Lecture-VI (Part-XIL, Chapter-1II: Articles 299 & 300) : State Liability

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Lecture-VI

State Liability
(Part-XIL, Chapter-1II: Articles 299 & 300)

Chapter III of Part XIl containing Articles 294 to 300 lays


down the provisions relating to Property, Contracts, Rights,
Liabilities, Obligations and suits in respect of the Union and State
Governments. Chapter IlI deals with (1) Succession to property,
assets. rights, liabilities and obligations in certain cases (Article 294),
(2) Succession to property, assets, rights, liabilities and obligations
in other cases (Article 295), (3) Property accruing by escheat or
lapse or as bona vacantia (Article 296), (4) Things of value within
territorial waers or continental shelf and resources of the exclusive
economic zone to vest in the Union (Article 297), (5) Contract
(Article 299), (6) Suits and proceedings (Article 300).
The present lecture deals with the liability of State, liability of
the Union and State Governments or simply state liability for civil
wrongs viz. breach of contracts and torts committed by its servants
(Govermment/Civil servants) while acting in colour of office i.e. in
discharge of their duties under sovereign delegated power
Article 298 of the Indian Constitution confers on the Union
and State Governments, executive power to carry on trade and
business by entering into contracts like an individual Article 298 runs

as follows:
The executive power of the Union and of each State shall
and to the
extend to the carrying any trade or business
on of
of
acquisition, holding and disposal of property and the making
contracts for any purpose. Provided that
far such
The said executive power of the Union shall, in
so as
a)
with respect to
trade or business or such purpose is not one

133
134 Lectures on Constitutional Law-lI
Lec.6
which Parliament may make laws, be subject in each State to
legislation by the State, and
b) The said executive power of each State shall, in so far as such
trade or business or such purpose is not one with respect to
which the State Legislature may make laws, be subject to
legislation by Parliament.
In Mahabir Auto v. 10C (AIR 1990 SC 1031)-it has been
held that the freedom of the Government to enter into business with
anybody it likes is subject to the condition of reason and fair play
as well as public interest.
Articles 299 and 300 of the Constitution lays down the
provisions relating to Contractual liability and Tortious Liability
respectively of the State i.e. the Union and State Governments for
the breach of contracts and torts committed by its servants.
The Government Liability or State Liability, may be explained
as follows-
1. Tortious Liability of the State (Article 300).
2. Contractual Liability of the State (Article 299).
1. TORTIOUS LIABILITY OF THE STATE
(ARTICLE 300)
Article 300 of the Indian Constitution, which speaks about the
Suits and Proceedings, deals with the legal status of the Union and
State Governments to sue and be sued in respect of the torts
committed by its servants, while discharging their duties on behalt
of the Government, the Union or State. Article 300 reads as
follows-
(1) The Govemment of India may sue or be sued by the name
of the Union of India and the Government of a State may sue or
be sued by the name of the State and may, subject to any
provisions which may be made by Act of Parliament or of tne
Legislature of such State enacted by virtue of powers conferred
State Liability 135
Lec.6]

by this Constitution, sue or be sued in relating to their respective


affairs in the like cases as the Dominion of India and the
coresponding Provinces the corresponding India States might
or

have sued or been sued if this Constitution had not been enacted.

(2) If at the commencement of this Constitution-

a) Any legal proceedings are pending to which the Dominion of


India is a party, the Union of India shall be deemed to be
substituted for the Dominion in those proceedings, and
Province or an
b) Any legal proceedings are pending to which a
Indian State is a party, the corresponding State shall be
deemed to be substituted for the Province or the Indian State
in those proceedings
Tortious Liability of the State means Liability of the Statel
Government for the torts committed by its servants. "Tort'
means

civil wrong causing injury or damage to another (injured


or
a
mental or
aggrieved). The injury may be personal, physical,
resorts to remedy by an action in
otherwise and the injured party
civil court. The remedy may be unliquidated damages or injunction
or restitution of property etc.
administrative functions,
In view of tremendous growth in
to another's
being discharged by the Government Servants, danger arises is:
the question
person or property may take place. Then,
liable for the torts
whether the Govermment or State is vicariously
means liability of one
committed by its servants? (Vicarious liability
person for the tort (wrong) committed by another.)
of vicarious liability is
Underlying Principle: The doctrine
based on the following two maxims:
se: It means "he who does
Quasi facit per alium facit per
an act through another does it himself."
"let the Superior (Principal)
2
2. Respondent Superior: It means

be liable."
136 Lectures on Constitutional Law-lI [Lec.6
Position in England: Earlier, the King (Crown) or the State
in England enjoyed
complete immunity (i.e., not liable) for the torts
committed by its servants. This immunity was
of the well known maxim "The
given on the basis
King can do no wrong'. In course
of time, with the increase in functions
of the Government and
expansion the Govemmental machinery, such immunity was found
of
to be
impracticable in the interests of justice and social security.
Consequently, the Crown Proceedings Act, 1947 was passed, and
the immunity was withdrawn.
the Crown is
According to Section 2(1) of the Act,
vicariously liable like an ordinary individual or any
other Employer for the torts
committed by the servants.
Position in India: Indian Parliament has not
the Crown passed any Act like
Proceedings Act, prescribing the tortious
Govemment/State. However, Article 300 of the Indian liability the
of
down the provisions Constitution lays
relating to the liability of the Government/State
for the torts committed
by its servants. In India also, the Govemment
State is vicariously liable for the torts
committed by its servants.
Article 300(1) of the Constitution
Government of India may be sued in relationprovides that the
to its affairs in the
like case as the Dominion of
India, subject to any law, which
be made by Act of may
Parliament. However, the
of liability is not clear position and extent
(uncertain) due to lack of
Whenever such situation to
prescribe legislation.
proper
arises, the Courts traced back to State/Government liability
followed sovereign, pre-constitutional period and
in P& O Steam
non-sovereign dichotomy, enunciated in 1861
Navigation Case (5 Bom. H.C.R.
Sovereign Immunity: *Sovereign Appl.1).
exemption (immunity) from liability on theImmunity' means
sovereign." The State or Government is not ground of being
the torts committed
by its servants (enjoys vicariously liable for
provided the following conditions are sovereign immunity)
satisfied:
1. The tort iscommitted by the servant in
obligation imposed on him by law. discharge of duty or
Lec.6] State Liability 137

2. Discharge of such duty, must be in delegation of sovereign


power

Now, the question is, what is sovereign power? And what is


non-sovereign power?
Sovereign and Non-sovereign Dichotomy: Peacock, C.J.,
made a distinction between sovereign power and non-sovereign
power in the leading case of:
P & O Steam Navigation Co. v. Secretary of State for
India, (1861) 5 Bom. H.C.R. App. 1, P.1- In this case, the
plaintiff's servant was travelling in a carriage, driven by two horses
through the Kidderpore Dockyard. Due to the negligence of the
defendant (Dockyard)'s servant, an iron rod hit the plaintiff's servant
and the horses and they were injured. In an action by the plaintiff,
the defendant, Co. pleaded immunity on the ground that they were
engaged in ship repair process, managed by the East India
Company to which sovereign powers were accorded. But Peacock
CJ. did not agree with the contention and held the defendant liable.
The Supreme Court of Calcutta through Peacock, C.J. coined
the principle of "Sovereign: Non-Sovereign Dichotomy" by drawing
a line between sovereign power and non-SOvereign power. Though,
the crown was accorded sovereign status to the East India
Company, ship repairing was a commercial activity which could be
carried on by a private person, and hence it is non-sovereign and
the defendant Co. was held liable.
Tests: There is no test or definition to distinguish between
those functions,
SOvereign and non-sovereign function. However,
which can alone be undertaken by the State/Government viz., army,
and Order etc.
navy, air-force, Administration of Justice, Law are

There are some other functions


regarded as sovereign functions.
like trade, commerce, roads and buildings, lransport,
Communication etc. may be delegated to any private person
or an

functions.
gency, and hence, they are regarded as non-sovereign
138 Lectures on Constitutional Law-II
Lec.6
Position of State/Government Liability after the
Constitution of India: Even after the Constitution of India came into
force, the courts followed sovereign, non-sOvereign dichotomy in
many
cases in spite of the Court's
Supreme decision in Vidyavathî's case:
State of Rajasthan v. Vidyavathi (AIR 1962 SC 933)-
Vidyavathi's husband died of an accident having knocked down
by a Collector's jeep on official trip. On appeal, the Supreme Court
through Sinha C.J. held the State liable without taking into
consideration, the Sovereign, Non-Sovereign Dichotomy.
In spite of the Supreme Court's decision in
Vidyavathi's
Case, the position as to the liability of the Government/State is not
certain/clear. Following cases illustrate on this
point:
Kasturilal v. State of Uttar Pradesh (AIR 1965 SC
In this case, Kasturilal's 1039)-
gold was seized by the police under the
suspicion that it was the stolen property. The gold was kept in the
Police Malkhana under the
custody of a Head Constable. He
misappropriated the gold and fled for Pakistan. In an action
by
Kasturilal against the State for of the
recovery Gold or its equivalent
value, the trial court dismissed the suit. On
Court upheld the Trial Court's decision appeal, the Supreme
following the rule of
sovereign:
non-sovereign dichotomy laid down in P& O Steam Navigation Case.
The above rule was followed
State of Uttar Pradesh v. Tulasi by the Supreme Court in:
It is to be noted Ram, (AIR 1971 All. 162)-
that, plead the
to
stated above are to be satisfied. If immunity both the conditions
either of the two conditions is
absent, the State is liable as in the case
of Hindustan Lever
Limited v. State of Uttar
Pradesh, (AIR 1972 All. 486).
Gross negligence by the
is
Servant: The Government/State
vicariously liable for the gross
negligence of its servants. Relevant
case on this
point is:
Ramakanda Reddy v.State, (1989)- The A.P. High Court
held the State liable to
pay compensation. In this case, an undertrial
State Liability 139
Lec.6

nrisoner died owing


to negligence of the prison authorities. The
Court viewed that the sovereign imnmunity could no longer be
applicable in cases for violation of the right to life and personal liberty
Constitution.
guaranteed under Article 21 of the
1967 Delhi
In Satyawati Devi v. Union of India (AIR
returned by a bus.
98-Air Force personnel played the game and
the bus negligently causing the death of the
The bus driver drove
the Union of India
husband of the Satyawati Devi. The Court held
on the ground that carrying of the
teams
was liable for damages
matches was not in the exercise of sovereign
function.
to play the

In State of Orissa v. Padmalochan (AIR 1975 Ori. 41)-


a mob emerged on the of the office of the Sub Divisional
scene

Police and some police personnel


Officer, Orissa to protest. Military
manhandled some persons of the mob resulting
in injury to plaintiff.
manhandled the
The Court observed that although police personnel
but it occurred while
plaintiffwithout permission of the Magistrate
exercising the sovereign power.
1959 Punj. 39)-
In Union ofIndia v. Harbans Singh (AIR
Delhi for distribution
being carried from the
cantonment,
meals were
The truck carrying meals belonged
to
to military personnel on duty.
a military driver.
and was being driven by
the military department
of a person. It was held
t caused an accident resulting in the death
and
done in exercise of sovereign power,
nat the act was being
not be made
liable for the samne.
nerefore, the State could
Role of Judiciary: The
India and the
Existing position in
with regard to the Government Liability
in India
CXIStung position Gadkar C.J., in
Kasturilal's Case
S not certain. Hence, Gajendra
the lawlessness in respect of the State
over
pressed dissatisfaction its discretionary
However, the judiciary by exercising
Lability. 1ollowing
cases:
the
POwer, removed the uncertainty in
distinction between Sovereign
The Supreme Court made no
Rao & Co. . State
non-sovereign power
in N.Nagendra
d held that when due
The Court has
A.P (AIR 1994 SC 266).
Law-I Lec.6
140 Lectures on Constitutional
State a citizen suffers anv
the negligent act of the officers of
to and the
the State will be liable to pay compensation
damage absolve him from
principle of sovereignimmunity of State will not
The Court, further, held that in the context of modem
this liability.
the doctrine of sovereign immunity stands
concept of sovereignty
between sovereign and non-sovereign
diluted and the distinction
functions no longer exists.
1983 SC 1086)- an
In Rudul v. State of Bihar (AIR
for more than 14 years.
acquitted person was prison
detained in
to release him immediately
The Supreme Court directed the State
and awarded exemplary damage of Rs.35,000/-.
1986 SC 494)-
In Bhim Singh v. State of Bihar (AIR
Bhim Singh was awarded Rs.50,000/- as exemplary damages (by
the Supreme Court) for unlawful detention.
1984
In Sebastian M Hongray v. Union of India (AIR
SC 1026)- two persons were taken to military camp by the army
The Government failed to produce them before the Court.
jawans.
The Supreme Court awarded exemplary damages of Rs.1,00,000/-
each to the wives of the said two persons for having undergone
torture, mental agony etc.
In Saheli, A women's Resource Centre v. Commissioner
of Police,Delhi (AIR 1990 Sc 513)- a child of 9 years was
beaten to death by the Police. The Supreme Court awarded a
compensation of Rs.75,000/- to the mother of the child.
In Kalawati v. State of Himachal Pradesh (AIR 1989
HP 5)-two persons died in a Government Hospital owing to
negligence of hospital staff who administered nitrous oxide in place
of Oxygen to the patients. The Court awarded compensation under
Article 21.
In Kumari v. State of T.N (AIR 1992 SC 2069)- a child
fell into an 'uncovered sewage tank' and died. The Court directed
the State to pay compensation.
Lec.6] State Liability 141

In Govind Kumar v. State of Rajasthan (AIR 2009


Raj. 61-a 4 year child had died on account of drowning in a
pond in a small village constructed by the Municipality. The court
has held that the State was vicariously liable to pay compensation.
The Government (Liability in Tort) Bill, 1967: In view of
uncertainty as to State liability, due to lack of proper legislation, the
Law Commission recommended the legislation enshrining various
provisions relating to State liability. Consequently a bill entitled "The
Govemment (Liability in Tort) Bill, 1967 was introduced in Lok Sabha
in 1969. But, it has not yet been passed into law.

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