CHANAKYA NATIONAL LAW UNIVERSITY

Final draft for partial fulfillment of project of Torts

On

“Sovereign and Non-Sovereign Functions- Liability of State”

Submitted to: Submitted By:

Mrs. Sushmita Singh Ananya Shukla

(Faculty of Torts) Roll Number 1914

1st Year, B.A.LL.B(Hons.)

 Acknowledgement
First of all I am very grateful to my subject teacher Mrs. Sushmita Singh without the kind
support of whom and help the completion of the project would have been a herculean task for
me. She took out time from her busy schedule to help me to complete this project and suggested
me from where and how to collect data.

I acknowledge my family and friends who gave their valuable and meticulous advice which was
very useful and could not be ignored in writing the project. I want to convey most sincere thanks
to my faculties for helping me throughout the project.

Thereafter, I would also like to express my gratitude towards our seniors who played a vital role
in the compilation of this research work.

I would also like to express my gratitude towards the library staff of my college which assisted
me in acquiring the sources necessary for the compilation of my project.

Last, but not the least, I would like to thank the Almighty for obvious reasons.

Ananya Shukla

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 Declaration
I hereby declare that the work reported in the BA LL.B (Hons.) Project Report entitled
“Sovereign and Non-Sovereign Functions- Liability of State” submitted at Chanakya National
Law University, Patna is an authentic record of my work carried out under the supervision of
Mrs. Sushmita Singh. I have not submitted this work elsewhere for any other degree or diploma.
I am fully responsible for the contents of my Project Report.

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Aims and Objectives
1. To study the various functions performed by the state, sovereign and non-sovereign.

2. To study the difference between sovereign and non-sovereign functions of the state.

3. To study when the state can be made liable for the tortious conduct of its employees.

4. To study various cases based on sovereign and non-sovereign functions.

Hypothesis
The researcher is of the view that a detailed study of precedents can give us an insight into how
the sovereign and non-sovereign functions have been distinguished from each other.

The State is engaged with various functions, but all of them cannot be construed as primary
inalienable functions and for the sovereign functions, the state is not answerable to any court of
law.

Research Methodology
As the research work for this topic is confined to the library and books and no field work has
been done. Hence, researcher in this research work has opted the doctrinal methodology of
research. For doing the research work various sources has been used. Researcher in the research
work has relied upon the sources like various books on ‘law of torts’, statutes and online
materials is also helpful source for the research.

Sources of Data
The researcher has used primary and secondary sources of data for the purpose of research.

Limitations
Area of limitations - Every study has own limitation due to the limited time, lack of sufficient

financial resources and limited area of survey/study of the subject matter.

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Contents
1. Introduction .................................................................................................................................... 6

2. Sovereign Functions ......................................................................................................................... 7

a) Non-Liability of the State under Legislative Protection ................................................................. 7

3. Non-sovereign Functions ................................................................................................................. 8

4. Difference between Sovereign and Non-sovereign functions ........................................................... 9

5. Sovereign Immunity ....................................................................................................................... 11

a) Sovereign Immunity in the Pre Constitutional Era .......................................................................... 12

b) Sovereign Immunity in the Post-Independence Era .................................................................... 12

c) Recent Developments ................................................................................................................ 14

6. Various cases on Vicarious Liability of State ................................................................................... 15

i. State of Rajasthan v. Vidyawati .............................................................................................. 15

ii. Kasturi Lal v. State of U.P........................................................................................................ 16

iii. State of M.P. v. Chironji Lal..................................................................................................... 17

iv. Satyawati Devi v. Union of India ............................................................................................. 17

v. Union of India v. Sugrabai....................................................................................................... 18

vi. Khatri(II) v. State of Bihar ....................................................................................................... 18

vii. Rudal Shah v. State of Bihar ................................................................................................ 19

viii. Bhim Singh v. State Of Jammu And Kashmir........................................................................ 19

ix. Saheli, A Women’s Resources v. Commissioner Of Police ....................................................... 19

x. Common Cause, A Registered Society v. Union of India .......................................................... 20

xi. N. Nagendra Rao v. State of A.P.............................................................................................. 20

xii. Chairman, Railway Board v. Chandrima Das ........................................................................ 21

xiii. State of Gujarat v. Haji Memon .......................................................................................... 21

xiv. Basava Kom Dyamgonde Patil v. State of Mysore ............................................................... 22

7. Conclusion ..................................................................................................................................... 22

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1. Introduction
Sovereign Immunity is a legal doctrine by which the sovereign or the state cannot commit a legal
wrong, and is immune from civil suit or criminal prosecution. The liability of state differs from
that of individuals. A state is immune from torts committed by itself or its agents while
performing sovereign functions. However, if the state was not discharging its sovereign function
but discharging obligations such as welfare obligations then it will be liable for its actions. State
immunity is confined to acts of state.

The doctrine of sovereign immunity is based on the Common Law principle borrowed from the
British Jurisprudence that the King commits no wrong and that he cannot be guilty of personal
negligence or misconduct, and as such cannot be responsible for the negligence or misconduct of
his servants. Another aspect of this doctrine was that it was an attribute of sovereignty that a
State cannot be sued in its own courts without its consent.

Sovereign functions are those actions of the state for which it is not answerable in any court of
law. For instance, acts such as defense of the country, raising and maintaining armed forces,
making peace or war, foreign affairs, acquiring and retaining territory, are functions which are
indicative of external sovereignty and are political in nature. Therefore, they are not amenable to
jurisdiction of ordinary civil court. The State is immune from being sued, as the jurisdiction of
the courts in such matters is impliedly barred.

Initially in India, the distinction between sovereign and non-sovereign functions was maintained
in relation to the principle immunity of the Government for the tortuous acts of its servants. In
India, there is no legislation which governs the liability of the State. It is Article 300 of the
Constitution of India, 1950, which specifies the liability of the Union or the State with respect to
an act of the Government.

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2. Sovereign Functions
Sovereign functions are those actions of the State for which it is not answerable before the
Court of Law. Matters such as defense of the country, raising and maintaining armed forces,
making peace in retaining territory, are functions which are indicative of external sovereignty
and are not amenable to jurisdiction of ordinary civil Court. Sovereign functions are
primarily inalienable functions, which the State only could exercise. The State is engaged
with various functions, but all of them cannot be construed as primary inalienable functions.
Taxation, eminent domain and police functions including maintenance of law and order,
legislative functions, administration of law, grant of pardon could be found as the sovereign
functions of the State. In the modern sense, the distinction between sovereign or non-
sovereign power does not suit. It depends upon the nature of the power and the manner of its
exercise.

Peninsular and Oriental Steam Navigation Co. v. Secretary of State for India, was the
historical case which had drawn the principle of sovereign and non-sovereign functions of
the Government while deciding the extent of liability and immunity of the State. The
Supreme Court of Calcutta held that the Secretary of State is liable only for the extent of
commercial functions and not liable for anything done in exercise of sovereign powers. The
dichotomy theory of “Sovereign and Non-Sovereign functions determined by the Court in
Peninsular case helped the judiciary to interpret the functions of the government when the
question of liability of State arose. But there is no uniform and static norm to decide the
sovereign functions. Various judicial interpretations are given by the Courts in various cases
as sovereign functions to exempt the State from liability. When the functions of the State are
carried out by its servants under the provisions of the State the State is not responsible to pay
compensation for the wrongful acts of its servants.

a) Non-Liability of the State under Legislative Protection

Now the extent of liability and immunity of State under tort depends on the nature of
the power and manner of its exercise. The Constitution of India, provides legislative
supremacy subject to Judicial Review. The Parliament is free to enact any legislation
on any topics and any subjects authorized by the Constitutional provisions without

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 violating basic structure of the Constitution. Likewise, the executive is also free to
execute the actions through law. Thus the legislature may enact bad law due to its
negligence or the law may be affected due to failure of compliance of fundamental
rights or public policy. In such circumstances, the affected person cannot approach a
Court of law for negligence in making law. The legislature may justify it on the
ground of public interest and the executive may also justify it on the same ground.
Thus the statutory provisions protect the acts of State for its smooth functioning. Even
though it is conflicting with the modern concept of sovereignty, the State should not
be answerable in torts. But it is not acceptable that the affected common man is left
out without remedy. It is left to the judiciary to render social justice in case when
injustice is done due to the legislative or executive action. In such cases, the officers
are made personally liable for torts. In such situation the question is why the State is
exempted from liability when the officers who are linked with the State are made
liable.

3. Non-sovereign Functions
However the immunity ends there. No civilized system can permit an executive to play with
the people of its country and claim that it is entitled to act in any manner, as it is sovereign.

The concept of public interest has changed with structural change in the society. The need of
the state to have extraordinary powers cannot be doubted. However with the conceptual
change of statutory power being statutory duty for (the) sake of society and the people, the
claim of a common man or ordinary citizen cannot be thrown out, merely because it was
done by an officer of the state; duty of its officials and right of the citizens are required to be
reconciled, so that the rule of law in a welfare state is not shaken.

The court emphasized the element of welfare state in these words:

In a welfare state, functions of a state are not only the defence of the country or
administration of justice or maintaining law and order, but it extends to regulating and
controlling the activities of people in almost every sphere, educational, commercial, social,

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 economic, political and even marital. The demarcating line between sovereign and non-
sovereign powers, for which no rational basis survives, has largely disappeared. Therefore,
barring functions such as administration of justice or maintenance of law and order and
repression of crime etc which are among the primary and inalienable functions of a
constitutional government, the state cannot claim any immunity.

The court linking together the state, and the officers, said that, the determination of vicarious
liability of the state being linked with (the) negligence of its officers, if they can be sued
personally for which there is no dearth of authority and the law of misfeasance in discharge
of public duty having marched ahead, there is no rationale for the proposition that even if the
officer is liable, the state cannot be sued.

The court also distinguished the judgment in Kasturilal, in these words:

The ratio of Kasturilal is available to those rare and limited cases where the statutory
authority acts as a delegate of such functions for which it cannot be sued in court of law. In
Kasturilal case, the property for damages of which the suit was filed was seized by the police
officers while exercising the power of arrest under s 54(1)(iv) of the Code of Criminal
Procedure. The power to search and apprehend a suspect under the Code of Criminal
Procedure is one of the inalienable powers of the state. It was probably for this reason that
the principle of sovereign immunity in the conservative sense was extended by the court.
However the same principle would not be available in large number of other activities carried
on by the state by enacting a law in its legislative competence.

4. Difference between Sovereign and Non-sovereign functions

The distinction between sovereign and non-sovereign functions was considered at some
length in N Nagendra Rao v State of Andhra Pradesh1. All the earlier Indian decisions on
the subject were referred to. The court enunciated the following legal principles in its
judgement.

1
AIR 1994 SC 2663.

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In the modern sense, the distinction between sovereign or non-sovereign power does not
exist. It all depends upon the nature of the power and manner of its exercise. Legislative
supremacy under the Constitution arises out of constitutional provisions. The legislature is
free to legislate on topics and subjects carved out for it. Similarly, the executive is free to
implement and administer the law. A law made by legislature may be bad or ultra vires, but
since it is an exercise of legislative power, a person affected by it may challenge its validity
but he cannot approach a court of law for negligence in making the law. Nor can the
government, in exercise of its executive action, be sued for its decision on political or policy
matters. It is in (the) public interest that for acts performed by the state, either in its
legislative or executive capacity, it should not be answerable in torts. That would be
illogical and impracticable. It would be in conflict with even modern notions of sovereignty.
The court in the above case suggested the following tests-
One of the tests to determine if the legislative or executive function is sovereign in nature is,
whether the state is answerable for such actions in courts of law. For instance, acts such as
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. Therefore, they are not amenable to
jurisdiction of ordinary civil court No suit under the Code of Civil Procedure would lie in
respect of it. The state is immune from being sued, as the jurisdiction of the court in such
matters is impliedly barred.
The court in case of N Nagendra Rao offered the following distinction
A law may be made to carry out the primary or inalienable functions of the State. Criminal
Procedure Code is one such law. A search or seizure effected under such law could be taken
to be an exercise of power which may be in domain of inalienable function. Whether the
authority to whom this power is delegated is liable for negligence in discharge of duties
while performing such functions, is a different matter. However, when similar powers are
conferred under the other statute as incidental or ancillary power to carry out the purpose
and objective of the Act, then, it being an exercise of State function which is not primary or
inalienable, an officer acting negligently is liable personally and the state vicariously.
Maintenance of law and order or repression of crime may be inalienable functions, for the
proper exercise of which, the state may enact a law and may delegate its functions, the

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 violation of which may not be sueable in torts, unless it trenches into and encroaches on the
fundamental rights of life and liberty guaranteed by the Constitution. However that principle
would not be attracted where similar powers are conferred on officers who exercise statutory
powers which are otherwise than sovereign powers as understood in the modern sense. Any
power for 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. No constitutional system can, either on state necessity or public policy,
condone negligent functioning of the state or its officials.

5. Sovereign Immunity
The State generally benefits from two forms of immunity:

 Immunity to Jurisdiction
A state’s immunity to jurisdiction results from the belief that it would be inappropriate for
one State’s courts to call another State under its jurisdiction. Therefore, State entities are
immune from the jurisdiction of the courts of another State. However, this immunity can
generally be waived by the State entity. Reference to arbitration is in many legal systems
sufficient to demonstrate a waiver of immunity to jurisdiction by the State. However, certain
developing countries may be hesitant to submit themselves to international arbitration,
believing that arbitration is dominated by Western principles and would not give a
developing country a fair hearing. These same developing countries may feel more secure
submitting to arbitration under the UNCITRAL rules, which are often considered more
culturally neutral than those of the ICC or other Western tribunals.

 Immunity from execution

The State will also have immunity from execution, as it would be improper for the courts of
one State to seize the property of another State. Immunity from execution may also
generally be waived.
Waiving immunity from execution may be difficult for a government to address. As a
general proposition under most legal systems, certain assets belonging to the state should

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 not be available for satisfaction of the execution of an arbitral award; for example, the
country’s foreign embassies, or consular possessions. Therefore, some method may have to
be made available for the private party to seize certain state assets, possibly through careful
definition of those possessions available for seizure.

a) Sovereign Immunity in the Pre Constitutional Era

In India, the story of the birth of the doctrine of Sovereign Immunity begins with the
decision of Peacock C.J. in Peninsular and Oriental Steel Navigation Company v. Secretary
of State for India2, in which the terms “Sovereign” and “Non-sovereign” were used while
deciding the liability of the East India Company for the torts committed by its servants.

In this case the provision of the Government of India Act, 1858 for the first time came
before the Calcutta Supreme Court for judicial interpretation and C.J. Peacock determined
the vicarious liability of the East India Company by classifying its functions into
“sovereign” and “non-sovereign”.

Two divergent views were expressed by the courts after this landmark decision in which the
most important decision was given by the Madras High Court in the case of Hari Bhan Ji v.
Secretary of State3, where the Madras High Court held that the immunity of the East India
Company extended only to what were called the ‘acts of state’, strictly so called and that the
distinction between sovereign and Non-sovereign functions was not a well-founded one.

b) Sovereign Immunity in the Post-Independence Era

After the commencement of the Constitution, perhaps the first major case which came up
before the Supreme Court for the determination of liability of Government for torts of its
employees was the case of State of Rajasthan v. Vidyawati4. In this case, court rejected the
plea of immunity of the State and held that the State was liable for the tortious act of the

2
5 BOM HCR APP. 1.
3
(1882) 5 ILR MAD. 273.
4
AIR 1962 SC 933.

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 driver like any other employer. Later, in Kasturilal Ralia Ram Jain v. State of U.P.5, the Apex
Court took a different view and the entire situation was embroiled in a confusion. In this case,
the Supreme Court followed the rule laid down in Peninsular and Oriental Steam Navigation
Company case by distinguishing Sovereign and Non-Sovereign functions of the state and held
that abuse of police power is a Sovereign act, therefore State is not liable.

In practice, the distinction between the acts done in the exercise of sovereign functions and
that done in non-Sovereign functions would not be so easy or is liable to create considerable
difficulty for the courts. The court distinguished the decision in Vidyawati’s case as it
involved an activity which cannot be said to be referred to, or ultimately based on the
delegation of governmental powers of the State. On the other hand, the power involved in
Kasturilal’s case to arrest, search and seize are powers characterized as Sovereign powers.
Finally the court expressed that the law in this regard is unsatisfactory and the remedy to cure
the position lies in the hands of the legislature.

The Courts in later years, by liberal interpretation, limited the immunity of State by holding
more and more functions of the State as non-Sovereign.

To ensure the personal liberty of individuals from abuse of public power, a new remedy was
created by the Apex court to grant damages through writ petitions under Article 32 and Article
226 of the Constitution. In the case of Rudal Shah v. State of Bihar 6, the Supreme Court for
the first time awarded damages in the writ petition itself.

In Bhim Singh v. State of Rajasthan7, then principle laid down in Rudal Shah was further
extended to cover cases of unlawful detention. In a petition under Article 32, the Apex court
awarded Rs.50,000 by way of compensation for wrongful arrest and detention.

The latest case of State of A.P. v. Challa Ramakrishna Reddy8 on the point clearly indicates
that the distinction between Sovereign and non-Sovereign powers have no relevance in the

5
AIR 1965 SC 1039.
6
AIR 1983 SC 1086.
7
AIR 1986 SC 494.

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 present times. The Apex Court held that the doctrine of Sovereign immunity is no longer
valid.

c) Recent Developments
The courts in successive cases continued with the policy of narrowing the scope of sovereign
immunity, rather than attempt an express overruling of Kasturilal. Though there were
murmurs of disapproval at the principle of Kasturilal in a number of cases9, the most explicit
disapproval came in State of Andhra Pradesh v. Challa Ramkrishna Reddy.
The petitioner and his father were lodged in a jail, wherein one day bombs were hurled at
them by their rivals, causing the death of the father and injuries to the petitioner. The victims
were having previous knowledge of the impending attack, which they conveyed to the
authorities, but no additional security was provided to them. On the contrary, there was gross
negligence since there was a great relaxation in the number of police men who were to guard
the jail on that fateful day. Thus, on the grounds of negligence a suit was filed by the
petitioner against the Government. While the case had been dismissed in trial court, the case
was allowed in the High Court, where the Court even while accepting the principle of
Kasturilal, took consideration of Article 21 of the Constitution and came to the conclusion that
since the Right to Life was part of the Fundamental Rights of a person, that person cannot be
deprived of his life and liberty except in accordance with the procedure established by law.
Further, by virtue of Maneka Gandhi v. Union of India 10, the procedure too should have been
fair and reasonable. Thus, the High Court held that since the negligence which led to the
incident was both unlawful and opposed to Article 21, and that since the statutory concept of
sovereign immunity could not override the constitutional provisions, the claim for violation of
fundamental rights could not be violated by statutory immunities. On appeal by the State, the
Supreme

Court dismissed the appeal and ruled: “The Maxim that King can do no wrong or that the
Crown is not answerable in tort has no place in Indian jurisprudence where the power vests,

8
AIR 2000 SC 2083.
9
AIR 2000 SC 988.
10
AIR 1978 SC 597.

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 not in the Crown, but in the people who elect their representatives to run the Government,
which has to act in accordance with the provisions of the Constitution and would be
answerable to the people for any violation thereof.” Thus, the ratio of this case was that
sovereign immunity, which is a statutory justification, cannot be applied in case of violation
of fundamental rights, because statutory provisions cannot override constitutional provisions.
The procedural aspect of this was that aggrieved persons can successfully file their petitions in
trial courts for tortious acts committed by State, and there is no need to approach High Court
or Supreme Court under Articles 226 or 32. However, the court in this case even while
holding that Kasturi Lal’s case had paled into insignificance and was no longer of binding
value, did not consider the cases where no fundamental rights but other legal rights might be
violated. The question that arises is whether in violation of such statutory rights, the sovereign
immunity can be effectively claimed. This issue can be decided only by a Constitutional
bench of seven or more judges, if the need arises to overrule the Kasturi Lal case.

Consequently, there has been an expansion in the area of governmental liability in torts.

6. Various cases on Vicarious Liability of State

i. State of Rajasthan v. Vidyawati11

The respondents filed a suit for the damages made by an employee of a State and the case
questioned whether the State was liable for the tortious act of its servant – The Court held that
the liability of the State in respect of the tortious act by its servant within the scope of his
employment and functioning as such was similar to that of any other employer.
It was held in this case that the State should be as much liable for tort in respect of tortuous
acts committed by its servant within the scope of his employment and functioning as such, as
any other employer.

11
AIR 1962 SC 933.

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 The facts of this case may shortly be stated as follows. In that case, the claim for damages was
made by the dependants of a person who died in an accident caused by the negligence of the
driver of a jeep maintained by the Government for official use of the Collector of Udaipur
while it was being brought back from the workshop after repairs. The Rajasthan High Court
took the view-that the State was liable, for the State is in no better position in so far as it
supplies cars and keeps drivers for its Civil Service. In the said case the Hon’ble Supreme
Court has held as under:
“Act done in the course of employment but not in connection with sovereign powers of the
State, State like any other employer is vicariously liable.”
In the aforesaid case, the Hon’ble Apex Court while approving the distinction made in Steam
Navigation Co.’s case between the sovereign and non-sovereign function observed that the
immunity of crown in the United Kingdom was based on the old feudalistic notions of Justice,
namely, that the King was incapable of doing a wrong. The said common law immunity never
operated in India.

ii. Kasturi Lal v. State of U.P.12

The ruling in this case was given 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. Also, that employment belonged to a category of sovereign power. This
removed any liability on the part of the state. In this case, the plaintiff had been arrested by
the police officers on a suspicion of possessing stolen property. Upon investigation, a large
quantity of gold was found and was seized under the provisions of the Code of Criminal
Procedure. Ultimately, he was released, but the gold was not returned, as the Head Constable
in charge of the maalkhana, where the said gold had been stored, had absconded with the gold.
The plaintiff thereupon brought a suit against the State of UP for the return of the gold or
alternatively, for damages for the loss caused to him. It was found by the courts below, that
the concerned police officers had failed to take the requisite care of the gold seized from the
plaintiff, as provided by the UP Police Regulations. The trial court decreed the suit, but the
decree was reversed on appeal by the High Court. When the matter was taken to the Supreme

12
AIR 1995 SC 1039.

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 Court, the court found, on an appreciation of the relevant evidence, that the police officers
were negligent in dealing with the plaintiff’s property and also, that they had not complied
with the provisions of the UP Police Regulations. However, the Supreme Court rejected the
plaintiff’s claim, on the ground that “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. The 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 they are powers which
can be properly categorized as sovereign powers. Hence the basis of the judgment in Kasturi
Lal was two-fold – The act was done in the purported exercise of a statutory power. Secondly,
the act was done in the exercise of a sovereign function.

iii. State of M.P. v. Chironji Lal 13

A new question came before the court relating to the payment of damages for the loss caused
by the lathi-charge of the police in a situation where it was unauthorized and unwarranted by
law. It was alleged that the police resorted to lathi-charge willfully and without any reasonable
cause and thus damaged the plaintiff’s property. The claim was rejected on the ground that the
function of the state to regulate processions and to maintain law and order is a sovereign
function.

iv. Satyawati Devi v. Union of India 14

The Delhi High Court held that the carrying of a hockey team in a military truck to the Air
Force Station to play a match is not a sovereign function. In this case an Air Force vehicle was
carrying hockey team of Indian Air Force Station to play a match. After the match was over,
the driver was going to park the vehicle when he caused the fatal accident by his negligence. It
was argued that it was one of the functions of the Union of lndia to keep the army in proper
shape and tune and that hockey team was carried by the vehicle for the physical exercise of
the Air Force personnel and therefore the Government was not liable. The Court rejected this
argument and held that the carrying of hockey team to play a match could by no process of

13
A.I.R 1981 M.P. 65.
14
A.I.R 1967 DELHI 98.

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 extension be termed as exercise of sovereign power and the Union of lndia was therefore
liable for damages caused to the plaintiff.

v. Union of India v. Sugrabai 15

The Bombay High Court held that the transporting of military equipment from the workshop
of the Artillery School is not a sovereign function.
The Bombay High Court overruled the plea of sovereign immunity when a military driver
driving a motor truck carrying a Records Sound Ranging machine from military workshop to
military school of artillery killed a cyclist on the road. It was held that the driver was not
acting in exercise of sovereign powers. The Bombay High Court observed in following words:
“Sovereign powers are vested in the State in order that it may discharge its sovereign
functions. For the discharge of that function one of the sovereign powers vested in the State is
to maintain an army. Training of army personnel can be regarded as a part of the exercise of
that sovereign power. The State would clearly not be liable for a tort committed by an army
officer in the exercise of that sovereign power. But it cannot be said that every act which is
necessary for the discharge of a sovereign function and which is undertaken by the State
involves an exercise of sovereign power. Many of these acts do not require to be carried out
by the State through its servants. In deciding whether a particular act was done by a
Government servant in discharge of a sovereign power delegated to him, the proper test is
whether it was necessary for the State for the proper discharge of its sovereign function to
have the act done through its own employee rather than through a private agency.”

vi. Khatri(II) v. State of Bihar16

An important question was raised regarding liability of government for wrongful arrest and
detention. Moving ahead in the direction of new dimension of the right to life and personal
liberty, Justice Bhagwati said: “Why should the court not be prepared to forge new tools and
devise new remedies for the purpose of vindicating the most precious of the precious
fundamental rights to life and personal liberty.” It may be noted that the Government of India
have not signed treaty which provides for compensation for wrongful arrest and detention.

15
A.I.R 1969 BOM 13.
16
(1981) 1 SCC 627.

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 This amply proves the lack of government’s concern for the precious of the precious rights of
the people for the sake of discounting its own inefficiency and lawlessness.

vii. Rudal Shah v. State of Bihar 17

In this case it was laid down a most important principle of compensation against government
for the wrong action of its official the important judgement was handed down by the Supreme
Court against the Bihar Government for the wrongful and illegal detention of Rudal Shah in
Muzaffarpur jail for as many as 14 yrs after he was acquitted by the Sessions Court in June
1968. The Court ordered compensation of Rs 30,000 for the injustice and injury done to Rudal
Shah and his helpless family.

viii. Bhim Singh v. State Of Jammu And Kashmir 18

In this case the Court awarded exemplary cost of Rs 50,000 on account of the authoritarian
manner in which the police played with the liberty of the appellant.

ix. Saheli, A Women’s Resources v. Commissioner Of Police 19

Saheli v. Commissioner of Police was another milestone in the evaluation of compensation
urisprudence in writ courts. The masterpiece judgement in Vidyawati, which was freezed by
asturi Lal was rightly quoted in this case. The State was held liable for the death of nine year
old child by Police assault and beating. Delhi Administration was ordered to pay
compensation of Rs. 75000/-. The significance of this case is that firstly, the revival of
Vidyawati ratio and secondly that the Delhi Administration was allowed to recover money
from those officers who are held responsible for this incident.

17
(1983) 4 SCC 141.
18
1985 (2) SCALE 1117.
19
1990 AIR 513.

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x. Common Cause, A Registered Society v. Union of India 20
The Supreme Court emphatically stressed that Kasturi Lal case, apart from being criticized,
not been followed by the Court in subsequent cases, and therefore, much of its efficacy as a
binding precedent has been eroded. In this case the entire history relating to the institution of
suits by or against the State or, to be precise, against Government of India, beginning from the
time of East India Company right up to the stage of Constitution, was considered and the
theory of immunity was rejected. In this process of judicial advancement, Kasturi Lal’s case
has paled into insignificance and is no longer of any binding value.

xi. N. Nagendra Rao v. State of A.P.21

In this case, the Supreme Court held that when due to the negligent act of the officers of the
state a citizen suffers any damage the state will be liable to pay compensation and the
principle of sovereign immunity of state will not absolve him from this liability. The court
held that in modern concept of sovereignty the doctrine of sovereign immunity stands diluted
and the distinction between sovereign and non sovereign functions no longer exists. The court
noted the dissatisfactory condition of the law in this regard and suggested for enacting
appropriate legislation to remove the uncertainty in this area. Rejecting the contention of the
state the Supreme Court held that the state was liable vicariously for the negligence
committed by its officers in discharge of public duty conferred on them under a statute. As
regards the immunity of the state on the ground of sovereign function, the court held that the
traditional concept of sovereignty has undergone a considerable change in the modern times
and the line of distinction between sovereign and non sovereign powers no longer survives.
No civilised system can permit an executive as it is sovereign. The concept of public interest
has changed with structural change in the society. No legal system can place the state above
law as it is unjust and unfair for a citizen to be deprived of his property illegally by negligent
act of the officers of the state without remedy. The need of the state to have extraordinary
powers cannot be doubted. But it cannot be claimed that the claim of the common man be
thrown out merely because the act was done by its officer even though it was against law.

20
1996(4) SCC 33.
21
AIR 1994 SC 2663.

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 Need of the state, duty of its officials and right of the citizens are required to be reconciled so
that the rule of law in a welfare state is not shaken. In welfare state, functions of the state are
not only defence of the country or administration of justice or maintaining law and order but it
extends to regulating and controlling the activities of the people in almost every sphere. The
demarcation between sovereign and non sovereign powers for which no rational basis
survives has largely disappeared. The court further said that sovereign immunity was never
available if the state was not involved in commercial or private function nor it is available
where its officers are guilty of interfering with life and the liberty of a citizen not warranted
by law. In both the cases the state is vicariously liable to compensate. The doctrine of
sovereign immunity has no relevance now when the concept of sovereignty has itself
undergone a major change. Sovereignty is now with the people. The people of India made the
Constitution and gave it to themselves. The structure and functions of the state have been
created and constituted to serve the people. Accordingly the state is liable for negligence of
its officers. Further, in a large number of cases the courts have ordered the Government to pay
compensation to the victims of torture for violation of their fundamental right guaranteed by
Article-21 of the Constitution.

xii. Chairman, Railway Board v. Chandrima Das22

In this case, the Supreme Court held that the functions of the State not only relate to the
defence of the country or the administration of justice, but they extend to many other spheres
e.g. education, commercial, social, economic, political etc. These activities cannot be said to
be related to sovereign power.

xiii. State of Gujarat v. Haji Memon23

It was held in this landmark judgment, that is bound to be of great use to the public, that if any
property (moveable) is seized by the police/custom officials or any other department of the
government, they are under the same responsibility as a Bailee to take care of the goods as a
ordinary man would take care of his own goods under similar circumstances. The state cannot
seek to evade responsibility for loss of goods under its custody under the cloak of sovereign

22
AIR 2000 SC 465.
23
AIR 1967 SC 938.

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 functions and under the fallacious argument that Bailment can only arise by a contract (s.148)
as the said section is not exhaustive upon matters of bailment.

xiv. Basava Kom Dyamgonde Patil v. State of Mysore24

Wherein 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. In a
proceeding for the restoration of the goods, it was held that when there was no prima facie
defence made out, that due care had been taken by officers of the State to protect the property,
thecourt can order the State to pay the value of the property to the owner.

7. Conclusion
In all the cases discussed before, the entity sought to be made liable is not the government but
the State. So far as the government is concerned, it may well say that the statutory authority is
neither accountable nor subordinate to it. Hence the government cannot be visited with the
consequences flowing from a wrong order made by a statutory authority. As far as the State is
concerned, it cannot put forward any such plea inasmuch as the statute is enacted by it by
Legislature. The appointment of the authority is also done either by the Statute itself or by
such authority as may be authorized by the Statute. The act of the statutory authority in such a
case is an act done for and on behalf of the State. Hence the state is held liable. State’s
liability for the acts or omissions of statutory authorities arises only in cases where the
statutory authority acts outside his legal authority while purporting to act pursuant to the legal
authority conferred upon him and the act or omission, which causes or results in damage to a
person, is not within the ambit of the statutory protection, if any, contained in such
enactments. This rule is evolved for the obvious reason that an act done under a statute and in
accordance with the statute can never amount to a tort as was said by the Supreme Court by
following cases. The Court said “A result flowing from a Statutory provision is never an evil”.
“The Government of India may sue or be sued by the name of the Union of India and the

24
AIR 1977 SC.

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 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.”

8. Bibliography
Books:

 Law of Torts by Dr. R.K. Bangia

 The Law of Torts by Ratanlal and Dhirajlal

Websites:

 wikipedia.org
 indiankanoon.org
 i-scholar.org

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