Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh

Police seized a bullion dealer's gold. The head constable keeping it stole it and fled to Pakistan. The Supreme Court found the police grossly negligent, yet held that the State was not liable in tort (a civil wrong). It said the seizure was done under a sovereign power, and it urged the legislatures to change the law.

Quick Revision

Parties

M/s. Kasturilal Ralia Ram Jain — appellant and plaintiff. It is a firm of bullion dealers at Amritsar, registered under the Indian Partnership Act. Ralia Ram was one of its partners.

State of Uttar Pradesh — respondent and defendant. It employed the police officers whose negligence caused the loss.

Procedural History

The judgment gives this history. It does not state the trial court's name or dates.

1. Suit. The firm sued the State for return of the seized gold or, in the alternative, its value. The alternative claim was Rs. 11,075-10-0 as the price of the gold and Rs. 355 as interest by way of damages, with future interest.
2. Trial court. It found for the firm on both questions: negligence of the police officers and liability of the State. It could not order return of the gold, so it passed a decree for Rs. 11,430-10-0.
3. Allahabad High Court. The State appealed (First Appeal No. 67 of 1950). The High Court upheld the State's pleas on both questions. It found that no negligence was established. It also held that, even if the officers were negligent, the firm could not get a money decree against the State. Its judgment and decree are dated 18 March 1960.
4. Supreme Court. The firm obtained a certificate from the High Court and appealed (Civil Appeal No. 105 of 1963). It argued that the High Court erred on both findings. The first finding is one of fact and the second is one of law.

Facts

1. On 20 September 1947, about midnight, Ralia Ram arrived at Meerut by the Frontier Mail. He went there to sell gold, silver and other goods in the Meerut market.
2. While he was passing through the Chaupla Bazar, three police constables took him into custody and searched his belongings.
3. They took him to the Kotwali Police Station and detained him in the lock-up.
4. They seized his gold, weighing 103 tolas 6 mashas and 1 ratti, and silver weighing 2 maunds and 6 1/2 seers. They kept both in police custody.
5. On 21 September 1947 he was released on bail.
6. Some time later the silver was returned to him. Ganga Prasad, a Class II Officer at Meerut Kotwali, returned the silver articles on 26 October 1947.
7. Ralia Ram made repeated demands for the gold. He could not recover it from the police officers.
8. The State said that Mohammad Amir, then the Head Constable, had taken the gold into custody. He kept it in the police malkhana (store room for seized property) under his charge.
9. Mohammad Amir misappropriated the gold and fled to Pakistan on 17 October 1947. He also misappropriated other cash and articles deposited in the malkhana.
10. A case under section 409 of the Indian Penal Code and section 29 of the Police Act was registered against him. Nothing effective came of it, because despite the police department's best efforts he could not be apprehended.
11. Ganga Prasad's evidence was that Mohammad Amir had left without handing over the keys and without permission. A check of the malkhana then showed that considerable property was missing.
12. The firm then filed the suit described under Procedural History.

Issues Raised

1. Were the police officers negligent in taking care of the gold seized from Ralia Ram?
2. Is the State of Uttar Pradesh liable to compensate the firm for the loss caused by the negligence of the public servants it employed?

The Court called the first question one of fact. It called the second a short question of law.

Arguments Contended

The judgment records the State's pleas and the appellant's argument in the Supreme Court. It does not record separate oral arguments for the State.

For the appellant (Mr. M.S.K. Sastri):

• The High Court erred in both its findings. The first is a finding of fact (no negligence). The second is a finding of law (no liability of the State).
• Once negligence of the police officers is established, the Court should decree the claim against the State.
• Such a decree would only extend the principle recognised in State of Rajasthan v. Mst. Vidhyawati, where the State was held liable for the negligence of the driver of a Government jeep.
• The observations in Vidhyawati support this. The Court there said the State's liability for a servant's tort is the same as any other employer's. It rejected Crown immunity as based on feudal notions and as inconsistent with a Republican form of Government.

For the respondent (State of Uttar Pradesh), as pleaded:

• The State was not liable to return the gold or to pay its money value.
• The gold was in the malkhana under Head Constable Mohammad Amir. He misappropriated it and fled to Pakistan on 17 October 1947.
• A case under section 409 of the Indian Penal Code and section 29 of the Police Act was registered against him. It could not be pursued because he could not be apprehended.
• This was not a case of negligence of the police officers.
• Even if negligence were proved, the State could not be liable for the loss resulting from it.
• Before the High Court the State argued that the trial court erred on both findings. The High Court accepted those pleas.

Court's Reasoning

The judgment is a single opinion of the Court, delivered by Gajendragadkar, C.J. The judgment has no numbered paragraphs. The steps below follow its order of discussion.

Gajendragadkar, C.J. (for the Court)

Part 1: Was there negligence?

1. Noted: The material facts about the seizure are not in dispute. The only question in this part is whether the loss of the gold can be attributed to the negligence of the police officers in charge of the police station.
2. Noted: Ganga Prasad (Class II Officer, Meerut Kotwali) said Mohammad Amir fled to Pakistan without delivering the keys and without permission. The malkhana check showed considerable property missing. He returned the silver on 26 October 1947. The gold was not found.
3. Noted: Ganga Prasad said the investigation against Mohammad Amir became ineffective because the police could not apprehend him from Pakistan.
4. Noted: Ganga Prasad said the gold and silver were not attached in his presence and remained in the Kotwali malkhana. No list of the goods went to any official. He could not explain why they were not kept in the Treasury.
5. Noted: He said valuables are generally kept in a wooden box whose key is held by the officer in charge of the malkhana. The seized articles were not kept in that box in his presence.
6. Noted: Mohd. Umar (Sub-Inspector II, Kotwali) swore to the seizure. The goods were not kept in the malkhana in his presence.
7. Noted: He said the arrested person and the seized goods were left with the Head Constable, whom he had instructed to keep the goods in the malkhana. No list was prepared. He could not say whether proper precautions were taken in the malkhana.
8. Noted: Agha Badarul Hasan (station officer in September 1947) said one Sub-Inspector inspected the malkhana every morning under his order. The articles were neither weighed nor kept in the malkhana in his presence.
9. Noted: He claimed to have checked the malkhana, and said gold and silver were there. He admitted he made no note of the check in the Diary.
10. Noted: He kept the valuables in the malkhana without further instructions. He was not present when they were put in the box. He said valuables are not sent to the Treasury unless the police get orders.
11. Noted: This is the whole of the material evidence on negligence.
12. Noted: The relevant Code of Criminal Procedure provisions are these. Section 54(1)(iv) lets a police officer arrest, without an order or warrant, a person in whose possession a thing is found that may reasonably be suspected to be stolen property. Ralia Ram was arrested at midnight under it.
13. Noted: Section 550 lets a police officer seize property suspected to be stolen. The gold and silver were seized under it.
14. Noted: Section 51 justified searching Ralia Ram after his arrest and before the seizure.
15. Noted: Section 523 gives the procedure for safe custody. A police seizure of property taken under section 51 must be reported at once to a Magistrate. The Magistrate orders its disposal or delivery to the person entitled to it. If that person cannot be found, the Magistrate orders its custody and production.
16. Noted: Chapter XIV of the U.P. Police Regulations covers custody and disposal of property. Regulation 165 sets a detailed procedure. When property is seized, meticulous care is needed to list it, describe it, weigh it and ensure its safety. Clause (5) says gold, silver, jewellery and other valuables must go in a sealed packet after weighing. The weight must be noted in the general diary and on the list. Each police station must keep weights and scales.
17. Noted: Regulation 166 says that, unless the Magistrate directs otherwise, property of every description stays with the malkhana moharrir under the general control of the Prosecuting Inspector until finally disposed of. Cash above Rs. 100, property of equal value and property in cases of importance are excepted. The Prosecuting Inspector keeps those in a separate box under lock and key in the treasury. The Court found the wording complex and confusing but its meaning clear.
18. Held: Under Regulation 166 property remains in the malkhana moharrir's custody unless the Magistrate directs otherwise. Cash above Rs. 100, property of equal value and property in important cases must be kept in a locked box in the treasury. Property not in that category goes to the treasury if the Magistrate so directs.
19. Held: The gold and silver seized from Ralia Ram had to be kept in a separate box under lock and key in the Treasury. This was admittedly not done.
20. Held: The High Court wrongly assumed there was no obligation to deposit the property in the Treasury. The words of Regulation 166 are not as clear as they should be, and the High Court misconstrued their effect.
21. Held: The police officers were negligent in dealing with the property after seizure. The property was not kept in safe custody in the treasury. The manner of dealing with it at the malkhana showed gross negligence. No list was made and there is no evidence it was weighed.
22. Held: It does not help the State that Head Constable Mohd. Amir misappropriated the goods. That does not show the manner of dealing with the property was free of gross negligence.
23. Held: The trial court was right. The loss was based on the negligence of the police officers employed by the State. This raised the question of law.

Part 2: The appellant's argument and Vidhyawati

22. Noted: Mr. Sastri argued that decreeing the claim would only extend the principle in Vidhyawati.
23. Noted: In Vidhyawati, the husband of respondent No. 1 and father of minor respondent No. 2 was knocked down by a Government jeep. An employee of the State of Rajasthan drove it rashly and negligently. The jeep was being taken from the repair shop to the Collector's residence for the Collector's use.
24. Noted: This Court there allowed the claim for damages. It observed that the State's liability for a servant's tort within the scope of employment is the same as any other employer's.
25. Noted: This Court there said Crown immunity in the United Kingdom rested on old feudalistic notions of justice, that the King could do no wrong and could not be sued in his own courts. It said this was inconsistent with a Republican form of Government. The States in India undertake industrial and other activities and employ a large army of servants. So there was no justification, in principle or in public interest, why the State should not be vicariously liable.
26. Noted: The Court conceded that some observations in Vidhyawati support Mr. Sastri and make his argument prima facie (on first view) attractive. But the facts there belong to a category distinct from this one.
27. Noted: That makes it necessary to examine the true legal position. This falls under Article 300(1) of the Constitution.

Part 3: Article 300(1) and the Government of India Acts

28. Noted: Article 300(1) says the Government of India may sue or be sued as the Union of India. A State may sue or be sued by the name of the State. Subject to any law made by Parliament or the State Legislature, they may sue or be sued in like cases as the Dominion of India and the corresponding Provinces or Indian States might have, if the Constitution had not been enacted.
29. Held: The article has three parts. The first deals with the form and cause-title of a suit. The second says a State may be sued in cases like those in which a corresponding Province might have been sued. The third lets Parliament or the State Legislature make provision.
30. Held: No such law has been passed by the State in this case. So the question is whether such a suit would have been competent against the corresponding Province.
31. Noted: This leads to section 65 of the Government of India Act, 1858, section 32 of the Government of India Act, 1915 and section 176 of the Government of India Act, 1935. It is unnecessary to go beyond section 65 of the 1858 Act. The relevant decisions all rest on its effect.
32. Noted: Section 65 says the Secretary of State in Council may sue and be sued in India and England as a body corporate. All persons have the same suits and remedies against him as against the East India Company. The property vested in Her Majesty for the Government of India is liable to the same judgments as it was while vested in the Company.

Part 4: The Peninsular and Oriental case (1861)

33. Noted: The first leading decision is the 1861 judgment of the Supreme Court at Calcutta, per Chief Justice Peacock, in Peninsular and Oriental Steam Navigation Company v. Secretary of State for India. Its principles have been consistently followed, with one exception. The Court called it ironical that the judgment went unreported in Calcutta and appeared in 5 Bom. H.C.R. (1868-69).
34. Noted: The facts: a servant of the plaintiff company was driving a carriage drawn by a pair of its horses on a highway in Calcutta. Government servants employed in the dockyard at Kidderpore were carrying a piece of iron funnel. The manner of carrying it injured one horse. The company claimed damages from the Secretary of State.
35. Noted: The Small Cause Court Judge found the servants were wrongdoers because they carried the funnel in the centre of the road. He was unclear whether the Secretary of State was liable and referred the question to the Supreme Court at Calcutta.
36. Noted: That Court held the Secretary of State in Council liable for damage caused by negligence of Government servants, if the negligence would make an ordinary employer liable.
37. Noted: Peacock, C.J. said section 65 mainly transferred the government of British territories from the East India Company to Her Majesty. It did not seem meant to alter the nature or extent of liabilities on India's revenue. He asked whether the Company would have been liable if the 21st and 22nd Vict., c. 106 had not been passed.
38. Noted: He said that after the 3rd and 4th Wm. IV., c. 85, the Company exercised powers of government and also traded as merchants. So the principles for Sovereigns and States, and the maxim that the King can do no wrong, had no force. He agreed with Chief Justice Grey in Bank of Bengal v. East India Company. That case held that the Company's possession of sovereign powers did not make it sovereign.
39. Noted: If the Company engaged in undertakings like the bullock train and carrying goods and passengers for hire, it was reasonable that it did so subject to the liabilities of individuals. The Company would have been liable for such accidents both before and after the 3rd and 4th Wm. IV., c. 85. The Secretary of State in Council, who may be sued so as to satisfy the claim out of India's revenues, has the same liability. He said it would be "inconsistent with commonsense and justice to hold otherwise".
40. Noted: It was urged that the Secretary of State in Council should be treated as the State or a public officer employed by it. The Court rejected this because the statutory words did not justify it and because the Company was not a sovereign. A company with delegated sovereign powers which also traded on its own account could not claim a sovereign's exemption.
41. Noted: Peacock, C.J. drew the classic distinction between acts done in the exercise of what are usually termed sovereign powers and acts done in undertakings that private individuals might carry on. Where an act is done in the exercise of powers which cannot be lawfully exercised except by a sovereign, or a private individual delegated by a sovereign, no action lies. Where the powers are not sovereign, an action lies.
42. Held: The case recognises a material difference between two kinds of acts of State servants. One kind is referable to the exercise of delegated sovereign powers. The other is not.
43. Held: The test: was the tortious act committed by the public servant in discharge of statutory functions referable to, and ultimately based on, the delegation of the State's sovereign powers? If yes, an action for damages for the loss does not lie. If the servant was discharging duties assigned not by delegated sovereign power, an action lies. In that case the servant acted as a servant that a private individual might have employed for the same purpose.
44. Noted: The Court said this distinction is clear and precise in law but is sometimes forgotten when State liability is discussed. That is why the 1861 statement is recognised as a classic.

Part 5: Later decisions applying the distinction

44. Noted: Secretary of State for India in Council v. Moment (Privy Council, (1912-13) 40 I.A. 48): section 41(b) of Act IV of 1898 (Burma) is similar to section 65 of the 1858 Act. The Privy Council held a suit for wrongful interference with the plaintiff's land would have lain against the East India Company. It expressly approved the principles stated by Peacock, C.J.
45. Noted: Shivabhajan Durgaprasad v. Secretary of State for India ((1904) I.L.R. 28 Bom. 314): the plaintiff sued the Secretary of State for the negligence of a chief constable with respect to goods seized. The Bombay High Court upheld the defence that no action lay. The chief constable seized the goods in performance of a statutory power vested in him by the Legislature, not in obedience to an order of the executive Government.
46. Noted: The principle: where the duty is imposed by law and not by the will of the employer, the employer is not liable for the agent's wrong. Jenkins, C.J. doubted the correctness of the Peninsular and Oriental decision. He accepted it as binding because it had stood so long unchallenged. This was the only whisper of dissent.
47. Noted: Secretary of State for India in Council v. Cockcraft ((1914) I.L.R. 39 Mad. 351): the plaintiff was hurt in a carriage accident said to be caused by negligent stacking of gravel on a military road kept by the Public Works Department. The Madras High Court held there was no cause of action. Providing and maintaining roads, especially a military road, is a governmental function in the exercise of sovereign powers. It is not an undertaking private persons might carry on.
48. Noted: Secretary of State for India in Council v. Shreegobinda Chaudhuri ((1932) I.L.R. 59 Cal. 1289): the Calcutta High Court held that no suit lay against the Secretary of State for the wrongs of managers appointed by the Court of Wards. Rankin, C.J. said no action in tort lies against the Secretary of State on the respondeat superior principle. But he recognised that a suit may lie for torts connected with a private undertaking or one not in exercise of sovereign power.
49. Noted: The Allahabad High Court took the same view in Mohammad Murad Ibrahim Khan v. Government of United Provinces (I.L.R. [1957] 1 All. 94).
50. Noted: Uma Parshad v. The Secretary of State ((1936) I.L.R. 18 Lah. 380): stolen property was recovered by the police and kept in the malkhana under the Magistrate's orders during the thieves' trial. The man in charge of the malkhana absconded with it. The plaintiff sued for the property or its price.
51. Noted: The Lahore High Court held the liability arose under the Criminal Procedure Code, so the plea of act of State (an act of sovereign power, not open to challenge in court) could not succeed. It held the Secretary of State could be liable only where a private employer could be liable. It answered no, because the man's criminal act was felonious and unauthorised by his employer.
52. Noted: The Court said some reasons in Uma Parshad may be open to doubt. The decision can still be justified because a public servant authorised by statute did the act. That discharge of function can be referred to delegation of the State's sovereign power. So the criminal act could not sustain a claim for damages against the State.
53. Held: The principle stated by Peacock, C.J. in 1861 has been consistently followed in cases of State liability for the tortious or negligent acts of public servants.

Part 6: Vidhyawati distinguished; application

53. Noted: In Vidhyawati the negligent act was committed by an employee of the State of Rajasthan driving a jeep from the workshop to the Collector's residence for the Collector's use. The question was whether that gave a valid claim for damages. The Court said that aspect had not been brought out clearly or emphatically in that case.
54. Held: On the principal facts, the driver was on a task or undertaking not referable to, or ultimately based on, delegation of sovereign or governmental powers. Employing a driver to drive a jeep for a civil servant is not connected with the State's sovereign power at all. That is the basis on which Vidhyawati rests. It is absent here.
55. Held: When the State pleads immunity against claims for injury caused by its servants' negligence, "the area of employment referable to sovereign powers must be strictly determined". Before upholding the plea, the Court must find the act was committed in an undertaking or employment referable to the exercise of sovereign power or delegated sovereign power.
56. Why: In pursuit of their welfare ideal, the Governments enter many commercial and other undertakings with no relation to traditional governmental activity. The area of State affairs tied to sovereign power must be limited. Then citizens who have a cause of action over non-governmental or non-sovereign activities are not barred from claiming against the State. That is why State immunity must be limited, and Vidhyawati did this.
57. Held: Here the act of negligence was committed by police officers while dealing with property they had seized in exercise of statutory powers. The powers to arrest, to search and to seize property are conferred on specified officers by statute. In the last analysis they are powers properly characterised as sovereign powers.
58. Held: The act that gave rise to the claim was committed by the State's employee during the course of employment (while doing the job). But the employment was of the category that can claim the special characteristic of sovereign power. The Court went back to what Peacock, C.J. decided in 1861 and held the claim not sustainable.

Part 7: Remarks on legislation

59. Noted: The Court added that "it is time that the Legislatures in India seriously consider whether they should not pass legislative enactments" to regulate their claim of immunity, on the lines of the Crown Proceedings Act, 1947 in England.
60. Noted: The immunity doctrine rests on the Common Law principle that the King commits no wrong. He cannot be guilty of personal negligence or misconduct, so he is not responsible for his servants'. A second aspect was that a State cannot be sued in its own courts without its consent.
61. Noted: The Crown Proceedings Act, 1947 (10 & 11 Geo. 6, c. 44) altered this position substantially. Halsbury's Laws of England, 3rd ed., Vol. II, p. 8, says claims against the Crown that could earlier be enforced only by petition of right, subject to the royal fiat, may now be enforced as of right without a fiat.
62. Noted: Section 1 of that Act has this effect. Section 2 makes the Crown liable in tort in six classes of cases (clauses (1) to (6)). Clause (3) deals with functions conferred or imposed on a Crown officer as such, by the common law or by statute. If he commits a tort while performing or purporting to perform them, the Crown's liability is what it would have been had the functions been conferred solely by the Crown's lawful instructions. Section 11 saves acts done under prerogative and statutory powers. The Court did not refer to the Act's other provisions.
63. Noted: The Court's only point in mentioning the Act: the immunity doctrine borrowed in India was based on the English Common Law principle, which the Crown Proceedings Act has now substantially modified.
64. Noted: The Court said it was disturbed that a citizen whose property was seized by process of law is told, when he asks a court why it was not returned, that he can make no claim against the State. "That, we think, is not a very satisfactory position in law."
65. Held: The remedy lies in the hands of the Legislature. The appeal fails.

Authorities

The judgment has no footnote-only citations beyond those listed here. Citations are as printed in the judgment.

• State of Rajasthan v. Mst. Vidhyawati and Anr., [1962] Supp. 2 S.C.R. 989 — distinguished. The driver of a Government jeep was on an undertaking not tied to sovereign power. The Court said its observations on State liability support the appellant but rest on that basis.
• Peninsular and Oriental Steam Navigation Company v. The Secretary of State for India, 5 Bom. H.C.R. App. A. 1 (Calcutta, 1861; reported 1868-69) — approved and followed as the classic statement of the sovereign / non-sovereign distinction.
• The Bank of Bengal v. The East India Company, Bignell, Rep. p. 120 — Chief Justice Grey held that the Company's possession of sovereign powers did not make it sovereign. Peacock, C.J. agreed with this.
• The Secretary of State for India in Council v. Moment, (1912-13) 40 I.A. 48 (Privy Council) — expressly approved the principles of Peacock, C.J.
• Shivabhajan Durgaprasad v. Secretary of State for India, (1904) I.L.R. 28 Bom. 314 — no action for a chief constable's negligence over seized goods. Jenkins, C.J. doubted the Peninsular and Oriental case but followed it.
• The Secretary of State for India in Council v. A. Cockcraft and Anr., (1914) I.L.R. 39 Mad. 351 — no cause of action over a military road, a sovereign function.
• The Secretary of State for India in Council v. Shreegobinda Chaudhuri, (1932) I.L.R. 59 Cal. 1289 — no action in tort on respondeat superior for sovereign acts; a suit may lie for private undertakings.
• Mohammad Murad Ibrahim Khan and Anr. v. Government of United Provinces, I.L.R. [1957] 1 All. 94 — Allahabad High Court took the same view.
• Uma Parshad v. The Secretary of State, (1936) I.L.R. 18 Lah. 380 — malkhana property taken by the man in charge; no liability. The Court said some reasons were doubtful but the result is justified.
• Halsbury's Laws of England, 3rd ed., Vol. II, p. 8 — cited for the effect of section 1 of the Crown Proceedings Act, 1947.

Also cited in footnotes: none beyond the references above.

Provisions mentioned

• Article 300(1), Constitution of India — Governments may sue or be sued in the same cases as the Dominion or corresponding Province or Indian State, subject to law made by Parliament or the State Legislature.
• Section 65, Government of India Act, 1858 — the Secretary of State in Council may sue and be sued as the Company was. Sections 32 (1915 Act) and 176 (1935 Act) are its later forms.
• Section 41(b), Act IV of 1898 (Burma) — similar to section 65 of the 1858 Act.
• 3rd and 4th Wm. IV., c. 85, section 9 and 21st and 22nd Vict., c. 106, section 65 — the Charter statutes discussed in the Peninsular and Oriental case.
• Sections 54(1)(iv), 51, 550 and 523, Code of Criminal Procedure — arrest, search, seizure of suspected stolen property, and reporting to a Magistrate.
• Section 409, Indian Penal Code and section 29, Police Act — the case registered against Mohammad Amir.
• Indian Partnership Act — the firm was registered under it.
• U.P. Police Regulations 165 and 166 — custody and disposal of seized property.
• Crown Proceedings Act, 1947, sections 1, 2 and 11 — the English reform the Court pointed to.

Judgement

1. The appeal fails and is dismissed.
2. The State of Uttar Pradesh is not liable for the loss of the gold, although the police officers were negligent.
3. The Court held that the High Court was wrong on negligence but right that the State is not liable.
4. The remedy for the present position lies with the Legislature.
5. Costs: the parties bear their own costs throughout.

Legal Principle / Ratio

The State is not liable in tort for a public servant's tortious act if it was done in discharging statutory functions referable to the delegation of sovereign power. Arrest, search and seizure are such powers. A State is liable where the servant was doing what a private employer's servant might do.

Key holding: "the employment in question being of the category which can claim the special characteristic of sovereign power, the claim cannot be sustained".

• Obiter: the Court urged the Legislatures to consider laws regulating State immunity, on the lines of the Crown Proceedings Act, 1947 (the Court's suggestion in its last paragraphs).
• Condition of the ratio: the Court said the area of employment referable to sovereign powers must be strictly determined, and the Court must find the act was within it before upholding the plea.

Subsequent Treatment

This section is based on three later judgments. Only what each says about this case is stated. The later judgments do not number the relevant parts of Verma, J.'s opinion or of Chandrima Das.

Nilabati Behera v. State of Orissa

• 1993 AIR 1960, 1993 SCR (2) 581, 1993 SCC (2) 746 (Supreme Court; Verma, Anand and Venkatachala, JJ.; decided 24 March 1993). Verma, J. held that the sovereign immunity (the State's protection from tort suits for sovereign acts) upheld in this case is confined to the sphere of liability in tort. It is distinct from the State's liability for violating fundamental rights. That doctrine has no application in the constitutional scheme and is no defence to the remedy under Articles 32 and 226.
• Verma, J. said this case concerned the value of goods seized and not returned, a claim for the tort of conversion (wrongfully dealing with another's goods) under the ordinary process. It was not a claim for compensation for violating fundamental rights. So it is inapplicable and distinguishable. He noted that Saheli did not refer to this case. Anand, J., in his concurring opinion, also said monetary compensation in public law is a remedy based on strict liability (liability without proof of fault) for violating basic rights.

Chairman Railway Board v. Chandrima Das

• AIR 2000 SC 988, 2000 (2) SCC 465 (Supreme Court; Sethi and Saghir Ahmad, JJ.; decided 28 January 2000). Saghir Ahmad, J. held that reliance on this case could not help the appellants. Later decisions, including State of Gujarat v. Memon Mahomed Haji Hasan (AIR 1967 SC 1885) and Basava Kom Dyamogouda Patil v. State of Mysore (AIR 1977 SC 1749), had not followed it. Seervai criticised it in his book. A three-judge Bench in Common Cause (1999) 6 SCC 667 did not follow it and said its efficacy as binding precedent (a ruling later courts must follow) had eroded.
• In the same judgment the Court said the theory in this case is no longer available in a welfare State. Running railways and Yatri Niwas is a commercial activity. The Union can be held vicariously liable for torts of employees. The Court was dealing with the matter in the Public Law domain.

Kaushal Kishor v. State of UP

• Writ Petition (Criminal) No. 113 of 2016 (Supreme Court Constitution Bench; Nazeer, Gavai, Bopanna, Ramasubramanian and Nagarathna, JJ.; decided 3 January 2023). Ramasubramanian, J. said the Court went down a slippery slope in this case after Vidhyawati (para 148). He said the decision was diluted after nearly 30 years (para 149).
• He recorded that this Court recommended legislation in 1965 and a Government (Liability in Torts) Bill was introduced in 1967. Nothing happened in the past 55 years (para 153). Para 76 summarises the Nilabati distinction between tort liability and liability for violating fundamental rights.

Other later cases (not summarized): N. Nagendra Rao & Co. v. State of A.P., (1994) 6 SCC 205, is named in Chandrima Das and in the Kaushal Kishor table as limiting the immunity laid down in this case.

Critical Analysis

Analysis based on the judgment text.

• The Court itself found the result unsatisfactory. It said a citizen whose property was seized by process of law is left with no claim, which is not a very satisfactory position in law (see Court's Reasoning, Part 7).
• The test depends on how the act is classified. The judgment gives no list of sovereign functions beyond arrest, search and seizure and a military road in earlier cases.
• The Court called the sovereign / non-sovereign distinction clear and precise in law, yet it said Vidhyawati did not bring out this aspect clearly. This shows the line between the two cases is thin.
• The immunity is borrowed from English law. The Court itself noted that the English law has changed by statute.

Significance

• It is the leading case stating the sovereign / non-sovereign test for State liability in tort after the Constitution.
• It limits Vidhyawati to non-sovereign activity and tells courts to define sovereign employment strictly.
• It urged legislative reform. Nothing came of it for decades (Kaushal Kishor, as stated in Subsequent Treatment).
• Later cases confined it to private-law tort claims and developed constitutional compensation (see Subsequent Treatment).

Exam-Important Points

• Rule: no tort liability where the act is referable to delegated sovereign power (statutory arrest, search, seizure). Trap: the State was held liable in Vidhyawati only because driving a jeep is not a sovereign act.
• Test: was the tort committed in discharging statutory functions based on delegated sovereign power? If yes, no action lies.
• Source: Peacock, C.J. in the Peninsular and Oriental case (1861), under section 65 of the Government of India Act, 1858 and Article 300(1).
• Negligence was found: no list, no weighing, no treasury deposit as Regulation 166 required.
• Costs: each party bears its own.
• Later: Nilabati Behera confined it to tort. Constitutional compensation under Articles 32 and 226 is unaffected.

Prepared from the full text of the judgment. Paragraph numbers follow the official Supreme Court judgment text; law reports may number the same paragraph differently.