NATIONAL LAW INSTIUTE UNIVERSITY

Project Work

LAW OF TORTS

VICARIOUS LIABILITY OF STATE

SUBMITTED BY:
UNNATI BHADAURIA

2018 B.A.L.L.B. (HONS.) 92

SUBMITTED TO:
M/s. KAVITA SINGH

ASSOCIATE PROFESSOR

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 ACKNOWLEDGEMENT

I take great pleasure in presenting this piece of project work. For it provided me an
opportunity not only to gain in-depth knowledge about the concerned topic but
also helped me in developing research skills.
While writing this acknowledgement, I would like to record my sincere thanks to
all those who have extended their help and cooperation by providing valuable
suggestions and guidance. Firstly I express my gratitude to M/s Kavita Singh,
Associate Professor under whose guidance I have been able to present this project
of Law of Torts based on Vicarious Liability of the State.
I also extend my gratitude to the Library of National Law Institute University
(NLIU), Bhopal, which provided me a great source of information and helped me
in learning and exploring more about Liability of State under Law of Torts and the
related topics.
Though last but not the least I would like to thank my family for giving constant
support and help directly or indirectly in preparing the project.

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Table of Contents

OBJECTIVES………………………………………………………………………………………………
……………………………………4
METHOD OF
STUDY……………………………………………………………………………………………………
……………………….4

INTRODUCTION......................................................................................................................... 5
HISTORICAL DEVELOPMENT .................................................................................................7
PRE CONSTITUTION DECISIONS..........................................................................................12
POST CONSTITUTION DECISIONS........................................................................................16
CONCLUSION.......................................................................................................................... 25
BIBLIOGRAPHY…………………………………………………………………………………………
……………………………………………30

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OBJECTIVES

 To understand the concept of vicarious liability in torts.

 To know about the historical evolution and development of vicarious

liability over a period of time, both in India and England.

 To be able to comprehend the specific elements for application of

vicarious liability of state.

 To distinguish between sovereign functions and non-sovereign functions.

 To study various case laws regarding vicarious liability of state under

sovereign immunity.

METHOD OF STUDY

The proposed project work is based on doctrinal method of data collection.

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 INTRODUCTION

Vicarious Liability refers to a situation where someone is held responsible for the
commission or omissions of another person. This liability is also a branch of Law
of Torts. There may be circumstances where one person may be held responsible
for the acts of another. Strictly vicarious liability applies only to employer-
employee relationship, although there are a number of other situations in which
liability may arise from the acts of a person other than the tortfeasor. In the field of
Torts Vicarious Liability is considered to be an exception to the general rule that a
person is liable for his own acts only. It is a well-established principle of Law of
Torts that the master is vicariously liable for the torts of his servants if the alleged
tortuous act is done in the course of his employment. Like various other laws it has
travelled to this country through the British in India and now stands varied due to
being regulated by certain local laws and Constitutional provisions. The common
examples of such a liability are:

 Liability of the Principal for the tort of his Agent

 Liability of Partners of each other’s tort
 Liability of the Master for the tort of his Servant
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  Liability of State

CONSTITUENTS OF VICARIOUS LIABILITY

The following are the constituents of vicarious liability-

1. There must be a relationship of certain kind.

2. The wrongful act must be related to the relationship in a certain way.
3. The wrong has been done within the course of employment.

The reason for this rule is explained by the latin maxims –Qui facit per alium facet
per se1 and Respondeat superior2. Also it is governed by the deep-pocket principle
because there is lack of funds in the hands of servants to bear the burden of
liability. This emphasizes the compensation function of the law of torts. So if the
burden is put on the employer, liability can be easily imposed on him.

WHAT IS VICARIOUS LIABILITY OF STATE?

The term ‘administration’ is used here synonymously with ‘State’ or

’Government’. Liability of State for the tortuous acts of its servant known as
tortious liability of State, making it liable for the acts of omission and commission,
voluntary or involuntary and brings it before Court of Law in a claim for non-
liquidated damages for such acts. To what extent the ‘administration’ would be
liable for the torts committed by its servants is a complex problem especially in
developing countries with ever widening State activities. The whole idea of

1 He who does act through another does through himself.

2 Let the principle be liable.

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Liability of the State for the torts committed by its servants essentially arises from
the principle of Vicarious Liability.

How far this rule of Vicarious Liability be applied against Government? In the
modern social welfare State of increased governmental activity, the State pervades
every aspect of human life. Running buses, railways and industries, maintenance
of hospitals, slum clearance, sewage disposal and supply of necessaries like food,
gas, and electricity are now the concern of the Government. Administrators who
are the executors of these policies may at times commit wrongs in the discharge of
these duties. Can the Government as the employer be sued for such torts
committed by its employees?

HISTORICAL DEVELOPMENT

The question that broadly arises in this process is whether it is the state or the
errant official that should ultimately be liable or accountable for the wrong. This
question has vexed almost all the legal systems for a long time and is neither
conclusively settled nor free from difficulties.

IN INDIA

In ancient India, under the Hindu jurisprudence, it was an undisputed principle that
no one is exempt from the operation of law. The wrong doer may he be a king,
relative of king, a judge or an ordinary citizen, was amenable to ordinary court and
liable to equal punishment. There was undoubted supremacy of the rule of law
which was binding on the rulers and the ruled alike. The status of the ancient

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Hindu King was conceived as a bundle more of a duties than of rights. The King in
Vedic times had not the overwhelming might and personality that he acquired in
the later literature. From Manu Smriti onwards the King is deemed to be a God,
Vishnu himself, in human form. Yet in early law, the concept of the divine
personality of the King seems to be entirely absent. The important functions of
King were concerned with protection of people, punishment of crimes and the
maintenance of dharma or social order. The King’s courts were motivated to pass
a deterrent punishment so as to cause a deterrent impact in the society and
generally vicarious tortious liability was unknown to Hindu jurisprudence. Manu
and Yajnavalkya refer to the practice of personal liability of officers and the
village headmen to compensate the victim of any theft which occurred due to their
negligence.
Personal liberty of officers for their wrongs was more in vogue in medieval Indian
history. There is evidence to show that legal equality existed between the rulers
and the ruled and the subjects have sued the monarch in the ordinary courts of law.
For example, in Widow v. King Ghyas, the King by mistake ,wounded the son of a
widow by an arrow. The tribunal of Kazi, after summoning and hearing the king
asked the king to pay compensation. The practice of personal liberty of officers
continued even during the Mughal period. Only when the king considered it proper
to undertake the burden of the public of, it was then the state treasury which used
to pay the compensation. In short, dharma was the sophisticated form of
administrative law which bound the king as well as the subjects equally and
personal liability of the officers for wrong was the rule. As a matter of fact, both in
Hindu law and Muslim law, the rulers themselves administered justice as far as
possible and the rest was done by the exceptionally honest and learned judges
appointed by them after serious deliberation and maure consideration. A Muslim
ruler was regarded as God’s servant, responsible for the observance of His law by
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all alike. He was thus not people’s master but only held an office in trust for the
Supreme Being. The law regarding vicarious liability of officers for their wrongs
was the same as the law of the Hindu kings.

The following document immediately before the Constitution is the Government

of India Act 1935. Section 176(1) of the Act reads thus:
“The Federation may sue or be sued by the name of the Federation of India and a
Provincial Government may sue or be sued by the name of province, …….in
relation to their respective affairs in the like cases as the Secretary of State in
Council might have sued or been sued if this Act had not been passed”
In order to understand the liability of the Secretary of State in Council one should
look to Section 32 of the Government of India Act 1915. Section 32(2) of the Act
stated:
“Every person shall have the same remedies against the Secretary of State in
Council as he might have against the East India Company if the Government of
India Act 1858 and this Act had not been passed.”

IN ENGLAND
In the United Kingdom, under the general rule at common law no proceeding, civil
or criminal, was maintainable against the monarch in person, for it was said the
courts, being the King’s own , could have no jurisdiction over him. The Crown
was not suable for the torts of its servants because of the acceptance of feudal
maxim “the King can do no wrong”. The only methods of redress against the
Crown in the courts were by the way of petition of right, which was dependent on
the grant of the royal fiat; by suits against the Attorney General for a declaration;
or by actions against ministers and government departments which had been

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incorporated or declared liable to suit by statute. The Crown enjoyed numerous
immunities and privileges, in particular immunity from liability for damages for
torts committed by Crown servants.
But this immunity in tort never extended to its servants. The officials were
personally liable for any injury for which they could not produce legal authority.
But the aggrieved persons found it impossible personally because the latter might
not in a position to pay damages. Thus serious discussion and protest arose against
the immunity of the Crown. Consequently the Crown Proceedings Act, 1947 was
passed making the Crown freely suable in torts. Under this Act the extent of the
liability of the Crown is the same as that of a private person of full age and
capacity6 and it leaves untouched the power of the Crown servants except in
certain cases concerning armed forces. The principle evolved by the law in the
course of his employment, the servant and the Crown are jointly imposed by the
law is not absolute because of the judicial process, post office, armed forces etc.
are exempted from the purview of the law.

Current Indian Scenario

Unlike the English Crown Proceedings Act, we do not have any statutory
provision mentioning the liability of the State of India. The position of State
Liability, as stated in Article 300 of the Constitution of India, is as under:
“ The Government of India may sue and be sued by the name of Union of India
and the Government of a State may sue or be sued by the name of the State and
may, subject to any provision which may be made by Act of Parliament or the
Legislature of such State enacted by virtue of power conferred by this
Constitution, sue or be sued in relation to their respective affairs in the like cases

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as the Dominion of India and the corresponding Provinces or the corresponding
Indian States might have sued if this constitution had not been enacted.”
The law on this matter is thus under the above article subject to any law that ,may
be made by Parliament or a state legislature by virtue of powers conferred by the
constitution. There being no such statutory law which prevailed before 26 January
1950 continues. The law before this date was regulated by the provisions of the
Government of India Acts, beginning from the Act of 18589. These Acts made the
Secretary of State for India in Council and after 1 April 1937, the Government of
India, and of the provinces of British India liable in the circumstances in which the
East India Company could have been sued before 1950.
To know the present position as regards the liability of the state for tortious acts
we have to go back to the pre- Constitution days. The law in India with respect to
the liability of the State for the tortious acts of its servants has become entangled
with the nature and character of the role of the East India Company prior to 1858.
The roots of existing law on state liability in tort lie in Section 65 of the
Government of India Act 1858. This section provided: ‘All persons and bodies
politic shall and may have and take the same suits, remedies and proceedings,
legal and equitable against the Secretary of State for India as they could have done
against the said company. ’
Consequently, one has to uncover the extend of liability of the East India
Company in order to understand the liability parameters of the administration
today because the liability of the administration today is direct succession to that
of the East India Company. It launched its reach in India as a purely commercial
corporation but gradually acquired sovereignty. Therefore, in the beginning, the
company did not enjoy the immunity of the crown. It was only when it acquired
political powers that a distinction was made between sovereign and non
sovereign functions.
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PRE-CONSTITUTION JUDICIAL DECISIONS
Before the Constitution there was a chain of enactments which ultimately made the
liability same as that of the East India Company. Several important judicial
decisions dealing with the liability of the State in tort were pronounced in India in
the period before the Constitution; and referring to a few of them, confining to the
most important of those decisions.

PENINSULAR & ORIENTAL STEAM NAVIGATION CO V.

SECRETARY OF STATE FOR INDIA IN COUNCIL3

Facts- A servant of the plaintiff-company was proceeding on a highway in

Calcutta, driving a carriage which was drawn by a pair of horses belonging to the
plaintiff. He was passing by the Kidderpore dockyard in Calcutta, which is the
government property. Due to negligence on the part of the defendant’s servants, a
heavy piece of iron, which they were carrying for the repair of a steamer, fell and
its clang frightened the horse. The horse rushed forward against the iron and met
with an accident. For the loss caused by the accident, the plaintiff claimed
damages against the Secretary of State for India.
Sir Barnes Peacock, C.J observed that the doctrine that the “King can do no
wrong”, had not application to the East India Company. The company would have

3 (1861) 5 Bombay High Court Reports App 1

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been liable in such cases and the Secretary of State was therefore also liable (He
was interpreting Section 65, Government of India Act, 1858, which equated the
liability of the Secretary of State for India with that of the East India Company).
According to Peacock, CJ:
“The East India Company was a company to whom sovereign powers were
delegated, and which treated on their own account and for their benefit and were
engaged in transactions partly for the purpose of Government and partly on their
account, which without any delegation of sovereign rights might be carried on by
private individuals. There is a great and clear distinction between acts done in
exercise of what are usually termed sovereign powers and acts done in the conduct
of undertakings which might be carried on by private individuals without having
such powers delegated to them…… But where the act is done, or a contract is
entered into, in exercise of powers usually called sovereign powers, by which we
mean powers which cannot be lawfully exercised except by a sovereign or private
individual delegated by a sovereign to exercise them, no action will lie. ”

On this holding, a distinction was drawn between sovereign and non-sovereign

functions of East India Company. It was held that if a tort were committed by a
public servant in the discharge of sovereign functions, no action would lie against
the Company; but if the function was a non-sovereign one i.e., which could have
been performed by a private individual without any delegation of power by the
Government, the company would be liable. The East India Company had two-fold
character:
 As a sovereign power
 As a trading company.
The liability of the company could only extend to in respect of its commercial
dealings and not to the acts done by it in exercise of delegated sovereign power. In
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the present case, the damage was done to the plaintiff in the exercise of non-
sovereign function. Maintenance of the dockyard was considered to be a non-
sovereign function and as such, the Government was held liable.

NOBIN CHANDRA DEY V. SECRETARY OF STATE FOR INDIA4

The doctrine of immunity for acts done in the exercise of “sovereign functions”,
enunciated in the P & O case, was applied by the Calcutta High Court in this case.
The plaintiff contended that the Government had made a contract with him for the
issue of license for the sale of ganja and had committed breach of the contract. The
High Court held as under:
(i) On the evidence, no breach of contract had been proved.
(ii) Even if there was a contract, the act was done in exercise of sovereign power
and, therefore it was not actionable. The High Court expressly followed the P & O
ruling (discussed supra).

SECRETARY OF STATE V. HARI BHANJI5

Facts- During the course of transit of salt, duty payable on salt, was enhanced and
the merchant was called upon to pay the difference at the port of destination. The
amount was paid under protest and the suit was instituted to recover the amount.
The principal question which arose was the jurisdiction of the court to entertain the
suit.
Two questions governing the maintainability of suits by a subject against the
sovereign were considered:

4 (1873) India Law Report 1 Calcutta p. 1

5 (1882) Indian Law Report 5 Madras p. 273

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  Related to the personal status of the defendant i.e. whether the defendant
was a sovereign, who could not be sued in his own courts.
 Related to the character of the act in respect of which the relief was sought.
The first question did not present much difficulty as the immunity enjoyed by the
Crown in England did not extend to the East India Company, all the charter Acts
having recognized the right and liability of the company to sue or be sued. The
second question regarding the nature of the act complained of was more difficult.
It was held that the immunity of the East India Company extended only to what
are known as “acts of State”.
The case was decided by two eminent judges of Madras High Court, Sir Charles
Turner, C.J. and Muthuswamy Aiyar, J.. The Court held that State immunity was
confined to acts of State. In coming to this conclusion, they pointed out that in the
P&O Case, it did not go beyond acts of State, while giving illustrations of
situations where the immunity was available. It was defined that ‘acts of state’ are
acts done in exercise of sovereign power, where the act complained of is
professedly done under the sanction of municipal law, and in the exercise of power
conferred by law. The position was thus explained:
“The act of State, of which the municipal courts of British India are debarred from
taking cognizance, are acts done in the exercise of sovereign power, which do not
profess to be justified by municipal law ……where an act complained of is
professedly done under the sanction of municipal law, and in exercise of powers
conferred by that law, the fact that it is done by the sovereign powers and is not an
act which could possibly be done by a private individual does not oust the
jurisdiction of the civil court”.
It should, however, be mentioned that the Madras judgment in Hari Bhanji holds
that the Government may not be liable for acts connected with public safety even
though they are not acts of State.
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The Madras High Court re-iterated this view in Ross v. Secretary of State6.
However, in Secretary of State v. Cockraft7, making or repairing a military road
was held to be a sovereign function and the Government was held to be not liable,
for the negligence of its servants in the stacking of gravel on a road resulting in a
carriage accident injuring the plaintiff. The more liberal approach of Hari Bhanji
case was thus slightly modified.

POST-CONSTIUTION JUDICIAL DECISIONS

STATE OF RAJASTHAN v VIDYWATI8

Facts- The driver of a Government jeep, which was being used by the Collector of
Udaipur, knocked down a person walking on the footpath by the side of a public
road. The injured person i.e. the husband of plaintiff died three days later, in the
hospital. The legal representatives of the deceased sued the State of Rajasthan and
the driver for compensation / damages for the tortious act committed by the driver.
It was found by the court, as a fact, that the driver was rash and negligent in
driving the jeep and that the accident was the result of such driving on his part.
The suit was decreed by the trial court, and also by the High Court. The Rajasthan
high court took the view that the State was liable, for the State is in no better
position in so far as it supplies cars and keeps drivers for Civil Services. The
appeal against the High Court judgment was dismissed by the Supreme Court.

Supreme Court’s view

6 All India Report 1915 Madras p. 434

7 AIR 1915 Madras p. 993; ILR 39 Madras p. 35

8 AIR 1962 Supreme Court p. 933

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The position of law, obtaining both prior and subsequent to 1858, the position
obtaining under Article 300 of the Constitution and the facts and circumstances
leading to the formation of the State of Rajasthan, were all reviewed by the
Supreme Court in Vidyawati case, which held as under:
“The State of Rajasthan has not shown that the Rajasthan Union, its predecessor,
was not liable by any rule of positive enactment or by Common Law…. We have
not been shown any provision of law, statutory or otherwise, which would
exonerate the Rajasthan Union form vicarious liability for the acts of its servants,
analogous to the Common Law of England….. In this connection it has to be
remembered that under the
Constitution we have established a welfare State, whose functions are not confined
only to maintaining law and order, but extend to engaging in all activities
including industry, public transport .…In so far as the State activities have such
wide ramifications involving not only the use of sovereign powers but also powers
as employer in so many public sectors, it is too much to claim that the State should
be immune from the consequences of tortuous acts of its employees committed in
the course of their employment as such.”
Vidyawati case thus opened a new trend. In this case the court has qualified the
significance of the distinction between sovereign and non-sovereign functions laid
down in P&O case especially in view of the concept of a Welfare State involve not
only use of sovereign powers but also its power as employer. So it is much to
claim that the State should be immune from the consequences of tortuous acts of
its employees committed in the course of employment. In a democratic country, in
order to meet individual justice, the Government also should be made liable for the
torts of its employees just as an ordinary employer. To achieve this, sovereign
immunity should be kept at a minimum level. Sinha, C.J. had made a good move
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in this direction in Vidyawati by restricting the sovereign immunity through the
liberal interpretation of non-sovereign functions.

KASTURI LAL v. STATE OF UTTAR PRADESH9

Facts - The appellant is a firm which deals in bullion and other goods at Amritsar.
Kasturilala Ralia Ram Jain was one of its partners as registered under Indian
Partnership Act. His object was to sell gold, silver and other goods in the market.
He had been arrested by the police officers on a suspicion of possessing stolen
property and his belongings were seized and kept in police custody (malkhana),
under the provisions of the CrPC17. Ultimately, he was released, thereafter the
silver was returned but the gold was not returned, as the Head Constable in charge
of the malkhana (wherein the said gold was stored) had absconded with the gold.
The plaintiff thereupon brought a suit against the State of UP for the return of the
gold (or in the alternative) for damages for the loss caused to him.
It was found by the courts below, that the concerned police officers had failed to
take the requisite care of the gold seized from the plaintiff, as provided by the UP
Police Regulations. Two substantial questions arose:
1. 1. Whether the police officers in questions were guilty of negligence in the
matter of taking care of the gold which had been seized from Ralia Ram;
2. 2. Whether the respondent was liable to compensate the appellant for the
loss caused to it by the negligence of the public servants employed by the
respondent.
The trial court decreed the suit, but the decree was reversed on appeal by the High
Court. When the matter was taken to the Supreme Court, the court found, on an

9 All India Report 1965 Supreme Court p. 1039

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appreciation of the relevant evidence, that the police officers were negligent in
dealing with the plaintiff’s property and also, that they had also not complied with
the provisions of the UP Police Regulations in that behalf. In spite of the said
holding, the Supreme Court rejected the plaintiff’s claim, on the ground that
“The act of negligence was committed by the police officers while dealing with
the property of Ralia Ram, which they had seized in exercise of their statutory
powers. The power to arrest a person, to search him and to seize property found
with him, are powers conferred on the specified officers by statute and in the last
analysis, they are powers which can be properly categorized as sovereign powers;
and so, there is no difficulty in holding that the act which gave rise to the present
claim for damages has been committed by the employee of the respondent during
the course of its employment; but the employment in question being of the
category which can claim the special characteristic of sovereign power, the claim
cannot be sustained.”

Basis of the judgment in Kasturilal :-

(a) The act was done in the purported exercise of a statutory power.
(b) The act was done in the exercise of a sovereign function.
The judgement of Supreme Court in this case has been severely criticized by the
jurists and authors alike. HM Seervai observed: “It failed to distinguish between
an act of state and act done or purporting to be done under the authority of
municipal law, thus overlooking the distinction made in the P&O case between
trading and the sovereign function of the company which had been consistently
followed is clearly wrong and is made per incurium.” For instance can it not be
argued that the specific activity involved in the Kasturilal’s case was that of
bailment i.e., keeping the goods of another safely for a period of time.
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Suggestion in Kasturilal’s case :-

Having thus rejected the claim, the Supreme Court made the following pertinent
observations in Kasturilal’s case, Gajendragadkar, CJ, suggested that:
“Before we part with this appeal, however, we ought to add that it is time that the
Legislatures in India seriously consider whether they should not pass legislative
enactments to regulate and control their claim from immunity
in cases like this, on the same lines as has been done in England by the Crown
Proceedings Act, 194710. It will be recalled that this doctrine of immunity is based
on the common law principle that the King commits no wrong and that he cannot
be guilty of personal negligence or misconduct, and, as such, cannot be
responsible for the negligence or misconduct of his servants. Another aspect of
this doctrine was that it was an attribute of sovereignty that a State cannot be sued
in its own courts without its consent. This legal position has been substantially
altered by the Crown Proceedings Act, 1947.As Halsbury points out that claims
against the Crown which might, before 1st January, 1948, have been enforced,
subject to the grant of the royal fiat, by petition of right may be enforced, as of
right and without a fiat, by legal proceedings taken against the Crown….. Our only
point in mentioning this Act is to indicate that the doctrine of immunity which has
been borrowed in India in dealing with the question of the immunity of the State,
in regard to claims made against it for tortuous acts committed by its servants, was
really based on the common law principle which prevailed in England; and that
principle has now been substantially modified by the Crown Proceedings Act. In
dealing with the present appeal, we have ourselves been disturbed by the thought

10 (10 and 11 Geo. 6 c. 44)

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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 remedy to cure this position, however, lies
in the hands of the Legislature.”

RUDAL SHAH V. STATE OF BIHAR11

Facts – The petitioner was arrested in 1953 on charges of murdering his wife. He
was detained illegally in the person for over fourteen years in Muzaffarpur jail
after his acquittal in a full-dressed trial by Sessions Court in 1968. He filed a
habeas corpus petition in the Supreme Court for his release from illegal detention.
He obtained that relief, his detention in the prison after his acquittal being wholly
unjustified. He further contended that he was entitled to be compensated for his
illegal detention, and that the Supreme Court ought to pass an appropriate order for
payment of compensation in that petition itself.
The court speaking through YV Chandrachud, CJ said:
“That takes us to the question as to how grave injustice which has been perpetrated
upon the petitioner can be rectified, in so far as it lies within our power to do in the
exercise of our writ jurisdiction under Article 32 of the constitution……Article 21
which guarantees the right to life and liberty will be denuded of its significant
content if the power of this court were limited to passing orders from release on
illegal detention. One of the telling ways in which the violation of that can
reasonably be prevented and due compliance with the mandate of Art 21 secured,
is to mulct its violators in the payment of monetary compensation. Administrative
sclerosis leading to flagrant infringements of Fundamental Rights cannot be

11 All India Report 1983 Supreme Court 1086

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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
acts in the name of public interest …..Therefore, the state must repair the damage
done by its officers to the petitioner’s rights. ”
Rudul Sah’s case is a landmark judgment in the jurisprudence of state liability. It
is considered particularly important as it led to the emergence of compensatory
jurisprudence for the violation of fundamental rights under the Constitution.
It is noteworthy in this context that there is no express provision for awarding
compensation in the text of the Indian Constitution, and that this judgment was on
the basis of the Court’s interpretation of the extent of its remedial powers. This
was the first case since the inception of the Supreme Court that awarded monetary
compensation to a person for the violation of his fundamental rights guaranteed
under the Constitution. The grant of such monetary compensation was in addition,
and not to the exclusion, to
the right of the aggrieved person to bring an action for damages in civil law or in
tort. Following this case, the Supreme Court awarded compensation in several
cases.

SAHELI v. COMMISSIONER OF POLICE12

It was another milestone in the evaluation of compensation jurisprudence in writ
courts. These writ petitions have been filed by the Women and Civil Right
Organization known as ‘Saheli’, a women’s resource centre on behalf of two
women Maya Devi and Kamlesh Kumari. The State was held liable for the death
of nine tear old child by police assault and beating. The significance of this case is
that firstly, the revival of Vidyawati ratio and secondly that the Delhi

12 (1990) 1 SCC p.422

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Administration was allowed to recover money from those officers who are held
responsible for this incident. The masterpiece judgment in Vidyawati, which was
frozen by Kasturilal’s case was rightly quoted in this case.

NILABATI BAHERA v. STATE OF ORRISA13

Plaintiff’s son was taken into police custody for interrogation. Later on, his dead
body, with visible signs of injury, was found near the railway track. The mother of
the deceased filed a writ petition against the Government for claiming
compensation, the State, inter alia, pleaded the defence of sovereign immunity.
The apex court, rejecting all contentions, awarded compensation under Article 21
of the constitution.

NAGENDRA RAO & CO. v. STATE OF ANDHRA PRADESH14

FACTS– The appellant carried on business in fertilizer and food-grains under

license issued by the appropriate authority. His premises were visited by the police
inspector, vigilance cell on 11th August, 1975 and huge stocks of fertilizers, food-
grains and even non-essential goods were seized in the exercise of statutory power
for violation of the Control Orders. Later on he was found innocent and seized
goods were returned. But the appellant found that the stock had been spoilt both in
quality and quantity.
In this case the Supreme Court held that when due to the negligent act of the
officers of the state a citizen suffers any damage the state will be liable to pay
compensation and the principle of sovereign immunity of state will not absolve
him from this liability. The court held that in modern concept of sovereignty the
13 (1993) 2 SCC p. 422

14 All India Report 1994 Supreme Court p.2663

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doctrine of sovereign immunity stands diluted and the distinction between
sovereign and non-sovereign functions no longer exists. The court noted the
dissatisfactory condition of the law in this regard and suggested for enacting
appropriate legislation to remove the uncertainty in this area. Rejecting the
contention of the state the Supreme Court held that the state was liable vicariously
for the negligence committed by its officers in discharge of public duty conferred
on them under a statute.
“As regards the immunity of the state on the ground of sovereign function, the
court held that the traditional concept of sovereignty has undergone a considerable
change in the modern times and the line of distinction between sovereign and non-
sovereign powers no longer survives. The concept of public interest has changed
with structural change in the society. No legal system can place the state above
law as it is unjust and unfair for a citizen to be deprived of his property illegally by
negligent act of the officers of the state without remedy. The need of the state to
have extraordinary powers cannot be doubted. But it cannot be claimed that the
claim of the common man be thrown out merely because the act was done by its
officer even though it was against law.
Need of the state, duty of its officials and right of the citizens are required to be
reconciled so that the rule of law in a welfare state is not shaken. In welfare state,
functions of the state are not only defence of the country or administration of
justice or maintaining law and order but it extends to regulating and controlling the
activities of the people in almost every sphere. The demarcation between
sovereign and non-sovereign powers for which no rational basis survives has
largely disappeared.”
The court further said that sovereign immunity was never available if the state was
not involved in commercial or private function nor it is available where its officers
are guilty of interfering with life and the liberty of a citizen not warranted by law.
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In both the cases the state is vicariously liable to compensate. The doctrine of
sovereign immunity has no relevance now when the concept of sovereignty has
itself undergone a major change. Sovereignty is now with the people. The people of
India made the Constitution and gave it to themselves.
The structure and functions of the state have been created and constituted to serve
the people. Accordingly the State is liable for negligence of its officers.

CONCLUSION
It is established principle that the master is vicariously liable for the torts of his
servant if the alleged tortuous act is committed in the course of employment. This
principle is based on the latin maxims- Qui facit per alium facit per se and
Respondeat Superior . How far this rule of vicarious liability is to be applied to the
State is a vexed question.
With the emergence of what is generally known as the welfare state, and the ever
increasing state activity and power, the need for increased state responsibility to
match the increased power has become very urgent.
Public power ought to be controlled lest it should stampede the individual rights of
citizens or tread down the social interest in the security of a society37. But apart
from the control of powers, reparation by payment of compensation to private
persons who had been injured by the action of public authorities is also required.
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. Disowning of
liability by the state leads to a feeling of alienation in the victim which can be fatal
to the system.
In ancient India, the King was not above law. Laws were equally binding on the
sovereign. The status of King was more of a bundle of duties than of rights. I n

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discharge of these duties the King was not immune from liability to compensate
his subjects. However he could recover the same from the guilty officers. It is to
be liability to compensate his subjects. However he could recover the same from
the guilty officers. It is to be appreciated that personal liability of the officers was
emphasized by the ancient law givers. This practice continued during the medieval
period also. The treasury used to pay compensation only when the King
considered it appropriate to shoulder the burden of public officer.
The Common Law concept of Sovereign immunity never operated in India during
the British period. It is an anachronism of Indian history that the conquered people
of India were able to obtain redress for wrongs done by the state almost hundred
years before the same privilege was conferred on the British subjects in their own
country. It was so because of then peculiar circumstances that accompanied the
British conquest. The East India Company had been invested with powers and
privileges of a two-fold nature; as a trading company it had the power to carry on
trade as merchants and as a delegate of the British Crown it had sovereign power
over the occupied territory. The immunity of the crown in England never extended
to the East India Company. There are no provisions in any of the Charter Acts
extending sovereign immunity in respect of tort to the Company. However two
important decisions delivered during the charter period have laid the foundation
for subsequent development of the law of state liability. In Gopee Mohan Deb v.
East India Company, it was held that an action would lie against the East India
Company even for acts done in their public or political capacity, provided that
there was a previous order or a subsequent ratification of the act. In Dhakji
Dadajee v. East India Co. it was observed that there was no distinction between
the acts done or authorized by East India Company, in their political character or
commercial character, for the purpose of liability. However, for acts of state, the
East India Company was not liable.
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The subsequent Government of India Act, 1858 which made the Secretary of State
liable to the same extent to which East India Company was liable, necessarily
implied that the immunity of British Crown from liability to be sued did not apply
to the Government of India. In the first important case P&O Steam Navigation Co.
v. Secretary of State, Sir Barnes Peacock C.J., initiated the clear distinction
between ‘Sovereign’ and ‘Non sovereign’ functions for the purpose of state
liability. The court held the secretary of state liable as the injury was caused while
performing an act of private nature. It was not required of the Court to express its
opinion regarding maintainability of an action with respect to an act of sovereign
nature. Therefore, it is submitted that the dictum of Sir Barnes Peacock that ‘where
an act is done in the exercise of powers usually called sovereign powers, no action
will lie’ was an obiter dictum. Unfortunately the obiter became more important
than the ratio in subsequent cases.
Two views came to be held about the correct holding of P &O case in the later
period. One was that the Government was not liable for damage caused by the
exercise of sovereign functions and the other, that the immunity extended only to
the cases of what are called ‘act of state’. The second view, it is submitted was in
conformity with the principles prevailing then. The first view was followed in
Nabin Chunder Dey v. The Secretary of State for India. By adopting the second
view, the Madras High Court put the Governmental liability in its correct
perspective in the Secretary of State for India v. Hari Bhanji.
Two views came to be held about the correct holding of P & O case in the later
period that:
1. The Government was not liable for damage caused by the exercise of sovereign
functions; and
2. The immunity extended only to the cases of what are called ‘act of state’.

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The second view, it is submitted was in conformity with the principles prevailing
then. The confusion created due to sovereign and non-sovereign distinction, as the
definition of sovereign function adopted was a circular one, continued in the later
period because of the repetition of the provision contained in Section 65 of the
Government of India Act, 1858, in Section 32 of the Government of India Act
1915 and Section 76 of the Government Of India Act 1935.
The Constitution makers left the law of state liability where it was prior to
adoption of the Constitution. The language of Article 300 seems to denote
intended perpetuation of the pre-constitutional position in the post constitution era.
Thus even after the Constitution, in order to make the state liable in a suit brought
by an individual, the question that remains to be answered is - would such a suit lie
against the East India Company had the case arisen prior to 1858. The courts could
have started afresh in framing the jurisprudence of state liability in consonance
with the basic constitutional principles of limited government; but they did not do
so and continued to apply the tests evolved earlier.
The progressive interpretation adopted by the Supreme Court in State of Rajasthan
v. Vidyawati to the effect that the rule of sovereign immunity based on English
law had no validity in India and that after adoption of the republican form of
government under the Constitution, there was no justification for the proposition
that the state should not be held liable for the tort of its servants, suffered set back
in Kasturilal v. State of U.P. in Kasturilal the Supreme Court placed exclusive
reliance on P & O case and distinguished Vidyawati. It is submitted that the
decision in Kasturilal is blatantly illogical as it erroneously identified the statutory
power as sovereign power. It would have been proper if the Court had followed
the principle of Hari Bhanji, which confined the sovereign immunity only to ‘acts
of state’. The Law Commission of India also had accepted the correctness of Han

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Bhanji in its first report. The Governmental attempts to enact a law to define the
liability of state in torts failed.
When the modem welfare state is embarking upon varied activities
indistinguishable form those performed by private persons, watertight
compartmentalization of the functions of the state as ‘sovereign and non
sovereign’ or ‘governmental and non-governmental’ is neither practicable nor
desirable. The courts should keep the social needs at their heart while delineating
the principles of state liability. In the later yea’s the courts have made an attempt
to rationalize the archaic law by narrowing the sovereign immunity defence.
Ultimately it stands confined to only primary and inalienable functions of the state
in N.Nagendra Rao & Co v. State of Andhra Pradesh. The Court held that the test
to determine if the function is sovereign in nature is whether the state is
answerable for such actions in courts of law; the state is immune only in situations
where the jurisdiction of courts is barred. The Court in Nagendra Rao case could
not overrule Kasturilal case as it was decided by a Constitution Bench of five
judges. It is submitted that the Supreme Court should constitute a Constitution
Bench at the first possible opportunity and overrule the irrational principle of
Kasturilal’s case expressly. If that is done, India can afford to provide justice even
without a statute comparing to the statutes in United Kingdom and United States.

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 BIBLIOGRAPHY
BOOKS
 Shridhar M & Lakshminath A, Ramaswamy Iyer’s The Law Of Torts, Lexis Nexis
Butterworths
Wadhwa, Nagpur, Tenth Edition
 Grady Fransworth, Torts Cases & Questions

ARTICLES
 Prasanna A, Tortious Liability Of The Government, Cochin University Of Law Review
(CULR) vol 9,
1985, p.413-435
 Dwivedi, Bishnu Prasad, From Sah To Saheli : New Dimensions of Government Liability, 36
Journal
of the Indian Law Institute (JILI) 110 1994

REPORTS
 Law Commission of India, First Report, (Liability of the State in Tort) 1956.

WEBSITE
 www.manupatra.in
 www.jstor.com
 www.legalserviceindia.com

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