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Liability of the State for tortious acts: Urgent need for legislation

July 22, 2021

By Y. Srinivasa Rao, Research Scholar in Law of Torts., Principal Senior Civil Judge, Tirupati, Andhra Pradesh.


  1. Introduction
  2. Situation after of the Act of 1858
  3. Urgent need for legislation
  4. Conclusion

In India, Article 300 of the Indian Constitution regulates the liability of the State to be sued. The Researcher does want to discuss the law relating to liability of the State in respect of property and contract etc inasmuch as it is not in doubt. It is seminal to note that under Article 300, the liability of the State (the Union and the States) is the same as that of the Dominion and the Provinces of our country before the Indian Constitution introduced in India. It would be noticed that it is subject to legislation by the Parliament or the Legislatures of the States concerned. To know liability of the Dominion and the Provinces, we have to go back to understand the Government of India Act, 1858 by which the Crown assumed sovereignty. No difference was made between acts committed by the East Indian Company in its political capacity and acts done by it in exercise of its commercial activities was clear from the landmark judgment in Dhackjee Dadajee Vs. The East India Company. It was also known if we refer to the Charter of the Supreme Court established at Calcutta in 1774. See also. Section 10 of the Charter Act,1833. Under section 10 of the Act,1833, the East India Company could be held liable only in respect of liabilities incurred by it and not by the Governor over whose acts it had no control. The ratio decidendi in the Dhackjee Dadajee Vs. The East India Company is very important to understand the earlier legal position for reason that it was held before the Charter Act of 1856 and under the law then obtaining.

Situation of after the Act of 1858:—
It is now significant to refer to P & O. Their Lordships pointed out that Company was not sovereign though it exercised sovereign functions and, therefore, was not entitled to the immunity of the Sovereign. His Lordship Chief Justice held as follows:
‘But where an act is done or a contract is entered into, in the exercise of powers usually called sovereign powers by which we mean powers which cannot be lawfully exercised except by a sovereign or private individual delegated by a
sovereign to exercise them, no action will lie.’
To understand the Charter Acts and the Govt. of India Act, 1858, it is important to refer to the ruling given in P & O’s case (supra).
As to the question of trespass is concerned, ratio laid down in Peninsular case is essential, a fortiori, the law laid down in Peninsular case was accepted in Moment’s case. In this case, Section 65 of the Act of 1858 was interpreted. The dictum of P & O’s case was not approved in Moment’s case. In fact, section 65 of the Act of 1858 and section 32 of the Government of Indian Act, 1915 were similar. Interpreting the same, it was observed in the above two decisions of the Judicial Committee that section 65 related to parties and procedure and had not the effect of limiting or barring the right of action otherwise available to an individual against the Government.
After Peninsular case, two divergent views were come by the courts. Now, the point is what ruling will give us a clear guidance to understand the point in question. The Hon’ble Law Commission of India in its First Report, it was observed that Hari Bhanji’s case is the most important decision. The main question was arisen was the jurisdiction of the court to entertain the suit. In Nobinchandra’s case,it was held that in respect of acts done in the exercise of its sovereign functions by the East India Company , no suit could be entertained against the Company.
In Hari Bhanji’s case, two important questions were answered.

  1. Whether the defendant was a sovereign, who could not be sued in his own
  2. Second question related to the charter of the act in respect of which the
    relief was claimed.
    The first question did not present much difficulty as the immunity enjoyed by the Crown in England did not extend to the East Indian Company, all the Charter Acts having recognized the right and liability of the Company to sue and to be sued. It was held that the immunity of the East Indian Company extended only to what are known as ‘Acts of State’ strictly so-called, and the distinction based on sovereign and non-sovereign functions of the Company was not well-founded.
    If we go through the decisions which are summarized in Ilbert, Government of India, at pages 196 and 202, it is known that the cases before the Act of 1858 and the later cases were considered by the High Courts in India. Further. We have to refer to rulings Tanjore case and Nabob of Arcot Vs. The East India Company to under the dicta about the concept of ‘Acts of State.’
    In Forrester Vs. Secretary of State of India, the Privy Council upheld the jurisdiction of the Court holding that an act directed by the Executive against a subject within its territory and was not an ‘Act of State’. The importance of this decision is that the Judicial Committee did not consider that the exercise of sovereign power against a subject could not be questioned in a court of law. As was observed by the Law Commission of India in its first report, the lvey of custom duty is undoubtedly a sovereign function; yet the Madras Judges in Hari Bhanji’s case held that as it was an act, the jurisdiction for which was sought under the municipal law, the municipal courts had undoubted jurisdiction. That decision is noteworthy as laying down a test which can be applied with certainty. See also. Eshugbay Vs. Govt. of Nigeria and Secretary of State Vs. Cockraft as to the other lines of cases proceed on the basis of a distinction between sovereign and non-sovereign functions. In Secretary of State Vs. Cockraft, it was held that ‘If the State derived benefit from the exercise of sovereign powers, it would be liable.’
    In which cases, the Union & the States was held not liable for torts arising out of ?
    The States was held not liable for torts arising out of:
  3. Commandeering goods during war.
  4. Making or repairing a military road.
  5. Administration of Justice.
  6. Improper arrest, negligence or trespass by police officers.
  7. Removal of an agent by a labour supply association under an ordinance. 6. Wrongful refusal to issue a licence to sell ganja under excise law.
  8. Negligence of officers of the court of wards in the administration of estate in their charge.
  9. Negligence of officers in the discharge of statutory duties.
  10. Loss of movable property in the custody of government.
  11. Payment of money to a person other than the rightful owner by
    government servants.
  12. Negligence acts of servants of the Government. The Crown was not liable
    for negligent or tortious acts of its officers done in the course of their official duties imposed by statue except where it could be proved that the impugned act was authorized by the Crown or that it had profited by its performance.
  13. Removal of a child by the negligence of the authorities of a Hospital maintained out of the revenues of the State.
  14. Negligence of the Chief constable who seized hay under statutory authority.

Urgent need for legislation:-
As noticed by the Law Commission of India in its First Report, there is an urgent need for legislation in respect of liability of the Union and the States for tortious acts.
General principles of tortuous liability as referred to in the proposals of the Law Commission of India in its first report.

  1. Liability of master to third parties for torts committed by servants.
  2. Liability of an employer for torts committed by an independent contractor,
    his servants or agents.
  3. Liability of principal for torts of his agents.
  4. Liability of master to servant.
  5. Common law duties attaching to ownership, occupation, possession, or
    control of property.
  6. Absolute liability for inherent dangerous things. 7. Things not inherently dangerous.
    The Law Commission of India succinctly explained these proposals in its first report.
    On the initiative of the President of India, the Law Ministry took up for consideration of the question whether legislation on the lines of the Crown Proceedings Act, 1947 of the United Kingdom in respect of the claims against the Union and the States based on tort is needed. The Law Commission of India submitted First Report on May 11, 1956. But, still now there is no complete codification of law of torts on this subject of liability of the State in tort. Of course, the law relating to the liability of the State in respect of contracts and property etc., is not in doubt. But, the law relating to the liability of the State for tortuous acts is in a state of uncertainty and therefore an appropriate legislation is essential.

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