# KASTURILAL RALIA RAM JAIN v. TIIE STATE OF UTTAR PRADESH

- **Citation:** [1965] 1 S.C.R. 375
- **Court:** Supreme Court of India
- **Decided:** 1965
- **Case number:** Civil Appeal No. 105 of 1963
- **Bench:** P. B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah, Raghubar Dayal, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kasturilal-ralia-ram-jain-v-tiie-state-of-uttar-pradesh-3325
- **Pages:** 18

## Headnote

375
Constitution of India, 1950, Art. 300(1)-State Liability for tortiou.-
acts of its servants.
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 th• trial court but was
dismissed by the Higb 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
D
ststutc 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. & 0. Steam Navigation Co. v. The Secretary of State for
E
India, (1868-69) 5 Born. H.C.R. App. A. !, approved.
The State 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 BJ.
F

## Text

_Characters 0–39,937 of 46,869. This is a partial read: ask again with offset=39937 for what follows._

A
B
c
KASTURILAL RALIA RAM JAIN
v.
TIIE STATE OF UTTAR PRADESH
September.29, 1964
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO,
M. HIDAYATULLAH, RAGHUBAR DAYAL AND
J. R. MUDHOLKAR JJ.)
375
Constitution of India, 1950, Art. 300(1)-State Liability for tortiou.-
acts of its servants.
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 th• trial court but was
dismissed by the Higb 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
D
ststutc 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. & 0. Steam Navigation Co. v. The Secretary of State for
E
India, (1868-69) 5 Born. H.C.R. App. A. !, approved.
The State 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 BJ.
F
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
G the appellant.
H
A. V. Viswanatha Sastri and 0. P. Rana, for the respondent.
The Judgment Qf 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 reswndent. This question arises
376
SUPREME
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REPORTS
[ 1965] 1 s.c.R.
A
in this way. The appellant is a firm which deals in bullion and
ether 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 Mcerut 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
B
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 I 03 to/as 6 mashas and I ratti, and silver
weighing 2 maunds and 6t seers, were seized from him and kept in
C
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
D
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 al:emative
claim
thus
made
by him
consisted
of
Rs. 11,075-10-0 as the price of the gold and Rs. 355 as interest b\'
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
E
the police Malkhana under his charge.
Mohd. Amir, however,
F
misappropriated the gold and fled away to Pakistan on the 17th
October, 194 7. He had also misappropriated some other cash and
articles deposited in the Malkhana before he left India. The res~
pendent further alleged that a case under section '409 of ihe
Indian Penal Code as well as s. 29 of the Police Act had been
registered against Mohd. Amir, but nothing effective could he
G
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 pleJdecl by the respondent that this
was not a case of negligence of the nolicc 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 ]0$5 resulting
ff
from such negligence.
On these pleadings, two substantial questions arose between
KASTURILAL v. STATE (Gajendragadkar c. /.)
377
A the parties; one' was whether the police officers in que.stion 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
B 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
c 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
D 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
E 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
F loss of gold can be legitimately attributed to the negligence of the
police officers in charge of the police station where the gold lmd
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 PakisG tan 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
H 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
SUPREME COURT REPORTS
(1965) I S.C.R.
-
..
since the police department was unable to apprehend him from A
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 Kotw:ili. No list of
these goods was forwarded to any officialS. This witness further
added -that valuables are generally kept in the wooden box and n
the key is kept by the officer-in-charge of Malkhana. The gold
and silver articles seized from the appellant had not been kept in
that box in his. presence. He c<;mld 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 c
in the Kotw:ili 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 witriess admitted that no D
list was prepared of the seized goods and he was· not able to say
whether proper precautions· 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 E
swears that it was a routine requirement that every day in the
morning one Sub-Inspector had to. inspect the Ma!khana 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
F.
· 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
G
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 . H
54(1 )(iv) of the Code of Criminal Procedure provides that any
. . . police o~cer may, without an order from a Magistrate and without
..
KASTURILAL v. STATE (Gaje11dragadkar c. J.)
379
A
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
B
might be stolen property, and so, his arrest can be said to be
justified under section 54(1)(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
C
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
D
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 a/ia,
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
E
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.
F
That takes us to the U.P. Police Regulations. Chapter XIV
of these Regulations deals with the custody and disposal of property. Regulatipn 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
G 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
H
must be sent in a sealed packet after being weighed, and its weight
must be noted. jn the general diary and on the list which accompanies the packet. It requires that a set of weights and scales should
380
SUPREME
COURT
REPORTS
[1965] I S.C.R.
be kept at each police station.
Regulation 166 is important for
A
our purpose.
It reads thus :-
"Unless the Magistrate otherwio;e directs, property of
every description, except cash exceeding Rs. I 00 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 confusing. but its purport and meaning arc 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.
B_ut this rule does not
apply to cash exceeding Rs. I 00 and property of equal value and
property pertaining to cases of importance. Property falling und<:r
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
~hould also be kept in the treasury, that direction has to be followed
and the property in such a case cannot be kept in the custady of
the malkhana moharrir. It is thus clear that gold and silver which
B
c
D
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 Hig)! Court h:ts
erroneously assumed that there was no obligation on the police
G
officers to deposit Ralia Ram's property in the Treasury.
This
conchLsion is apparently due to the fact that the words med in
Regulation 166 are not as clear as they should he 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 he no escape from the conclusion
that the police officers were negligent in dealing with Ralia Ram's
property after it was seized from him. Not only was the proper!)
H
•
KASTURILAL v. STATE (Gajendragadkar C.J.)
381
A
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
B
ntisappropriated 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
C
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
D
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.('). In that case, respondent No. l's husband
and father of minor respondent No. 2 had been knocked down
E
by a Government jeep car wflich 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
F
the claim, this Court observed that the liability of the State for
damages in respect of a tortious act comntitted 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
G Kingdom on which basically the State of Rajasthan resisted the
respondents' claim, was based on the old 1'eudalistic notions of
justice, namelv, 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 ot Government in our
country, particularly because in pursuit of their welfare and_
socialistic objectives, States in India undertook various industrial
(t) [1962] Supp. 2 S.C.R. 989.
382
SUPREME
CO!IRT
REPORTS
[1965] I S.C.R.
and other activities and had to employ a large arn1y 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 lii1ble vicariously for the tortious acts of its servants. It is
A
on rhese observations that Mr. M. S. K. Sastri relies and contends
thut the said observations as well as the decision itself can be
easily extended and applied to the facts in the present case.
B
It must be conceded that there are certain observations made
in ·the V idhyawati case (') which support Mr. Sastri's argument
and make it prima facie attractive. But, as we shall presently point
out, the facts in the Vidhyawari case fall in a category of claims
which is distinct and separate from the category in which the
C
facts in the present case fall; and that makes it necessary to
examine what the true legal position is in regard to a claim for
damages against the respol\dent for loss caused to a citizen bv
the tortious acts of the respondent's servants.
This question essentially falls to be considered under Art. 300 D
(I) 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 nanie of the State and
may, subject to any provisions 'l"hich may be made by
Act of Parlianient or of the Legislature of such State
E
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."
F
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 Gc>vernment of a State. The second part provides,
inter alia, that a State may sue or be sued -in relation to it~ allairs
G
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 whetlier a suit can be
filed against the Government of a State, tlie enquiry has to bC :
could such a suit have been filed against a rorresponding Province
if the Constitlltion liad not been p1!5sed ? The third part of the
article provides tliat it would be competent to the Parliament or
H
(I) [1962) Supp. 2 S.C.R. 989.
•..
•...
•
~
'
KASTURILAL Y. STATE (Gajendragadkar c. /.)
383
A 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 10
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
B competent against the corresponding Province.
This last enquiry inevitably t~es us to the corresponding
preceding provisions in the respective Constitution Acts of India;
they ares. 65 of the Government of India Act, 1858, s. 32 of the
Government of India Act, 1915 ands. 176 of the Government of
C 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 ~ring 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. 6S nt
this stage:
D
E
F
"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, remedl~ and proceedings; legal and
equitable, against the Secretary of State in Council (lf
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 fiable 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 "n
this point was pronounced by the Supreme Court at Calcutta in
G
1861 in the case of the Peninsular and Oriental Steam Na11igation
Company v. The Secretary of State for India('). It is a remarkable tn1>ute to the judgment pronotptced by Chief Justice Peacock
in that case that ever since, the principles enunciated in the judJ?-
inent have been consistently followed by all judicial deci!rion< in
India, and except on one occasion, no dissent has been exo~sed
ff in respect of them. It seems somewhat ironical that the judgment
of this importance should not have been reported in due course
(0 ' B. H.C.R. Appendix A. p. I
384
SUPREME
COURT REPORTS
(1965] 1 S.C.R.
in Calcutta, but found a place in the Law Reports in 5 Born.
A
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. The said
~rvants were carrying a piece of iron funnel, and the manner in
which they w.:re carrying the said funnel caused an injury to one
of the horses that were drawing the plaintiff's 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 callsed by the said accident. The
B
c
suit was tried by the Small Cause Court Judge at Calcutta. He
found that the defendant's servants were wrongdoers ina~much as
D
they carried the iron funnel in the centre of the road. Accordin_g
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
th~ damages cx:casioned by the negligence of servants in the service
of Government if the negligence is ~uch 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,
E
F
but it does not appear to have been the intention of the Legislature
G
to alter the nature or extent of liabilities with which the revenue
of India should ~ 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 Ea~t India Company
have been liable in the present action, if the 21st and 22nd Viet.,
c. 106, had not hccn passed? Dealing with this question, the
II
learned Chief Justice observed that "the origin and progress of
the East India Company arc too well-known to require any detail
KASTURILAL v. STATE (Gajendragadkar c. /.)
385
A 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 circwnstances, have been liable to an action, the general
B principles applicable to Sovereigns and States, and the reasoning
deduced fro!Il 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(') that the fact
of the Company's having been invested with powers usually called
C 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,
D such as
th~ 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 Chiet Justice expressed the opinion that for accidents like the one with which the Court was dealing, if caused by
(he negligence of servants employed by Government, the East
E India Company would have been liable, both ~fqre 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,
F but also within the spirit, of the 3rd & 4th Wm. IV., c. 85, s. 9,
and of the 21st and 22nd Viet., 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
G 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 exemntion
of a sovereign." That is how the learned Chief Justice took the
R
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
(I) Bignell, Rep. p. 120.
386
SUPREME COURT REPORTS
( 1965] I S.C.R.
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 govi!mment, 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 beep consistently followed in all
,ubsequ~nt decisions. Said the learned Chief Justice : "there is a
~rcat and clenr distinction between acts done in the exercise of
what are usi:ally termed sovereign powers, and acts done in the
conduct of undertakings which might be carried on by private
individuals without having such powers· delegatw 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
A
B
c
of powers usually called sovereign powers; by which we mean
powers which cannot be lawfully exercised except by sovereign, or D
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. That, in brief, is the
decision of the Supreme Court of Calcutta in the case of the
Pmin.mlar and Oriental Steam Navigation Co.(').
E
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.
F
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 0
If the answer is in the affirmative. the action for damages
G
for loss cau~ed 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
er.1ployment is. in this category of cases, an act of a servant who
H
might have been employed by a private individual for the same
- ------· ---
(I) S B.H.C.R. Appendi• A, I" 1.
KASTURILAL v. STATE (Gajendragadkar c. J.)
387
A 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 a,nd 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.
B
We have already indicated that this distinction has been
uniformly followed by judicial decisions in India. In that connecti6n, we will refer to a few representative decisions. In The
Secretary of State for India in Council v. Moment('), the Privy
Council had occasion to consider the effect of the provisions of
C s. 4l(b) ot 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
D 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. Jn
that case, a suit had been instituted against the Secretary of State
in Council to recover damages on account of the negligence of a
E 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,
F but in performance of a statutory pOWf?T vested in him by the
Legislature. The principle on which tills decision was based was
stated to be that where the duty to be performed is inl.posed by law
and not by the will of the party employing the agent, the employer
is not liable for the wron_g done by the agent in such em'1oymelit.
In discussing this point, Jenkins C.J., referred to the decision
G in the case of Peninsular and Oriental Steam Navigation Co.(1)
and observed that though he entertained some · doubt about its
correctness, the said view had stood so long unchallenged that he
thought it necessary to aecept 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.
H
submitted to the authority of the said decision.
(I} (1912·13) 40 I.A. 48.
(2) SB. H.C. R. Appendix A p,1.
(3) (1904) I.LR. 28 Born. 314.
388
SUPREME
COURT
REPORTS
( 1965] I S.C.R.
In the Secretary of State for India in Co1111ci/ v. A. Cockcraft &
Anr.( 1 ), a claim for damages against the Secretary of State arose
in respect of injurie~ sustained by the plaintiff in a carriage acci-
<.lent which was alleged to have been due to the negligent stacking
of gravel on a road whi.:h was stated in the plaint to be a military
road maintained by the Public Works Department of the Government. 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.
A
B
c
In the Secretary of State for India in Council v. Shreegobinda
Chaudhuri('), 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 · D
of managers appointed by the Court of Wards, because the acts
l!iving rise to the claim were done by officers of Governn)Cnt 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 uron the 'respondent
.w,nrrior'. The learned C'. J., however, recognised that a suit may
E
lie al!ainst the Secretary of State for India in Council for torts
commiucd by the Government in connection with a private undertaking or an undertaking not in exe,rcise 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 )
F
In Um'a Par.~had v. The Secretary of State('), 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
G
receiver. H. A., the man in 'charge of the Malkhana, absconded with
it. That led to a "'it by the plaintiff for the recovery of the properly, or in the alternaiive. for its price. The Labore 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 5Ucceed. Even so. the Court
H
(I) (t9t4) I.LR. 39 Mad. 351.
(ll l.L.R. (195711. All. 94.
(2) (1932) I.LR. 59 Cit. t289.
(4) (1936) I.LR. 18 Lah. 38Q.
KASTUR!LAL v. STATE (Gajendragadkar c. /.)
389
A 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
B the ground that no liability attached to the Secretilry 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 lligh
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
C 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 a~ such the
criminal act which gave rise io the action, could not validly sustain
D 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 Vtdhyawati
case('), it would be recalled that the negligent act which
gave rise to the claim for danmges against the State of Rajasthan
in that case, was committed bf 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
F 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.