Article 300 of the Constitution provides that the Government of India may sue and be sued by the name of Union of India, and Government of a State may sue or be sued by the name of the State, or of the legislature of a State. Thus, the Union and States are juristic persons capable of owng and acquiring property, making contracts, carrying on trade or business, bringing and defending legal actions just like individuals. The position remains the same as it existed before the commencement of the Constitution as long as Parliament does not make a law providing otherwise.
Before the passing of the Constitution, the East India Company and after the Government of India Act, 1858, which transferred the Government of India to Her Majesty with its rights and liabilities, the Secretary of State for India in Council, was liable for the tortuous acts of their servants committed in the course of their employment.
Section 65 of the Government of India Act, 1858, provided that the Secretary of State for India in Council can be sued as it could be done against the East India Company. Section 32 of Government of India Act, 1915, and Section 176 of the Government of India Act, 1935, also provided the same. In the present Constitution, Article 300 provides the corresponding provisions.
The first and foremost case in this connection is P. & Q. Steam Navigation Co. vs. Secretary of State for India in Council, 5 Bom. H.C.R. Appl. 1. The facts of the case were that a servant of the plaintiff (company) was travelling from Garden Reach to Calcutta in a carriage driven by a pair of horses.
The accident took place when the coach was passing through the Kidderpore Dockyard which was a Government dockyard. Some workmen were carrying a heavy piece of iron for the purpose of repairing a steamer.
They were walking along the middle of the road. When the carriage of the plaintiff drove up nearer, the coach-man gave a warning to the men carrying the iron rod. Seeing the horse and carriage close to them, they became alarmed and suddenly dropped the iron and ran away.
The iron injured one of the horses which thereupon rushed forward violently and fell on the iron. The company filed a suit against the Secretary of State in Council for the damages for injury to its horse caused due to the negligence of the servants of the Government of India.
The Supreme Court held that the Secretary of State for India in Council was liable for the damages caused by the negligence of Government Servants because the negligent act was not done in exercise of sovereign powers. The court drew distinction between sovereign and non-sovereign powers. The liability could arise only in case of non-sovereign functions.
The above principles have been approved and applied by Supreme Court of India in the following cases.
In State of Rajasthan vs. Vidyawati. AIR 1962 S.C. 933, a driver of the State of Rajasthan for the official use of Collector of a district had rashly and negligently knocked down a pedestrian who had died subsequently.
The Supreme Court held in this case that the State was liable and awarded damages. The accident had taken place when the driver was bringing it back from the workshop to the residence of the Collector. It cannot be said that accident took place when the driver was exercising sovereign function. The court held that the employment of driver of the Jeep car for the use of the civil servant was not an activity which was connected in any manner with the sovereign power of the State.
The court expressed the view that in the absence of a law in force today is the law that was in force ever since the days of East India Company.
In Kasturi Lai v. State of U.P., AIR 1965 S.C. 1039, a person was detained on suspicion of having possession of stolen gold and silver. His property was taken out and kept in Malkhana till the disposal of the case. The gold was stolen by the head constable who fled to Pakistan.
The appellant sued the State of U.P. for return of gold and silver and alternatively claimed damages caused by the negligence of Meerut police. The Supreme Court held in this case that the State was not liable.
The court approved the distinction made in Steam Navigation case between sovereign and non-sovereign function of the State. The court held that the tortuous act of the police officer was committed by him by virtue of sovereign power and the State was therefore not liable.
The court held that the power to arrest a person, to search him and to seize property found from him, were conferred on the specified officers by statute, and therefore they are powers, which can properly be characterised as sovereign powers.
The Court, however, made a strong plea for the enactment of a legislation to regulate and control the claim of the State for immunity on the lines of “Crown’s Proceedings Act, 1947” of England.
In Thangarajan vs. Union of India, an army driver was deputed for collecting CO2 gas from the factory and to deliver it to ship, I.N.S. Jamuna. As a result of rash driving he knocked down the appellant, a minor boy aged 10 years.
It was held that accident was caused to the plaintiff while the driver was driving the lorry for the purposes of supply of CO2 gas to the ship, I.N.S. Jamuna, which was in exercise of sovereign functions of the State. In view of peculiar circumstances, the court recommended to the Central Government to make an ex gratia payment of Rs. 10,000 to the appellant. The court held the State liable.
It is submitted that in modern times it is very difficult to draw a distinction between sovereign and non-sovereign powers of the State. Due to increased activities of the State, the liability of the State for the acts of its servants has extended so much that its activities are now not confined to essential works of the State rather to the welfare activities of the State. Hence, a new law is necessary on this score.