Tortious Liability of State
The concept of tortuous liability of State means that the state is liable for the acts of its servants. State has to act through human agencies in carrying out various functions. So the important question which arises is whether the State can be held vicariously liable for the acts of its employees. Under the English the old position was that the Crown enjoyed immunity from the wrongs committed in tort. In other words, Crown could not be sued for the torts of its servants. This was largely based on the concept ‘King can do no wrong’. However, with increase of government’s function this concept was abolished by Crown Proceedings Act, 1947. This Act placed the government in the same position as the subjects. As far as Indian position is concerned the doctrine of ‘King can do no wrong’ was never accepted in India. Liability of government is fixed under Article 300 of the Constitution. Union of India and State can sue and be sued in the same way as the Dominion of India and Provinces before the commencement of the Constitution. In order to effectively appreciate the concept of tortuous liability of State the concept of sovereign and non-sovereign functions is to be understood.
Sovereign and non-sovereign functions
When East India Company arrived in India it was essentially a trading entity. The purpose of the company was to trade in India. Subsequently, it obtained the Diwani rights from Mughals and acquired dual character i.e. (1) trading company and (2) sovereign. Later, the company was granted the right to acquire territories and maintain army on behalf of the Crown. By virtue of Government of India Act, 1858 the Crown took sovereignty from the company. The Act allowed the Secretary of the State in Council to sue and be sued. Similar provisions were found in Government of India Act, 1915 and 1935. Because of dual character of East India Company there was distinction between sovereign and non-sovereign functions. In respect of sovereign functions the company was not liable while in respect of non-sovereign functions the company was liable.
In P & O Steam Navigation Co. v. Secretary of State, (1868) 5 Bom HCR App 1 court held that if a particular act can be done by private persons then it does qualify for sovereign functions. Court recognized that there is a clear distinction between acts done in exercise of sovereign powers and acts done in conduct of undertakings which might be carried on by private individuals without having such powers delegated to them. The court classified the acts of Secretary of State in (1) sovereign functions and (2) non-sovereign functions. The court clarified that in respect of sovereign functions Secretary of State was not liable. This observation of the court was followed in catena of decisions. In Nobin Chunder Dey v. Secretary of State for India, ILR (1875) 1 Cal 11 plaintiff applied for a licence of ganja shop and he deposited certain amount. The licence was denied. He sued the State for refund of amount and claimed damages. Court held that the grant of licence of run ganja shop was a sovereign function and action was not maintainable.
After the commencement of the Constitution the Supreme Court was confronted with this question in State of Rajasthan v. Vidyawati, AIR 1962 SC 933. In this case the jeep was owned by the State of Rajasthan for official use of Collector. The driver of the jeep while bringing the jeep back from workshop drove it negligently and injured a pedestrian who subsequently died. The court held the State vicariously liable for rash and negligent act of the driver. Supreme Court rejected the notion that ‘King can do no wrong’ and stated that such notion is not applicable in India. Keeping in mind the socialistic pattern of society and large number of functions of the Government State should be held vicariously liable for the tortious acts of its servants. However, later in Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 Supreme Court diluted the observation in Vidyawati case. Court categorically held that of the tortious act is committed by public servant in exercise of sovereign functions then the State will not be liable however, if the act is done in exercise of non-sovereign functions the State will be liable in tort.
Law laid down in Kasturi Lal’s case held ground for quite some time. However, in later decisions, Supreme Court did not follow the law laid down in Kasturi Lal’s case. Court always distinguished the facts of this case from other cases. Nevertheless, it is pertinent to note that Kasturi Lal’s case has not been specifically overruled till date. In N. Nagendra Rao v. State of Andhra Pradesh, (1994) 6 SCC 205 Supreme Court held that the concept of sovereign immunity cannot be a defence where the State is involved in commercial activities. Such concept can also not apply where officers of State are guilty of interfering with life and liberty of citizens. In all such cases the State should be held vicariously liable and constitutionally bound to compensate and indemnify the wronged person. The court observed that the distinction between sovereign and non-sovereign functions does not exist anymore. This distinction is contrary to modern thinking. Thus, the demarcating line between sovereign and non-sovereign functions has disappeared. It must be noted that after expansion of scope of Article 21 and evolution of compensatory jurisprudence under Article 32 and 226 the concept of sovereign and non-sovereign function has become outdated. Kasturi Lal’s case, though not specifically overruled, has lost its vigour and significantly eroded. Recent judicial trend is in favour of holding State liable for tortious acts committed by its servants.