TORTIOUS LIABILITY OF THE STATE: PRE AND POST-INDEPENDENCE

The author, Samyutha Samudrala, is a 4th year student at Symbiosis Law School, Hyderabad.

This article is a critical analysis of the tortious liability of the State for the acts of its officials over the past few decades. It reviews various case laws and sheds light on the change in judicial stance on state liability after the independence.

Tortious liability of the state is based on the principle of vicarious liability and essentially holds the State liable for the wrongs committed by its servants in the exercise of their duty. The concept of vicarious liability of the State in India is based on the principles of respondent superior, Quifacit per alium facit per se and public accountability. 1 The concrete principle of tortious or vicarious liability of State can be traced back to the East India Company period. Section 65 of the Government of India Act 1858 imposed liability on the Crown for the sovereign powers exercised by the officers of the State. This was the first instance for the codification of the tortious liability of the State. In the course of time, the new legislations also provided this right to the people. The Government of India Act, 1915 under Section 32 and the Government of India Act, 1935 through Section 176 reiterated what was mentioned in Section 65 of 1858 Act.

Subsequently, after the independence, the same with necessary modifications was encompassed in Article 300(1) of the Indian Constitution. Article 300 provides the people to sue the government for the acts of administrative authorities. In the case of Union of India v. Mohin Chandra 2 , the court discussing the nature of Article 300, held that this provision confers the Government of India to be a juristic person which means it is an individual in the eyes of law and can sue or be sued without any immunity other than for sovereign functions. This paper studies the paradigm shift, pre and post-independence in the liability of the state for tortious acts of the officials.

TRADITIONAL VIEW ON TORTIOUS ACTS

The question of the liability of State in tort law first came before the court in the case of P & O Navigation Co. v. Secretary of State for India in Council 3 . The question before the court was whether the East India Company would be liable in such situation as the liability of the Secretary of the State is same as that of the East India Company 4 . The court pointed out that the fact that the company exercised sovereign powers as a delegate of the Crown did not make it a sovereign and hence it will not enjoy the immunity of the Crown. It was held that the general principles applicable to the Sovereigns such as ‘king can do no wrong’ would have no application for the East India Company.

In ascertaining the liability in the instinct case, the court established two principles 5 – “(i) suits which could have been brought against the East India Company can now be against the Secretary of State as its successor for the acts done in the conduct of undertakings which might be carried on by private individuals without sovereign powers, and (ii) the Secretary of State was not liable for anything done in exercise of sovereign powers.”

The principles established by the court in P & O case were considered to be a guiding formula for ascertaining state liability for tortious acts. However, there existed a difficulty with the distinction of sovereign and non-sovereign functions as the court did not provided a strait jacket distinction or list out the functions that can be performed by a sovereign or an individual to whom sovereign power is delegated. This empowered the courts with a high degree of discretion to determine if an action is sovereign or not. It is open to the courts to either give a wide interpretation to the term ‘non-sovereign’ and provide compensations to the citizens or instead exempt the State from the liability by giving liberal interpretation to ‘sovereign’ 6 .

The misuse of the discretion can be witnessed in a number of situations and one such case is

Nobin Chunder Day v. Secretary of State 7 . In this case the dispute was regarding the license

agreements for sale of gania and sindhi. The plaintiff was the highest bidder and paid the required amount of the bid but the excise authority refused to give license to the plaintiff. The

High Court held that refusing the rights to plaintiff was an activity related to imposing and collecting excise duties which is a sovereign function. The court further observed that there was no breach of agreement and even if there existed a contract, it would be a sovereign act and no action could lie against the government. The verdict of the court in this case was against the principles of just, fair and reasonability as it failed to consider the fact that the plaintiff fulfilled all the procedural requirements including the payment of the requisite amount. The court instead should have held the government liable by interpreting the term ‘imposition and collection of excise duties’ strictly and excluding other incidental activities from the ambit of sovereign function 8 .

The issue of such wide discretion was soon resolved a certain extent in the case of Secretary of State v. Hari Bhanji 9 . The court held that the immunity of the East India Company is limited only to the acts of the State and defined them as:

“Acts done in exercise of sovereign power, where the act complained of is professedly done under the sanction of municipal law, and in exercise of powers conferred by law.”

The court also clarified that when an act done by exercising the power beyond what is conferred by law, no immunity will be provided even if the act is while discharging sovereign duties. This imposes restrictions on the executive authorities while using their powers. Despite the various opinions of the judiciary, there was no hard and fast rule established to distinguish between the sovereign and non-sovereign functions of the State. If the view in the

Hari Bhanji case was adopted then the status of imposition of tortious liability on the State in the 1900’s would have been different and would be inclined towards providing compensation

to the adverse party. Unfortunately, the courts favoured towards the rule that the Government is not liable for the tortious acts in discharge of sovereign functions. In the subsequent years, the question of tortious liability of the State arouse in a number of cases like Secretary of State v. Cockraft 10 , Gurucharan Kaur v. Madras Province 11 , Etti v. Secretary of State 12 and K. Krishnamurthy v. State of Andhra Pradesh 13 but the court failed to re-look the principle laid down in P & O case.

POST CONSTITUTIONAL VIEW

Until independence the position was stagnant as regards to tortious liability of State for the acts of its servants and the Government was not held liable in any situation causing great injustice to common man. There is a shift in the judicial attitude towards the tortious liability of the State, when India has changed from Police State to Welfare State. Laissez-faire concept favoured non-liability of the State, while Welfare State recognised the concept State liability.

After the commencement of the constitution, the question of tortious liability of the Government came to be re-examined by the Supreme Court in the case of State of Rajsthan v. Vidhyawati 14 . The court held that government would be liable for damages caused by the negligence of its servants if the negligence was such that he would make any other ordinary employer liable. Though the court did not expressly state but it vaguely suggested that it would not hold the government immune from the tortious acts of its servants whether committed in the exercise of sovereign or non-sovereign functions. The observations favoured a broader view of state’s liability for tortious acts of its servants than what the P & O case had laid down.

However, the value of the views mentioned in this case were undermined by the Supreme Court itself in the case of Kasturi Lal v. State of Uttar Pradesh 15 . In Kasturi Lal, the Court looked into the judgement of the P & O case and relied on the distinction made between sovereign and non-sovereign functions of the State. The court pointed out that the distinction between sovereign and non-sovereign functions was uniformly followed in India in judicial decisions and the same would apply to every case dealing with tortious liability of the State. The court held that in the instant case the act of negligence was committed by on-duty police officers while discharging their powers. Hence, the acts can be properly characterised as falling within the concept of sovereign power so no claim for damages will lie.

Despite the conflicting views on tortious liability, the judiciary did not lay down any clear test to determine the act as sovereign or non-sovereign. It is left to the discretion of the court and the facts of each case to determine the nature of power exercised during the commission of act causing injury. One proposed way to distinguish a sovereign from non-sovereign function, is to check if the power is conferred by a statue. However, this is not relevant as the functions overlap sometimes 16 . An activity may be regarded as non-sovereign even it has statutory basis and an activity may be considered as sovereign without any statutory basis. Government engaging in a commercial activity under a statue is an example for the former situation and Government entering into a with foreign country may be an example of latter case 17 .

Considering these differences, many jurists stated that this judgement suffers illogical reasoning as the court in this case erroneously identified that statutory power as sovereign power. It was also criticised as there was no reason why an individual stuck down by a jeep of the social welfare department of the government should get damages but not an individual who was struck by a van carrying warm clothing for soldiers 18 . This created massive confusion as to when the State would be liable.

As the rule in Kasturi Lal case was conflicting with the principles of law, the views given in the case were buried by the Supreme Court in future cases but did not overrule the decision in Kasturi Lal. This has been done by liberally classifying State functions and non-sovereign and also citing exceptions to it by awarding compensation under the writ jurisdiction 19 . The courts in Rudul Shah v. State of Bihar, 20 Bhim Singh v. State of Rajasthan, 21 C Ramakrishna Reddy v. State 22 and Sebastian M. Hongray v. Union of India 23 , have recognised the liability of the State for violation for Article 21 and duly compensated the victims. The courts have held the State liable for tortious acts causing any injury to the people though not explicitly violating any rights enshrined under Part III of the Constitution. 24

PRESENT POSITION OF STATE LIABILITY AND SOVEREIGN IMMUNITY

The State is the biggest employer, and its servants have various functions to perform by way of sovereign powers, statutory powers and powers entrusted by master for other purposes. The public servant’s performance of duties is related to both sovereign and non-sovereign functions. Public servant may either perform the duties maliciously or in good faith, both of which may result in damage to a person or property. There might be a possibility of violation of fundamental rights by public servants. Considering all these aspects, currently, the liability of the Government can be of five kinds 25 :

- Sovereign duties in Good Faith – If a tort is committed by public servant while performing sovereign function in good faith, servant is not liable because he has immunity prescribed by statue. In these cases, it is not possible to impose liability on state because it has sovereign immunity.

- Sovereign duties in Bad Faith – Statutory immunity cannot extend to the torts committed by the government servant while performing the sovereign functions, because the provisions specifically confine immunity to torts done in ‘good faith’ only. Thus, the servant and the state are liable for those torts.

- Fundamental Rights and Sovereign Functions – The situation will be different where fundamental rights are violated, and it is not possible to prove who exactly violated. If a person suffers death or custodial injuries while under custody of the police, the state would be liable to pat the damages. This strict liability rule has come to be established in cases such as Rudal Shah, which proved prolonged detention of the victim even after acquittal and in Nilabati Behra it could not be established who killed the victim but the fact that he died in police custody made the State liable.

- Non -sovereign functions in good faith – Employees of the Government will be exempted from liability because of statutory immunity but the State will be made liable for their torts causing damage to the people.

- Non – sovereign functions in bad faith – The employee and state would be liable for torts if committed during the performance of non-sovereign functions in bad faith. Kasturilal case is an example of negligence which is considered as functioning in bad faith.

CONCLUSION

However, the main loophole is that neither the judiciary nor the legislature developed a clear test to differentiate the sovereign and non-sovereign functions of the State. The distinction is left to the discretion of the judge of a particular case and this often leads to bias. Uncertainty in law leads to abuse of judicial process and there is a need to develop a balanced law relating to it. The Law Commission of India in its First Report suggested that the old view of P & O case regarding the distinction of sovereign and non-sovereign functions shall not be allowed to determine the liability of the State. In view of the various recommendations made by the Law Commission, two Bills in 1965 and 1967 were introduced in the Parliament but were not passed.

It is the need of hour to regulate the concept of tortious liability of State though a legislation. This legislation shall provide a concrete list of sovereign functions for which the State shall be provided immunity and it shall also provide the non- sovereign functions. Moreover, the legislation should explicitly provide no immunity in cases of incidental matters while discharge of sovereign functions. Government immunity should not be ruled out completely but it should be reduced to a minimal degree. This will ensure that the State does not perform acts in bad faith or negligently and take the defence of sovereign functions.

1 I.P.Massey, Administrative Law, Eastern Book Company, 9 th ed. 2017, pp. 468.

2 Union of India v. Mohin Chandra A.I.R 1952 Ass. 159.

3 P & O Navigation Co. v. Secretary of State for India in Council (1861) 5 Bom HCR App 1.

4 M P Jain and S N Jain, Principles of Administrative Law, Lexis Nexis, 6 th ed. (2010), pp. 841.

5 Supra 4 at 842.

6 A Prasanna, Tortious Liability of Government, 9 Co. Uni. L’. R’, 419 (1985).

7 Nobin Chunder Day v. Secretary of State (1876) ILR 1 Cal. 12.

8 Id.

9 State v. Hari Bhanji (1882) 5 ILR Mad. 273.

10 Secretary of State v. Cockraft AIR 1915 Mad. 993.

11 Gurucharan Kaur v. Madras Province, AIR 1942 Mad. 539.

12 Etti v. Secretary of State, AIR 1939 Mad. 663.

13 K. Krishnamurthy v. State of Andhra Pradesh AIR 1961 AP 283.

14 State of Rajsthan v. Vidhyawati AIR 1962 SC 933.

15 Kasturi Lal v. State of Uttar Pradesh AIR 1965 SC 1039.

16 Supra 4 at 841.

17 Id.

18 S P Sathe, Administrative Law, Lexis Nexis Publication, 7 th ed., 2004, pp. 593.

19 Id at 594.

20 Rudal Shah v. State of Bihar, AIR 1983 SC 1086.

21 Bhim Singh v. State of Rajasthan, AIR 1986 SC 494.

22 C Ramakrishna Reddy v. State, AIR 1989 AP 235.

23 M. Hongray v. Union of India, AIR 1984 SC 1026.

24 Alvaro v. General, Telecom, AIR 2000 Bom 278; Dhian Singh Sobha Singh v. Union of India, AIR 1958 SC

274.

25 Ramaswamy Iyer The Law of Torts, Lexis Nexis, Butterworths Wadhwas Nagpur, 10 th ed., 2007, pp. 896.