Vicarious Liability of the State

In one line

The State is liable for the torts of its servants to the same extent as the East India Company was, and the old sovereign and non-sovereign division has been cut down almost to nothing.

In the wording a student can write in an exam: article 300(1) of the Constitution provides that the Union and the States may sue and be sued in the like cases as the Dominion of India and the corresponding Provinces might have sued or been sued if the Constitution had not been enacted, so the extent of the State's liability is that of the East India Company as settled in the P. and O. Steam Navigation case, which distinguished sovereign from non-sovereign functions; State of Rajasthan v. Vidhyawati held the State liable like any other employer, Kasturilal Ralia Ram Jain v. State of Uttar Pradesh denied liability for an exercise of sovereign power, and N. Nagendra Rao and Co. v. State of Andhra Pradesh held that the doctrine of sovereign immunity has no place in a modern welfare State.

The provision

Article 300(1) provides that the Government of India may sue and be sued by the name of the Union of India, and the Government of a State by the name of the State, and may, subject to any provisions made by Parliament or a State Legislature, sue or be sued in relation to their respective affairs in the like cases as the Dominion of India and the corresponding Provinces or Indian States might have sued or been sued if this Constitution had not been enacted.

Three things follow.

The State can be sued. There is no general immunity in India.

The extent is historical. The words "in like cases" send the court back through the Government of India Acts to the liability of the East India Company.

Parliament may change it. No Act has been passed, and N. Nagendra Rao records that a Bill introduced in 1965 was withdrawn, reintroduced in 1967 and lapsed.

Article 294 deals with the succession to property and liabilities, article 299 with the form of government contracts, and article 361 with the personal immunity of the President and Governors, which chapter [Who May Not Be Sued] takes.

The four cases, in order

One: the East India Company case. The P. and O. Steam Navigation case, decided by the Supreme Court of Calcutta in 1861, drew the line the whole subject still uses: the Company was liable for acts done in the conduct of undertakings which might be carried on by a private person, and not for acts done in the exercise of powers which could only be exercised by a sovereign. The Supreme Court approved it in Kasturilal.