BEFORE THE HON’BLE SUPREME COURT OF INDIA.

APPELLATE JURISDICTION.

APPEAL NO. 1/2020 UNDER ARTICLE 132 READ WITH ARTICLE 133(1) OF THE CONSTITUTION
OF INDIA.

Girdharilal & Firm…...…...…...…..…………………………………………..……

APPELLANT

V.

State of Rajasthan…………………………...……………………………………
RESPONDENT

CLUBBED WITH

APPEAL NO. 2/2020 UNDER ARTICLE 132 READ WITH ARTICLE 133(1) OF THE CONSTITUTION
OF INDIA.

Girdharilal & Firm………..…...…..…………………………………………..……

APPELLANT

V.

State of Kolkata…………………………….……….……....…….………………
RESPONDENT

MEMORANDUM FILED ON BEHALF OF THE GIRDHARILAL &FIRM (APPELLANT).

[1]
 TABLE OF CONTENTS

TABLE OF CONTENTS................................................................................................................2

LIST OF ABBREVIATIONS..........................................................................................................4

INDEX OF AUTHORITIES............................................................................................................5

STATEMENT OF JURISDICTION.................................................................................................7

STATEMENT OF FACTS..............................................................................................................8

ISSUES FOR CONSIDERATION..................................................................................................10

SUMMARY OF ARGUMENTS....................................................................................................11

WRITTEN SUBMISSION............................................................................................................13

I. THAT THERE WAS VIOLATION OF GIRDHARILAL AND FIRM’S

FUNDAMENTAL RIGHT TO DO BUSINESS AND BREACH OF
CONSTITUTIONAL RIGHT OF FREEDOM OF TRADE COMMERCE AND
INTERCOURSE....................................................................................................................13

1.1. CORPORATE BODY IS A PERSON HAVING FUNDAMENTAL RIGHTS...........13

1.2. THE NEGLIGENT ACT OF THE GOVERNMENT OFFICIALS RESULTED IN

VIOLATION OF FUNDAMENTAL RIGHTS OF TRADE AND COMMERCE OF
GIRDHARI LAL AND COMPANY...................................................................................13

II. THAT A NON-CONTRACTUAL BAILMENT EMERGED BETWEEN

GOVERNMENT & GIRDHARILAL AND FIRM WHEN THE GOODS WERE
SEIZED BY GOVERNMENT OFFICIALS.......................................................................14

2.1. POSSESSION GAVE RISE TO THE NON-CONTRACTUAL BAILMENT WITH

STATE..................................................................................................................................15

2.2. BAILMENT DOES NOT REMAIN TECHNICALLY OR ESSENTIALLY BE

SUBJECT TO THE LIMITATIONS OF AN AGREEMENT.............................................15

III. THAT THERE WAS NEGLIGENCE ON THE PART OF GOVERNMENT

SINCE DUE CARE OF THE BAILED ITEMS WERE NOT TAKEN...........................17

IV. THAT THERE EXISTS NO SOVEREIGN IMMUNITY AVAILABLE TO THE

STATES..................................................................................................................................18

[2]
 4.1. THE “SOVEREIGN AND NON-SOVEREIGN” DEMARCATION DOES NOT
EXIST ANY LONGER BARRING SOME ESSENTIAL FUNCTIONS OF A STATE....18

4.2. THE STATE CANNOT ESCAPE THE LIABILITY BY TAKING THE BENEFIT OF
SOVEREIGN IMMUNITY..................................................................................................20

PRAYER....................................................................................................................................22

[3]
 LIST OF ABBREVIATIONS

ABBREVIATIONS FULL FORMS

¶ Paragraph

v/v. versus
§ Section
SCC Supreme Court Cases
AIR All India Reporter

SCR Supreme Court Reporter

SC Supreme Court
HC High Court
G&F Girdharilal and Firm

IPO Initial Public Offer

Govt./govt. Government
Anr. Another
Ors. Others

AP Andhra Pradesh
QB Queen’s Bench
Bom Bombay
art article

All ER All England Reporter

[4]
 INDEX OF AUTHORITIES

Indian Cases

Basavva Kom Dyamangouda Patil v State of Mysore, (1977) 4 SCC 358..............................16

Bennet Coleman Co v Union of India, AIR 1973 SC 106.......................................................10
Chiranjitlal Chaudhari v Union of India, AIR 1951 SC 41....................................................10
Delhi Cloth and General Mills Ltd v Union of India, 1983 4 SCC 166..................................10
Dharangadhara Chemical Works Ltd v State of Saurashtra, 1957 SCR 152..........................14
Lasalgaon Merchants Co-operative Bank Ltd v Prabhudas Hathibhai, 1965 SCC OnLine
Bom 66.................................................................................................................................11
N Nagendra Rao v State of AP, (1994) 6 SCC 205..................................................................16
N Nagendra Rao v State of AP, (1994) 6 SCC 205..................................................................16
P Gangadharan Pillai v State of Kerala, AIR 1996 Ker 71....................................................11
Rasiklal Kantilal & Co v Port of Bombay, (2017) 11 SCC 1..................................................13
Rudal Shah v State of Bihar, (1983) 4 SCC 141......................................................................17
State of AP v Challa Ramakrishna Reddy, (1996) 3 SCC 485.................................................18
State of Gujarat v Memon Mahomed Haji Hasam, (1967) 3 SCR 938..............................12, 15
State of Maharashtra v Ravikant S Patil, (1991) 2 SCC 373...................................................16
State of Rajasthan v Vidyawati, AIR 1962 SC 933............................................................15, 16
Trustees of the Port of Bombay v Premier Automobiles Ltd, (1981) 1 SCC 228....................13
Union of India v Sancheti Food Products Limited, (2015) 15 SCC 447.................................17

English Cases

Chesworth v Farrar, [1967] 1 QB 407, 415............................................................................13

Gilchrist Watt And Sanderson Pty Ltd v York Products Pty Ltd, [1970] 3 All ER 825...........14
Gilchrist Watt And Sanderson Pty Ltd v York Products Pty Ltd, [1970] 3 All ER 825...........13
Hiort v Bott L R 9 Ex 86 (1874)..............................................................................................14
Morris v C W Martin and Sons Ltd, [1966] 1 QB 716.............................................................14
Morris v C W Martin and Sons Ltd, [1966] 1 QB 716, 731, 738.............................................13

Constitution Of India

Constitution of India, 1950......................................................................................................17

[5]
Statutes

Indian Contract Act, § 151.......................................................................................................12

Indian Contract Act, § 160.......................................................................................................12

Books

Joseph Chitty, Chitty on Contracts 247 (H.G.Beale, 32nd ed, 2015)........................................14

Norman Palmer, Palmer on Bailment 704-5 (3rd edn, 2009)...................................................12
Norman Palmer, Palmer on Bailment, 1979 edn, p 2..............................................................13

Journals

Charles E Cullen, The Definition of Bailment, 11 St Louis Law Review 257 (1926)……….12
Samuel Stoljar, The Conception of Bailment, 7 Res Judicatae 160 (1955-57)........................12

[6]
 STATEMENT OF JURISDICTION

The Counsel for the appellant humbly submits before the Hon’ble Supreme Court of India.
The memorandum is presented on behalf of the appellant, Adityaveer, who is representing
Girdharilal and Firm pursuant to article 132 of the Constitution of India read with article
133(1) of the Constitution of India. The relevant section of the Article reads:

131.(1). An appeal shall lie to the Supreme Court from any judgment, decree or final order of
a High Court in the territory of India, whether in a civil, criminal or other proceedings,…
Constitution.

133.[(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order in
a civil proceeding of a High Court in the territory of India.

The appellant humbly submits to the jurisdiction of this Hon’ble Supreme Court.

[7]
 STATEMENT OF FACTS

THE PARTIES.

Girdhari & Firm is leading grocery firm in India, which is a populous, plural, democratic
country. It has been working in the FMCG sector in last 50 years and has 65% market share
in the category. The firm is managed by Adityaveer who is management graduate. Girdhari &
Firm is having its registered office in Coimbatore and operates from Chennai. Girdhari &
Firm in May 2020 signs an agreement with the Government of India under Article 299 for
supply of 200000 Tons of Wheat flour and 300000 Liters of edible oil. Their warehouses are
located in Kolkata, Coimbatore, Ahmedabad and Gurugram.

BACKGROUND.

In December 2019 China reports an outbreak of Covid-19 virus which is highly contagious
and till April it has claimed 500000 lives and 10000000 peoples are infected with this virus.
Indian Prime Minister has declared a lockdown in March and extended it intermittently till
May. Adityaveer as per the terms of agreement asks for earnest payment. The agreement
between Government and Company is not through bidding or tendering process rather it is
one to one contract. Government makes the initial payment.

THE PROBLEM.

Amid the Covid-19 outbreak Central Government has given guidelines and instructions to
State for following lockdowns. Adityaveer starts supplying the items at desired locations of
Government of India. 200 trucks carrying essential items from Ahmedabad are caught and
seized under relevant law for breaking the lockdown by Rajasthan Government, likewise 200
trucks are seized by Kolkata Governments and these trucks carrying tons of wheat flour and
edible oils are left open in Jaipur and Kolkata respectively. The value of the items is Rs. 200
Crores. Due to negligence of Government Officials trucks are left unattended and being in
open the supply is destroyed by mob rioting and heavy rains

PROCEEDINGS BEFORE THE HIGH COURT.

Adityaveer on behalf Company files a petition in Calcutta High Court and in Rajasthan High
Court for payment of compensation owing to tortious acts of State and violation of his

[8]
Fundamental right to do business and breach of constitutional right of freedom of trade
commerce and intercourse and holding it to be a non-contractual bailment. Both High Courts
rejects the petition and upholds the Government’s stand that this was a sovereign function
and it was not a bailment of goods. This kind of function also does not qualify for non-
contractual bailment.

APPEAL.

Aggrieved by the judgment of High Courts, Adityaveer went in appeal to the Supreme Court
which combines the matter for joint hearing.

[9]
 ISSUES FOR CONSIDERATION

ISSUE I.: WHETHER THERE WAS A VIOLATION OF FUNDAMENTAL RIGHT OF

FREEDOM OF TRADE AND BUSINESS, AND CONSTITUTIONAL RIGHT OF
FREEDOM OF TRADE COMMERCE AND INTERCOURSE OF
GIRDHARILAL&FIRM?

ISSUE II.: WHETHER THERE EXISTED A NON-CONTRACTUAL BAILMENT

BETWEEN GIRDHARILAL&FIRM AND RESPECTIVE STATE GOVERNMENT’S?

ISSUE III.: WHETHER THERE WAS NEGLIGENCE ON THE PART OF STATE

GOVERNMENT’S AND ARE THEY LIABLE TO PAY FOR THE DAMAGES?

ISSUE IV.: WHETHER THERE EXISTS ANY SOVEREIGN IMMUNITY AVAILABLE

TO THE RESPECTIVE STATES?

[10]
 SUMMARY OF ARGUMENTS

I. THAT THERE WAS VIOLATION OF GIRDHARI AND FIRM’S

FUNDAMENTAL RIGHT TO DO BUSINESS AND BREACH OF
CONSTITUTIONAL RIGHT OF FREEDOM OF TRADE COMMERCE AND
INTERCOURSE.

The arguments under this issue are twofold: [1] That there exist fundamental rights of the
firms under the Indian Constitution. And [2] that there was the violation of fundamental right
of trade of Girdharilal and Firm due to the negligent act of the government officials that
resulted in destruction of supply by mob rioting and heavy rains. In the instant case, after
Adityaveer started supplying the items at desired locations of Govt. of India, 200 trucks
carrying essential items from Ahmedabad were caught and seized and challenged under
relevant law for breaking the lockdown by Rajasthan Government, likewise 200 trucks were
seized by Kolkata Govt. which were carrying tons of wheat flour and edible oils and were left
open in Jaipur and Kolkata, respectively

II. THAT A NON-CONTRACTUAL BAILMENT EMERGED BETWEEN

GOVERNMENT & GIRDHARILAL AND FIRM WHEN THE GOODS WERE
SEIZED BY GOVERNMENT OFFICIALS.

In the present case the liability of the government arises because of the non-contractual
bailment that happened between government and Girdharilal and Firm. It is to be noted that
due to COVID outbreak permission only regarding the essential goods are allowed but not the
other types of goods, which essentially what the trucks were carrying owing to a contract
between the Central Govt. and G&F. Possession being one of the essentials to form a
bailment, it existed the moment goods were seized. It is the contention of appellants that
possession gave rise to the non-contractual bailment.

III.THAT THERE WAS NEGLIGENCE ON THE PART OF GOVERNMENT SINCE

DUE CARE OF THE BAILED ITEMS WERE NOT TAKEN.

Even if the Government of India contends that there was no such contract between it and
Girdharilal & Firm, it is still liable to pay compensation for the damage incurred to the goods.
It was the duty of Government officers to take such care as every prudent manager would
take of his own goods. The Government stood in the position of bailees. Hence, the Sates
should be made liable for their act since it is negligence of Government Officials because of

[11]
which trucks were left unattended and being in open the supply got destroyed by mob rioting
and heavy rains.

IV. THAT THERE EXISTS NO SOVEREIGN IMMUNITY AVAILABLE TO THE

STATES

It is respectfully submitted that the defense of sovereign immunity shall not be available to
the government in the instant case. As noted by SC in a plethora of judgments that where the
plea of immunity if the State could not be upheld and the State was liable for the tortuous act
of the driver like any other employer. The SC awarded damages to the petitioner and the
defense of sovereign immunity was not upheld. The case revolves where several people
against whom no evidence of available were imprisoned in the jails beyond the time that is
prescribed in the relevant acts.

[12]
 WRITTEN SUBMISSION

I. THAT THERE WAS VIOLATION OF GIRDHARILAL AND FIRM’S

FUNDAMENTAL RIGHT TO DO BUSINESS AND BREACH OF
CONSTITUTIONAL RIGHT OF FREEDOM OF TRADE COMMERCE AND
INTERCOURSE.

Freedom of trade and commerce is provided under article 19 of the Indian Constitution.
Although it is not available to companies due to its scope restricted to citizens, in different
pronouncements, it has been held that the rights of shareholders are not lost when they
proceed to form a company. The arguments under this issue are twofold: [1] That there exist
fundamental rights of the firms under the Indian Constitution. And [2] that there was the
violation of fundamental right of trade of G&L due to the negligent act of the government
officials that resulted in destruction of supply by mob rioting and heavy rains.

1.1. CORPORATE BODY IS A PERSON HAVING FUNDAMENTAL RIGHTS.

It is submitted that certain fundamental rights incorporated under the constitution are
available for the protection of any person including corporate bodies and not merely to
citizens.1 This rule is now expanded by the judgment in Bennett Coleman Co. v Union of
India2 where the court remarked that, “fundamental rights of shareholders as citizens are not
lost when they associate to form a company”. In addition, if the petitioner is an incorporated
company, the petition shall not be dismissed at the threshold as held by the full-bench of
Hon'ble Supreme Court in Delhi Cloth and General Mills Ltd. v Union of India.3 As
mentioned in the factual matrix, G&F is having a registered office in Coimbatore, this means
that G&F is a registered company4.

1.2. THE NEGLIGENT ACT OF THE GOVERNMENT OFFICIALS RESULTED IN

VIOLATION OF FUNDAMENTAL RIGHTS OF TRADE AND COMMERCE OF
GIRDHARI LAL AND COMPANY.

In the instant case, after Adityaveer started supplying the items at desired locations of Govt.
of India, 200 trucks carrying essential items from Ahmedabad were caught and seized and

1
Chiranjitlal Chaudhari v Union of India, AIR 1951 SC 41.
2
Bennet Coleman Co v Union of India, AIR 1973 SC 106.
3
Delhi Cloth and General Mills Ltd v Union of India, 1983 4 SCC 166.
4
Moot Proposition, ¶ 3.
[13]
challenged under relevant law for breaking the lockdown by Rajasthan Government, likewise
200 trucks were seized by Kolkata Govt. which were carrying tons of wheat flour and edible
oils and were left open in Jaipur and Kolkata, respectively. The value of the items was Rs.
200 Crores. Due to the negligence of Government Officials, trucks were left unattended and
being in open, the supply was destroyed by mob rioting and heavy rains.

Premising on the above submissions in sub-issue 1, Adityaveer’s right to trade are not lost as
a shareholder of the company. As there was negligence resulting into violation of the rights to
trade, Adityaveer has the locus standi to file his case.

In a case of similar nature in Kerala, when the petitioner’s hotel was ransacked in a mob
attack, causing damage to the property of the writ petitioner. The State was held liable for
failure to protect the petitioner’s hotel, which failure had resulted in infringement of the
petitioner’s right to carry on business and trade, as contained in article 19(1)(g) of the
Constitution.5

Additionally, for a similar factual matrix, the action taken by the Circle Officer in seizing the
goods was held to be not empowered by law. It is on that ground also that the act was illegal.
At the same time, in view of the fact that the Circle Officer was exercising delegated
authority, he was not taken to be doing an act in the discharge of his statutory duties.6

II. THAT A NON-CONTRACTUAL BAILMENT EMERGED BETWEEN

GOVERNMENT & GIRDHARILAL AND FIRM WHEN THE GOODS WERE
SEIZED BY GOVERNMENT OFFICIALS.

The appellants humbly submit that when the goods were seized by the govt. officials, the
possession of the goods got transferred to the State. Possession being one of the essentials to
form a bailment, it existed the moment goods were seized. It is the contention of appellants
that possession gave rise to the non-contractual bailment. The appellants shall submit two
pronged arguments: [i] That possession gave rise to the non-contractual bailment of G&F
with State; and [ii] Bailment does not remain technically or essentially be subject to the
limitations of an agreement.

5
P Gangadharan Pillai v State of Kerala, AIR 1996 Ker 71.
6
Lasalgaon Merchants Co-operative Bank Ltd v Prabhudas Hathibhai, 1965 SCC OnLine Bom 66.

[14]
2.1. POSSESSION GAVE RISE TO THE NON-CONTRACTUAL BAILMENT WITH
STATE.

Bailment, in the Indian Contract Act, 1872, is defined as the delivery of goods by the bailor
to the bailee for a specific purpose7. However, bailment is not restricted to the realm of
contract or tort or property rather the autonomous nature of bailment makes it a sui generis
concept8. A decision of a SC crystallises the same line where it said that, “Bailment is dealt
by the Contract Act only where it arises from the contract but it is not correct to say that there
cannot be a bailment without an enforceable contract.” 9 The non-contractual nature of
bailment arises considering that a bailor-bailee relationship may arise by mere possession,
irrespective of a contract. Contract and consent being one of the essentials of contract; both
were thought to move hand in hand when bailment was concerned.

However, it was soon observed that a person may find himself in possession of another’s
goods without having consented to them i.e. having a lack of ‘consent’ or ‘mutual agreement’
can also rise to bailment 10. Hence, a person who finds himself in possession of another’s
goods, though involuntarily, is a bailee and has a duty to redeliver them to the owner 11, which
makes the bailee to take as much care of the goods bailed to him as a man of ordinary
prudence would, under similar circumstances, take of his own goods of the same bulk, quality
and value as to the goods bailed12. This also makes the bailee responsible to the bailor for any
loss, destruction or deterioration in the property13.

2.2. BAILMENT DOES NOT REMAIN TECHNICALLY OR ESSENTIALLY BE

SUBJECT TO THE LIMITATIONS OF AN AGREEMENT.

In the present case the liability of the government arises because of the non-contractual
bailment that happened between government and G&F. It is to be noted that due to COVID
outbreak permission only regarding the essential goods are allowed but not the other types of

7
The Indian Contract Act, 1872, § 148.
8
Samuel Stoljar, The Conception of Bailment, 7 Res Judicatae 160 (1955-57).
9
State of Gujarat v Memon Mahomed Haji Hasam, (1967) 3 SCR 938.
10
Charles E Cullen, The Definition of Bailment, 11 St Louis Law Review 257 (1926).
11
Norman Palmer, Palmer on Bailment 704-5 (3rd edn, 2009).
12
Indian Contract Act, § 151.
13
Indian Contract Act, § 160.
[15]
goods, which essentially what the trucks were carrying owing to a contract between the
Central Govt. and G&F. The confiscating of trucks essentially and then leaving them
unattended is the reason why items of value Rs. 200 crores were destroyed. What is required
in a bailment is whether there was possession or not, which in fact was present in the
instantaneous case and hence, that would give rise to the non-contractual bailment.

The appellants base their contentions on the judgment of SC in Trustees of Port of Bombay v.
Premier Automobiles Ltd. where is was held that it is well settled that the essence of bailment
is possession. It is equally well settled that a bailment may arise, as in this case, even when
the owner of the goods has not consented to their possession by the bailee at all. It is
sufficient if that possession is within the knowledge of the person concerned. It follows that a
bailment may very well exist without the creation of a contract between the parties and it
essentially gives rise to remedies which, in truth and substance, cannot be said to be
contractual14. This reasoning was further upheld by the SC in Rasiklal Kantilal & Co v. Port
of Bombay.15

A bailment should not technically or essentially be subject to the limitations of an agreement

which arises out of the possession and connotes the relationship between the person and the
thing in his charge16. If we apply this reasoning in the instant case, we get to see that merely
because there was not an agreement, it should not be construed that it will lead to non-
existence of bailment. Possession shall be enough to lead to the existence of a bailment. On
the same lines another decision of Privy Council can be relied where the plaintiffs went to
take the delivery of 2 cases from the wharfinger, one of the cases were find missing and was
never found. The plaintiffs sued the shipowners against whom defendant contended that since
there was no express bailment agreement, the shipowners shall not be liable. The trial court
decision was affirmed by the SC of Wales which observed: “although there was no express
agreement of bailment, the defendants became bailees when they notified the plaintiffs of the
arrival of the goods, retaining possession and control of them.”17

This has to be construed in the sense that since the goods were seized by the police of
respective states, they retained the possession of them and hence, absence of any express
14
Trustees of the Port of Bombay v Premier Automobiles Ltd, (1981) 1 SCC 228.
15
Rasiklal Kantilal & Co v Port of Bombay, (2017) 11 SCC 1.
16
Norman Palmer, Palmer on Bailment, 1979 edn, p 2.
17
Gilchrist Watt And Sanderson Pty Ltd v York Products Pty Ltd, [1970] 3 All ER 825.
[16]
agreement will not say that there was no existence of non-contractual bailment. The reference
be made to the two other English judgments where it was held that, “I am of the opinion that
at common law the duty of a bailee arises when one person, otherwise than as a servant,
voluntarily takes into his physical possession goods which are the property of another.”18

III. THAT THERE WAS NEGLIGENCE ON THE PART OF GOVERNMENT

SINCE DUE CARE OF THE BAILED ITEMS WERE NOT TAKEN.

It is the contention of appellants that police personnel who seized the goods were the
employees of respective states and the act of seizing goods were done in their police
personnel capacity. As a general rule, an employer is responsible for the acts of the employee
done in the course of their service of duty should be applied in the instant case and this is
known as the vicarious liability 19. Hence, the Sates should be made liable for their act since it
is negligence of Government Officials because of which trucks were left unattended and
being in open the supply got destroyed by mob rioting and heavy rains 20. This is also to be
noted that due precaution and care could be taken by State officials to prevent the loss that
happened.

In the case of Morris v C W Martin and Sons Ltd 21, where defendant’s servant stole the mink
stole of plaintiff, it was held that the defendants had a non-contractual liability to the
plaintiffs since duties are owed by one person to another only if there exists a relationship
between them. One of such recognised relationships is created by the voluntary taking into
custody of goods which are the property of another which can bring the existence between
the plaintiff and defendants the relationship of bailor and bailee. Also, the court pointed that
the legal relationship of bailor and bailee of a chattel can exist independently of any contract.

It is respectfully submitted that although there was no contractual relation or attornment

between the defendants and the plaintiffs, the defendants by voluntarily taking possession of
the plaintiffs' goods assumed an obligation to take due care of them and were liable to the

18
Morris v C W Martin and Sons Ltd, [1966] 1 QB 716, 731, 738; Chesworth v Farrar,
[1967] 1 QB 407, 415.
19
Dharangadhara Chemical Works Ltd v State of Saurashtra, 1957 SCR 152.
20
Moot Proposition, ¶ 10.
21
Morris v C W Martin and Sons Ltd, [1966] 1 QB 716.
[17]
plaintiffs for their failure to do so.22 An involuntary bailee, in possession of goods without
knowledge or consent, is liable only for grossly negligent acts with regard to the goods. The
duty of care imposed upon him relies upon the ‘reasonable care’ standard.23

In the case of Hiort v Bott24 the defendant was held to be an involuntary bailee having been
delivered goods that didn’t belong to him and the reasonable standard of care, which included
finding the true owner, was imposed upon him. If we go by the facts of the instantaneous
case, it is submitted that the reasonable care would be to take care of the essential items
during trying times when COVID-19 had grippled the whole nation, however, the state failed
in taking due care and due to its negligence the items worth Rs. 200 Crores got destroyed. A
reliance may be made on the judgment of State of Gujarat v Memon Mahomed Haji Hasam25
where the court not only said that a noncontractual bailment can come into existence but it
also moved one step forward and said that there is a legal obligation to preserve the property
intact and also the obligation to take the reasonable are of it so as to enable the govt. to return
it in the same condition in which it was seized.

IV. THAT THERE EXISTS NO SOVEREIGN IMMUNITY AVAILABLE TO THE

STATES.

It is respectfully submitted that the defence of sovereign immunity shall not be available to
the respective states in the instant case. As noted by SC in a plethora of judgments that where
the plea of immunity if the State could not be upheld and the State was liable for the tortuous
act of the driver like any other employer 26. The appellants submit primarily two arguments in
this regard: [i] The “sovereign and non-sovereign” demarcation does not exist any longer
barring some essential functions of a state; and [ii] The state cannot escape the liability by
taking the benefit of sovereign immunity.

22
Gilchrist Watt And Sanderson Pty Ltd v York Products Pty Ltd, [1970] 3 All ER 825.
23
Joseph Chitty, Chitty on Contracts 247 (H.G.Beale, 32nd ed, 2015).
24
Hiort v Bott, L R 9 Ex 86 (1874).
25
State of Gujarat v Memon Mahomed Haji Hasam, (1967) 3 SCR 938.
26
State of Rajasthan v Vidyawati, AIR 1962 SC 933.
[18]
4.1. THE “SOVEREIGN AND NON-SOVEREIGN” DEMARCATION DOES NOT
EXIST ANY LONGER BARRING SOME ESSENTIAL FUNCTIONS OF A STATE.

In a 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 people in almost every sphere, educational, commercial, social, 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, 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 determination of vicarious liability of
the State being linked with negligence of its officers, since they can be sued personally 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 sued27.

By virtue of Article 300 if a competent legislature enacts a law for compensation or damage
for any act done by it or its officers in discharge of the statutory duty then a suit for it would
be maintainable. The Essential Commodities Act itself provides for return of the goods if
they are not confiscated for any reason. And if the goods cannot be returned for any reason
then the owner is entitled for value of the goods with interest28.

Public policy requires the court to exercise the power in private law to compensate the owner
where the damage or loss is suffered by the negligence of officers of the State in respect of
cause of action for which suits are maintainable in civil court. Since the seizure and
confiscation of appellant's goods was not in exercise of power which could be considered to
be act of State of which no cognizance could be taken by the civil court, the suit of the
appellant could not be dismissed29. No constitutional system can, either on state necessity or
public policy, condone negligent functioning of the state or its officers30.

The modern social thinking of progressive societies and the judicial approach is to do away
with archaic State protection and place the State or the Government on a par with any other
27
State of Maharashtra v Ravikant S Patil, (1991) 2 SCC 373.
28
N Nagendra Rao v State of AP, (1994) 6 SCC 205.
29
State of Rajasthan v Vidyawati, AIR 1962 SC 933.
30
Basavva Kom Dyamangouda Patil v State of Mysore, (1977) 4 SCC 358; N Nagendra Rao
v State of AP, (1994) 6 SCC 205.
[19]
juristic legal entity. Any watertight compartmentalisation 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 operation of the doctrine of sovereignty is
confined to specific areas of State functions i.e., barring functions such as administration of
justice, maintenance of law and order and repression of crime, defence, raising of the armed
forces and maintaining it making peace or war, foreign affairs. power to acquire and retain
territory and similar other functions, etc. which are among the primary and inalienable
functions of a constitutional Government, the State cannot claim any immunity. The
determination of vicarious liability of the State being linked with 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.31

4.2. THE STATE CANNOT ESCAPE THE LIABILITY BY TAKING THE BENEFIT
OF SOVEREIGN IMMUNITY.

The state cannot escape the wrongful act done by its employee on the ground that such
function was done as a sovereign function of the state. In the case of Rudal Shah v. State of
Bihar32 the SC awarded damages to the petitioner and the defence of sovereign immunity was
not upheld. The case revolves where several people against whom no evidence of available
were imprisoned in the jails beyond the time that is prescribed in the relevant acts.

Over the course of time, the SC adopted a more liberal view in cases where the tortious act
was done by the employee of the state. For instance, in Rudal Shah33 only the principle was
laid down to cover unlawful detention and in a petition under article 32, the Apex court
awarded Rs. 50,000 by way of compensation for wrongful arrest and detention. Due to the
negligence of state employees the wheat and other food grains were left in the open and they
got destroyed. Government’s defence that this was a sovereign function and it was not a
bailment of goods34, is inherently wrong since it has already been established that there was a
non-contractual bailment of goods in the present case. It is respectfully contended that the
High Courts have erred in their decisions since, under Constitution itself, the remedy is
31
Union of India v Sancheti Food Products Limited, (2015) 15 SCC 447.
32
Rudal Shah v State of Bihar, (1983) 4 SCC 141.
33
Rudal Shah v State of Bihar, (1983) 4 SCC 141.
34
Moot Proposition, ¶ 12.
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allowed. Under Article 294(4) of the Constitution 35, the liability of Union Government or a
State Government may arise ‘out of any contract or otherwise’. The word otherwise suggests
that the said liability may arise in respects of tortuous acts also. The word “otherwise” has to
be stressed in the instant case, which essentially provides that a liability of State Government
would arise because of the non-contractual bailment.

In the case of State of A.P. v. Challa Ramakrishna Reddy on the point clearly indicates that
the distinction between Sovereign and non-Sovereign powers have no relevance in the
present times. The Apex Court held that the doctrine of Sovereign immunity is no longer
valid. The article 300 would be attracted to meet the situation where the public officer or
public authority or, for that matter, a private person does an act under power conferred or
deemed to be conferred by an Act of the legislature by which injury is caused to another
person who invokes the jurisdiction of the Court to claim compensation for that Act. Thus,
where a public officer acting bona fide under or in pursuance of an Act of the Legislature
commits a 'tort', the action complained of would be governed by this article which, however,
would not protect a public officer acting mala fide under colour of his office36.

35
Constitution of India 1950, art 294(4).
36
State of AP v Challa Ramakrishna Reddy, (1996) 3 SCC 485.
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 PRAYER

Wherefore, in light of the facts of the case, issues raised, arguments advanced and authorities
cited, may this Hon’ble Court be pleased to adjudge and declare that:

i. That there has been a violation of fundamental right to trade and business, and
constitutional right of freedom of trade, commerce and intercourse by the State.
ii. That a non-contractual bailment existed between the G&F and respective states.
iii.That the negligence arose because the officials of State didn’t take due care of the
seized items.
iv. That no defence of “sovereign immunity” exists in the instant case.

All of which is respectfully submitted

Counsel for the Appellant.

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