CHAPTERS

Chapter – I – Introduction to a State 13

Chapter – II – Principle of Vicarious Liability 17
Chapter – III – Tortious Liability 19
Chapter – III(A) – Act of a State 30

ACKNOWLEDGMENTS

LIST OF ABBREVIATIONS
1. S - Section
2. & - And
3. Eg. - Example
4. Ed. - Edition
5. All - Allahabad
6. ER - England Reporter
7. Vol. - Volume
8. Para. - Paragraph
9. Co. - Company
10. Ltd. - Limited
11. Ch. - Chapter
12. LR - Law Reporter
13. App. - Application
14. SCC - Supreme Court Cases
15. BLR - British Law Reporter
16. AIR - All India Reporter
17. MP - Madhya Pradesh
18. Cal - Calcutta
19. SCR - Supreme Court Review
20. SC - Supreme Court
21. Mad - Madras
22. Bom - Bombay
23. ILR - Indian Law Review
24. AP - Andhra Pradesh
25. PC - Punjab and Chandigarh
26. P&H - Punjab and Haryana
27. P - Paragraph

LIST OF CASES

1. Kartick v. W.B.S.I.C.
2. Ramana v. I.A.A.I
3. State of Punjab v. Raja Ram
4. Gulam v. State of U.P.
5. Som Prakash v. Union of India
6. Pradeep Kumar Biswas v. Indian Institute of Chemical Biology
7. Rajasthan State Electricity Board v. Mohan Lal
8. Ujjam Bai v. State of U.P.
9. Ramamurthi v. Chief Commr.
10. State of Gujarat v. Shantilal
11. Rashid Ahmed v. Municipal Board
12. Ajit Singh v. State of Punjab
13. Bhagat Ram v. State of Punjab
14. R. I. Handicraft Manufacturing Association v. Kottayam Municipality
15. Natwarlal Khodidas Parmar v. Dist. Panchayat , Jamnagar
16. State Trading Corporation v. C.T.O
17. Housing Board v. H.H.B.E.U
18. Masthan Sahib v. Chief Commr
19. Sonu Prakash Rakhi v. Union of India
20. Trilok Singh v. Kailash Bharti
21. Tamlin v. Hannaford
22. U.S. v. Muniz
23. Peninsular & Oriental Steam Navigation Company v. Secretary of State
24. Secretary of State v. Hari Bhanji
25. Forrester v. Secretary of State for India
26. Maharaja Bose v. Governor – General in Council
27. State of Rajasthan v. Vidhyawati
28. Annamalai v. Abithakujambal
29. Chairman, Railway Board v. Chandrima Das
30. Satyawati v. Union of India
31. M. Vijaya v. Chairman and Managing Director, Singrani Collieries Co. Ltd.
32. State of Punjab v. Modern Cultivators
33. Union of India v. P. S. Mahal
34. Sebastin M. Hongray v. Union of India
35. Rudul Shah v. State of Bihar
36. Bhim Singh v. State of Jammu & Kashmir
37. SAHELI a Woman‟s Resources Centre v. Commr. of Police, Delhi
38. Inder Puri General Stores v. Union of IndiaNilabati Behera v. State of Orissa
39. Tobin v. The Queen
40. Nieraha v. Baker
41. Stanbury v. Exeter Corporation
42. Ross v. Secretary of State
43. Venkatesh v. The City Municipal Council
44. National Small Scale Industries Corpn. v. Bishambhar Nath
45. Kerala State Electricity Board v. Suresh Kumar
46. Union of India v. Mohd. Nazim
47. Traifus & Co. Ltd. v. Post Office
48. C.I.T. v. P.M. Rathod & Co.
49. Union of India v. Amar Singh
50. Nabob of Carnatic v. East India Company
51. East India Company v. Sayed Ally
52. Eshugbayi Eleko v. Govt. of Nigeria
53. P. V. Rao v. Khushaldas
BIBLIOGRAPHY

Statutes Referred:

1. The Constitution of India

Books Referred:

1. Justice Y. V. Chandrachud, Justice S. S. Subramani, Justice B. P. Banerjee,

Constitution of India – Durga Das Basu, Eighth Edition, Wadhwa Nagpur
Publications
2. Justice G. P. Singh, The Law of Torts – Ratanlal and Dhirajlal, Sixth Edition,
Wadhwa Nagpur Publications
3. M. P. Jain, Principles of Administrative Law – M. P. Jain and S. N. Jain, Sixth
Edition, Wadhwa Nagpur Publications
4. Mark Elliott, Administrative Law (Text and Materials) – Beatson, Matthews and
Elliot, First Indian Edition, Oxford University Press

Web-sites referred:

1. www.manupatra.com
2. www.jstor.org
3. www.westlaw.com
4. www.lexisnexis.com

INTRODUCTION

This project mainly deals with the liability of a State or a Government, where the
action is done either by the officials of the Government or by the State as a whole, and where the
question of the liability of the State and protection of the rights of the citizens arises. The basic
question of this project is primarily to decide, the cases where the State or the Government can
be said to be sovereign institutions- to decide if they are liable or not for their actions. To find
answer to this question, it becomes necessary to understand the concept of “State” as provided in
the Constitution under Art. 12. For better presentation and understanding of the topic, the present
project has been divided into three Chapters.
Chapter – I of this project concentrates of the scope of the term “State” which includes the
Government, the Parliament of India, any form of Legislature and all local and other authorities
that are under the control of the Government of India. In liberal ordinary sense a State is any
form of institution, authority or a body of people that has the powers to makes and legislates
uniform laws to provide Fundamental Rights to the citizens as provided under Part – III of the
Constitution. Hence, any action can lie against such a State even under non – constitutional
grounds or when its actions have been performed in violation of the Part – III of the Constitution.
And authorities that are under the control of the Government of India need not necessarily be a
Government Department or a Legislature. Institutions like schools, colleges, hospitals etc. also
come within the ambit of the word “State” as defined under Art. 12. As would be clarified in
Chapter – I, a State is any institution or authority that comes within the control of the
Government of India. There will be many cases where the Government will be required to
compensate its own employees in case the functions of the Government have been breached,
causing violation of Art. 21 – Right to Personal Life and Liberty or any other Fundamental Right
as provided in Part – III. To understand the concept of the liability of a State, it becomes
necessary to understand the principle of vicarious liability provided under the Tort law. The
principle of vicarious liability states that in case if there is a master – servant, principal – agent or
a partnership relationship between the employer and the employee, the employee will have to be
compensated by the State or the employer, if and only if his Fundamental Rights have been
violated during the course of his employment. The State and all the other institutions and
authorities falling within its ambit can be held to be liable to pay damages to the employee if any
damages have been occurred to violate his Fundamental Rights when he is in the course of his
employment. If the employee is not working for such institutions, and breach of this rights occur,
the State cannot be made liable to compensate for the damages caused to him. The Constitution
of India under Art. 300 provides for the instances when the State or a Government institution can
be sued. But if the person has been damaged when the Government has been acting as a
sovereign, the State cannot be made liable to pay damages to compensate to the victim.
Sovereignty of the Government means individual acts of the Government, not hindering the
rights of the citizens or causing breach of any of the
Fundamental Rights.

Chapter – III of the project deals with situations where tortious liability of a State
arises. Tort means a civil wrong that has been committed that have led to damages beingcaused
to the victim. Tortious liability of a Government means a situation where the Government is to
be held liable for a civil wrong committed by any official working for the Government or the
State as a whole, against an individual, that has resulted in violation of his Fundamental Rights.
As explained earlier, liability of a Government only arises in situations where the Government
has not been acting as a sovereign. A situation of vicarious liability has been created where, as
per the definition, one person is held liable for the acts committed by the others. In a situation
where vicarious liability is said to have arisen for the State, the Government or an official
working for the Government has caused breach of the Fundamental Rights of an individual. Thus
determination of the liability of a State and to decide whether it is a sovereign or otherwise, is
one of the main question that has been dealt with under Chapter – III.

Chapter – III also deals with the situation of the law before and after the Constitution
was enacted and relates to instances where and in what cases the Government is made liable for
acts committed by people working for it. Comparison between the English Law and the Indian
Law has been made with regard to the position of tortious liability of the State.

Chapter – III (A) essentially deals with the act of a State where the acts have been
committed by one sovereign against another sovereign or any other alien body or territory. There
is a immunity from courts‟ interference in respect of an act done by the State against an alien
outside its territory, since the courts cannot try the acts committed by the sovereign under the
general municipal law. If the fault of the State or the Government has been brought under the
jurisdiction of a general court of the country, it cannot fall under the ambit of the meaning of the
words “act of a State” as they cannot try cases between two sovereigns under the general
municipal law. The case of Nabob of Carnatic v. East India Company was a landmark judgment
simplifying the meaning of this principle and clearing the doubts between acts done by a
sovereign against another sovereign and acts done by a sovereign against its
subjects.

CHAPTER – I

INTRODUCTION TO A “STATE”

Art. 12 of the Constitution of India defines a “State” as, “In this Part, unless the context
otherwise requires, “the State” includes the Government and Parliament of India and the
Government and the Legislature of each of the States and all local or other authorities within the
territory of India or under the control of the Government
of India.”

Scope:
This definition in Art. 12 is only for the purpose of application of the provisions
contained in Part – III. Hence, even though a body of persons may not constitute "State" within
the instant definition, a writ under Art. 226 may lie against it on non – constitutional grounds or
on ground of contravention of some provision of the Constitution outside Part – III, e.g., where
such a body has a public duty to perform or where its acts are supported by the State or public
officials. A State need not necessarily be a body governed by a Government, which has uniform
and codified laws. Institutions like Schools, Corporate institutions and the Government itself also
form a part of the definition of a State as provided in Art. 12. The Supreme Court has held that
the word “includes” indicates that the definition of “State” is
not confined to a Government Department and the Legislature, but extends to any action –
administrative (whether statutory or non – statutory), judicial or quasi – judicial; which can be
brought within the fold of "State action‟ and violates a fundamental right. Quasi – governmental
agency is a sponsored enterprise or corporation (sometimes called government controlled
corporation). Authority is the “person or persons in whom government or command is vested”.
An authority which is located outside India may still come under the definition of "State" under
Art. 12 if it is under the control of the Government of India. These words extend to the
application of the fundamental rights to areas outside the territory of India,
which may be under the control of the Government of India for the time being, e.g.,
mandatory and trust territories which might be placed by international organisations under the
control of the Government of India. This article explains that India would not discriminate, so far
as the fundamental rights of individuals are concerned, between its own nationals and the people
of other countries, which might come under the administration of India under some international
arrangement.
The Supreme Court has, however, given to the above words a meaning different
from that given in the Constituent Assembly. According to the Supreme Court, the words "under
the control of Government of India" control the word "authorities" and not the word "territory",
so the expression would be read thus:"all local or other authorities within the territory of India
or all local or other authorities under the control of the Government of India".
The result of interpretations is that in respect of authority situated outside India, a test has to be
satisfied before it can be brought within Art. 12, namely, whether it
is "under the control of Government of India". Thus, according to this interpretation, Art. 12 will
apply to two categories of "authorities":
(a) Authorities situate within the territory of India; these need not be under the control of India in
order to be deemed "State" under Art. 12.
(b) Authorities situate outside the territory of India (e.g., territories administered by India under
the Foreign Jurisdiction Act, 1947); these will come within the purview of Art. 12 only if they
are under the control of India.

CHAPTER – II

PRINCIPLE OF VICARIOUS LIABILITY

Vicarious liability is a concept of Tort Law meaning the liability to be borne by one
person for the acts committed by another person. The principle of vicarious liability arises only
in certain cases and where a relationship has been established between the two persons. These
relationships are mainly categorized in three parts: (a) Principle and Agent, (b) Partners, and (c)
Master and Servant. The liability of the principal arises when his agent commits a tort in the
course of performance of his duty as an agent and hence they are considered to be joint
tortfeasors since their liability is joint and several. When the wrongful act is done by one partner
in the ordinary course of the business of the firm, all the other partners are vicariously liable for
the same. Their liability is also joint and several and the plaintiff can choose to sue either one of
the partners or the entire firm for the tort committed by the guilty partner. The same rule applies
in the case of master – servant relationship where the master is vicariously liable for the
wrongful act done by his servant in the course of employment.
The principle of vicarious liability underlines one very important concept. It states
that in the case of a principal – agent, partners, or a master – servant relationship, the
principal, all of the partners, and the master, respectively, can only be sued if the agent, the guilty
partner, and the servant commit the wrongful act during the course of their employment. In the
case of Trilok Singh v. Kailash Bharti, while the owner of the motor cycle was outside the
country, his younger brother took the motor cycle without his knowledge or permission and
caused the accident. It was held that the younger brother could not be deemed to be the agent of
the owner of the motor cycle and the latter could not be vicariously liable for the accident.
In the case where a state is to be held liable for the acts committed by its employees
and officials, Art. 300 of the Constitution should be reffered. Art. 300 of the Constitution of
India is as under:
Art. 300 (1) The Government of India may sue and be sued by the name of 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 provision which may be made by Act of Parliament or of the Legislature of such
State enacted by virtue of power 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. (2) If, at the commencement of this Constitution – (a) any legal proceedings are
pending to which the Dominion of India is a party, the Union of India shall be deemed to be
substituted for the Dominion of those proceedings; and (b) any legal proceedings are pending to
which a Province or an Indian State is a party, the corresponding State shall be deemed to be
substituted for the Province or the Indian State in those proceedings.
No action lies against the Government for injury done to an individual in the course of
exercise of sovereign functions of the Government. If the Government has been acting out of its
own accord, and during such a course of fulfilment of the duty, it causes injury to any individual,
then the individual cannot be compensated for the damages done to him because, such an act was
done as a sovereign function and injury to the individual was not caused to him during the course
of his employment. Art. 300 provides for situations under which the Government of India can be
sued after the commencement of the Constitution. It provides for the trial of those cases that are
pending in the Courts before and after Indian independence and admission and disposal of those
cases under the name of Union of India.

CHAPTER – III

TORTIOUS LIABILITY

1. GOVERNMENTAL TORTIOUS LIABILITY:

a. Position in Foreign Countries:
(i) Britain: Before 1947, the Crown enjoyed immunity from tortious liability
under the common law because it was believed that the neither any wrong could be
imputed to the King and nor could he authorize any wrong, and as such, the King
could not be held responsible for the negligence or misconduct of his servants.
Moreover, as per one of the aspect of the doctrine of immunity, it was regarded as an
attribute of sovereignty that the state could not be sued in its own courts without its
consent. To mitigate the injustice arising out of the immunity rule, the government
would pay compensation in proper cases by settling the matter with the injured party.
However, as it was decided in the case of Tamlin v. Hannaford, statutory corporations were held
liable for torts. Hence, the position was accordingly changed by the Parliament enacting the
Crown Proceedings Act, 1947, which makes the Crown in principle liable for torts to the same
extent as a private person of full age and capacity subject to such exception, inter alia, as
defence of the realm, armed forces and postal services. The Crown thus becomes vicariously
liable o a very large extent for the torts committed by its servants.
(ii) U.S.A: In the United States of America, the Federal Tort Claims Act, 1946,
defines the tortious liability of the central government. In the case of common law
duties, the U.S. Government is liable to the same extent as a private individual under
like circumstances. Intentional torts such as assault, battery, false imprisonment etc.
are excluded. The Act exempts the government from liability for torts committed by
officials in the discharge of their discretionary functions conferred on them by statutes, even if
the discretion is abused or there is negligence, so long as it is
exercised with due care. The tortious liability of the U.S. Government is more
restricted than that of the British Government. The Supreme Court of America, in the
case of U.S. v. Muniz, where the question arose that whether the United States was
liable for the acts and omissions of its employees resulting in death of, or personal
injuries to, a federal prisoner, accepted the allegations. The Court emphasized that the
Federal Tort Claims Act was designed not only to avoid injustice to those having
meritorious claims barred till then by sovereign immunity but it also waived the
sovereign immunity for claims arising out of the negligent treatment in government
hospitals.
b. Position in India:
(i) Pre – Constitution: The extent of liability of the government for torts of its
employees is defined by Art. 300(1) of the Constitution which declares inter alia that
the Government of India, or of a State, may 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 the
Constitution had not been enacted. This is subject to any law made by the Parliament
or the State Legislature. S. 176 of the Government of India Act, 1935, stated that the
Dominion of India and the Provincial Government may sue or be sued in relation to
their respective affairs in the like cases as the Secretary of State for India in Council
might have sued or been sued if the Government of India Act of 1935 had not been
enacted. Thus, the liability of the Government was made co – extensive with that of
the Secretary of State for India under S. 32 of the Government of India Act, 1915,
which in turn made it co – extensive with that of the East India Company prior to the
Government of India Act, 1958. S. 65 of this Act thus preserved against the
government the same suits and proceedings which were then available against the
East India Company. The Secretary of State for India in Council could be sued in all
those cases in which the East India Company could be sued. By the Charter Act of 1833, the East
India Company came under the hold of the Government of India in trust for the British Crown. In
1858, the Crown assumed sovereignty in India to take over the administration of India from the
hands of the Company. Thus, from 1765 to 1858, the Company had a dual character: it was a
trader and also exercised some sovereign powers. As the Company was an autonomous
corporation, having an existence of its own, and bearing no relationship of servant or agent to the
British Crown, the immunity enjoyed by the Crown was never extended to it. In a leading case
arising under S. 65 of the Government of India Act, 1858 –Peninsular & Oriental Steam
Navigation Company v. Secretary of State28 – was decided in 1861 by the Calcutta Supreme
Court, where the P. & O. made a claim for damages against the Secretary of State for injury to its
horse caused on the highway because of the negligence of some workmen employed in the
Government Kidderpore Dockyard. To determine the liability of the government, the court posed
the question whether the East India Company would have been made liable in such a situation.
After the Charter Act of 1833, the Company was acting in a dual capacity in India as a merchant,
as well as one exercising sovereign powers as a trustee of the Crown in
respect of the territorial possessions acquired by it. The court pointed out that the fact
that the Company exercised sovereign powers as a delegate of the Crown did not
make it a sovereign. Therefore, the Crown immunity could not extend to it. As to the
scope of actual liability of the Company, the court stated that where an act was done
in exercise of "sovereign powers", no action would lie against it. The court further
stated that if the Company were carrying on activities which would be carried on by
private persons, the Company would be liable for torts of its servants committed
during the course of such activities. Hence, no action would lie in the former case.
The sovereign powers were defined as “powers which cannot be lawfully exercised
except by a sovereign or private individual delegated by a sovereign to exercise
them”. On the basis of this reasoning, the court held in the instant case that the
Company would have been liable for negligence of its servants in repairing a river
steamer or doing any action in connection with such repairs. Thus, the Secretary of
State was held liable.
The P. & O. case thus laid down two propositions:
(a) Apart from any special statutory provision, suits could have been
brought against the East India Company and, consequently, against the
Secretary of State as successor to the Company, in respect of acts done in the
conduct of an undertaking which might be carried on by private individuals
without sovereign powers.
(b) The Secretary of State was not liable for anything done in the exercise of
sovereign powers. Most of the cases cited in P. & O. as examples of sovereign functions are
really cases pertaining to act of state. However, the distinction between the "sovereign" and "non
– sovereign" functions is amorphous and unfocussed except
when the court equals sovereign functions with acts of state in the present case.
The P. & O. case was considered by the Madras High Court in the case of
Secretary of State v. Hari Bhanji. The facts of the case, briefly stated, were that
during the course of transit of salt from Bombay to Madras ports, the rate of duty on
salt as enhanced and the merchant was called upon to pay the difference at the port of
destination. He paid under protest and instituted a suit for recovery. The court ruled
that the immunity of the East India Company extended only to “acts of state”, strictly
so – called and that the distinction based on sovereign and non – sovereign functions
of the East India Company was not well founded. Acts thus done in the exercise of
sovereign powers but which do not profess to be justified by municipal law are what
we understand to be the acts of State which municipal courts are not authorised to
take cognizance. As regards P. & O., it was said that it was an authority for the proposition that
the government was responsible for injuries in the course of transactions of a commercial or
private character, but that it did not exclude liability in other respects.
In Hari Bhanji, a broader view of government liability, and a narrower view of the P.
& O. ruling was adopted. The view propounded that the government was liable for all
acts other than an "act of state" and that the distinction based on "sovereign" and "non
– sovereign" functions was not well founded. The view was taken that the acts of the
government fell either outside, or within, the municipal law and that it was only the
former of which the courts could not take cognizance. While the line of reasoning adopted by the
court in Hari Bhanji found some support in a few later cases, in effect, the P. & O. view drawing
distinction between sovereign and non – sovereign functions came to be perpetuated in the case
of Forrester v. Secretary of State for India. Had the view propounded in Hari Bhanji found
judicial acceptance in India, the position as regards the tortious liability of the government would
have developed on entirely different lines. But the view that found general judicial acceptance,
and thus became the ruling norm, was that the government was not liable for any tortious
liability arising out of the exercise of a "sovereign" function.
(ii) Post – Constitution: Even in Republican India after the new Constitution
came into force in 1950, the pre – Constitution judicial trend continued and the courts
kept on enforcing the P. & O. ruling. The courts continued to distinguish between
sovereign and non – sovereign functions of the government for purposes of
governmental liability.
In the case of Maharaja Bose v. Governor – General in Council32, the
Government was held liable for tortious action of a railway servant committed by him
within the course of his employment as running of railways was held to be not in
exercise of sovereign powers. Railways were held to be a “commercial undertaking,
an undertaking which a private individual can equally well undertake, an undertaking
not in exercise of sovereign powers.”
2. DEVELOPMENTS IN THE LAW:
A large number of cases have occurred pertaining to claims of damages against the State by
individuals for injuries caused to them due to negligence of the drivers of the State transport. As
stated by the Supreme Court in the case of State of Rajasthan v. Vidhyawati, the State was held
liable for the accident caused by the driver of a jeep owned and maintained by the State for the
official use of the collector. Similar are the judgments of various High Courts and the Supreme
Court in various cases concerning the state liability, in light of the Vidhyawati case. In the case
of Annamalai v. Abithakujambal, a person was killed in an accident with a jeep driven by a
government employee during the scope and course of his employment. Hence, the court held that
the government was to be held liable to pay damages to the widow of the deceased on the
principle of vicarious liability for its servant‟s tortious act, as driving a jeep is a non – sovereign
function, since any person can drive a jeep.
b. Railways:
In the case of Chairman, Railway Board v. Chandrima Das, a Bangladeshi
woman was gang raped by several railway employees in yatri niwas attached to a
railway station. The court ruled that running of railways has been characterised as a
commercial activity. Establishing yatri niwas at various railway stations to provide
lodging and boarding facilities to passengers on payment of charges is regarded as a
part of the commercial activity of the Government of India and such an activity
cannot be equated with the exercise of sovereign power.
c. Military Vehicles:
In several cases, the government has been held liable to pay compensation for
injuries caused by negligent driving of military vehicles engaged in doing various odd
jobs. The test applied is not that a military vehicle was involved in an accident, but the
purpose on which the vehicle was employed and whether that purpose could be
characterized as "sovereign". If not, the government would become vicariously liable
for the torts of its servants.
Similarly, in the case of Satyawati v. Union of India, no "sovereign" function
was held to be discharged when a military vehicle carrying hockey and basket ball
teams to an Indian Air Force station to play matches against the Indian Air Force, met
with an accident due to the negligence of the driver, and a person was killed and
hence the state was not entitled to claim immunity for the tortious act of its employee.
d. Government Hospitals:
In the case of M. Vijaya v. Chairman and Managing Director, Singrani
Collieries Co. Ltd., the appellant was awarded compensation by the court for
negligent transfusion of HIV infected blood in a government hospital.
e. Torts against Property:
The government was held liable under the general principles of law of torts in
the case of State of Punjab v. Modern Cultivators, where the plaintiff brought a suit
for compensation against the State Government for the damage caused to his land and
crops due to inundation as a result of breach in canal maintained by the government
under the Northern India Canal and Drainage Act, since the breach had been caused
by the negligence of the government employees.
f. Torts against Person:
Art. 21 of the Constitution of India plays a very important role in this part,
since it means right to live with human dignity and this includes a guarantee against.
In the case of Chairman, Railway Board v. Chandrima Das, where a
Bangladeshi woman was gang raped by railway employees in the yatri niwas attached
to a railway station, the Supreme Court ruled that rape is an offence which is violative
of the Fundamental Right of a person under Art. 21. It violates the most cherished
rights of the victim, viz., the right to live with human dignity contained in Art. 21.
The Court also ruled that the protection of Art. 21 extends not only to the citizens of
India but even to foreigners who come to India merely as tourists or in any other
capacity, and hence the Court awarded compensation to the concerned person.
The cases of Rudul Shah v. State of Bihar, Sebastin M. Hongray v. Union of
India,Bhim Singh v. State of Jammu & Kashmir and SAHELI a Woman’s
Resources Centre v. Commr. of Police, Delhi, also lead to the inference that the
defence of sovereign immunity is not available when the State or its officers acting in
the course of their employment infringe a person‟s fundamental right of life and
personal liberty as guaranteed by Art. 21 of the Constitution.
g. Failure to maintain Law and Order:
In the case of Inder Puri General Stores v. Union of India, loss of property
was caused to the petitioners in a communal riot in Jammu. The Government made an
ex gratia payment of Rs. 25,000 as compensation to the petitioners whereas the
government appointed expert committee had assessed the loss at a much higher
figure. Directing the Government to pay adequate compensation to the petitioners for
the loss suffered by them, the High Court pointed out that the maintenance of law and
order is the duty of a responsible government; it cannot abdicate this function and put
the life and liberty of the citizens in jeopardy.
h. Police Lawlessness:
A significant pronouncement in this line of cases is Nilabati Behera v. State of
Orissa, where the Supreme Court had awarded a compensation of Rs. 1,50,000 to
the widow of a person who had died in police custody as a result of injuries inflicted
on him because of the police. The Court explained the basis on which the liability of
the State arises in such cases like custodial death, police atrocities etc.) for payment
of compensation and the distinction between this liability and the liability in private
law for payment of compensation in an action of tort. The award of compensation in a
proceeding under Art. 32 or Art. 226 of the Constitution is a remedy available in
public law, “based on strict liability for contravention of fundamental rights to which
the principle of sovereign immunity does not apply, even though it may be available
as a defence in private law in an action based on tort.

CHAPTER – III (A)

ACT OF A STATE
The government is not regarded as liable for an “act of state”. An act of state, under
the English law, is an act of executive as a matter of policy performed in the course of is
relations with another state during its relations with the subject of that state, unless they are
temporarily within the allegiance of the Crown. An act of state is an act of a sovereign against
another sovereign or an alien outside its territory. It is a sovereign act which is not grounded in
law. As an act of state derives its authority not from municipal law but from ultra – legal or supra
– legal means, municipal courts have no power to examine the propriety or legality of an act of
state. There is immunity from courts‟ interference in respect of an act done by the state against
an alien outside its territory. This principle has also been applied in India in a number of cases in
the pre – Constitution era with respect to the princely states existing at the time. In Nabob of
Carnatic v. East India Company, a suit brought by the Nabab against the Company for an
account under a political treaty between the Company and the Nabab
was dismissed as it was a matter between two sovereigns, the Company was having acted
throughout in its political capacity. In East India Company v. Sayed Ally, it was held that the
resumption by the Madras Government of a jagir granted by the former Nabab of Carnatic before
the date of cession to the East India Company was an act of sovereign power and so exempt from
the jurisdiction of the courts. There can be no act of state between a state and its subjects, and
such an act is not immune from judicial scrutiny. If the government justifies its act under a
municipal law, that
act cannot be an act of state. Its legality and validity must be tested by the municipal law and in
municipal courts.

CONCLUSION
The Preamble of the Constitution of India declares India to be a "sovereign, socialist,
secular, democratic republic". The word "sovereign" emphasises that India is no more
dependent on any outside authority. It is a sovereign, both internally and externally. So as far as
the Constitution of India is concerned, the king has no place and the country and the government
owe no allegiance to him. This is not the position in England. Till the 1947, the Crown enjoyed
immunity over the fact that they cannot be tried and charged for any wrong done by them or the
government to the citizens during their course of employment or otherwise. The position was
however changed in 1947, where the new law declared all statutory corporations and the
government to be held liable in cases where the employees have been damaged or hurt during
their course of employment, and compensate them for the same. The definition of a "state"
provided in Art. 12 of the Constitution of India includes the Government and the Parliament of
India, the Government and Legislature of each state, all local and other authorities within the
territory of India, and all local and other authorities outside India, that is under the control of the
Government of India. It thus includes all legislative and executive organs of the state Union and
the states. Thus, all corporations, municipal bodies, schools, universities, railways, post-offices,
etc. fall within the ambit of the meaning of the word "state" as defined in Art. 12. To prove the
liability of these institutions, it is necessary to prove them to be vicariously liable. The principle
of vicarious liability means that the liability is to be borne by one person for the acts committed
by another, during the course of his or her employment. It is necessary to understand the fact that
the act committed by such an institution has caused damages to the person during the course of
his or her employment. If the aggrieved person
has been acting out of his own accord and performing a sovereign function, the institution cannot
be held liable to pay damages and compensation to the person thus hurt. The principle of
vicarious liability arises only in those situations where there is a relationship of master servant,
principal-agent or of partners between the employer and the employee. Art. 300 of the
constitution provides for situations wherein the Government can be sued and under what
circumstances it can be sued. It is therefore concluded that when a state is exercising sovereign
functions of its own, it cannot be sued. In case if damages have been caused to the employee
during the course of his employment, the government is required to pay compensation to the
employee for the
damages caused. All private institutions do not fall under the concept of the definition of a state.
Hence, if a private corporation is tried and charged for committing an offence against an
employee and where an employee is damaged, the government cannot be compelled to pay
compensation to the employee, since the private institution is a sovereign and it is performing
sovereign functions that do not fall within the control of the Government of India. In case where
the act has been committed by the state, the government is still liable to pay compensation to the
employees. Thus, in case where a tort has been committed by a government that is not in
exercise of its sovereign functions, it will be held liable to pay all costs to the aggrieved party.