December 4, 2022

Principle of Act of State under Tort- In Detail

The concept of public interest has changed with structural change in the society. No legal or political system today 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 officers of the State without any remedy.

The principle of immunity against sovereign Acts, was developed to give the protection to the King against civil or criminal Proceeding. This was the part of common law and developed in United Kingdom. It also came in India through the adaption of common law doctrine by Indian Courts.

Origin in Britain

In the case of Tobin v. The Queen (1864)[1], it was said by the court,

“He (The King) is not liable to be sued civilly or criminally for a supposed wrong. That which the sovereign does personally, the law presumes will not be wrong; that which the sovereign does by command to his servants, cannot be a wrong in the sovereign because, if the command is unlawful, it is in law no command, and the servant is responsible for the unlawful act, the same as if there had been no command.”

So the Crown was not liable in tort at common law for wrongs committed by its servants in the course of employment not even for wrongs expressly authorised by it. Even the heads of the department or superior officers could not be sued for torts committed by their subordinates unless expressly authorised by them; only the actual wrongdoer could be sued in his personal capacity.

In practice, the action against the officer concerned was defended by the Treasury Solicitor and the judgment was satisfied by the Treasury as a matter of grace. Difficulty was, however, felt when the wrongdoer was not identifiable.

The Crown Proceedings Act, 1947

The increased activities of the Crown have now made it the largest employer of men and the largest occupier of property. The above system was, therefore, proving wholly inadequate and the law needed a change which was brought about by the Crown Proceedings Act, 1947.

The extent of Sovereign Immunity to Indian Government

The maxim that the “King can do no wrong” on the basis of which Common Law rule that “Crown was not answerable for the torts committed by its servants” was generated, has not been applied here in this country.

India at one time was under the Sovereignty of East India Company which had two-fold character. They had powers to carry on trade as merchants. This was their basic character. They had an additional character. They had been delegated by the British Crown powers to acquire, retain and govern territories, to raise and maintain armies and to make peace and war with native States. East India Company was subsequently taken over by the Crown and Govt. of India Act, 1858 was passed by the British Parliament.

Section 68 of the Act allowed the Secretary of the State in Council to sue or be sued marking a departure from the common law rule that no proceedings, civil or criminal, could be filed against the Crown.

In spite of the above provision, the Supreme Court of Calcutta in The Peninsular & Oriental Steamship Navigation Co. vs. The Secretary of State for India 1868-69, held that the rule of immunity was applied by drawing a distinction by the acts done by the public servants in the delegated exercise of sovereign powers and acts done by them in the conduct of other activities.

Peacock, CJ, who delivered the judgment observed:

“It is clear that the East India Company would not have been liable for any act done by any of its officers or soldiers in carrying on hostilities, or for the act of any of its naval officers in seizing as prize property of a subject, under the supposition that it was the property of an enemy, nor for any act done by a military or naval officer or by any soldier or sailor, whilst engaged in military or naval duty, nor for any acts of any of its officers or servants in the exercise of judicial functions.”

This decision was followed by the Calcutta High Court in Nobin Chunder Dey v. Secretary of State for India[2] (1875-76), but the Madras High Court in Secretary of State for Indian Council vs. Hari Bhanji & Anr.[3] (1882) and the Bombay High Court in P.V. Rao vs. Khushaldas S. Advani (1949)[4] did not follow the decision.

The decision of the Bombay High Court was subsequently approved by Supreme Court in Province of Bombay vs. K.S. Advani 1950[5] and it was clearly laid down that the Govt. would also be liable for Torts committed in exercise of Sovereign powers except when the act complained of amounted to an act of State.

Retaining of the provision of Sovereign Immunity

Govt. of India Act, 1858 was replaced by the Govt. of India Act, 1915 and the provisions contained in Section 65 of 1858 Act were retained in Section 32 of the 1915 Act. This Act was subsequently replaced by the Govt. of India Act, 1935 and in this Act the corresponding provision was made in Section 176(1).

This provision was continued in the Constitution by Article 300 (1) which reads as under:

“The Government 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 an Act of Parliament or of the legislature of such State enacted by virtue of powers conferred by this Constitution, 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 this Constitution had not been enacted.”

The decision of Supreme Court in Province of Bombay vs. K.S. Advani (supra) was followed by the First Report of the Law Commission of India in 1956 which accepted the view of this Court and recommended as under:

“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 a greater impact on the citizen. For the establishment of a just economic order industries are nationalised. Public utilities are taken over by the State. The State has launched huge irrigation and flood control schemes.

The production of electricity has practically become a Government concern. The State has established and intends to establish big factories and manage them. The State carries on works departmentally. The doctrine of laissez faire – which leaves everyone to look after himself to his best advantage has yielded place to the ideal of a welfare State – which implies that the State takes care of those who are unable to help themselves.”

The Commission after referring to various provisions in the legislation of other countries also observed:

“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. As Professor Friendman observes:

‘It is now increasingly necessary to abandon the lingering fiction of a legally indivisible State, and of a feudal conception of the Crown, and to substitute for it the principle of legal liability where the State, either directly or through incorporated public authorities engages in activities of a commercial, industrial or managerial character. The proper test is not an impracticable distinction between governmental and non-governmental functions, but the nature and form of the activity in question.’

In State of Rajasthan vs. Mst. Vidhyawati AIR 1962 SC 933, a claim for damages was made by the dependants of a person who died in an accident caused by the negligence of the driver of a jeep maintained by the Govt. for official use of the Collector of Udaipur while it was being brought back from the workshop after repairs.

The Rajasthan High Court held that the State was liable. This view was upheld by this Court with the observation that:

“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. In India, ever since the time of the East India Company, the Sovereign has been held liable to be sued in tort or in contract and the common law immunity never operated in India.

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 act of its servant.”

The Infamous Case of Kasturi Lal

The course of justice, insofar as the tortious liability of the State is concerned, was disturbed by the decision of Supreme Court in Kasturi Lal Ralia Ram Jain vs. State of U.P. 1965[6], in which a 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 on 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.

Supreme Court, speaking through Gajendragadkar, CJ, observed as under:

“The act of negligence was committed by police officers while dealing with the property of Ralia Ram which they had seized in the exercise of their statutory powers. Now, 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 characterised 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 employees of the respondent during the course of their employment; but the employment in question being of the category which can claim the special characteristic of sovereign power, the claim cannot be sustained.”

The earlier decision of Supreme Court in Mst. Vidyavati’s case (supra) was distinguished on the ground that it was based on a tortious liability not arising from the exercise of Sovereign power. The decision in Kasturilal’s case (supra), has, apart from being criticised (See: Constitutional Law of India by Seervai), not been followed by Supreme Court in subsequent decisions and, therefore, much of its efficacy as a binding precedent has been eroded.

The further right way

Reference in this connection may be made to the decisions of this Court in State of Gujarat vs. Memon Mahomed Haji Hasan[7]1967 and Smt. Basava Kom Dyamogouda Patil vs. State of Mysore[8]1977 and a number of other cases, including those dealt with under Article 32 of the Constitution by this Court in all of which compensation and damages were awarded to the petitioner for tortious liability of the servants of the State.

It may be mentioned that in Kasturilal’s case, the Court did not consider the State liability for violation of Fundamental Rights of a citizen relating to Life and Personal Liberty. It will be seen that where on account of tortious act of the servant of a State, a person’s Fundamental Right to Life and Liberty was violated, the Court granted damages and compensation to that person. The liability is based on the provisions of the Constitution and is a new liability which is not hedged in by any limitations including the doctrine of `Sovereign immunity’.

Reference may also be made to the decision of Privy Council in Maharaj vs. Attorney General of Trinidad & Tobago[9] (1978) in which the appellant, who was a Barrister, was sentenced to 7 days’ imprisonment by a Judge of the High Court, which was set aside by the Privy Council in appeal. The appellant, in the meantime, applied for redress under Section 6 of the Constitution of Trinidad & Tobago on the ground that he was deprived of his liberty without due process of law as guaranteed to him under Section 1 of that Constitution.

The claim was dismissed by the High Court, but was upheld by the Privy Council in appeal. The Privy Council held that Section 6 of the Constitution impliedly allowed the High Court to award compensation as compensation may be the only practicable form of redress in some cases.

The entire case law was reviewed by R.M. Sahai, J. in his illuminating judgment in N. Nagendra Rao & Co. vs. State of A.P. 1994[10] in which it was observed, inter alia, as under:

“But there the immunity ends. 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. The concept of public interest has changed with structural change in the society. No legal or political system today 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 officers of the State without any remedy.

From sincerity, efficiency and dignity of State as a juristic person, propounded in Nineteenth Century as sound sociological basis for State immunity the circle has gone round and the emphasis now is more on liberty, equality and the rule of law. 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 at par with any other juristic legal entity. Any watertight compartmentalisation of the functions of the State as “sovereign and non-sovereign or “governmental or non-governmental” is not sound. It is contrary to modern jurisprudential thinking.

The need of the State to have extraordinary powers cannot be doubted. But with the conceptual change of statutory power being statutory duty for sake of society and the people the claim of a common man or ordinary citizen cannot be thrown out merely because it was done by an officer of the State even though it was against law and negligently. Needs 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.

Even in America where this doctrine of sovereignty found it place either because of the ‘financial instability of the infant American States rather than to the stability of the doctrine theoretical foundation,’ or because of ‘logical and practical ground,’ or that ‘there could be no legal right as against the State which made the law’ gradually gave way to the movement from, ‘State irresponsibility to State responsibility.’

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 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.”

Reference

Common Cause, a registered Society v. Union of India, (1999)


[1] 16 CB [N.S.] 310

[2] ILR (1875-76) 1 Cal. 11

[3] ILR (1882) 5 Mad. 273

[4] (1949) 51 Bombay Law Reporter 342

[5] 1950 SCR 621

[6] AIR 1965 SC 1039

[7] AIR 1967 SC 1885

[8] AIR 1977 SC 1749

[9] (No.2) (1978) 2 All ER 670

[10] AIR 1994 SC 2663 = (1994) 6 SCC 205