitted his reply on 17.08.2001 and an additional reply but the authorities were not satisfied with the
same and on 29.05.2003 cancelled his candidature. 6...The respondent filed a petition before the Central Administrative
Tribunal which was dismissed on 13.02.2004. Against that order the respondent filed a writ petition which has been
allowed by the Delhi High Court and hence this appeal. 7...The learned counsel for the ..appellant(s) has submitted that
the respondent should have disclosed the fact of his involvement in the criminal case even if he had later been acquitted.
Hence, it was submitted that his candidature was rightly cancelled. 8...We respectfully agree with the Delhi High Court
that the cancellation of his candidature was illegal, but we wish to give our own opinion in the matter. When the
incident happened the respondent must have been about 20 years of age. At that age young people often commit
indiscretions, and such indiscretions can often been condoned. After all, youth will be youth. They are not expected to
behave in as mature a manner as older people. Hence, our approach should be to condone minor indiscretions made by
young people rather than to brand them as criminals for the rest of their lives. 9...In this connection, we may refer to the
character 'Jean Valjean' in Victor Hugo's novel 'Les Miserables', in which for committing a minor offence of stealing a
loaf of bread for his hungry family Jean Valjean was branded as a thief for his whole life. The modern approach should
be to reform a person instead of branding him as a criminal all his life. 10...We may also here refer to the case of Welsh
students mentioned by Lord Denning in his book 'Due Process of Law'. It appears that some students of Wales were
very enthusiastic about the Welsh language and they were upset because the radio programmes were being broadcast in
the English language and not in Welsh. Then came up to London and invaded the High Court. They were found guilty
of contempt of court and sentenced to prison for three months by the High Court Judge. They filed an appeal before the
Court of Appeals. Allowing the appeal, Lord Denning observed :- "I come now to Mr. Watkin Powell's third point. He
says that the sentences were excessive. I do not think they were excessive, at the time they were given and in the
circumstances then existing. Here was a deliberate interference with the course of justice in a case which was no
concern of theirs. It was necessary for the judge to show - and to show to all students everywhere - that this kind of
thing cannot be tolerated. Let students demonstrate, if they please, for the causes in which they believe. Let them make
their protests as they will. But they must do it by lawful means and not by unlawful. If they strike at the course of justice
in this land - and I speak both for England and Wales - they strike at the roots of society itself, and they bring down that
which protects them. It is only by the maintenance of law and order that they are privileged to be students and to study
Page 833
and live in peace. So let them support the law and not strike it down. But now what is to be done.. The law has been
vindicated by the sentences which the judge passed on Wednesday of last week. He has shown that law and order must
be maintained, and will be maintained. But on this appeal, things are changed. These students here no longer defy the
law. They have appealed to this court and shown respect for it. They have already served a week in prison. I do not
think it necessary to keep them inside it any longer. These young people are no ordinary criminals. There is no violence,
dishonesty or vice in them. On the contrary, there was much that we should applaud. They wish to do all they can to
preserve the Welsh language. Well may they be proud of it. It is the language of the bards - of the poets and the singers -
more melodious by far than our rough English tongue. On high authority, it should be equal in Wales with English.
They have done wrong - very wrong - in going to the extreme they did. But, that having been shown, I think we can,
and should, show mercy on them. We should permit them to go back to their studies, to their parents and continue the
good course which they have so wrongly disturbed." [ Vide : Morris Vs. Crown Office, (1970) 2 Q.B. 114 ] In our
opinion, we should display the same wisdom as displayed by Lord Denning. 11...As already observed above, youth
often commit indiscretions, which are often condoned. It is true that in the application form the respondent did not
mention that he was involved in a criminal case under Section 325 /34 IPC . Probably he did not mention this out of
fear that if he did so he would automatically be disqualified. At any event, it was not such a serious offence like murder,
dacoity or rape, and hence a more lenient view should be taken in the matter. 13,..For the reasons above given, this
Appeal has no force and it is dismissed. No costs... 9.....In Ram Het Meena..s case(supra), the petitioner successfully
cleared the selection process for appointment as a Constable Driver under CISF. On account of his conviction for an
offence punishable under Section 326 IPC and release on probation, the petitioner was intimated that the appointing
authority found him unsuitable for service in CISF, vide order dated 13.1.2009. In the said case, relying on the decision
in Government of NCT of Delhi & Anr vs. Robin Singh, 171 (2010) DLT 705 (DB), in which the petitioner was
convicted of offences punishable under Sections 323 , 504 506 IPC , the Hon..ble High Court of Delhi directed the
..respondent(s) to reconsider the candidature of the petitioner in the light of the law laid down in Robin Singh..s case
(supra). 10.....In Rajesh Kumar..s case (supra),the petitioner was an accused for commission of offences under Sections
323 and 324 IPC and the criminal case ended in his acquittal on compromise. The Hon..ble High Court of Delhi set
aside the Tribunal..s order as well as the order issued by the ..respondent(s) canceling the candidature of the petitioner
for the post of Constable (Executive)Male and directed the ..respondent(s) to consider the case of the petitioner for
appointment, subject to his complying with the other requirements/formalities and otherwise being suitable. 11...In
Naveen Kumar Mandiwal..s case (supra), the respondent had applied for the post of Constable (Executive)Male in Delhi
Police. He appeared in the selection process and was duly selected for the aforesaid post. On the basis of the said
selection, the respondent was allowed to join the duties with effect from 2.1.2010.While the respondent was working in
the aforesaid position, it came to the notice of the Commissioner of Police that at the time of making application for the
post of Constable (Executive) Male, the respondent was facing trial in FIR No.54/2007 dated 13.4.2007 under Sections
143 , 341 323 IPC . The respondent had not given this information at the time of making the application. A
show-cause notice was issued to the respondent as to why his services be not terminated under Rule 5(1) of the Central
Civil Services (Temporary Service) Rules,1965. The respondent gave his reply to the said show cause notice. However,
it was not treated as satisfactory and the services of the respondent were terminated invoking the aforesaid provision.
Challenging the order of the petitioner, the respondent approached the Tribunal seeking quashing of the termination
order. The Tribunal allowed his O.A. and directed his reinstatement in service. The writ petition filed against the
Tribunal..s order was dismissed by the Hon..ble High Court. 12.....In Anoop Kumar..s case (supra), the applicant in his
application form for the post of Constable in Delhi Police disclosed that a criminal case under Sections 308 and 325
IPC was registered against him and pending trial. He was provisionally selected for the said post. Subsequently, a
show-cause notice was issued to him for cancellation of his candidature on the ground that he was acquitted of the
charge since witnesses turned hostile and that it was not an honourable acquittal. The applicant..s reply was not found
convincing and his candidature was cancelled. The Tribunal allowed the O.A. and directed the ..respondent(s) to offer
appointment to the applicant for the post of Constable, if he might otherwise be entitled to. 13.....In the instant case, the
applicant is facing trial in the criminal case for offences under Sections 323 , 341 506 read with Section 34 IPC ,
which arose out of a scuffle among the young boys. The offences alleged against the applicant are not serious ones and
are non-cognizable and compoundable. He duly disclosed the same in the attestation form. Considering the facts and
circumstances of the case in the light of the decisions of the Hon..ble Supreme Court and the Hon..ble High Court of
Page 834
Delhi, as well as the O.Ms. dated 2.7.1982 & 7.6.1983 (ibid) and the order dated 1.2.2012 (ibid), issued by the
Government of India, Ministry of Home Affairs, we have no hesitation to hold that the impugned order/letter dated
31.1.2013 (Annexure A) issued by respondent no.2 rejecting the candidature of the applicant for the post of Vehicle
Mechanic (AFV) in 505 Army Base Workshop, is unsustainable and liable to be quashed. 14.....In the result, the
Original Application is allowed. The impugned order/letter dated 31.1.2013 (Annexure A) issued by respondent no.2 is
quashed. Direction is issued to the ..respondent(s) to offer appointment to the applicant in the post of Vehicle Mechanic
(AFV), 505 Army Base Workshop, within a period of three months from today. No order as to costs. (RAJ VIR
SHARMA)........(ASHOK KUMAR) JUDICIAL MEMBER ......ADMINISTRATIVE MEMBER AN
Tamil Nadu State Consumer Disputes Redressal Commission, Chennai/2011/June/K.V.Sathasivam, Proprietor Versus
M/s.Sandeep Industrial Gases Pvt. Ltd.&"Others - LNIND 2011 SCDRCTN 379
LNIND 2011 SCDRCTN 379
K.V.Sathasivam, Proprietor Versus M/s.Sandeep Industrial Gases Pvt. Ltd.&"Others
Tamil Nadu State Consumer Disputes Redressal Commission, Chennai

THIRU A.K. ANNAMALAI, M.A., M.L., M.PHIL., PRESIDING MEMBER JUDICIAL&"TMT. VASUGI
RAMANAN, M.A., B.L., MEMBER
F.A.No.359/2009 [Against order in C.C.No.48/2005 on the file of the DCDRF, Chennai (North)]
2 June 2011
Explosives Act
Consumer Protection Act
ADVOCATES APPEARED: For the Appellant : M/s.D.Jawahar, Advocate. For the Respondent : M/s. T. Ravikumar,
Advocate.
Subject :
Judgment
The Appellant as complainant filed a complaint before the District Forum, Chennai (North) alleging deficiency against
the opposite parties not to deal with the cylinders which are contravention of policy of the Government of India and also
in violation of provisions of Explosives Act , 1884 and the rules framed these under, not to
make any demand with the respect to the 100 cylinders which were transferred to the 3rdopposite party under
instructions from the 1stand 2ndopposite parties, direct the 3rdopposite party to reimburse the balance amount of
Rs.61,191/- along with the commercial rate of interest @ 18% p.a., direct the 1stand 2ndopposite parties to pay a
compensation of Rs.1,00,000/- each to the complainant, for the mental agony and to pay costs. The District Forum,
dismissed the complaint against the opposite parties. Against the said order, this appeal is preferred by the complainant,
praying to set aside the order of the District Forum, Chennai (North), dated 24.09.08 in C.C.No.48/2005.
This appeal coming before us for hearing finally on 27.05.2011, upon hearing the arguments of the counsel on both
sides and perused the documents, written submissions as well as the order of the District Forum, this Commission made
the following order :-
A.K.ANNAMALAI, PRESIDING MEMBER JUDICIAL

Page 835
1. The unsuccessful complainant is the appellant.
2. The Complainant filed a complaint against the opposite parties for the relief of directing the opposite parties not to
deal with cylinders in contravention of the Explosives Act 1884 and not to make any demand
with respect of 100 cylinders which were transferred to the 3rdopposite party and directing the 3rdopposite party to
reimburse the balance amount of Rs.61,191/- with interest and for compensation of Rs.1,00,000/- for 1stand
2ndopposite parties for mental agony and deficiency of service and for costs.
3. The brief details of the complaint are as follows :- The complainant engaged business of industrial gases approached
for 1stopposite party and undertaken to by industrial Oxygen cylinder on hire purchase basis by the 1stopposite party
for transferring the cylinder and complainant paid Rs.1,00,000/- and two occasions i.e. 5.8.1999 and 7.8.1999
respectively. The complainant had to pay transport charges door delivery was promised free of cost. The cylinder cost is
also increased to Rs.3,100/- go it was negotiated for Rs.2,500/- per cylinder. Thus the complainant had incurred huge
financial loss and thereafter negotiated with opposite party reached an agreement by which 100 cylinders were
transferred to 3rdopposite party for an amount Rs.1,56,691/- and 3rdopposite party to pay directly to 1stopposite party.
The 3rdopposite party had given a cheque for Rs.1,54,233/-. The 2ndopposite party after encashment of few cheque an
amount of Rs.95,500/- was paid to the complainant out of Rs.1,56,691/-. An agreement dated 31.02.03 paying
compensation of Rs.3,56,146/- was signed by the complainant with the 2ndopposite party along with the other damages
to the 2ndopposite party and also gave three cheques to 2ndopposite party. 1stopposite party came forward for the
settlement with however no progress was made on the claim complaint filed seeking award direct the 3rdopposite party
to reimburse an amount of Rs.61,191/- along with the commercial rate of interest 18% and direct the opposite parties 1
and 2 to pay compensation Rs.1,00,000/- each for the mental agony and suffered.
4. The opposite parties denied the allegations of the complainant in the written version and stated that the complaint is
not maintainable, since he is not a consumer as he sold industrial gases for profit and as per 2(1) D of the
Consumer Protection Act , the complaint is not maintainable. For the defect in the cylinders cannot claim
relief before this Forum interpretation of the agreement and transaction should not be decided before the Forum and
Civil court alone have competent jurisdiction and further the complaint is barred by limitation under 24A of
Consumer Protection Act 1986. The complaint filed on 14.2.04 and the alleged payment of Rs.50,000/-
made and another payment of Rs.50,000/- made on December 2004 is barred by limitation. The complainant having
taken delivery gas cylinders should have returned if any defects found. But he failed to do so. He has agreed over the
price hike of Rs.3,500/- and if he feel that the amount is on the higher side, he could have declare the transaction as
void. Deficiency is not pleaded in the complainant regarding service are defective goods. There was no negligence no
compensation for payable.
5. On the basis of both sides materials after an enquiry the District Forum dismissed the complaint on the grounds that
the complainant failed to establish the deficiency of service on the part of the opposite parties.
6. Aggrieved by the order of the District Forum, the complainant has come forward with this appeal and in the grounds
of appeal among other things, the District Forum wrongly dismissed the complaint without going in to the facts of the
case and the documents relied upon by the complainant and the cause of action is a continuing action and thereby the
complaint was not barred by limitation and thereby appeal to be allowed.
7. Before this Commission Respondents 2 and 3 remained absent.
8. While considering the appellants and 1stopposite party'"s contentions, arguments, and averments it is not in dispute
that the appellant/complainant was having business dealings with the 1stopposite party regarding the supply of gases in
industrial cylinder and the complainant alleged he was having agreement with the 1stopposite party for the purchase of
supply of gas cylinders on hire purchase basis and by obtaining the cylinders from the 1stopposite party supplied to the
small industrialists for using gas supply for the industrial purpose and from that business he was earning. The District
Forum considered the nature of business as commercial purpose only and not for his self employment livelihood. On
Page 836
perusal of complaint details and the documents filed by the complainant and opposite parties, it is clearly proved the
business transactions are all relates to commercial purpose in nature and the complainant himself has stated that he had
supplied the 100 cylinders to the 3rdopposite party through the 2ndopposite party as per the instructions of 1stopposite
party for which regarding payment dispute is pending between the parties. This would clearly prove that the transaction
was purely in commercial nature and thereby the complainant will not come under the purview of the term ?"consumer'"
as per Sec 2(1)(d) of the Consumer Protection Act and further in this case, the complaint was
filed on 14.12.04 which was taken on file in January 2005, on the basis of cause of action which is said to have been
arose in the year 1999. In the complaint in para 17 it is stated that the cause of action arose at Chennai in August 1999
when the complainant made the advance payment of Rs.1,00,000/- for hire purchase of 100 cylinders and subsequently
in March 2000 when 100 cylinders were delivered to the complainant and subsequently when the opposite party failed
to rectify the defects in the cylinders sold to the complainant and on various dates when the cylinders were transferred
to the 3rdopposite party under instructions from 1stand 2ndopposite parties subsequently on 31.10.03, when the
2ndopposite party obtained an agreement with the complainant by using threat and coercion from the complaint and
when caused a legal notice dated 2.12.03. As per the above recitals in March 2000 after obtaining 100 cylinders from
the 1stopposite party on various dates certain defects arose in the cylinders to rectify the same for which no specific
dates are mentioned. However the original cause of action is being only with the 1stopposite party and the alleged
agreement obtained by coercion and fraud by 2ndopposite party on 31.10.03, the original cause of action comes in to
plea only from August 1999 or in March 2000 and the complaint should have been filed within two years from those
dates. But in this case on the basis of legal notice issued on 2.12.03, the complainant filed the complaint only in 2004
end of the year cannot be acceptable under the provision of Sec 24(A) and the contention of the complainant that it is
the continuous cause of action which cannot be accepted without any satisfactory proof for the same as the complainant
states no deficiency of service in the supply of cylinders except for the claim of money for the 100 cylinders by the
1stopposite party which is opposed by the complainant. Regarding other prayer are concerned the complainant prayed
the direction against the opposite party not to deal with the cylinders by the 1stopposite party against the rules of
Explosives Act 1884 and directing the opposite parties not to make any demand with respect of payment for
other cylinders which were transferred to 3rdopposite party as per the instruction from 1stand 2ndopposite parties and
for the reimbursement of Rs.61,191/- with interest from the 3rdopposite party and in view of the cheques already given
for payment to the 2ndopposite party were bounced and thereby those prayers are all not to be entertained by the
Consumer For a, which are all complicated matters to be decided before the appropriate Forum or Civil Court in which
the Consumer Forum has no role to play. Since the documents filed by the complainant and the opposite parties would
reveal that the nature of dispute relates to the industrial gas supply and relating to the cylinders for those purposes which
were all governed with the rules and regulations under various Acts and provisions under which appropriate licenses are
given to first opposite party with reference to his business and in case of violations of the same the appropriate remedy
will be to approach the concerned appropriate authorities and those directions cannot be given under the
Consumer Protection Act 1986. Further in this case, there is no defect in the cylinder supplied to the
complainant and there is no question of deficiency of service arises. The complainant controverted the memorandum of
understanding between the complainant and opposite party as per Exhibit B3 and as per the records of both sides it is
evident that the complainant was not in a position to settle the dues to the 1stopposite party then an there and even the
complainant entered in to agreement with 2ndopposite party relating to the purchase of 100 cylinders for the price fixed
Rs.2,58,146/- which was not paid within the specified time before 2.12.03 and the cheques given were bounced and as
per the written version of 2ndopposite party due to sympathy shown on the complainant he has not preceded against the
complainant in this regard and the complainant alleged to have transferred cylinders to the 2ndopposite party illegally
gaining both ends and illegally depriving the 2ndopposite party'"s money. Even though he had stated that supplies were
made to 3rdopposite partyas per the instructions of opposite parties 1 and 2 for which no proof was filed. In those
circumstances when the complainant is having defects and draw locks with him and not in a position to be loyal with
the 1stopposite party in the business transactions and thereupon filing complaint with the unsustainable prayers which
are all cannot be considered by the Consumer Forum and the complaint also barred by limitation and thereby the
District Forum after analyzing both sides materials in a careful manner passed a well considered order, in which we feel
that there is no need for any interference in the same and thereby this appeal deserves to be dismissed.
Page 837
9. In the result, the appeal is dismissed by confirming the order of the District Forum, Chennai (North), in
C.C.No.48/2005 dated 24.09.08. There will be no order as to cost in this appeal.
Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi/2010/April/M/s. Harshita Handling
Versus CCE, Bhopal - LNIND 2010 CESTATND 221
LNIND 2010 CESTATND 221
M/s. Harshita Handling Versus CCE, Bhopal
Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi
THE HONOURABLE DR. CHITTARANJAN SATAPATHY, TECHNICAL MEMBER & THE
HONOURABLE MR. D.N. PANDA, JUDICIAL MEMBER
SERVICE TAX APPEAL NO. 346 OF 2007
26 April 2010
ADVOCATES APPEARED: Shri Z.U. Alvi, Advocate for the Appellants; Shri Sansar Chand, Authorised
Representative (DR) for the Revenue.
Subject:
Judgment
Per D.N. PANDA:
The only dispute in this appeal is whether the activity carried out by the appellants shall be Repair & Maintenance
service or Statutory obligation of technical inspection and certification service.
2 2 When the appellants were periodically testing the cylinders under Gas Cylinder Rules , 2004 framed under Section
5 & 7 of Indian Explosive Act 1884,such a service was construed by Revenue authority as maintenance and repair.
3 3 Learned Counsel appearing on behalf of the appellants submitted that the activity carried out by the appellants was
neither maintenance nor repair meant for public but statutory obligation discharged under the Explosive Act , 1884. The
testing and inspection is statutory one discharged on behalf of the Indian Oil Corporation in terms of work order dated
28.11.2001. In the absence of maintenance or repair the service cannot be called so.
4 4 Revenue's argument is that orders have been passed by the lower authorities properly analyzing the work order
placed by I.O.C., Bhopal. Therefore, no interference should be made to the appellate order passed by the learned
Commissioner (Appeals).
5 5 Heard both sides and perused the record. No evidence was brought to our notice by Revenue to appreciate basis of
levy of service tax of Rs. 5,17,673/- under the category of Maintenance and Repair. The appellate authority had allowed
Small Scale exemption benefit under Notification No. 06/2005 dated 1.3.2005 subject to verification by the adjudicating
authority. There is no material on record to show that the appellants does repair and maintenance of cylinders for all in
commercial way. Record only reveals that this appellant was engaged by I.O.C. Ltd. to periodical test and upkeep the
cylinders under the requirements of Explosive Act , 1884. Without finding any material to agree with adjudication that
there was repair and maintenance activity carried out commercially other than under the requirement of Explosive Act,
1884, we set aside the orders of the authorities below and allow the appeal.
Page 838
Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench At Chennai/2007/June/Meghraj Jain Versus CC
Chennai - LNIND 2007 CESTATRBMAA 178
LNIND 2007 CESTATRBMAA 178
Meghraj Jain Versus CC Chennai
Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench At Chennai
THE HONOURABLE MR. P.G. CHACKO, MEMBER (JUDICIAL) & THE HONOURABLE MR. P.
KARTHIKEYAN, MEMBER (TECHNICAL)
Appeal No.C/97/2004
22 June 2007
Section 114 (d) of the Customs Act
Explosives Act
ADVOCATES APPEARED: Shri A.Ganesh, Advocate. For the Appellants. Shri B.L.Meena, SDR. For the
Respondents.
Subject
Judgment
P.G. Chacko, Member (Judicial)
In adjudication of a show-cause notice issued by the department after down seizure of 155 refrigerant gas cylinders of
foreign origin from the appellants godown, the original authority ordered absolute confiscation of the goods valued at
Rs.6,16,500/- (CIF), under Section 114 (d) of the Customs Act read with Gas Cylinders Rules , 1981 and the Indian
Explosives Act , 1884, and also imposed a penalty of Rs.2 lakhs on the appellant under Section 112 of the Customs
Act . In appeal, the Commissioner (Appeals) reduced the penalty to Rs.1 lakh while sustaining the decision of the lower
authority on merits. In the present appeal, the party is still aggrieved by the penalty of Rs.1 lakh.
2. After examining the records and hearing both sides, I find that the appellant abandoned the goods, which indicates
that he has no grievance against the absolute confiscation. Where the liability of the goods for confiscation under
Section 111 of the Customs Act stands virtually conceded, there is no room for total opposition to the penalty imposed
under Section 112 of the Act. In the circumstances, the limited purpose of this appeal is evident. The appellant seeks
reduction of the quantum of penalty. Ld.counsel submits that the appellant was in prison, following his arrest and
remand in the case of illegal import of refrigerant gas-filed cylinders of foreign origin. It is said that he was not aware of
the provisions of the Gas Cylinder Rules 1981 or of the Indian Explosives Act 1884. These, according to ld.counsel,
are extenuating circumstances warranting reduction of penalty. Ld.SDR has opposed any further reduction of penalty.
3. After considering the submissions, I am not moved by the circumstances mentioned by ld.counsel. However, having
regard to the value of the goods under absolute confiscation, I have found reason for a marginal reduction of the
penalty. I reduce the quantum of penalty to Rs.60,000/- (Rupees Sixty thousands only). With this modification, the
impugned order is sustained. The appeal is disposed of.

Kathuria Supreme Court On Criminal Law B

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Kathuria: Supreme Court on Criminal Law/B/BA/BAIL 2 of 2

Held: Bail was wrongly granted by the High Court.

Note: The Special leave petition was dismissed.

Held: The detention could not be justified only on that basis.

K.K. Girdhar vs M.S. Kathuria (1988) 1 Rec CR 492.

Central Bureau of Investigation, Special Investigation Cell-I, New Delhi vs Anupam J.

with certainty that the petitioner would not be released on bail.

Provision in S. 37 to the extent it is inconsistent with S. 437 of the Cr.P.Code supersedes

the contrary view.

Giani Pratap Singh vs State of Rajasthan AIR 1996 SC 74.

Salauddin Abdulsamad Shaikh vs State of Maharashtra AIR 1996 SC 1042.

Salauddin Abdulsamad Shaikh vs State of Maharashtra AIR 1996 SC 1042.

involving ( a) corruption, misappropriation of public funds, cheating, whether

Kirtikant D. Vadodaria vs State of Gujarat 1996 SCC (Cr) 762.

Chandraswami vs Central Bureau of Investigation AIR 1997 SC 2575: (1996) 6 SCC

the provisions of the NDPS Act.

Held: The appellant be released on bail.

2774: JT (2000) 1 SC 552.

Paramjit Singh vs State (N.C.T. of Delhi) AIR 2000 SC 3473(2).

Union of India through C.B.N.C. vs Aharwa Deen AIR 2000 SC 3512(2).

Amritlal vs Union Government through Secretary, Ministry of Finance AIR 2000 SC

Note: The order of detention was quashed.

Amritlal vs Union Government through Secretary, Ministry of Finance AIR 2000 SC

Held: He can be released on bail now.

Kumar vs State of Karnataka JT (2000) 4 SC 353: (2000) 4 Crimes 31.

( c) the severity of the punishment which conviction will entail,

sentence awarded to her in suspension.

At the stage of granting bail a detailed examination of evidence and elaborate

Note: Bail was cancelled.

State of Madhya Pradesh vs Kajad AIR 2001 SC 3317.

Ram Prakash Pandey vs State of Uttar Pradesh AIR 2001 SC 3592.

Held: It would be open for the accused to furnish corporate guarantee.

M. Sreenivasulu Reddy vs State of Tamil Nadu (2001) 2 Crimes 230 (SC).

State of Haryana vs L.D. Kataria (2001) 3 Crimes 130 (SC).

Note: Bail was granted.

Laxman Mahadeo Sariputra vs State of Maharashtra (2001) 3 Crimes 183 (SC).

Note: Bail was granted but conditions were imposed.

Bashishth Singh vs State of Bihar AIR 2002 SC 487.

Afzal Khan vs State of Gujarat 2007 Cri LJ 3223 (3227) (SC).

Rajesh Ranjan Yadav vs C.B.I. 2008 Cri LJ 1033 (1034) (SC).

Rajesh Ranjan Yadav vs C.B.I. 2008 Cri LJ 1033 (1035) (SC).

Rajesh Ranjan Yadav vs C.B.I. 2008 Cri LJ 1033 (1035) (SC).

Dinesh Dalmia vs C.B.I. (2008) 1 SCC (Cri) 36.

State vs McCrary 365 MO 799: 287 SW 2d 785 (21 Am Jur 2d Ed 285).

Prince vs State 36 Mi 55 (21 Am Juris 2nd Ed 284).

Note: See also "ANTICIPATORY BAIL" and "CANCELLATION OF BAIL".

M P Jain Principles of Administrative Law/Volume 2/CHAPTER XXIX TORTIOUS LIABILITY &

M P Jain and S N Jain Administrative Law

TORTIOUS LIABILITY & COMPENSATION

2. GOVERNMENTAL TORTIOUS LIABILITY

Statutory corporations, however, were held liable for torts.6

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

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

4. AFTER THE CONSTITUTION

(1) Maharaja Bose