Vicarious Liability of the State

Two: Vidhyawati.

Facts. State of Rajasthan v. Vidhyawati, AIR 1962 SC 933, decided on 2 February 1962. A Government jeep being driven from the repair shop to the Collector's residence by a State employee was driven rashly and negligently and killed a pedestrian. His widow and daughter sued.

Held. The State was liable. Its liability for a tort committed by its servant within the scope of employment is the same as that of any other employer. Article 300(1), by using the words "in like cases", refers back through section 176(1) of the Government of India Act 1935 and its predecessors to the liability of the East India Company.

Three: Kasturi Lal.

Facts. Kasturilal Ralia Ram Jain v. State of Uttar Pradesh, AIR 1965 SC 1039, decided on 29 September 1964. Police at Meerut arrested a partner of a bullion firm on suspicion and seized gold and silver, which were kept in the police malkhana. The head constable in charge misappropriated the gold and absconded to Pakistan. The firm sued the State for its value.

Held. The claim failed. The powers to arrest, to search and to seize are conferred by statute on specified officers and can properly be characterised as sovereign powers, so although the negligence was that of State employees in the course of employment, no claim lay. The Court approved the P. and O. case, distinguished Vidhyawati, and suggested that Parliament legislate.

Four: Nagendra Rao.

Facts. N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205, decided on 6 September 1994. Stocks of fertiliser and foodgrain were seized under control orders made under the Essential Commodities Act 1955, were not disposed of, and deteriorated. The trial court decreed their value; the High Court reversed on the authority of Kasturi Lal.

Held. The appeal was allowed and the decree restored. The doctrine of sovereign immunity has no place in a modern welfare State which runs factories and carries on trade; the old distinction between sovereign and non-sovereign functions should no longer decide the liability of the State; and the defence is not available where the State or its officers act negligently in the exercise of statutory powers over a citizen's property. The Court recorded that the Law Commission had recommended legislation and that the Government (Liability in Tort) Bill of 1965 was introduced, withdrawn, reintroduced in 1967 and lapsed.

Where the law stands now

Three propositions, and an answer should give all three.

Kasturi Lal has not been formally overruled, but it has been so narrowed that it is rarely applied.

The sovereign or non-sovereign division is no longer the test. Nagendra Rao says so in terms, and the modern question is whether the function is one that a private person could perform and whether immunity can be justified in a welfare State.

The constitutional remedy has overtaken the private law question altogether. Where a fundamental right is violated, compensation is awarded under articles 32 and 226 and sovereign immunity is no answer to it at all. Nilabati Behera v. State of Orissa, AIR 1993 SC 1960, and Chairman, Railway Board v. Chandrima Das, AIR 2000 SC 988, are the authorities, and chapter [Constitutional Tort] works them out. Achutrao Haribhau Khodwa v. State of Maharashtra, (1996) 2 SCC 634, made the State liable for negligence in a government hospital, which is the plainest modern illustration in private law.

A worked example

A State's officers do four things on the same day.

A State transport bus injures a pedestrian. Running a bus service is something a private person may do; the State is liable on Vidhyawati.

A police officer seizes goods and they rot in the malkhana. On Kasturi Lal the seizure was an exercise of sovereign power and no claim lay; on Nagendra Rao the State is liable for negligence in dealing with a citizen's property under statutory powers, and Nagendra Rao is the later and better view.

A prisoner dies in custody after a beating. The private law question hardly arises: compensation is awarded in a writ petition for the violation of article 21, and sovereign immunity is no defence, on Nilabati Behera v. State of Orissa, AIR 1993 SC 1960.

A patient dies because a mop was left inside her in a government hospital. Achutrao Haribhau Khodwa v. State of Maharashtra, (1996) 2 SCC 634: once death by negligence in the hospital is established, the State is liable to pay damages.

Quick revision

1. Article 300(1): the State may be sued "in like cases" as the Dominion and the Provinces, which sends the court back to the liability of the East India Company.
2. P. and O. Steam Navigation: liable for what a private person might do, not for the exercise of sovereign power.
3. State of Rajasthan v. Vidhyawati, AIR 1962 SC 933: liable like any other employer.
4. Kasturilal Ralia Ram Jain v. State of Uttar Pradesh, AIR 1965 SC 1039: not liable for an exercise of statutory police powers.
5. N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205: sovereign immunity has no place in a welfare State; the old division should no longer decide.
6. No statute has been passed; the 1965 Bill lapsed.
7. Constitutional compensation under articles 32 and 226 bypasses the question, and sovereign immunity is no answer to it.
8. Achutrao Haribhau Khodwa v. State of Maharashtra, (1996) 2 SCC 634: liability for negligence in a government hospital.

Test yourself

1. Discuss the liability of the State for the torts of its servants in India. Article 300(1) of the Constitution provides that the Union and the States may sue and be sued in relation to their affairs in the like cases as the Dominion of India and the corresponding Provinces might have done, so that the extent of the liability is historical and traces back through the Government of India Acts to the liability of the East India Company as settled in the P. and O. Steam Navigation case, which distinguished acts done in undertakings a private person might carry on from acts done in the exercise of sovereign power. In State of Rajasthan v. Vidhyawati, AIR 1962 SC 933, the State was held liable for a pedestrian killed by a Government jeep, its liability being that of any other employer. In Kasturilal Ralia Ram Jain v. State of Uttar Pradesh, AIR 1965 SC 1039, no claim lay for gold misappropriated from a police malkhana, because the powers of arrest, search and seizure were sovereign powers. In N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205, the Court held that sovereign immunity has no place in a modern welfare State and that the old division should no longer decide liability. Parliament has never legislated, the Bill of 1965 having lapsed, and in practice the constitutional remedy under articles 32 and 226 has overtaken the private law question.

2. Has Kasturi Lal been overruled? Not formally, but it has been narrowed until very little is left of it. N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205, held that the doctrine of sovereign immunity has no place in a modern welfare State which runs factories and carries on trade, that the old distinction between sovereign and non-sovereign functions should no longer be invoked to determine the liability of the State, and that the defence is not available where officers act negligently in the exercise of statutory powers over a citizen's property, which are the very facts of Kasturi Lal. In addition, where the wrong violates a fundamental right the claim is now made under articles 32 and 226, and Nilabati Behera v. State of Orissa, AIR 1993 SC 1960, holds that sovereign immunity does not apply to such a claim at all. So Kasturi Lal survives as authority on paper and is seldom decisive in practice.

3. Why has the constitutional remedy displaced the private law claim against the State? For four practical reasons. It is quicker, because a writ petition is decided without a full trial. It is not met by sovereign immunity, since Nilabati Behera v. State of Orissa, AIR 1993 SC 1960, holds that a claim in public law for the contravention of a fundamental right is distinct from and additional to the private law remedy in tort, and that the defence does not apply to it. It is available to any person, citizen or not, as Chairman, Railway Board v. Chandrima Das, AIR 2000 SC 988, holds, because article 21 protects every person. And it avoids the whole historical inquiry into what the East India Company would have been liable for, which article 300(1) otherwise requires and which no Indian legislature has replaced.