Governmental Liability for Torts

Committed by its Servants

In Kasturi v State of U. P. 1 the question arose as to whether

the respondent, the State of Uttar Pradesh could be made liable
to compensate the appellant, M/s. Kasturi Lal Ralia Ram Jain
for the loss caused to the firm by the negligence of the police
officers employed by the respondent.
The Supreme Court of India2 by its decision in the above men-
tioned case, in a way, modified its view expressed in State of Rajas-
than v Vidhyawati 3 wherein it was clearly laid down that "the
State should be as much liable for tort in respect of a tortious act
committed by its servant within the scope of his employment and
functioning as such, as any other employer". 4 The corresponding
right conferred upon the citizen of India has been whittled down by
the decision in the instant case. It was held that the act of negligence
was committed by the police officers while dealing with the property
of the plaintiff in exercise of their statutory powers. As such they
were powers which could be properly characterised as sovereign
powers and hence the act giving rise to the claim for damages, though
done in the course of its employment, the employment in question
being of the category which could claim the special characteristic
of sovereign power, the claim could not be sustained. Thus the
decision shows a tendency to perpetuate the rule differentiating
"sovereign" from "non-sovereign" functions in order to determine
governmental liability. This, it is submitted, is a retrograde step
in the development of judicial expositions in the field of tort liability
of government.

A.I.R. 1965 S.C. 1039.

By a unanimous decision of the Bench consisting of P. B. Gajendragadkar
C.J., K.N. Wanchoo, M. Hidayatullah, Raghubar Dayal and J.R. Mudhol-
kar JJ., the judgment being delivered by the Chief Justice.
A.I.R. 1962 S.C. 933.
The unanimous opinion of the Bench consisting of 13.P. Sinha C.J. and
J.L. Kapur, M. Hidayatullah, J.C. Shah and J.R. Mudholkar JJ., was
pronounced by the Chief Justice.
92 KERALA UNIVERSITY LAW REVIEW

In Kasturi Lars case Ralia Ram Jain, one of the partners of the
plaintiff firm was arrested by the police and his belongings con-
sisting of gold, silver and other goods, were seized from him and
kept in police custody. Subsequently he was released but the
articles, except the silver, were not returned to him. Those articles
were misappropriated by a police head constable who absconded
and who was not subsequently traced. The police had not complied
with the relevant provisions of the Uttar Pradesh Police Regulations
in the safe-keeping of the gold which resulted in the loss. The
suit was to claim either the return of the gold or its value. Two
questions arose: (1) whether the police officers were guilty of
negligence in the safe custody of the gold ,and (2) whether the State
of Uttar Pradesh was liable to compensate the appellant for the
loss caused by the negligence of its public servants. The U. P.
High Court, reversing the decision of the trial court, held that no
negligence had been proved against the police officers and that
even if they were negligent, the state would not be liable for the loss
of gold. Under certificate from the High Court, an appeal was
preferred to the Supreme Court. On the question regarding
negligence the court was positive. But the court negatived the
claim for damages against the State.
The question of liability against the state depends upon
the interpretation to be given to the scope and ambit of Article
300 (1) of the Constitution of India. 5 Article 300 (1) reads :
"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 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".

As analysed by Sinha C. J. 6 this Article consists of three

parts, namely :

(1) the first part provides for the form and the cause-title
in a suit and says that a State (omitting any reference to the Govern-
ment of India) may sue or be sued by the name of the State.

5• The said Article comes under Part XII, Chapter III dealing with "Property,
Contracts, Rights, Liabilities, Obligations and Suits."
6. A.I.R. 1965 S.C. 933 at p.935.
 NOTES AND COMMENTS 93

that a State may sue or be sued in relation to its officers in

like cases as the corresponding provinces or the corresponding
Indian States might have sued or been sued if this Constitution
had not been enacted; and
that the second part is subject to any provisions which
may be made by an Act of the Legislature of the State concerned,
in due exercise of its legislative functions, in pursuance of powers
conferred by the Constitution.
It can, therefore, be seen that regarding the extent of liability
of the Government the constitutional provision is referring the
issue back to the position prevailed just before the Constitution
came into application. Necessarily we have to resort to the early
position through the Government of India Act, 1935, 7 the Govern-
ment of India Act of 1915 8 and the Government of India Act
of 1858 9 back to the days of the East India Company. In 1858
Act, it was provided that "(E)very person shall have the remedies
against the Secretary of State in Council ,as he might have had
against the East India Co., if the Government of India Act, 1858
had not been passed."
P. & 0 Steam Navigation Co. r Secretary of State for
India-in-Council° has been accepted as the earliest leading case
touching this subject. The ratio decidendi of that case according
to the Supreme Court, in Vidhyawati's case, 11 is that, "the Secretary
of State-in-Council of India is liable for the damages occasioned

Ref: S. 176.
Ref: S.32.
Ref: S.65.
(1861) 5 Born. H.C.R. App.1
A• I.R. 1962 S.C. 933. at p . 939. But the line of thought seems to be differ-
ent in Kasturilal's case. (See A.I.R. 1965 SC. 1039 at p 1046)-"Thus it
is clear that this case recognises a material distinction between acts
committed by the servants employed by the State where such acts are
referable to the exercise of sovereign powers delegated to public servants
and acts committed by public servants which are not referable to the
delegation of any sovereign powers This distinction which is clear
and precise in law, is sometimes not borne in mind in discussing questions
of State's liability arising from tortious acts committed by public
servants." Such a distinction was denied by the American Supreme Court
in New York v. United States, 326 U.S • 572 (1945). The question there
was whether the State of New York was liable to the Federal Tax on the
sale of Mineral waters from its State-owned and operated Springs. The
rule that the liability to taxation depended on the distinction between the
State as government and the State as trader was denied. See also, Indian
Towing Co, v U.S. 350 U • S. 61 (1950) Per Frank further, J. and Davis,
Administrative Law Treatise Vol. 3, pp. 482-505 (1958)Edn,
94 KERALA UNIVERSITY LAW REVIEW

by the negligence of servants in the service of Government if the

negligence is such as w-mild render an ordinary employer liable".
Following this in Vidhyawati's case, Sinha C. J., observed as
follows :--
"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 Co., 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 Govern-
ment, 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 ro justification in principle or in public interest, that the State should
not be held liable vicariously for the tortious act of its servant. This
Court has deliberately departed from the Common Law rule that a civil
servant cannot maintain a suit against the Crown. In the case of State of
Bihar v Abdul Majid, 12 this Court has recognised the right of a government
servant to sue the Government for recovery of arrears of salary. When
the rule of immunity in favour of the Crown in the United Kingdom
has disappeared from the land of its birth, there is no legal warrant for
holding that it has any validity in this country, particularly after the
Constitution.
This dicta did in fact try to settle the age-old controversy
regarding the vicarious liability of the State for the torts of its
servants. 13 But as the Constitution has adopted the pre-existing

1954 S • C.R. 786.

In a number of cases it was expressed that the Government was liable for
the torts of its servants committed in the course of their employment,
only where the activity was such that it could have been undertaken by
private persons as well. Such activity of the government was called in some
cases commercial activity as contrasted with governmental activity proper.
Liability of the government for the torts of its servants was sought to
be confined to the former category and negatived in the latter. Thus came
into existence the distinction between "sovereign" functions and "non-
sovereign" functions of the State in this context. For instance, re: Nobin
Chander Dey v. Secretary of State., I.L.R.1 Cal.11, Shivbhaian Durga
Prasad v. Sec. of State (1904) 28 I.L.R. Bom. 314, Mclnerny v. Sec. of
State (1911) I.L.R.38 Cal. 797, Uday Chand Mahtab v. Province of Bengal,
I.L.R. 1947, 2 Cal. 141. But the Madras High Court took the other view
in Secretary of State v. Hari Bhanji (1882) I.L.R.5 Madras 272. There,
it was held that the liability of the State for torts of its servants was not
confined to activity which could be undertaken by private persons as well.
The court rightly divided all acts of the government into those done under
colour of municipal law and those done without any such colour and held
that the latter should be broadly called acts of State and, observed that
only this second class was beyond the jurisdiction of municipal courts.
See also Union of India v. Murlidhar Agarwala, A.I.R. 1952 Assam 141.
 NOTES AND COMMENTS 95

position which is fraught with uncertainties, the decision in the

case under comment has deviated from the general proposition
cutlined in Vidhyawati. It is interesting to note that both the
decisions are made on an appraisal of Chief Justice Barness
Peacock's decision in P. & 0. Steam Navigation Co., v Secretary
of State. 14 The very fact that Sinha C. J. and Gajendragadkar
C. J. have dwelt at length in interpreting the P. & 0. case shows
that Peacock did not lay down any precise general principle in 1861
to be followed by posterity. Now in this era where there is' a
plethora of legislation by acts, statutes, rules, regulations, ordinances,
notifications etc., of statutory status it would not be justifiable
to make a distinction between "sovereign powers" and "non-
sovereign powers", none the less a distinction between statutory
powers and non-statutory powers. In the context of a welfare
State under a Sovereign Democratic Republic with the imme-
diate ideal of a socialistic pattern of society wherein the government
and its servants are exercising full or almost full powers covering
all the aspects of human activity, the citizen has to be protected
not only against nonfeasance of the government and its servants
but also against their misfeasance and malfeasance. •
Almost all the reasons for governmental immunity from tort
liability are now generally accepted as unsustainable. Some of
them were especially pertinent to a monarchical regime, some to
certain peculiar feudal arrangement, some to that of logical con-
tradictions in theory in claiming "a legal right as against the
authority that makes the law on which the right depends" 15 and
some to the prima facie incongruity of the public treasury paying
for a private claim that resulted from the act of another individual
who happens to be a public officer and of the possible bankruptcy
of the State because of the innumerable claims that may be made
against it on this score.16
In India, as often laid down in judicial pronouncements, the
common law principles are to be applied with caution. The com-
mon law maxim, that the "King can do no wrong" created the
immunity as being linked with the royal prerogative. In India,
there , did not exist any common law. Hence; particularly after
the commencement, of the Constitution, the maxim could find

Supra.
Holmes J. in Kawananakoa v. Pol J'blank, 205 U.S. 349 (353).
See the comment on Vielhyawbtrs case by Dr. A.T. Markose vol.
4 p. 282)
96 KERALA UNIVERSITY LAW REVIEW

no place as such. 17 The rule of crown immnnity has been thrown

away even in the land where it was nurtured. *by the Crown Pro-
ceedings Act of 1947. The Crown has made itself liable for all
tortious acts for which if it were a private person of full age and
capacity would be subject (a) in _respect of torts committed
by its servants or agents; (b) in respect of breach of those duties
which a person owes to his servants or agents at the common
law by reason of their employer, and (c) in respect of torts relating
to the ownership, occupation possession or control of property. In
the United States also statute18 has made inroads into the venue
of state liability for torts. In Australia, under the Judiciary Act,
(1903-1950) the Commonwealth and States are liable to be sued
for claims against them "whether in contract or tort." The
evolution of French jurisprudence on governmental liability for
tort also shows the slow and steady development from absolute
immunity to liability based on 'risk' 19 instead of `faule.2° It is,
therefore, only in the fitness of things that Chief Justice Sinha
had in 1962 said that 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. 21 It is to be noted that the decision has been
arrived at "viewing the case from the point of view of first princi-
ples."22
The maxim that the King could not be sued in his own courts has, in a way.
been incorporated in the Indian Constitution in Art. 361 which protects
the President or the Governor of a State from being sued in the civil or
criminal courts or arrested or imprisoned for all their official acts during
their term of office.
Federal Tort Claims Act, 1946.
See Friedman, The Conseil d'Etat in Modern France (1961) 141-150.
"Responsibility for risk arises from a fortuitous or unexpected eventuality.
The cause is usually unkown. This is to be distinguished from a force
majeure, where the cause is known and the conseil does not assume
responsibility.' (See Friedman, op. cit. 146).
A.I.R. 1962 S.C. 940. In this case a jeep car was maintained by the
Rajasthan Government for the benefit of the Collector of Udaipur. It
was being driven back from a private workshop by a driver employed by
government and while doing so, it ran over a pedestrian causing fatal
injuries due to rash and negligent driving. The widow and child of the
deceased claimed damages against the driver and the State. The Supreme
Court upheld the judgment, granting compensation of Rs. 15,000 against
the State.
Ibid.
By the Crown Proceedings Act of 1947 the rule of crown immunity has
been thrown away even in the land where it was nurtured,
 NOTES AND COMMENTS 97

Unfortunately the Supreme Court has not followed this

trend of thought in Kasturilal's case. Distinguishing the 1962
decision with reference to its facts and circumstances the Court
tries to establish the distinction between "Statutory powers" and
"non-statutory powers" as said earlier. The relevant portions
of the dicta be cited here for convenience:
"It is not difficult to realise the significance and importance of making
a distinction particularly at the present time when, in pursuit of their
welfare ideal, the Government of the States as well as the Government of
India naturally and legitimately enter into many commercial and other
undertakinbs and activities which have no relation NA ith the traditional
concept of governmental activities in which the exercise of sovereign power
is involved. , It is necessary to limit the area of these affairs of the State in
relation to the exercise of sovereign power, so that if acts are commited by
Government employees in relation to other activities which may be con-
veniently described as non-governmental or non-sovereign, citizens who
have a cause of action for damages should not be precluded from making
their claim against the State. That is the basis on which the area of the
State immunity against such claims must be limited; and this is exactly
what has been done by this court in its decision in the case of State of
Rajasthan, 1962 supp. (2) S.C.R. 689.
"In the present case, the act of negligence was committed by the police
officers while dealing with the property of Ralia Ram which they had seized
in exercise of their statutory powers. Now, the power to arrest a person,
to search him and to seize property found with rim 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 employee of the respondent during the
course of its employment; but the employment in question being of the
category which can claim the special characteristic of sovereign power,
the claim cannot be sustained and so we inevitably hark back to what
Chief Justic Peacock decided in 1861 and hold that the present claim is not
sustainable".

Thus, the exercise of statutory powers being treated as an

essential incident of 'sovereign power' the exemption frcm liability
is justified by the Court. But it is submitted that the acceptance
of the Hari Bhanji23 gives the correct position. In Hari Bhanji's

23. The rule in this case was followed in P. V. Rao v Khushaldas

(A. I. R. 1949 Bom 277) where Chagla C. J. and Tendolkar, J., held
that the Hari Bhanji case laid down the law correctly. Mukherjee
J. approved this view when the case went up on appeal to the Supreme
Court—Province of Bombay v Khushaldas A. I. R. 1950 S. C. 222.
Therefore it cannot be said that the assumption followed by the learned
Judges in Kasturilal's case that the principles laid down by the P. &•
98 KERALA UNIVERSITY LAW REVIEW

case the court refused to draw the distinction suggested by Peacoak

C. J. and held that claims except those arising out of "act of
state" could be entertained by the civil courts. The distinction
between "statutory" and "non-statutory" powers is too narrow
as the Government and public authorities and their agencies now
exercise vast statutory powers. It is too wide as there is no com-
mon law in India widening or delimiting governmental powers.
Hence the distinction is unreal.
The suggestion made by the Law Commission of India
in favour of solving the riddle by legislation 24 is _supported by the
learned Chief Justice 25 who felt that the principle in deciding the
case 26 "is not a very satisfactory position in law." It is said,
"In dealing with the present appeal, we have ourselves been dis-
turbed by the thought that a citizen whose property was seized
by process of law, has to be told when he seeks a remedy in a court
of law on the ground that his property has not been returned to
him, that he can make no claim against the state. That, we
think, is not a very satisfactory position in law. The remedy
to cure this position, however, lies in the hands of the legislature". 27
It cannot be expected that a statute would be a complete cure
for the disease. Experience in other countries has shown that
statutory provisions might be made illusory by giving wide inter-
pretations to the exceptions provided for in statutes. In Dalehitt
v United States28 the U. S. Supreme Court gave a liberal inter-
pretation to the provision in the statute exempting acts of dis-
cretion by the Government employees in the performance of

0. case have been consistently followed by all judicial decisions in

India, is not fully correct.
It is interesting to note that there was another attempt to make a
a threefold distinction. In Nobin Chander v Scretary of State (I.
L. R. I. Cal. II) Phear J., attempted to establish a third category—"acts
of State", acts of a "commerical nature" and acts done by the States to
its own subjects which are of a "non-commerical nature".
Law Commission of India, First Report. It is in ftwour of adopting
the Hari Bhanji Rule.
Gajendragadkar C. J., expressing the view of the Bench.
Kasturilal's case.
"Already a Bill has been introduced in the Lok Sabha -The Govern
ment (Liability in Tort) Bill, 1965."
346 IJ • S. 15.
 NOTES AND COMMENTS 99

their auties. 29 However, Vidhyawati's case has also suggested

immediate legislation.3° In fact, Article 300 itself has saved
the right of Parliament or the legislature of a state
to enact law as it may think fit and proper in this behalf. When
the rule of immunity in favour of the Crown based on common
law in the United Kingdom has disappeared from the land of
its birth there is no legal warrant for holding that it has any
validity in this country, particularly after the Constitution. There-
fore, the distinctions brought about for conferring immunity upon
the State could not be applied with logical consistency to the
complex conditions of the modern society. 31 The age of laissez
faire has gone, and in that context . an even balance is to be struck
between governmental action and individual liberty and personal
rights. It is hoped that the unreal, unsound and unsatisfactory
distinctions in governmental functions would be thrown away
and at the earliest opportunity a rule of equality before the law
between Government as an employer and as a legal person, and
the private individual as a victim of injuries caused by govern-
mental agencies would be established.

M. Krishnan Nair *

In that case bags of ammonium nitrate stocked in a ship had exploded

in the harbour killin? several hudreds of persons, maiming many
and causing great damages to property. Though negligence was
proved to have been committed the Supreme Court held that the neg-
ligence was caused at the operational level of govermental activity,
although a private manufacturer, contractor or shipper would have
been held liable under similar circumstances. The decision has
been, severely criticised by jurists as it went against the very tenor of
the statute.
A. I. R. 1962 S. C. 933 at p. 940.
See Friedmann — Law in a changing Society (1959) pp. 383-396;
Law and Social Change 273 quoted in Law Commission's First Report
and Libility of the State in Tort (1956) p. 32.
B. Sc., BL., M. L., LL. M., Professor, Government Law College,
Trivandrum.

Thorne V. University of London

(1966 Q.B.D. 237, 239)
DIPLOCK L. J. This is i an application for leave to appeal
from an order of John Stephenson J. striking out the plaintiff's
writ and statement of claim and dismissing the action which he
100 KERALA UNIVERSITY LAW REVIEW

brought against the University of London, the defendants. The

indorsement on the writ reads as follows :-
"The plaintiff's claim is for damages for negligently misjud-
ging the plaintiff's examination papers for the intermediate and
finals LL.B. and for a mandamus commanding the defendants to
award the plaintiff the grade at least justified."
In his statement of claim the plaintiff set out a good deal of
praise of his ability as a lawyer. He went on to say that he sat
for some examinations in the London LL.B. examination, taking
the papers in Criminal Law, Trusts and Evidence, and that he
received notice that he had railcd in the papers in Trusts and
Criminal Law . and he claims that that was a result of negligence
on the part of the examiners.
There is clear and recent authority in Rex V. Dansheath,
Ex parte Meredith that actions of this kind relating to domestic
disputes between members of the University of London (as is the
case with other universities) are matters which are to be dealt with
by the Visitor, and the court has no jurisdiction to deal with them.
In that case which was a decision of the Divisional Court, Lord
Goddard C.J. referred with approval to Thomson V. London
University. That was another case in which a budding lawyer com-
plained about what had happened to him in the examinations held
by the University, and there is a passage in the judgment of Kinder-
sley V.C. which covers exactly the sort of claim which the plaintiff
has put forward in the present case. Kindersley V.C. said this:
"The holding of examinations and the conferring of degrees
being one, if not the main or only subject of this University, all
the regulations, that is, the construction of all the regulations, and
the carrying into effect of all those regulations as among persons
who are either actually members of the University or who come in
and subject themselves to be at least pro hoc vice members of the
university I mean with respect to the degrees which they seek to
have conferred upon them—all those are regulations of the domus:
they are regulations clearly in my mind coming within jurisdiction,
and the exclusive jurisdiction, of the Visitor."
Those words, which were approved in Rex v. D insheath,
Ex parte MerEdith, cover precisely the sort of claim which the
plaintiff seeks to bring before the High Court in this action. The
High Court does not act as a court of appeal from University
examiners: and, speaking for my own part, I am very glad that it
declines this jurisdiction. Clearly, it does decline the jurisdiction.
The action was wholly misconceived, and the decision of the
judge to strike out the indorsement on the writ and the statement of
claim and to dismiss the action was clearly right,