29 September 1964
Supreme Court


Case number: Appeal (civil) 105 of 1963






DATE OF JUDGMENT: 29/09/1964


CITATION:  1965 AIR 1039            1965 SCR  (1) 375  CITATOR INFO :  D          1967 SC1885  (7)  R          1971 SC2255  (8)  RF         1974 SC 890  (20)  MV         1975 SC1331  (187)  RF         1990 SC1480  (73)

ACT: Constitution of India, 1950, Art. 300(1)-State Liability for tortious acts of its servants.

HEADNOTE: Some  police  officers  of the State seized  gold  from  the appellant  in exercise of their statutory powers,  but  were negligent in dealing with its safe custody.  As a result  of such  negligence the gold was not returned to the  appellant and  so,  he filed the suit against the State  claiming  the value of the gold.  The suit was decreed by the trial  court but  was  dismissed  by the High Court on  appeal.   In  the appeal to the Supreme Court, HELD : The power to arrest a person, to search him. to seize property  found with him, are powers conferred on  specified officers  by statute and are powers which could be  properly characterised  as sovereign powers.  Therefore,  though  the negligent  act  was  committed  by  the  employees  of   the respondent-State during the course of their employment,  the claim against the State could not be sustained, because, the employment in question was of the category which could claim the special characteristic of sovereign power. [390 G-H; 391 A]. The  P. & O. Steam Navigation Co. v. The Secretary of  State for India, (1868-69) 5 Bom.  H.C.R. App.  A. 1, approved. The  Stale  of Rajasthan v. Must.  Vidhyawati  and  another, [1962] Supp. 2 S.C.R. 989, distinguished. The  passing  of  legislative  enactments  to  regulate  and control the liability of the State for the negligent acts of its servants, suggested [391 B].



JUDGMENT:    CIVIL  APPELLATE JURISDICTION : Civil Appeal No.  105  of 1963. Appeal from the judgment and decree dated March 18, 1960  of the Allahabad High Court in First Appeal No. 67 of 1950. M.S.  K.  Sastri  and M. S.  Narasimhan  for  P.  Keshava Pillai, for the appellant. A.   V.   Viswanatha  Sastri  and  O.  P.  Rana,   for   the respondent.The Judgment of the Court was delivered by Gajendragadkar C. J. The short question of law which  arises in this appeal is whether the respondent, the State of Uttar Pradesh,  is  liable  to  compensate  the  appellant,   M/s. Kasturilal  Ralia Ram Jain for the loss caused to it by  the negligence   of   the  police  officers  employed   by   the respondent.  This question arises 376 in this way.  The appellant is a firm which deals in bullion and  other goods at Amritsar.  It was duly registered  under the  Indian  Partnership  Act.  Ralia Ram  was  one  of  its partners.  On the 20th September, 1947 Ralia Ram arrived  at Meerut  by the Frontier Mail about midnight.  His object  in going to Meerut was to sell gold, silver and other goods  in the  Meerut  market.   Whilst he  was  passing  through  the Chaupla Bazar with this object, he was taken into custody by three police constables.  His belongings were then  searched and  he  was taken to the Kotwali Police  Station.   He  was detained  in  the police lock-up there  and  his  belongings which  consisted of gold, weighing 103 tolas 6 mashas and  1 ratti,  and silver weighing 2 maunds and 6 1/2  seers,  were seized  from  him and kept in police custody.  On  the  21st September,  1947  he  was released on bail,  and  some  time thereafter  the silver seized from him was returned to  him. Ralia  Ram then made repeated demands for the return of  the gold which had been seized from him, and since he could  not recover  the  gold from the police officers,  he  filed  the present  suit against the respondent in which he  claimed  a decree  that  the  gold seized from  him  should  either  be returned to him, or in the alternative, its value should  be ordered to be paid to him.  The alternative claim thus  made by him consisted of Rs. 11,075-10-0 as the price of the gold and Rs. 355 as interest by way of damages as well as  future interest. This  claim  was  resisted  by  the  respondent  on  several grounds.  It was urged that the respondent was not liable to return  either  the gold, or to pay its  money  value.   The respondent alleged that the gold in question had been  taken into  custody  by one Mohammad Amir, who was then  the  Head Constable, and it had been kept in the police Malkhana under his charge.  Mohd.  Amir, however, misappropriated the  gold and fled away to Pakistan on the 17th October, 1947.  He had also misappropriated some other cash and articles  deposited in  the  Malkhana  before he  left  India.   The  respondent further alleged that a case under section 409 of the  Indian Penal  Code  as  well as s. 29 of the Police  Act  had  been registered against Mohd.  Amir, but nothing effective  could be done in respect of the said case because in spite of  the best  efforts  made by the police  department,  Mohd.   Amir could not be apprehended.  Alternatively, it was pleaded  by the respondent that this was not a case of negligence of the police officers, and that even if negligence was held proved against the said police officers, the respondent State could not  be said to be liable for the loss resulting  from  such negligence. On these pleadings, two substantial questions arose between 377



the parties; one was whether the police officers in question were  guilty of negligence in the matter of taking  care  of the  gold  which  had been seized from Ralia  Ram,  and  the second  was whether the respondent was liable to  compensate the appellant for the loss caused to it by the negligence of the  public servants employed by the respondent.  The  trial Court found in favour of the appellant on both these issues, and  since the gold in question could not be ordered  to  be returned to the appellant, a decree was passed in its favour for Rs. 11,430-10-0. The respondent challenged the correctness of this decree  by an  appeal before the Allahabad High Court and it was  urged on its behalf that the trial Court was in error in regard to both the findings recorded by it in favour of the appellant. These  pleas  have been upheld by the High  Court.   It  has found  that no negligence had been established  against  the police officers in question and that even if it was  assumed that the police officers were negligent and their negligence led  to  the  loss  of gold,  that  would  not  justify  the appellant’s claim for a money decree against the respondent. The appellant then moved for and obtained a certificate from the said High Court and it is with the said certificate that it  has come to this Court by an appeal.  On behalf  of  the appellant, Mr. M. S. K. Sastri has urged that the High Court was  in error in both the findings recorded by it in  favour of the respondent.  The first finding is one of fact and the second is one of law. In dealing with the question of negligence, it is  necessary to refer to the evidence adduced in this case.  The material facts  leading  to the seizure of gold are not  in  dispute. The only question which calls for our decision on this  part of the case is whether the loss of gold can be  legitimately attributed  to  the  negligence of the  police  officers  in charge  of the police station where the gold and silver  had been kept in custody.  Ganga Prasad is the first witness  to whose  evidence it is necessary to refer.  He was  Class  II Officer  in Meerut Kotwali at the relevant time.  He  swears that  Mohammad Amir who was in charge of the  Malkhana,  had fled away to Pakistan without delivering the keys to any one and  without  obtaining permission for leaving his  post  of duty.  The Malkhana was accordingly checked and it disclosed that  considerable  properties  kept in  the  Malkhana  were missing.   On the 26th October, 1947, Ganga Prasad  returned the  silver articles to the appellant.  Gold  was,  however, not found in the Malkhana, and so, it could not be  returned to  it.   Ganga  Prasad then  refers  to  the  investigation carried   out  against  Mohd.   Amir  for  an   offence   of misappropriation and his evidence shows that Mohd.  Amir had absconded, and 378 since the police department was unable to apprehend him from Pakistan, the investigation in question became  ineffective. According  to  this  witness, the silver  and  gold  of  the appellant had not been attached in his presence.  He  admits that the goods of the .appellant remained in the Malkhana of the  Kotwali.  No list of these goods was forwarded  to  any officials.   This witness further added that  valuables  are generally kept in the wooden box and the key is kept by  the officer-in-charge   of  Malkbana.   The  gold  -and   silver articles seized from the appellant had not been kept in that box in his presence.  He could not explain why the said gold and silver articles were not kept in the Treasury. The next witness is Mohd.  Umar.  He was Sub-Inspector II in the Kotwali in September, 1947.  He swears to the seizure of the ,gold and silver articles from Ralia Ram and deposes  to



the  fact  that they were not kept in the  Malkhana  in  his presence.  Both the arrested person and the seized  articles were  left  in  charge of the Head Constable  who  had  been instructed by Mohd.  Umar to keep the goods in the Malkhana. This  witness  admitted  that no list was  prepared  of  the seized  goods  and  he was not able to  say  whether  proper precaution  were  taken  to  safeguard  the  goods  in   the Malkhana. The  third  witness is Agha Badarul Hasan.  He  was  station officer  of  the police station in  question  in  September, 1947.   He  swears that it was a  routine  requirement  that every  day in the morning one Sub-Inspector had  to  inspect the,  Malkhana under his order.  He knew that Ralia Ram  had been  kept in the lock-up and his articles were kept in  the Malkhana,  but he added that in his presence these  articles were neither weighed nor kept in the Malkhana.  He claims to have  checked  up  the  contents of  the  Malkhana.  but  he conceded  that he had made no note about this check  in  the Diary.   He  purported  to  say that  when  he  checked  the Malkhana, gold and silver were there.  He kept the valuables in  the Malkhana without any further instructions  from  the officers, and he was not present when they were kept in  the box.  This witness claims that valuables are not sent by the police  officers to the Treasury unless they got  orders  to that  effect.   That is the whole of the  material  evidence bearing  on  the  question  of  negligence  of  the   police officers. In appreciating the effect of this evidence, it is necessary to  refer to some of the relevant provisions, in  regard  to the  custody  of the goods seized in the  course  of  police investigation.  Section 5 4 (I) (iv) of the Code of Criminal Procedure  provides that any police officer may, without  an order from a Magistrate and without                             379 a warrant, arrest any person in whose possession anything is found  which  may  reasonably  be  suspected  to  be  stolen property  and  who  may reasonably be  suspected  of  having committed  an offence with reference to such thing.   It  is under  this  provision  that  Ralia  Ram  was  arrested   at midnight.   It was apprehended by the police  officers  that the gold and silver articles which he was carrying with  him might be stolen property, and so, his arrest can be said  to be justified under section 54 (I) (iv).  Section 550 confers powers on police officers to seize property suspected to  be stolen.  It provides inter alia, that any police officer may seize  property which may be suspected to have been  stolen; and so, gold and silver in the possession of Ralia Ram  were seized  in  exercise of the powers conferred on  the  police officers  under  s. 550 of the Code.  After  Ralia  Ram  was arrested  and  before  his  articles  were  seized,  he  was searched,  and such a search is justified by the  provisions of  s. 51 of the Code.  Having thus arrested Ralia  Ram  and searched his person and seized gold and silver articles from him under the respective provisions of the Code, the  police officers  had to deal with the question of the safe  custody of  these goods.  Section 523 provides for the procedure  in that behalf.  It lays down, inter alia, that the seizure  by any  police officer of property taken under s. 51  shall  be forthwith  reported  to a Magistrate, who  shall  make  such order  as  he  thinks fit respecting the  disposal  of  such property  or  the delivery of such property  to  the  person entitled  to  the  possession thereof, or,  if  such  person cannot be ascertained, respecting the custody and production of such property.  These are the relevant provisions of  the Code  in  respect of property seized from a person  who  has



been  arrested  on  suspicion that he  was  carrying  stolen property. That  takes us to the U.P. Police Regulations.  Chapter  XIV of these Regulations deals with the custody and disposal  of property.  Regulation 165 provides a detailed procedure  for dealing  with the disposal of movable property of which  the police  takes possession.  It is not necessary to  refer  to these  provisions;  it would be enough to state  that  these provisions  indicate  that when property is  seized  by  the police officers, meticulous care is required to be taken for making a proper list of the property seized, describing  it, weighing  it, and taking all reasonable steps to ensure  its safety.  Clause (5) of Regulation 165 provides that when the property  consists  of  gold,  silver,  jewellery  or  other valuables,  it must be sent in a sealed packet  after  being weighed,  and its weight must be noted in the general  diary and  on the list which accompanies the packet.  It  requires that a set of weights and scales should 380 be kept at each police station.  Regulation 166 is important for our purpose.  It reads thus :-               "Unless  the  Magistrate  otherwise   directs,               property  of  every description,  except  cash               exceeding Rs. 100 and property of equal  value               and_property    pertaining   to    cases    of               importance,   which  will  be  kept   by   the               Prosecuting Inspector in a separate box  under               lock  and key in the treasury, will remain  in               the custody of the malkhana moharrir under the               general  control  and  responsibility  of  the               Prosecuting   Inspector  until  it  has   been               finally disposed of." The  wording of the Regulation is somewhat complex and  con- fusing,   but  its  purport  and  meaning  are  clear.    In substance,  it provides that property of  every  description will  remain in the custody of the malkhana  moharrir  under the  general control and responsibility of  the  Prosecuting Inspector  until  it  has been finally  disposed  of.   This provision  is  subject to the instructions to  the  contrary which the Magistrate may issue.  In other words, unless  the Magistrate  directs otherwise, the normal rule is  that  the property should remain in the Malkhana.  But this rule  does not  apply to cash exceeding Rs. 100 and property  of  equal value  and  property  pertaining  to  cases  of  importance. Property  falling under this category has to be kept by  the Prosecuting  Inspector in a separate box under lock and  key in the treasury._ If the Magistrate issues a direction  that property not falling under this category should also be kept in  the treasury that direction has to be followed  and  the property in such a case cannot be kept in the custody of the malkhana  moharrir.  It is thus clear that gold  and  silver which  had  been seized from Ralia Ram had to be kept  in  a separate  box under lock and key in the Treasury; and  that, admittedly, was not done in the present case.  It is in  the light of the provisions contained in Regulation 166 that  we have  to  appreciate  the oral evidence  to  which  we  have already   referred.    Unfortunately,   in   dealing    with Regulations  165(5) and 166, the High Court has  erroneously assumed that there was no obligation on the police  officers to  deposit  Ralia  Ram’s property in  the  Treasury.   This conclusion is apparently due to the fact that the words used in  Regulation  166 are not as clear as they should  be  and their effect has been misconstrued by the High Court.  It is in the light of this position that the oral evidence in  the case has to be considered.



Thus considered, there can be no escape from the  conclusion that  the  police officers were negligent  in  dealing  with Ralia  Rani’s  property after it was seized from  him.   Not only was the property not kept in safe custody in the treasury, but the manner  in which  it  was  dealt  with  at  the  Malkhana  shows  gross negligence  on the part of the police officers.  A  list  of -articles seized does not-appear to have been made and there is  no evidence that they were weighed either.  It  is  true that  the  respondent’s  case  is  that  these  goods   were misappropriated  by  Head Constable Mohd.   Amir;  but  that would  not  assist  the respondent in  contending  that  the manner  in which the seized property was dealt with  at  the police station did not show gross negligence.  Therefore, we are  satisfied that the trial Court was right in  coming  to the  conclusion that the loss suffered by the  appellant  by the  fact that the gold seized from Ralia Ram has  not  been returned  to  it, is based on the negligence of  the  police officers  employed  by the respondent; and that  raises  the question of law which we have set out at the commencement of our judgment. Mr.  M. S. K. Sastri for the appellant has argued that  once he  is able to establish negligence of the police  officers, there   should  be  no  difficulty  in  our  decreeing   the appellant’s  claim against the respondent, because he  urges that  in  passing  a decree against the  respondent  in  the present  case,  we would merely be extending  the  principle recognised  by  this  Court in State of  Rajasthan  v.  Mst. Vidhyawati  and Anr. (1).  In that case, respondent No.  1’s husband  and  father  of minor respondent  No.  2  had  been knocked  down by a Government jeep car which was rashly  and negligently driven by an employee of the State of Rajasthan. The said car was, at the relevant time, being taken from the repair  shop to the Collector’s residence and was meant  for the  Collector’s  use.   A  claim  was  then  made  by   the respondents  for damages against the State of Rajasthan  and the said claim was allowed by this Court.  In upholding  the decision of the High Court which had granted the claim, this Court  observed that the liability of the State for  damages in respect of a tortious act committed by its servant within the scope of his employment and functioning as such was  the same  as  that of any other employer.  In  support  of  this conclusion,  this  Court observed that the immunity  of  the Crown in the United Kingdom on which basically the State  of Rajasthan resisted the respondents’ claim, was based on  the old feudalistic notions of justice, namely that the King was incapable  of doing a wrong, and, therefore, of  authorising or instigating one, and that he could not be sued in his own courts.   Such a notion, it was said, was inconsistent  with the   Republican   form  of  Government  in   our   country, particularly  because  in  pursuit  of  their  welfare   and socialistic  objectives, States in India  undertook  various industrial (1)  [1962] Supp. 2 S.C.R. 989. 382 and  other  activities  and had to employ a  large  army  of servants.   That is why it was observed that there would  be no  justification, in principle, or in public interest,  why the  State  should not be held liable  vicariously  for  the tortious acts of its servants.  It is ,on these observations that  Mr. M. S. K. Sastri relies and contends that the  said observations  as well as the decision itself can be  ,easily extended and applied to the facts in the present case. It must be conceded that there are certain observations made in  the  Vidhyawati  case(1)  which  support  Mr.   Sastri’s



argument  and  make it prima facie attractive.  But,  as  we shall presently point, out, the facts in the Vidhyawati case fall in a category of claims  which is distinct and separate from the  category  in which the facts in the  present  case fall; and that makes it necessary to    ,examine  what   the true legal positionis  in regard to a claim    for  damages against the respondent for    loss  caused to a      citizen by   the tortious acts of the respondent’ servants. This question essentially falls to be considered under  Art. 300 (1)    of the Constitution. This article reads thus :-               "The Government of India may sue or be sued by               the  name  of  the  Union  of  India  and  the               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." It  would  be noticed that this article  consists  of  three parts.   The  first part deals with the question  about  the form  and the causetitle for a suit intended to be filed  by or  against the Government of India, or the Government of  a State.   The second part provides, inter alia, that a  State may sue or be sued in relation to its affairs in cases  like those  in which a corresponding Province might have sued  or been  sued  if the Constitution had not  been  enacted.   In other words, when a question arises as to whether a suit can be filed against the Government of a State, the enquiry  has to  be  :  could  such a suit  have  been  filed  against  a corresponding  Province  if the Constitution  had  not  been passed  ?  The third part of the article  provides  that  it would be competent to the Parliament or (1)  [1962] Supp. 2 S.C.R. 989.                             383 the Legislature of a State to make appropriate provisions in regard  to the topic covered by Art. 300(1).  Since no  such law  has been passed by the respondent in the present  case, the  question as to whether the respondent is liable  to  be sued for damages at the instance of the appellant, has to be determined  by  reference to another question and  that  is, whether  such a suit would have been competent  against  the corresponding Province. This  last enquiry inevitably takes us to the  corresponding provisions  in  the respective Constitution Acts  of  India; they  are s. 65 of the Government of India Act, 1858, S.  32 of  the  Government  of India Act, 1915 and s.  176  of  the Government  of India Act, 1935.  It is unnecessary to  trace the  pedigree of this provision beyond s. 65 of the  Act  of 1858,  because the relevant decisions bearing on this  point to which we will presently refer, are ultimately found to be based on the effect of the provisions contained in the  said section.  For convenience, let us cite s. 65 at this stage :               "The  Secretary of State in Council shall  and               may  sue  and be sued as well in India  as  in               England by the name of the Secretary of  State               in  Council  as  a  body  corporate;  and  all               persons and bodies politic shall and may  have               and   take  the  same  suits,   remedies   and               proceedings. legal and equitable, against  the               Secretary of State in Council of India as they



             could have done against the said Company;  and               the property and effects hereby vested in  Her               Majesty for the purposes of the Government  of               India,  or  acquired for  the  said  purposes,               shall  be  subject  and  liable  to  the  same               judgments  and executions as they would  while               vested in the said Company have been liable to               in  respect of debts and liabilities  lawfully               contracted and incurred by the said Company." The  first decision which is treated as a leading  authority on  this  point  was  pronounced by  the  Supreme  Court  at Calcutta in 1861 in the case of the Peninsular and  Oriental Steam  Navigation  Company  v. The Secretary  of  State  for India(1).   It  is  a remarkable  tribute  to  the  judgment pronounced  by Chief Justice Peacock in that case that  ever since,  the principles enunciated in the judgment have  been consistently  followed by all judicial decisions  in  India, and except on one occasion, no dissent has been expressed in respect  of  them.   It seems  somewhat  ironical  that  the judgment of this importance should not have been reported in due course (1)  5 B. H.C.R. Appendix A, p. 1 384 in Calcutta, but found a place in the Law Reports in 5  Bom. H.C.R. 1868-69. Let  us  then consider what this case decided.   It  appears that a servant of the plaintiff company was proceeding on  a highway in Calcutta driving a carriage which was drawn by  a pair  of  horses belonging to the plaintiff.   The  accident which gave rise to the action took place on the highway, and it  was  caused  by the negligence of the  servants  of  the Government who had been employed in the Government  dockyard at  Kidderpore.  ’Me said servants were carrying a piece  of iron funnel, and the manner in which they were carrying  the Said funnel caused an injury to one of the horses that  were drawing  the plaintiffs carriage.  It is this injury  caused by the negligence of the servants of the Government employed in  the  Government dockyard that gave rise to  the  action. The. plaintiff company claimed damages against the Secretary of  State  for  India  for the damage  caused  by  the  said accident.  The suit was tried by the Small Cause Court Judge at  Calcutta.  He found that the defendant’s  servants  were wrongdoers  inasmuch as they carried the iron funnel in  the centre  of  the road.  According to the learned  Judge,  the servants  were  thus liable for the injury caused  by  their negligence.   He was, however, not clear on the question  of law as to whether the defendant Secretary of State could  be held liable for the tortious act of the Government  servants which led to the accident.  That is why he referred the said question  to the Supreme Court of Calcutta, and the  Supreme Court  held that the Secretary of State in Council of  India would be liable for the damages occasioned by the negligence of  servants in the service of Government if the  negligence is such as would render an ordinary employer liable. This  question  was considered by the Supreme Court  in  the light of s. 65 of the Act of 1858.  "The main object of that section,"  observed  Peacock C.J., "was to transfer  to  Her Majesty  the  possession  and  government  of  the   British territories  in  India, which were then vested in  the  East India Company in trust for the Crown, but it does not appear to  have been the intention of the Legislature to alter  the nature  or extent of liabilities with which the  revenue  of India should be chargeable." The learned Chief Justice  then considered  the scheme of the other relevant  provisions  of the  said  Act and posed the question thus: would  the  East



India Company have been liable in the present action, if the 21st  and 22nd Vict., c. 106, had not been passed ?  Dealing with this question, the learned Chief Justice observed  that "the  origin and progress of the East India Company are  too well-known to require any detail                             385 for  the purpose of the present case.  It is  sufficient  to state that after the passing of the 3rd and 4th Wm.  IV., c. 85,  they not only exercised powers of government, but  also carried on trade as merchants." It was then observed by  the learned  Chief  Justice  that in  determining  the  question whether   the   East   India  Company   would,   under   the circumstances,  have been liable to an action,  the  general principles  applicable  to Sovereigns and  States,  and  the reasoning deduced from the maxim of the English Law that the King  can  do  no wrong, would have  no  force,  because  he concurred entirely in the opinion expressed by Chief Justice Grey  in the earlier case of The Bank of Bengal v. The  East India Company(1) that the fact of the Company’s having  been invested with powers usually called sovereign powers did-not constitute them sovereign.  That is one aspect of the matter which was emphasised in that judgment. Proceeding  to  deal with the question on  this  basis,  the learned  Chief  Justice  remarked that  if  the  East  India Company  were  allowed, for the purpose  of  Government,  to engage  in undertakings, such as the bullock train  and  the conveyance  of  goods and passengers for hire, it  was  only reasonable  that  they  should do so, subject  to  the  same liabilities as individuals; and in that view of the  matter, the  Chief Justice expressed the opinion that for  accidents like the one with which the Court was dealing, if caused  by the negligence of servants employed by Government, the  East India Company would have been liable, both before and  after the 3rd and 4th Wm.  IV., c. 85, and that the same liability attaches to the Secretary of State in Council, who is liable to be sued for the purpose of obtaining satisfaction out  of the  revenues  of  India.  "We are  of  opinion,"  said  the learned   Chief  Justice  emphatically,  "that  this  is   a liability,  not only within the words, but also  within  the spirit,  of the 3rd & 4th Wm.  IV., c. 85, s. 9, and of  the 21st  and  22nd Vict., c. 106, S. 65, and that it  would  be inconsistent   with   commonsense  and   justice   to   hold otherwise." It then appears to have been urged before the Court in  that case  that  the  Secretary  of  State  in  Council  must  be considered  as the State or as a public officer employed  by the  State, and the question of his liability determined  on that  footing.  This argument was rejected on  two  grounds, that  the relevant words of the statute did not justify  it, and  that "the East India Company were not  sovereigns,  and therefore,   could  not  claim  all  the  exemption   of   a sovereign."  That is how the learned Chief Justice took  the view that the case "did not fall under the principle of  the cases with regard to the liabilities of such  persons--[that is to say, public (1)  Bignell, Rep. p. 120. 386 servants employed by the Sovereign]; but they were a company to  whom sovereign powers were delegated, and who traded  on their  own  account  and for their  own  benefit,  and  were engaged   in  transactions  partly  for  the   purposes   of government, and partly on their own account, which,  without any  delegation of sovereign rights, might be carried on  by private individuals." It is in respect of this aspect of the matter that the Chief



Justice  enunciated a principle which has been  consistently followed  in  all subsequent decisions.   Said  the  learned Chief  Justice  : "there is a great  and  clear  distinction between acts done in the exercise of what are usually termed sovereign   powers,  and  acts  done  in  the   conduct   of undertakings   which   might  be  carried  on   by   private individuals  without having such powers delegated to  them." Having  thus  enunciated  the  basic  principle,  the  Chief Justice  stated another proposition as flowing from it.   He observed  that  "  where an act is done, or  a  contract  is entered  into,  in  the exercise of  powers  usually  called sovereign  powers; by which we mean powers which  cannot  be lawfully   exercised   except  by  sovereign,   or   private individual  delegated  by a sovereign to exercise  them,  no action  will lie." And, naturally it follows that  where  an act is done, or a contract is entered into, in the  exercise of  powers which cannot be called sovereign  powers,  action will  lie.  ’Mat, in brief, is the decision of  the  Supreme Court of Calcutta in the case of the Peninsular and Oriental Steam Navigation Co. (1). Thus,  it  is  clear that this case  recognises  a  material distinction between acts committed by the servants  employed by  the State where such acts are referable to the  exercise of  sovereign powers delegated to public servants, and  acts committed by public servants which are not referable to  the delegation  of any sovereign powers.  If a tortious  act  is committed  by a public servant and it gives rise to a  claim for  damages, the question to ask is : was the tortious  act committed  by the public servant in discharge  of  statutory functions  which are referable to, and ultimately based  on, the delegation of the sovereign powers of the State to  such public  servant ? If the answer is in the  affirmative,  the action for damages for loss caused by such tortious act will not  lie.  On the other hand, if the tortious act  has  been committed  by  a  -public servant  in  discharge  of  duties assigned  to  him  not by virtue of the  delegation  of  any sovereign  power, an action for damages would lie.  The  act of the public servant committed by him during the course  of his  employment is, in this category of cases, an act  of  a servant who might have been employed by a private individual for the same (1)  5 B.H.C.R. Appendix A, p. 1.                             387 purpose.   This  distinction which is clear and  precise  in law, is sometimes not borne in mind in discussing  questions of   the  State’s  liability  arising  from  tortious   acts committed  by public servants.  That is why the clarity  and precision  with  which this distinction  was  emphasised  by Chief  Justice Peacock as early as 1861 has been  recognised as a classic statement on this subject. We  have  already indicated that this distinction  has  been uniformly followed by judicial decisions in India.  In  that connection, we will refer to a few representative decisions. In The Secretary of State for India in Council v. Moment(1), the Privy Council had occasion to consider the effect of the provisions of s. 41 (b) of Act IV of 1898 (Burma), which  is similar  to  the provisions of s. 65 of  the  Government  of India Act, 1858.  While holding that a suit for damages  for wrongful interference with the plaintiff’s property in  land would  have lain against the East India Company,  the  Privy Council has expressly approved of the principles  enunciated by  Chief  Justice  Peacock  in the  case  of  Peninsular  & Oriental Steam Navigation Co.(2). In Shivabhajan Durgaprasad v. Secretary of State for  India, this point arose for the decision of the Bombay High  Court.



In  that  case,  a  suit had  been  instituted  against  the Secretary of State in Council to recover damages on  account of the negligence of a chief constable with respect to goods seized;  and  the  plaintiffs  claim  was  resisted  by  the Secretary  of State in Council on the ground that no  action lay.   The High Court upheld the plea raised by the  defence on the ground that the chief constable seized the goods  not in obedience to an order of the executive Government, but in performance  of  a  statutory power vested  in  him  by  the Legislature.  The principle on which this decision was based was  stated  to be that where the duty to  be  performed  is imposed  by law and not by the will of the  party  employing the agent, the employer is not liable for the wrong done  by the  agent  in such employment.  In discussing  this  point, Jenkins  C.J.,  referred  to the decision  in  the  case  of Peninsular and Oriental Steam Navigation Co.(2) and observed that though he entertained some doubt about its correctness, the  said  view  had stood so  long  unchallenged  that  lie thought it necessary to accept it as an authority binding on the  Court.  It is on this solitary occasion that a  whisper of  dissent  was  raised  by  Chief  Justice  Jenkins,   but ultimately, the learned C. J. submitted to the authority  of the said decision. (1)  (1912-13)  40  I. A. 48.           (2)  5  B.  H.C.  R. Appendix A p.1. (3)  (1904) I.L.R. .28 Rom. 314. 388 In  the  Secretary  of  State for India  in  Council  v.  A. Cockcraft  &  Anr.(1),  a  claim  for  damages  against  the Secretary of State arose in respect of injuries sustained by the  plaintiff in a carriage accident which was  alleged  to have been due to the negligent stacking of gravel on a  road which  was  stated  in  the plaint to  be  a  military  road maintained  by the Public ’Works Department of  the  Govern- ment.  The Madras High Court held that the plaintiff had  in law  no cause of action against the Secretary of  State  for India  in Council in respect of acts done by the East  India Company  in  the  exercise of its  sovereign  powers.   This conclusion  was based on the finding that the provision  and maintenance of roads, especially a military road, is one  of the  functions of Government carried on in the  exercise  of its  sovereign powers and is not an undertaking which  might have been carried on by private persons. In   the  Secretary  of  State  for  India  in  Council   v. Shreegobinda Chaudhuri(2), it was held by the Calcutta  High Court  that  a  suit for damages does not  lie  against  the Secretary  of  State for India in Council  for  misfeasance, wrongs,  negligence  or  omissions  of  duties  of  managers appointed  by  the Court of Wards, because the  acts  giving rise  to the claim, were done by officers of  Government  in the  course of exercise of powers which cannot  be  lawfully exercised  save  by  the sovereign power.   It  is  in  this connection  that Rankin C.J., enunciated the principle  that no  action in tort lies against the Secretary of  State  for India  in  Council  upon  the  ’respondent  superior’.   The learned  C.  J.,  however, recognised that a  suit  may  lie against  the  Secretary of State for India  in  Council  for torts  committed  by  the Government in  connection  with  a private  undertaking  or an undertaking not in  exercise  of sovereign  power.   The  same view has  been  taken  by  the Allahabad  High Court in Mohammad Murad Ibrahim Khan &  Anr. v. Government of United Provinces. (3) In  Uma  Parshad  v.  The  Secretary  of  State(4),  certain property  which  had  been stolen  from  the  plaintiff  was recovered  by  the  police and was thereafter  kept  in  the



Malkhana under orders of the Magistrate during the trial  of the  thieves.  It appears that the receiver, H. A., the  man in charge of the Malkhana, absconded with it. That led to  a suit  by the plaintiff for the recovery of the property,  or in  the alternative, for its price.  The Lahore  High  Court held  that the liability in the case having  clearly  arisen under  the  provisions of the Criminal Procedure  Code,  the defence  plea  that the act was an act of  State  could  not succeed.  Even so, the Court (1)  (1914) I.L.R. 39 Mad. 351. (3)  I.L.R. [1957] 1. All. 94. (2)  (1932) I.L.R. 59 Cal. 1289. (4)  (1936) I.L.R. 18 Lah. 380. 389 came to the conclusion that the Secretary of State could  be held  liable  only under circumstances in  which  a  private employer  can be rendered liable.  The Court  then  examined the question as to whether in circumstances like those which led  to  the  claim for damages in the  case  before  it,  a private  employer  could  have been made  liable;  and  this question was answered in the negative on the ground that  no liability  attached to the Secretary of State on account  of the  criminal act of the man in charge of the Malkhana;  the said  act was a felonious act unauthorised by his  employer. We  would like to add that some of the reasons given by  the High  Court  in  support of its conclusion may  be  open  to doubt,  but, in substance, the decision can be justified  on the  basis  that the act which gave rise to  the  claim  for damages had been done by a public servant who was authorised by  a statute to exercise his powers, and the  discharge  of the  said function can be referred to the delegation of  the sovereign  power of the State, and as such the criminal  act which gave rise to the action, could not validity sustain  a claim for damages against the State.  It will thus be  clear that the basic principle enunciated by Peacock C. J. in 1861 has  been  consistently followed by  judicial  decisions  in dealing  with  the question about the State’s  liability  in respect  of negligent or tortious acts committed  by  public servants employed by the State. Reverting  then  to  the  decision  of  this  Court  in  the Vidhyanati case(1), it would be recalled that the  negligent act  which  gave rise to the claim for damages  against  the State  of  Rajasthan  in that case,  was  committed  by  the employee of the State of Rajasthan while he was driving  the jeep car from the repair shop to the Collector’s  residence, and  the  question which arose for decision was  :  did  the negligent  act committed by the Government  employee  during the  journey  of  the  jeep car from  the  workshop  to  the Collector’s residence for the Collector’s use give rise to a valid  claim for damages against the State of  Rajasthan  or not?   With respect, we may point out, that this  aspect  of the matter has not been clearly or emphatically brought  out in  discussing  the point of law which was decided  by  this Court  in  that case.  But when we  consider  the  principal facts  on  which  the claim for damages  was  based,  it  is obvious  that when the Government employee was  driving  the jeep car from the workshop to the Collector’s residence  for the  Collector’s  use,  he  was employed on  a  task  or  an undertaking  which  cannot be said to be  referable  to,  or ultimately based on, the delegation of sovereign or  govern- mental powers of the State.  In dealing with such cases,  it must (1) [19621 Supp. 2 S.CR. 989. L2Sup./64-12 390



be borne in mind that when the State pleads immunity against claims for damages resulting from injury caused by negligent acts  of its servants, the area of employment  referable  to sovereign powers must be strictly determined.  Before such a plea is upheld, the Court must always find that the impugned act  was  committed  in  the course  of  an  undertaking  or employment  which is referable to the exercise of  sovereign power, or to the exercise of delegated sovereign power;  and in the Vidhyawati case(1), this Court took the view that the negligent  act in driving the jeep car from the workshop  to the  Collector’s bungalow for the Collector’s use could  not claim such a status.  In fact, the employment of a driver to drive the jeep car for the use of a civil servant is  itself an  activity which is not connected in any manner  with  the sovereign  power of the State at all.  That is the basis  on which the decision must be deemed to have been founded;  and it is this basis which is absent in the case before us. It  is  not  difficult  to  realize  the  significance   and importance of making such a distinction particularly at  the present  time when, in the pursuit of their  welfare  ideal, the  Governments of the States as well as the Government  of India naturally and legitimately enter into many  commercial and other undertakings and activities which have no relation with  the traditional concept of Governmental activities  in which  the exercise of sovereign power is involved.   It  is necessary to limit the area of these affairs of the State in relation to the exercise of sovereign power, so that if acts are  committed by Government employees in relation to  other activities  which  may  be conveniently  described  as  non- governmental  or nonsovereign. citizens who have a cause  of action for damages should not be precluded from making their claim  against  the State.  That is the basis on  which  the area  of  the  state immunity against such  claims  must  be limited;  and  this is exactly what has been  done  by  this Court in its decision in the Vidhyawati case(1). In the present case, 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.   Now, 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  in  the  last analysis,   they   are   powers  which   can   be   properly characterised  as  sovereign  powers; and so,  there  is  no difficulty  in holding that the act which gave rise  to  the present  claim  for  damages  ’has  been  committed  by  the employee of the (1)  [19621 Supp. 2 S.C.R. 989.                             391 respondent  during  the course of its  employment;  but  the employment in question being of the category which can claim the  special  characteristic of sovereign power,  the  claim cannot be sustained; and so, we inevitably hark back to what Chief  Justice  Peacock decided in 1861 and  hold  that  the present claim is not sustainable. Before  we part with this appeal, however, we Ought  to  add that  it  is time that the Legislatures in  India  seriously consider whether they should not pass legislative enactments to  regulate  and control their claim of immunity  in  cases like  this on the same lines as has been done in England  by the  Crown Proceedings Act, 1947.  It will be recalled  that this  doctrine  of  immunity  is based  on  the  Common  Law principle 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 sited in its own courts without its consent.  This legal  position has been substantially altered by the Crown Proceedings Act, 1947  (  10 & I I Geo. 6 c. 44).  As  Halsbury  points  Out, "claims  against the Crown which might before  1st  January, 1948 have been enforced, subject to the ,-rant of the  royal flat, by petition of right may be. enforced as of right  and without  a  fiat  by legal  proceedings  taken  against  the Crown."(1)  That  is  the effect of s. I of  the  said  Act. Section 2 provides for the liability of the Crown in tort in six  classes  of cases covered by its clauses  (I)  to  (6). Clause (3), for instance, provides that where any  functions are  conferred  or imposed upon an officer of the  Crown  as such either by any rule of the common law or by statute, and that  officer commits a tort while performing or  purporting to perform those functions, the liabilities of the Crown  in respect of the tort shall be such as they would have been if those  functions  had been conferred or  imposed  solely  by virtue of instructions lawfully given by the Crown.  Section 11  provides  for  saving  in respect  of  acts  done  under prerogative  and  statutory powers.  It  is  unnecessary  to refer  to the other provisions of this Act.  Our only  point in  mentioning this Act is to indicate that the doctrine  of immunity  which has been borrowed in India in  dealing  with the  question  of  the immunity of the State  in  regard  to claims  made against it for tortious acts committed  by  its servants, was really based on the Common Law principle which prevailed  in  England;  and that  principle  has  now  been substantially  modified  by the Crown Proceedings  Act.   In dealing  with  the present appeal, we  have  ourselves  been disturbed by the thought that a citizen (1)  Halsbury’s Laws of England, 3rd ed., Vol.  II, p. 8. 392 whose property was seized by process of law, has to be  told when he seeks a remedy in a court of law on the ground  that his property has not been returned to him, that be can  make no  claim against the State.  That, we think, is not a  very satisfactory  position  in  law.  The remedy  to  cure  this position, however, lies in the bands of the Legislature. The result is, the appeal fails, but in the circumstances of this case, we direct that the parties should bear their  own costs throughout. Appeal dismissed. 393