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PETITIONER: THE STATE OF RAJASTHAN

       Vs.

RESPONDENT: MST. VIDHYAWATI AND ANOTHER

DATE OF JUDGMENT: 02/02/1962

BENCH: SINHA, BHUVNESHWAR P.(CJ) BENCH: SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L. HIDAYATULLAH, M. SHAH, J.C. MUDHOLKAR, J.R.

CITATION:  1962 AIR  933            1962 SCR  Supl. (2) 989  CITATOR INFO :  RF         1965 SC1039  (12,13,27,ETC,)  MV         1967 SC 997  (52)  D          1967 SC1885  (7)  E&R        1978 SC 548  (21)  F          1990 SC 513  (13)  RF         1990 SC1480  (73)

ACT:      Tort-Suit for  damages-Liability of State for tortious  act  of  its  servant  acting  as  such- Constitution of  India, Arts.  300 (1),  294, 295- Government of  India, Act  1935 (25 and 26 Geo. V. C. 42)  s. 176  (1)-Gavernment of India, Act, 1915 (5 &  6 Geo.  V. C. 61), s. 32-Government of India Act, 1858 (21 and 22 Victoria Ch. U.V. 1), s. 65.

HEADNOTE:      The respondent  1’s  husband  and  father  of minor respondent  2  was  on  February  11,  1952, knocked down  by a  Government jeep car rashly and negligently driven  by an employee of the State of Rajasthan, while  being taken from the repair shop to the  Collector’s  residence,  and  subsequently died in hospital. On a suit by the respondents for damages, the  trial court decreed the same exparte as against  the driver but dismissed it as against the State,  holding that  as  the  car  was  being maintained  for  the  use  of  the  Collector,  in discharge of  his official  duties, even though it was not  being used  for any purposes of the State at the time of the occurrence, that was sufficient to absolve the State of any vicarious liability as the  employer.   The   High   Court   on   appeal, disagreeing with the trial court, decreed the suit as against the State as well. ^      Held, 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

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functioning as  such was  the same  as that of any other employer.      The relevant  provisions for  determining the extent of  that liability were not those contained in  Arts.   294  and   295  which  were  primarily concerned with  the devolution  of rights,  assets and liabilities  but those  of Art. 300 (1) of the Constitution, which  by using  the expression  "in like cases"  in its second part defined the extent of that  liability and  referred back to the legal position obtaining  before the promulgation of the Constitution.      Article 300  (1), read in the light of s. 176 (1) of  the Government of India Act of 1935, s. 32 of the Government of India Act, 1915, and s. 65 of the Government  of India Act, 1858, left no manner of doubt  that the  extent of  the liability  of a State must  be the  same as that of the East India Company  as   decided  by  the  Supreme  Court  of Calcutta, in  the case  of Peninsular and Oriental Steam Navigation Co. v. The Secretary of State for India. 990      Peninsular and  Oriental Steam Navigation Co. v. The  Secretary of  State for India, (1868-69) 5 Bom. H. C. R. 1, approved.      Regard being  had to  the stages by which the State of  Rajasthan was  ultimately formed, it was not possible  in order  to judge  the liability of that State  under Art,  300 (1)  to go  beyond the last stage of integration leading to the formation of  the   Rajasthan  Union   on  the  eve  of  the Constitution  and   that  Union   would   be   the corresponding  State   as  contemplated   by   the Article. In  the absence  therefore,  of  any  law providing otherwise,  the Union of Rajasthan, just as the Dominion of India or any of its constituent providences, would  be vicariously  liable for the acts of its servant.      Viewed from  the  stand-point  of  the  first principles, the conclusion could not be otherwise. Ever since the days of the Fast India Company, the Sovereign was held liable to be sued in tort or in contract and the English Common law immunity as it existed in  England before  the enactment of Crown Proceedings Act,  1947, never  operated in  India. With  the   advent   of   the   Constitution   and inauguration  of  the  Republic  with  a  view  to establishing a  Socialistic State  with its varied industrial and  other  activities  engaging  large numbers   of   employees   there   could   be   no justification, in  principle or  public  interest, that the  State should  not  be  held  vicariously liable for the tortious acts of its servants.      State of  Bihar v. Abdul Majid, [1254] S.C.R. 786, referred to      As  neither  the  Parliament  nor  any  State Legislature had  thought fit  to enact  any law on the matter,  a right  saved by  by Art, 300 of the Constitution, the law must continue to be the same as it  had been  since the  days of the East India Company.

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JUDGMENT:      CIVIL APPELLATE  JURISDICTION :  Civil Appeal No. 263 of 1958.      Appeal from  the judgment  and  decree  dated March 22,  1957 of  the Rajasthan High Court in D. B. Civil First Appeal No. 36 of 1954.      G. C.  Kasliwal, Advocate-General, Rajasthan, H.R. Khanna,  B.K. Kapur,   P.D.  Menon,  for  the appellant.      S. N.  Andley, Rameshwar Nath and P.L. Vohra, for the respondents. 991      1962. February  2. The  Judgment of the Court was delivered by      SINHA, C.  J.-This appeal,  on a  certificate granted by  the High Court of Rajasthan under Art. 133(1)(c) of  the Constitution,  raises a question of considerable  importance, namely, the extent of the vicarious  liability  of  Government  for  the tortious acts  of its  employees,  acting  in  the course of  their employment  as  such.  The  Trial Court dismissed  the  claim  for  compensation  as against the  State of  Rajasthan,  which  was  the second defendant  in  the  suit  for  damages  for tortious act  of the first defendant. Lokumal, who is not  a party  to this  appeal. On appeal by the plaintiffs against  the judgment and decree of the Trial Court,  the High Court of Rajasthan passed a decree  in   favour  of  the  plaintiffs  allowing compensation of  Rs. 15,000/- against the State of Rajasthan also,  which is  the appellant  in  this Court.      The facts  of this case may shortly be stated as follows.  The first  defendant Lokumal,  was  a temporary employee  of the  appellant State,  as a motor driver  on probation.  In February, 1952, he was employed  as the  driver of  a Government jeep car, registered as No. RUM 49, under the Collector of Udaipur.  The car  had been  sent to a workshop for necessary  repairs.  After  repairs  had  been carried out,  the first  defendant, while  driving the car  back along  a public road, in the evening of February 11, 1952, knocked down one Jagdishlal, who was walking on the footpath by the side of the public road  in Udaipur city, causing him multiple injuries, including  fractures of  the  skull  and backbone, resulting in his death three days later, in the  hospital where  he had  been  removed  for treatment. The  plaintiffs  who  are  Jagdishlal’s widow and  a minor  daughter,  aged  three  years, through her  mother as  next friend  sued the said Lokumal and the State of Rajasthan for damages for the tort  aforesaid. They claimed the compensation of Rs. 25,000/- from both the 992 defendants. The first defendant remained ex-parte. The  suit   was  contested   only  by  the  second defendant on  a number  of issues.  But in view of the fact that both the Courts below have agreed in finding that  the first  defendant  was  rash  and negligent in driving the jeep car resulting in the accident and  the ultimate death of Jagdishlal, it is  no   more  necessary  to  advert  to  all  the questions raised  by way  of answer  to the  suit, except the  one  on  which  the  appeal  has  been

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pressed before  us. The  second defendant, who was the respondent  in the  High  Court,  and  is  the appellant before us, contested the suit chiefly on the ground that it was not liable for the tortious act of  its employee.  The Trial  Court, after  an elaborate discussion  of the evidence, decreed the suit against  the first  defendant  ex-parte,  and dismissed it  without  costs  against  the  second defendant. On  appeal by  the plaintiffs, the High Court of  Rajasthan (Wanchoo  C.J., and D. S. Dave J.)  allowed  the  appeal  and  decreed  the  suit against the  second defendant  also, with costs in both the  Courts. The  State of  Rajasthan applied for and  obtained the  necessary certificate "that the  case   fulfils  the   requirements  of   Art. 133(1)(c) of  the Constitution of India". The High Court rightly  observed that an important point of law of  general  public  importance,  namely,  the extent of the liability of the State, in tort, was involved.      In support  of the  appeal, counsel  for  the Appellant  raised   substantially  two  questions, namely,  (1)   that  under   Art.   300   of   the Constitution, the  State  of  Rajasthan,  was  not liable as the corresponding Indian State would not have been liable if the case had arisen before the Constitution came  into force;  and (2)  that  the jeep car,  the rash and negligent driving of which led to  the claim in the suit was being maintained "in exercise  of sovereign powers" and not as part of any  commercial  activity  of  the  State.  The second question  may shortly be disposed of before we address ourselves to the first question, 993 which is the more serious of the two raised before us. Can  it be  said that  when the  jeep car  was being driven  back from  the repair  shop  to  the Collector’s place,  when the  accident took place, it was  doing  anything  in  connection  with  the exercise of  sovereign powers of the State? It has to be  remembered that  the injuries  resulting in the death  of Jagdishlal were not caused while the jeep  car   was  being  used  in  connection  with sovereign powers  of the State. On the findings of the Courts below it is clear that the tortious act complained of  had been  committed  by  the  first defendant in circumstances wholly dissociated from the exercise  of sovereign powers. The Trial Court took the view that as the car was being maintained for the  use of the Collector, in the discharge of his official  duties, that  circumstance alone was sufficient to take the case out of the category of cases where  vicarious liability  of the  employer could arise, even though the car was not being use at the  time of the occurrence for any purposes of the State. The Trial Court accepted the contention of  the   State  of  Rajasthan,  on  reaching  the conclusion,  after   a  discussion  of  the  legal position, in these words:           "Therefore   it    follows   that    the      constitution and  control of  the Collector’s      office at  the  Udaipur  is  an  instance  of      exercise of sovereign powers." On appeal, the High Court disagreed with the Trial Court on  the legal  issue. Its  finding  on  this

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issue is in these words:           "In our  opinion, the  State  is  in  no      better position in so far as it supplies cars      and keeps  drivers for  its civil service. It      may  be   clarified  that  we  are  not  here      considering the  case of  drivers employed by      the State  for  driving  vehicles  which  are      utilised for military or public service." 994      In the  result,  the  High  Court  granted  a decree to  the plaintiffs  as against  the  second defendant also for the sum of Rs. 15,000/-. In our opinion, the High Court has taken the correct view of  the   legal   position,   in   view   of   the circumstances in which the occurrence took place.      The more  important question  raised on  this appeal rests upon the true construction and effect of Art.  300(1) of  the Constitution,  which is in these terms:           "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 will  be noticed  that this Article consists of three parts,  namely, (1)  the first part provides for the  form and  the cause-title  in a  suit and says that  a State  (omitting any reference to the Government of  India) may  sue or  be sued  by the name of the State, and (2) that a State may sue or be sued  in relation  to its affairs in like cases as   the    corresponding   Provinces    or    the corresponding Indian State might have sued or been sued if  this Constitution  had not  been enacted; and (3)  that the  second part  is subject  to any provisions which  may be  made by  an Act  of  the Legislature  of   the  State   concerned,  in  due exercise  of   its   legislative   functions,   in pursuance of powers conferred by the Constitution. The learned  Advocate-General  for  the  State  of Rajasthan argued that the 995 second part  of the  article has  reference to the extent of the liability of a State to be sued, and that, therefore, we have to determine the question of the  liability of  the State  in this  case  in terms of  the Article.  On the  other hand, it has been  argued   on  behalf   of   the   plaintiffs- respondents that  chapter III  of part  XII of the Constitution,  which   is  headed   as  "Property, Contracts, Rights,  Liabilities,  Obligations  and Suits", contains  other Articles  in  the  Chapter dealing with rights and liabilities, namely, Arts. 294 and  295 and that Art. 300 is confined to only the question  in whose  name suits and proceedings may be  commenced, in  which the  Government of  a State may figure as plaintiff or as defendant, and

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that the  Article is  not concerned  with defining the extent  of liability  of  a  State.  In  other words,  it   was  contended   that  Art.  300  was irrelevant for determining the vicarious liability of the  defendent State  in this  case,  and  that there was  nothing in  this Article  definitive of that liability.  In our opinion, it is not correct to argue  that the  provisions  of  Art.  300  are wholly  out   of  the   way  for  determining  the liability of  appellant State.  It  is  true  that arts. 294  and 295  deal with  rights to property, assets,  liabilities   and  obligations   of   the erstwhile Governers’  Provinces or  of the  Indian States  (specified   in  Part   B  of   the  First Schedule). But  Arts. 294  and 295  are  primarily concerned with  the devolution  of  those  rights, assets and  liabilities, and  generally  speaking, provide for  the succession  of a State in respect of the  rights and liabilities of an Indian State. That is to say they do not define those rights and liabilities, but  only provide for substitution of one Government  in place  of the other. It is also true that  first part  of  Art.  300,  as  already indicated, deals only with the nomenclature of the parties to  a suit  or proceeding  but the  second part defines the extent of liability by the use of the words  "in the like cases" and refers back for the determination  of  such  cases  to  the  legal position before the enactment of the 996 Constitution. That  legal position is indicated in the Government  of India Act, 1935 (25 & 26 Geo. V c. 42), s. 176(1) which is in these words:           "The Federation  may sue  or be  sued by      the name  of the  Federation of  India and  a      Provincial Government  may sue  or be sued by      the  name   of  the  Province,  and,  without      prejudice to  the  subsequent  provisions  of      this chapter,  may subject  to any provisions      which may  be made by Act of the Federal or a      Provincial Legislature  enacted by  virtue of      powers conferred  on that Legislature by this      Act, sue  or be  sued in  relation  to  their      respective affairs  in the  like cases as the      Secretary of State in council might have sued      or  been  sued  if  this  Act  had  not  been      passed." It will  be noticed  that the  provisions of  Art. 300(1)  and   s.  176(1)   are  mutatis   mutandis substantially the same. Section 176(1) refers back to the  legal position  as it  obtained before the enactment of  that Act,  that is  to  say,  as  it emerged  on   the  enactment   of  s.  32  of  the Government of India Act, 1915 (5 & 6 Geo. V c. 61) Sub-ss. (1)  and (2),  which only are relevant for our present purposes, are in these words:           "(1) The Secretary  of State  in Council      may sue  and be  sued  by  the  name  of  the      Secretary of  State in  Council,  as  a  body      corporate.           (2)  Every person  shall have  the  same      remedies against  the Secretary  of State  in      Council as he might have had against the East      India Company if the Government of India Act,      1858, and this Act had not been passed."

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As compared  to the  terms of Art. 300, it will be noticed that  part (1) of that Article corresponds to sub-s.  (1) of  s. 32  above, part (2) roughly, though not exactly, corresponds to sub-s. (2), and part (3)  of the Article, as indicated above, does not find a 997 place in  s. 32.  Sub-section (2)  of  s.  32  has specific reference to "remedies", and has provided that the  remedies against  the Secretary of State in Council  shall be  the same as against the East India Company,  if the  Government of India Act of 1858, and  the Government  of India Act, 1915, had not been  passed. We  are, thus,  referred further back to the Act 21 & 22 Victoria Ch. CVI, entitled "An Act  for the  better Government  of India." As this Act  transferred the  Government of  India to Her  Majesty,   it  had  to  make  provisions  for succession of  power  and  authority,  rights  and liabilities. Section  65 of  the Act of 1858 is in these terms:           "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." It  will  thus  be  seen  that  by  the  chain  of enactments, beginning  with the  Act of  1858  and ending with  the Constitution, the word "shall and may have  and take  the same  suits, remedies  and proceedings" in  s. 65  above,  by  incorporation, apply the  Government  of  a  State  to  the  same extent, as they applied to the East India Company. 998      The question  naturally arises:  What was the extent of  liability of the East India Company for the tortious  acts of  its servants  committed  in course of  their employment  as such  ? The  exact question  now   before  us  arose  in  a  case  in Calcutta, before the Supreme Court of Calcutta, in the case  of The  Peninsular  and  Oriental  Steam Navigation Company  v. The  Secretary of State for India (1).  The Calcutta case appears to have been cited before  the High Court in Bombay in the case of  Narayan   Krishna  Land   v.  Gerard   Norman, Collector of Bombay(2). The Bombay case related to an action  of trespass,  brought by  the plaintiff against the  Collector of  Bombay  in  respect  of certain land,  which the  Collector  believed  was Government property. Of immediate importance to us in his  case is  the report  of the Calcutta case, which does not appear to have been reported in any

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Calcutta legal, journal though, on the face of it, it was judgment of far reaching importance and has always been  cited as  the  leading  case  on  the subject. It  was a  case decided  by a Full Bench, consisting of Peacock, C.J., and Jakson and Wells, JJ., of  the Supreme  Court of  Calcutta. It arose out of  a reference by the Small Cause Court Judge under s. 55 of Act IX of 1850. The case, as stated to the Supreme Court, was to the following effect. A servants  of the  plaintiffs was proceeding on a highway in  Calcutta driving a carriage drawn by a pair of  horses belonging  to the  plaintiffs. The accident, which  took place  on the  highway,  was caused by the servants of the Government, employed in the  Government dockyard  at Kidderpore, acting in a  negligent rash  manner. As  a result  of the negligent manner in which the Government employees in the  dockyard were  carrying a  piece  of  iron funnel, one of the horses drawing the plaintiffs 999 carriage  was   injured.  The   plaintiff  company claimed damages against the Secretary of State for India for  the damage  thus  caused.  The  learned Small Cause  Court Judge  came to the finding that the  defendant’s   servants  were   wrongdoers  in carrying the  iron funnel  in the  centre  of  the road, and  were, thus, liable for the consequences of what  occurred. But  he was  in doubt as to the liability  of  the  Secretary  of  State  for  the tortious acts of the Government servants concerned in the  occurrence in  which the injury was caused to the  plaintiffs’ horse.  So the question, which was referred  to the  Court for  its  answer,  was whether the  Secretary of State was liable for the damage  occasioned   by  the   negligence  of  the Government servants,  assuming them  to have  been guilty of  such negligence  as would have rendered an ordinary  employer liable.  In  the  course  of their judgment, their Lordships began by examining the  question   whether   the   proviso   to   the jurisdiction of  the Small  Cause  Courts  to  the following effect could be a bar to the suit:           "Provided always  that the  Court  shall      not   have   jurisdiction   in   any   matter      concerning the revenue, or concerning any act      ordered or done by the Governor, or Governor-      General or  any  member  of  the  Council  of      India, or  of any  Presidency, in  his public      capacity, or  done by  any person by order of      the Governor-General  or Governor in Council,      or concerning  any act ordered or done by any      Judge or  Judicial Officer,  in the execution      of his  office, or by any person in pursuance      of any judgment or order of any Court, or any      such Judge  or Judicial  Officer, or  in  any      suit for libel or slander." (Proviso to s. 25      of the Small Cause Court Act.). The Court  came to the conclusion that the proviso was not  a bar to the suit. Having disposed of the preliminary question,  the Court  addressed itself to 1000 the main  controversy, which  it described as "one of  very   considerable  importance  and  of  some difficulty".  Then   the   Court   cosidered   the

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provisions of  s. 65  of  the  Act  of  1858,  and pointed out that as the Queen could not be sued in her own  courts, as  the East  India Company could have been,  it was  necessary to  provide by  that section the  mode for enforcing the liabilities of the Company  now devolved  upon the  Secretary  of State. Then  the Court  addressed  itself  to  the question. Would  the East  India Company have been liable in  the present  action if the Act (21 & 22 Vict.  ch.   106)  had  not  been  passed  ?  With reference to the provisions of 3 & 4 Wm IV, c. 85, it was  pointed out  that  the  Company  not  only exercised powers  of government,  but also carried on trade  as merchants. The Court then examined in great detail  the provisions  of the Act aforesaid and pointed  out that  by that Act the Company was directed to  close  its  commercial  business  and cease to  have any  interest  in  the  territorial acquisitions in  India, which  were to  be held by the Company until April 30, 1854, in trust for the Crown.  Section  10  of  the  Act,  which  may  be characterised as  the ancestor of s. 65 of the Act of 1858, provided as follows:           "That so  long  as  the  possession  and      government of  the said  territories shall be      continued to  the said  Company, all  persons      and bodies  politic shall  and may  have  and      take   the    same   suits,   remedies,   and      proceedings, legal and equitable, against the      said  Company,   in  respect   of  debts  and      liabilities as  aforesaid, and  the  property      vested  in  the  said  Company  in  trust  as      aforesaid shall  be subject and liable to the      same judgments  and execution,  in  the  same      manner and  form respectively  as if the said      property were  hereby continued  to the  said      Company to their own use." It is  noteworthy that  the provisions  of s.  10, quoted above, are materially similar to the latter part 1001 of s.  65 of the Act of 1858. It was in accordance with the provisions of s. 10, followed up by s. 65 aforesaid, that  the Court  laid it  down that the Secretary of  State for  India was  subject to the same liabilites as those which previously attached to the East India Company.      Before the  Supreme Court of Calcutta, it was contended  by  the  learned  Advocate-General,  on behalf of  the defendant, that the State cannot be liable for damages occasioned by the negligence of its officers  or of  persons in its employment. It was pointed  out,  "it  is  true  that  it  is  an attribute of  sovereignty that  a State  cannot be sued in  its own  courts without its consent." "In England, the  Crown", it  was further pointed out, "cannot  be   made  liable  for  damages  for  the tortious acts  of its  servants either by petition of right  or in  any other manner, as laid down by Lord Lyndhnrst  in the case of Viscount Canterbury v. The  Attorney-General" (1).  That decision  was based upon  the principle  that the King cannot be guilty of  personal negligence  or misconduct, and consequently  cannot   be  responsible   for   the negligence or  misconduct  of  his  servants.  The

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Court further  pointed out  that it was in view of these difficulties  in the  way of getting redress that the  liability of  the Secretary of State, in place of  that of  the  East  India  Company,  was specifically provided for by s. 10, aforesaid. The East India  Company itself  could not have claimed any  such   immunity  as   was  available  to  the sovereign. This  view was  based  on  the  opinion expressed by  Grey, C.J.,  in the case of the Bank of Bengal v. The East India Company (2), that "the fact of  the Company’s  having been  invested with powers usually  called sovereign  powers  did  not constitute them  sovereigns". This dictum was also founded upon the recital in 53 Geo. III c. 155, by which the  territories in the possession and under the government  of the  East  India  Company  were vested in them without prejudice to the undoubted 1002 sovereignty of  the Crown.  The Court also pointed out that  the liability  of the Secretary of State was in  no sense  a personal liability, but had to be satisfied out of the revenues of India.      This case also meets the second branch of the argument that  the State  cannot be liable for the tortious acts  of its servants, when such servants are engaged  on an  activity  connected  with  the affairs of the State. In this connection it has to be remembered  that under the Constitution we have established a  welfare state,  whose functions are not confined  only to  maintaining law  and order, but extend to engaging in all activities including industry, public transport, state trading, to name only a  few of  them.  In  so  far  as  the  State activities have  such wide ramifications involving not only  the use of sovereign powers but also its powers as  employers in so many public sectors, it is too  much to  claim that  the State  should  be immune from  the consequences  of tortious acts of its employees  committed in  the course  of  their employment as  such. In  this respect, the present set up  of the  Government  is  analogous  to  the position  of   the  East   India  Company,   which functioned not only as a Government with sovereign powers, as  a delegate  of the British Government, but also  carried on  trade and  commerce, as also public  transport   like   railways,   posts   and telegraphs and  road transport business. It was in the context  of those facts that the Supreme Court of Calcutta  repelled  the  argument  advanced  on behalf of the Secretary of State in these terms:           "It was  contended in  argument that the      Secretary of State in Council, as regards his      liability to  be sued,  must be considered as      the State, or as a public officer employed by      the State.  But, in our opinion his liability      to be  sued depends upon an express enactment      in the  21st & 22nd Vict. c. 106, by weich he      is constitututed  a mere nomial defendant for      the purpose of enforcing payment, out of the 1003      revenues  of   India,  of   the   debts   and      liabilities  which  had  been  contracted  or      incurred by  the East India Company, or debts      or liabilities  of a  similar  nature,  which      might afterwards be contracted or incurred by

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    the Government  of India.  We are  further of      opinion that  the East India Company were not      sovereigns, and  therefore, could  not  claim      all the  exemption of  a sovereign;  and that      they  were   not  the   public  servants   of      Government,  and,  therefore,  did  not  fall      under the  principle of the cases with regard      to the  liabilities of persons; but they were      a  company  to  whom  sovereign  powers  were      delegated,  and   who  traded  on  their  own      account and  for 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.  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: Moodaley v. The East India      Company and  The Same v. Morton (1 Bro. C. C.      469)".      It was also argued before that Court that the East India  Company having  the two-fold character of a  sovereign power and of a trading company, it would be  very difficult  to determine  whether  a particular act  had been  done in  the exercise of sovereign powers or of its activity in relation to business. In  answer to  this contention,  it  was pointed out  by the  Court that  the Company would not have  been liable  for any  act  done  by  its officers or  soldiers in  carrying on hostility or in seizing  property as  prize property  or  while engaged in 1004 military or  naval action. In such cases no action would  have   lain  even   against  the   officers themselves. But the Company would have been liable for the  negligence of their servants or officers, in navigating  a river steamer or in repairing the same or  in doing  any act in connection with such repairs.      The argument  that a  distinction had  to  be drawn between  the liability  under a contract and that arising  out of  a wrongful act, and that the latter category  of liability  would not be within the mischief  of the  words of the section (s. 65) was rightly  repelled with  reference to the words of  the   Statute,  which   said  "debts  lawfully contracted and  expenses or liabilities incurred". The latter expression ’liabilities incurred’ would include a liability arising out of a tortious act. The Court, after an elaborate consideration of all possible argument  in favour  of the  Secretary of State, came  to the following conclusion, which is rightly summed up in the head-note in these words:           "The Secretary  of State  in Council  of      India is 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."      But it  was  further  argued  that  Art.  300

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speaks  of  like  cases’  with  reference  to  the liability of  the corresponding  Indian States. In this connection,  it was  further argued  that the plaintiff, in  order  to  succeed  in  his  action against the  State of  Rajasthan, must  prove that the State  of Udaipur  which would be deemed to be the corresponding State, would have been liable in similar circumstances, before the Constitution was enacted, The  history of  events leading up to the formation of  the State  of Rajasthan  has, to  be adverted to  in this connection. It is clear, on a reference to  the  Government  publication  called "The White  Paper on Indian States" paragraphs 134 to 138, at pages 1005 (53-55) that  the  integration  of  the  Rajasthan States into  one  single  state  was  effected  in several stages. The Rajasthan Union was originally formed by  the smaller  States, which later united and  formed   the  United   State  of   Rajasthan, inaugurated  on   March  25,  1948.  Subsequently, bigger States  joined  and  the  second  Rajasthan Union was  inaugurated on  April 18,  1948.  By  a further process  of  integration  of  some  bigger States,  new   United  State   of  Rajasthan   was inaugurated on March 30, 1949. There was a further accession of  territory by the agreement contained in Appendix  XLI, on May 10, 1949, with the result that the initial United State of Rajasthan with an area of  16, 807  sq. miles  developed into one of the biggest  units  in  India,  as  the  Rajasthan Union, before  the Constitution,  with an  area of 1,28,424  sq.   miles,   and   finally,   on   the inauguration of the Constitution emerged the State of Rajasthan  as one  of the  Part B States. It is clear that  we cannot  go beyond the last stage of the integration,  as aforesaid, which brought into existence the  State just  before the  coming into effect of  the Constitution.  As  already  pointed out, the provisions of the second part of Art. 300 have to  be traced  backwards until  we reach  the Government of  India Act 1858 (s.65), which itself was basedupon  s. 10  of the  Act (3 & 4 Wm. IV c. 85) of  which the  relevant portions have been set out above.      From the resume of the formation of the State of Rajasthan given above, it is clear that we need not travel  beyond the  stage when  the  Rajasthan Union was  formed on  the eve of the Constitution. It has  not been  shown that  the Rajasthan  Union would not have been liable for the tortious act of its employee,  in the  circumstances disclosed  in the present  case. The  issue framed at the trial, on this  part of the controversy, was issue No. 9, in these terms: 1006      "Whether the State of Rajasthan is not liable for the act of Defendant No. 1 ?" The State  of Rajasthan  has not  shown  that  the Rajasthan Union,  its predecessor,  was not liable by any  rule of  positive enactment  or by  common Law. It  is clear  from what  has been  said above that the  Dominion of  India, or  any  constituent Province of  the Dominion,  would have been liable in  view   of  the   provisions  aforesid  of  the

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Government of  India Act,  1858. We  have not been shown  any   provision  of   law,   statutory   or otherwise, which  would  exonerate  the  Rajasthan Union from vicarious liability for the acts of its servant, analogous  to the  Common Law of England. It was  impossible, by  reason of  the maxim  "The King can  do no  wrong", to  sue the Crown for the tortious act  of its  servant. But it was realised in  the   United  Kingdom  that  rule  had  become outmoded in  the context of modern developments in state craft, and Parliament intervened by enacting the Crown  Proceedings Act,  1947, which came into force on  January 1,  1948. Hence the very citadel of the  absolute rule of immunity of the sovereign has now  been blown  up. Section  2(1) of  the Act provides that  the Crown  shall be  subject to all those liabilities,  in tort,  to which it would be subject if  it were  a private  person of full age and capacity, in respect of torts committed by its Bervants  or   agents,  subject   to   the   other provisions of the Act. As already pointed out, the law  applicable  to  India  in  respect  of  torts committed by  a servant of the Government was very much in  advance of  the Common  law,  before  the enactment of  the  Crown  Proceedings  Act,  1947, which has  revolutionised the  law in  the  United Kingdom also.  It has  not been  claimed before us that the  common law  of the United Kingdom before it was  altered be  the said  Act with effect from 1948, applied  to the  Rajasthan Union in 1949, or even earlier. It must, therefore, 1007 be held  that the State of Rajasthan has failed to discharge the  burden  of  establishing  the  case raised in Issue No. 9, set out above.      Viewing the  case from  the point  of view of first principles, there should be no difficulty in holding that  the State  should be  as much liable for tort in respect of a tortious act committed by its servant within the scope of his employment and functioning as  such as  any other  employer.  The immunity of  the Crown  in the United Kingdom, 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. In  India, ever since the time of the East  India Company,  the soversign  has  been held liable to be sued in tort or in contract, and the Common  Law immunity  never operated in India. Now that we have, by our Constitution, established a Republican  form of  Government, and  one of the objectives is  to establish  a  Socialistic  State with its  varied industrial  and other activities, employing a  large army  of servants,  there is no justification,  in   principle,   or   in   public interest, that the State should not be held liable vicariously for  the tortious  act of its servant. The  Court  has  deliberately  departed  from  the Common  Law  rule  that  a  civil  servant  cannot maintain a  suit against the Crown. In the case of State of  Bihar v. Abdul Majid (1), this Court has recognised the  right of  a government  servant to sue the  Government for  recovery  of  arrears  of salary. When the rule of immunity in favour of the

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Crown based  on common  Law in  the United Kingdom has disappeared  from the land of its birth, there is no  legal warrant  for holding  that it has any validity in  this country,  particularly after the Constitution. As  the cause of action in this case arose  after   the  coming   into  effect  of  the Constitution in,  our opinion,  it would  be  only recognising the  old established  rule, going back to more than 100 1008 years  at   least,  if  we  uphold  the  vicarious liability  of   the  State.   Art.  300   of   the Constitution  itself   has  saved   the  right  of Parliament or  the Legislature of a State to enact such law  as it  may think  fit and proper in this behalf. But  so long  as the  Legislature has  not expressed its  intention to  the contrary, it must be held  that the  law is  what it  has been  ever since the days of the East India Company.      In view  of these  considerations, it must be held that there is no merit in this appeal, and it is accordingly dismissed with costs.                            Appeal dismissed. 1