State Liability - Lecture - Law - Dr. Sridhar, Lecture notes for Labour Law. University of Hyderabad

State Liability - Lecture - Law - Dr. Sridhar, Lecture notes for Labour Law. University of Hyderabad

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Description about State Liability, Significant decisions, Other cases, Non-sovereign function,Statutory/sovereign powers, Suggestion in Kasturilal.
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State Liability

Government Servant

Sovereign Function

Non-sovereign Function

Defence Law & Order Adjudication Taxation Foreign Relations

Done in Good faith

Done in Bad faith

Done in Good Faith

Done in Bad Faith

Servant & State Not liable

No immunity State liable Servant also

Statutory immunity To servants, but State liable

No immunity State liable Servant also

Any activity which

Ordinary person

Can undertake

Committing Tort while exercising

Liability of Government Servant and Vicarious Liability of State for injuries caused to the persons

King can do no wrong

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.

King can do wrong

Crown Proceedings Act, 1947, which came into force on January 1, 1948.

Section 2 (1) of the Act provides that the “Crown shall be subject to all those liabilities, in tort, to which it would be subject, if it were a private person of full age and capacity, in respect of torts committed by its servants or agents, subject to the other provisions of this Act.

East India Co

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

Significant decisions

P & O Steam Navigation Co v Secretary of State for India (1861) HCR 51

• Peacoak held King can do no wrong is not applicable in India.

Nobin Chandra Deo v Sec of State (1873) ILR 1 Cal 1. Govt contract with N to sell Ganja. Govt not held liable, even if there is contract, Sovereign function.

Other cases

• Sec of State v Hari Bhanji (1882) ILR 5 Mad 273, immunity confined to acts of state.

• Sec of State v Cockraft AIR 1915 Mad 993 repairing military road is sovereign act. Gravel placed on road, caused injury, not liable

Govt Servant can sue

State of Bihar Vs. Abdul Majid, (1954) SCR 786: (AIR 1954 SC 245), this Court has recognised the right of a Government servant to sue the Government for recovery of arrears of salary.


State of Rajasthan v Vidyavathi AIR 1962 SC 933 State immunity is confined to sovereign function in good faith.

• State is liable for non-sovereign acts of servants with negligence

• State immunity is confined to sovereign functions performed in good faith


Kasturilal Lal v State of UP AIR 1965 SC 1039

• Was tortuous act committed by public servant in discharge of statutory functions which are referable to and ultimately based on the delegation of sovereign powers of State to such public servant?

• If answer is yes, not liable.

Non-sovereign function

• On the other hand if the tortuous act has been committed by a public servant in the discharge of duties assigned to him not by virtue of the delegation of any non- sovereign powers, an action for damages would lie, since the act of the public servant in such cases is same as the act of a servant who might have been employed by a private individual for the same purpose

Statutory/sovereign powers

“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 powersThe power to arrest a person, to search him and to seize property found with him, are powers conferred on the specified officers by statute and in the last analysis, they are powers which can be properly categorized as sovereign powers…”

Suggestion in Kasturilal

Supreme Court suggested legislature to make law on the lines of Crown Proceedings Act, 1947 of UK

Memon Mohamed case • State of Gujarat Vs. Memon Mohamed, AIR 1967 SC

1885; (1968) 1 SC J 273. • Certain goods were seized under the Sea Customs

Act. They were not properly kept and were disposed of, by an order of the Magistrate. On the owner suing the State for value of the goods, it was held that as the seizure was illegal because –

• a bailment arose; • a statutory obligation to return the goods arose; and • suit was maintainable against state

Basava case

Basava Kom Dyamgonde Patil Vs. State of Mysore, AIR 1977 SC 1749; (1977) 2 SCJ 289.

• Articles seized by the police were produced before a Magistrate, who directed the Sub- Inspector to keep them in his safe custody and to get them verified and valued by a goldsmith. The articles were lost, while they were kept in the police guard room. State to pay the value of the property to the owner. Statutory obligation.

Nagendra Rao case

N. Nagendra Rao Vs. State of AP (AIR 1994 SC 2663

• “In the modern sense, the distinction between sovereign or non-sovereign power thus does not exist.

• A person cannot sue if suffered by negligent way of making legislation or by negligent policy of state.

Sovereign functions

defence of the country, raising (the) armed forces and maintaining it, making peace or war, foreign affairs, power to acquire and retain territory, are functions which are indicative of external sovereignty and are political in nature

Immunity ends

• No legal or political system today can place the State above (the law) as it is unjust and unfair for a citizen to be deprived of his property illegally by negligent act of officers of the State without any remedy.

• Any watertight compartmentalization of the functions of the State as “sovereign and non- sovereign” or “governmental and non- governmental” is not sound. It is contrary to modern jurisprudential thinking


The primary or inalienable functions, eg maintenance of law and order, can not be sued unless entrenches FRs of individuals

But that principle would not be attracted where similar powers are conferred on officers who exercise statutory powers which are otherwise than sovereign powers

Immunity cannot extend • Functions which are not primary or not

inalienableThe Act (Essential Commodities Act) deals

with persons indulging in hoarding and black marketing. Any power for regulating and controlling the essential commodities and the delegation of power to authorized officers to inspect, search and seize the property for carrying out the object of the statute cannot be a power, for (the) negligent exercise of which the State can claim immunity

SC said, Finally

No constitutional system can, either on State necessity or public policy, condone negligent functioning of the State or its officers

• No civilised system can permit an executive to play with the people of a country and claim to be sovereign.

Liability and immunity

• State is liable for torts of its servants except in cases of ACTS of STATE like

• Defence of country • Administration of justice • Maintenance of law and order • Repression of Crime • State liable if FRs u/a 21 violated

Analysis of Nagendra rao

Non-existence of the distinctionNon-liability for political actsImmunity ends with political actsThe demarcating line – primary and

inalienable functions Misfeasance doctrineKasturi Lal’s case – inalienable


A.P. v CR Reddy

State of AP v Challa Ramkonda Reddy AIR 2000 SC 2023, SC awarded compensation to injured by public servants (police). SI conspired and Jail staff negligent

• Kasturilal is no longer of any binding value • F Rights are available to prisoners, cannot be

defeated by pleading sovereign acts, prisoner does not cease to be human being, retain residue of constitutional rights.

Federal Tort Claims Act 1946

• US, the State is made liable for torts to property, life and person

• US not liable for torts committed in discharge of such duties if the duties are performed with due care.

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