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INTRODUCTION

Sovereign immunity, or crown immunity, is a legal doctrine by which the

sovereign or state cannot commit a legal wrong and is immune from civil suit or
criminal prosecution. This principle is commonly expressed by the popular legal
maxim “rex non potest peccare,” meaning “the king can do no wrong.” The
doctrine of sovereign immunity is based on the Common Law principle
borrowed from the British Jurisprudence 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 doctrine held dead in
Indian courts since the mid nineteenth century until recently. When a genuine
claim for damages was brought to the courts, and it was refused on the basis an
ancient doctrine seemingly having no relevance, there were demands for review.
The Indian courts, in order to not let genuine claims be defeated, kept narrowing
the scope of sovereign functions, so that the victims would receive damages.
The Law Commission of India too, in its very first report, recommended the
abolition of this outdated doctrine. But for various reasons, the draft bill for the
abolition of this doctrine was never passed, and thus it was left to the courts to
decide on the compatibility of this doctrine in accordance with the Constitution
of India. It is necessary to take a look at Article 300 of the Constitution of India
which spells out the liability of the Union or State in acts of the Government.

Article 299
State liability consist of (a) Liability in contract (Article 299)
(b) Liability in tort (Article 300)
In article 299 the state should be held liable if any officer in its official capacity
or duty have committed any wrong. There are 3 condition for which the state
would be liable for the violation of contract which are-
(a) Must be expressed
(b) Must be exercised
(c) Must be executed

Article 300
Initially in India, the distinction between sovereign and non-sovereign functions
was maintained in relation to the principle immunity of the Government for the
tortuous acts of its servants. In India, there is no legislation which governs the
liability of the State. It is Article 300 of the Constitution of India, 1950, which
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specifies the liability of the Union or the State with respect to an act of the
Government.

The Article 300 of the Constitution originated from Section 176 of the
Government of India Act, 1935. Under Section 176 of the Government of India
Act, 1935, the liability was coextensive with that of Secretary of State for India
under the Government of India Act, 1915, which in turn made it coextensive
with that of the East India Company prior to the Government of India Act,
1858. Section 65 of the Government of India Act, 1858, provided that all
persons shall and may take such remedies and proceedings against Secretary of
State for India as they would have taken against the East India Company. [5] It
will thus be seen that by the chain of enactment beginning with the Act of 1858,
the Government of India and Government of each State are in line of succession
of the East India Company. In other words, the liability of the Government is
the same as that of the East India Company before, 1858.

An overview of Article 300 provides that the

(a) First part of the Article relates to the way in which suits and proceedings
by or against the Government may be instituted. It enacts that a State may
sue and be sued by the name of the Union of India and a State may sue
and be sued by the name of the State.
(b) The Second part provides, inter alia, that the Union of India or a State
may sue or be sued if relation to its affairs in cases on the same line as
that of Dominion of India or a corresponding Indian State as the case may
be, might have sued or been sued of the Constitution had not been
enacted.
(c) The Third part provides that the Parliament or the legislatures of State are
competent to make appropriate provisions in regard to the topic covered
by Article 300(1).

TYPES OF SOVEREIGN IMMUNITY

The State generally benefits from two forms of immunity –

1) Immunity to jurisdiction –

A state’s immunity to jurisdiction results from the belief that it would be

inappropriate for one State’s courts to call another State under its jurisdiction.
Therefore, State entities are immune from the jurisdiction of the courts of
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another State. However, this immunity can generally be waived by the State
entity. Reference to arbitration is in many legal systems sufficient to
demonstrate a waiver of immunity to jurisdiction by the State. However, certain
developing countries may be hesitant to submit themselves to international
arbitration, believing that arbitration is dominated by Western principles and
would not give a developing country a fair hearing. These same developing
countries may feel more secure submitting to arbitration under the UNCITRAL
rules, which are often considered more culturally neutral than those of the ICC
or other Western tribunals.

2) Immunity from execution–

The State will also have immunity from execution, as it would be improper for
the courts of one State to seize the property of another State. Immunity from
execution may also generally be waived. Waiving immunity from execution
may be difficult for a government to address.

As a general proposition under most legal systems, certain assets belonging to

the state should not be available for satisfaction of the execution of an arbitral
award; for example, the country’s foreign embassies, or consular possessions.
Therefore, some method may have to be made available for the private party to
seize certain state assets, possibly through careful definition of those
possessions available for seizure.

JOURNEY OF THE DOCTRINE OF SOVEREIGN IMMUNITY

PRE CONSTITUTIONAL ERA –

In India, the story of the birth of the doctrine of Sovereign Immunity begins
with the decision of Peacock C.J. in P. and O. Navigation Company v.
Secretary of State for India, in which the terms “Sovereign” and “Non-
sovereign” were used while deciding the liability of the East India Company for
the torts committed by its servants. The facts of the case were that a servant of
the plaintiff’s company was proceeding on a highway in Calcutta, driving a
carriage which was drawn by a pair of horses belonging to the plaintiff. He met
with an accident, caused by negligence of the servants of the Government. For
the loss caused by the accident, the plaintiff claimed damages against the
Secretary of State for India. Sir Barnes Peacock C. J. (of the Supreme Court)
observed that the doctrine that the “King can done wrong”, had not application
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to the East India Company. The company would have been liable in such cases
and the Secretary of State was thereafter also liable. The Court also drew the
distinction between sovereign and non-sovereign functions, i.e. if a tort were
committed by a public servant in the discharge of sovereign functions, no action
would lie against the Government – e.g. if the tort was committed while
carrying on hostilities or seizing enemy property as prize. The liability could
arise only in case of “non-sovereign functions” i.e. acts done in the conduct of
undertakings which might be carried on by private person-individuals without
having such power.

The aforesaid judgment laid down that the East India Company had a twofold
character:
(a) As a sovereign power and
(b) 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.
As the damage was done to the plaintiff in the exercise of non-sovereign
function, i.e. the maintenance of Dockyard which could be done by any private
party without any delegation of sovereign power and hence the government
cannot escape liability and was held liable for the torts committed by its
employees.

In this case the provision of the Government of India Act, 1858 for the first time
came before the Calcutta Supreme Court for judicial interpretation and C.J.
Peacock determined the vicarious liability of the East India Company by
classifying its functions into “sovereign” and “non-sovereign”.

Two divergent views were expressed by the courts after this landmark decision
in which the most important decision was given by the Madras High Court in
the case of Hari Bhan Ji v. Secretary of State, where the Madras High Court
held that the immunity of the East India Company extended only to what were
called the ‘acts of state’, strictly so called and that the distinction between
sovereign and Non-sovereign functions was not a well-founded one.
No attempt however has been made in the cases to draw a clear and coherent
distinction between Sovereign and Non-Sovereign functions at all.

POST-INDEPENDENCE –
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After the commencement of the Constitution, perhaps the first major case which
came up before the Supreme Court for the determination of liability of
Government for torts of its employees was the case of State of Rajasthan v.
Vidyawati. The point as to how far the state was liable in tort first directly arose
after independence before the Hon’ble Supreme Court in State of Rajasthan v.
Mst. Vidyawati, AIR 1962 SC 933. In that case, the claim for damages was
made by the defendants of a person who died in an accident caused by the
negligence of the driver of a jeep maintained by the Government for official use
of the Collector of Udaipur while it was being brought back from the workshop
after repairs. The Rajasthan High Court took 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 its Civil Service. In the said case the Hon’ble Supreme Court has held as
under:

“Act done in the course of employment but not in connection with sovereign
powers of the State, State like any other employer is vicariously liable. In this
case, court rejected the plea of immunity of the State and held that the State was
liable for the tortious act of the driver like any other employer.

Later, in Kasturi Lal v. State of U.P. the Apex Court took a different view and
the entire situation was embroiled in a confusion. In this case partner of
Kasturilal Ralia Ram Jain, a firm of jewellers of Amritsar, had gone to Meerut
for selling gold and silver, but was taken into custody by the police of the
suspicion of possessing stolen property. He was released the next day, but the
property which was recovered from his possession could not be returned to him
in its entirety inasmuch as the silver was returned but the gold could not be
returned as the Head Constable in charge of the Malkhana misappropriated it
and fled to Pakistan. The firm filed a suit against the State of U. P. for the return
of the ornaments and in the alternative for compensation. It was held by the
Apex Court that the claim against the state could not be sustained despite the
fact that the negligent act was committed by the employees during the course of
their employment because the employment was of a category which could claim
the special characteristic of a sovereign power. The court held that the tortious
act of the police officers was committed by them in discharge of sovereign
powers and the state was therefore not liable for the damages caused to the
appellant. In this case, the Supreme Court followed the rule laid down in P.S.O.
Steam Navigation case by distinguishing Sovereign and non-Sovereign
functions of the state and held that abuse of police power is a Sovereign act,
therefore State is not liable.
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In practice, the distinction between the acts done in the exercise of sovereign
functions and that done in non-Sovereign functions would not be so easy or is
liable to create considerable difficulty for the courts. The court distinguished the
decision in Vidyawati’s case as it involved an activity which cannot be said to
be preferable to, or ultimately based on the delegation of governmental powers
of the State. On the other hand, the power involved in Kasturilal’s case to arrest,
search and seize are powers characterized as Sovereign powers. Finally the
court expressed that the law in this regard is unsatisfactory and the remedy to
cure the position lies in the hands of the legislature.

The Courts in later years, by liberal interpretation, limited the immunity of State
by holding more and more functions of the State as non-Sovereign.
To ensure the personal liberty of individuals from abuse of public power, a new
remedy was created by the Apex court to grant damages through writ petitions
under Article 32 and Article 226 of the Constitution. In the case of Rudal Shah
v. State of Bihar, the Supreme Court for the first time awarded damages in the
writ petition itself.
In Bhim Singh v. State of Rajasthan, then principle laid down in Rudal Shah
was further extended to cover cases of unlawful detention. In a petition under
article 32, the Apex court awarded Rs. 50,000 by way of compensation for
wrongful arrest and detention.

The latest case of State of A.P. v. Challa Ramakrishna Reddy on the point
clearly indicates that the distinction between Sovereign and non-Sovereign
powers have no relevance in the present times. The Apex Court held that the
doctrine of Sovereign immunity is no longer valid.

From the said judgments, the following points emerge:

The sovereign immunity is not applicable to the cases in public domain i.e. in
cases of writ petitions under Article 32 & 226 of Constitution of India. The
principle is equally applicable to private law domain, i.e. claim of damages
under tort law, where the right to life as guaranteed by Article 21 Constitution
of India is violated, as the said right is sacrosanct, inalienable, and indefeasible.
Though the principle of Kasturi Lal Case is not applicable where the right to life
as guaranteed by Article 21 is transgressed. In such cases, damages have to be
awarded for the tortuous acts of government servant depriving the person of his
life and liberty except in accordance with the procedure established by law.
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The Negligent act causing the deprivation of life and property of a person is to
be held as violative of Fundamental right to life as guaranteed under Article 21
of the Constitution of India.

Last but not the least, the Hon’ble Supreme Court has also concluded in the
following words.

“….. the law has marched ahead like a Pegasus but the Government attitude
continues to be conservative and it tries to defend its action or the tortious
action of its officers by raising the plea of immunity for sovereign acts or acts of
State, which must fail.”

The aforesaid judicial pronouncement clearly laid down the earlier approach of
judiciary as revealed from various judicial pronouncements was to make
distinction between sovereign and non-sovereign functions and exempting the
government from tortuous liability in case the activity involved was a sovereign
activity. Later on, there has been significant change in the judicial attitude with
respect to “Sovereign and Non-Sovereign dichotomy” as revealed from various
judicial pronouncements where the courts, although have maintained the
distinction between sovereign and non-sovereign functions yet in practice have
transformed their attitude holding most of the functions of the government as
non-sovereign. Consequently, there has been an expansion in the area of
governmental liability in torts.

CONCLUSION

Sovereign immunity is a common-law doctrine which originated in court

decisions. Historically, the doctrine of sovereign immunity has been justified on
the grounds that the King could do no wrong, the diversion of funds required for
other governmental purposes could bankrupt the State and retard its growth, the
State could perform its duties more efficiently and effectively if it were not
faced with the threat of a floodgate of actions involving tort liability, and it was
more expedient for an individual to suffer than for society to be inconvenienced.

Whatever justifications initially existed for sovereign immunity, they are no

longer valid in today’s society. Sovereign immunity from tort liability.
Perpetuates injustice by barring recovery for tortuous conduct merely because
of the status of the wrongdoer. Sovereign immunity contradicts the essence of
tort law that liability follows negligence and that individual and corporations are
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responsible for the negligence of their agents and employees acting in the
course of their employment. We conclude that the State’s sovereign immunity
for tort liability is outdated and is no longer warranted.

Although it abolished the State’s sovereign immunity from tort liability, our
decision should not be interpreted as imposing tort liability on the State for the
exercise of discretionary acts in its official capacity, including legislative,
judicial, quasi-legislative, and quasi-judicial functions.

“While the rule is that a suit cannot be maintained against the sovereign without
its consent, it is equally well established that a clear official duty, not involving
the exercise of discretion, may be enforced when performance thereof is
arbitrarily refused, and that, if a person will receive injury because an official is
about to violate an official or legal duty, for which adequate compensation
cannot be had at law, such conduct may be enjoined.”

Furthermore, although the State’s sovereign immunity from tort liability, I

conclude that abrogation should be prospective so that the Legislature can
implement and plan in advance by securing liability insurance, or by creating
funds necessary for self-insurance.