Vicarious Liability of State in India

Introduction

Vicarious Liability deals with cases where one person is liable for the acts of others. So in a case of vicarious liability both the person at whose behest the act is done as well as the person who does the act are liable. Thus, Employers are vicariously liable for the torts of their employees that are committed during the course of employment. The common examples of such liability are:

1. Liability of the principal for the tort of his agent.
2.  Liability of partners of each other’s tort.
3. Liability of the master for the tort of his servant.
4.  Liability of the State or Liability of the Administration.

Constituents of Vicarious Liability

So the constituents of vicarious liability of state are:

1. There must be a relationship of a certain kind.
2. The wrongful act must be related to the relationship in a certain way.
3. The wrong has been done within the course of employment.

Vicarious Liability of the State

The term ‘administration’ is used here synonymously with ‘state’ or ‘Government’. To what extent the administration would be liable for the torts committed by its servants is a complex problem especially in developing countries with ever-widening State activities. The liability of the government in tort is governed by the principles of public law inherited from British Common law and the provisions of the Constitution. The whole idea of Vicariously liability of the State for the torts committed by its servants is based on three principles:

• Respondeat superior (let the principal be liable).
• Quifacit per alium facit per se (he who acts through another does it himself).
• Socialization of Compensation.

Vicarious Liability of State in India

The position of State liability as stated in Article 300 of the Constitution is as under: Clause (1) of Article 300 of the Constitution provides first, that 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; secondly, that the Government of India or the Government 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 be sued, “if this Constitution had not been enacted”, and thirdly, that the second mentioned rule shall be subject to any provisions which may be made by an Act of Parliament or of the Legislature of such State, enacted by virtue of powers conferred by the Constitution.

Consequently, one has to uncover the extent of liability of the East India Company in order to understand the liability parameters of the administration today because the liability of the administration today is in direct succession to that of the East India Company.

The East India Company launched its career in India as a purely commercial corporation but gradually acquired sovereignty. Therefore, in the beginning, the company did not enjoy the immunity of the Crown. It was only when it acquired political powers that a distinction was made between sovereign and non-sovereign functions.

State Liability

Under the English Common Law the maxim was “The King can do no wrong” and therefore, the King was not liable for the wrongs of his servants. But, in England, the position of the old Common Law maxim has been changed by the Crown Proceedings Act, 1947. Earlier, the King could not be sued in tort either for wrong actually authorized by it or committed by its servants, in the course of their employment.

With the increasing functions of the State, the Crown Proceedings Act had been passed, and now the Crown is liable for a tort committed by its servants just like a private individual. Similarly, in America, the Federal Torts Claims Act, 1946 provides the principles, which substantially decide the question of liability of the State.

In ancient India, under the Hindu jurisprudence, it was an undisputed principle that no one is exempted from the operation of law. This liability to equal punishment extended even to the king, a relative of the king, a judge or an ordinary citizen. The rule of law was considered supreme and binding on everyone alike. The important functions of the king were concerned with the protection of people, punishment of crimes and maintenance of dharma or social order.

In medieval Indian history the personal liability of officers for their wrongs was more vogues with evidence showing equality between the ruler and the ruled subject. Only when the king considered it proper to undertake the burden of a public officer, it was then the state treasury used to pay the compensation. Dharma was considered the administrative law binding the king as well as the subjects.

Both in Hindu law and Muslim law, the rulers themselves administered justice as far as possible and the rest was done by the exceptionally learned and honest judges. The most significant recent trend has been an assertion on the part of the court that it has the power to grant compensation. The principle of personal liability of public servants for wrongs done to citizens is already a part of Indian law based on English case laws.

Presently vicarious liability of state is defined by Article 300(1) of the Constitution which originated from Section 176 of the Government of India Act, 1935. This could be traced back to Section 32 of the Government of India Act, 1915, the genesis of which can be found in Section 65 of the Government of India Act, 1858. It will thus be seen that by the chain of enactment beginning with the Act of 1858, the Government of India and the Government of each State are in the line of succession of the East India Company. In other words, the liability of the Government is the same as that of the East India Company before, 1858.

Sovereign Functions

Sovereign functions are those actions of the state for which it is not answerable in any court of law. For instance, acts such as the defence of the country, raising and maintaining armed forces, making peace or war, foreign affairs, and acquiring and retaining territory, are functions which are indicative of external sovereignty and are political in nature. Therefore, they are not amenable to the jurisdiction of ordinary civil court. The State is immune from being sued, as the jurisdiction of the courts in such matters is impliedly barred.

The distinction between sovereign and non-sovereign functions was considered at some length in N. Nagendra Rao v. State of AP. All the earlier Indian decisions on the subject were referred to. The court enunciated the following legal principles, in its judgment:

In the modern sense, the distinction between sovereign or non-sovereign power thus does not exist. It all depends on the nature of the power and the manner of its exercise. Legislative supremacy under the Constitution arises out of constitutional provisions. The legislature is free to legislate on topics and subjects carved out for it.

Similarly, the executive is free to implement and administer the law. A law made by a legislature may be bad or maybe ultra vires, but, since it is an exercise of legislative power, a person affected by it may challenge its validity but he cannot approach a court of law for negligence in making the law.

Nor can the Government, in the exercise of its executive action, be sued for its decision on political or policy matters. It is in the public interest that for acts performed by the State, either in its legislative or executive capacity, it should not be answerable in torts. That would be illogical and impractical. It would be in conflict with even modern notions of sovereignty.

Pre-Constitution Judicial Decisions Relating to Vicarious Liability of State:

1. Peninsular & Oriental Steam Navigation Company v Secretary [1]

A consideration of the pre-Constitution cases of the Government’s liability in tort begins with the judgment of the Supreme Court of Calcutta in the case. P. & O. Steam Navigation Co. v. Secretary of State. The principle of this case holds that if any act was done in the exercise of sovereign functions, the East India Company or the State would not be liable. It drew quite a clear distinction between the sovereign and non-sovereign functions of the state for the purposes of vicarious liability of state.

As the facts of the case go, a servant of the plaintiff’s company was proceeding on a highway in Calcutta, driving a carriage which was drawn by a pair of horses belonging to the plaintiff. He met with an accident, caused by negligence of the servants of the Government. For the loss caused by the accident, the plaintiff claimed damages against the Secretary of State for India.

The Supreme Court observed that the doctrine that the ‘King can done wrong’, was applicable to the East India Company. The company would have been liable in such cases and the Secretary of State was thereafter also liable. This arose out of section 65, Government of India Act, 1858, which equated the liability of the Secretary of State for India with that of the East India Company. Distinguishing between sovereign and non-sovereign functions it was held that if a tort were committed by a public servant in the discharge of sovereign functions, no action would lie against the Government – e.g. if the tort was committed while carrying on hostilities or seizing enemy property as a prize.

This doctrine of immunity, for acts done in the exercise of sovereign functions, was applied by the Calcutta High Court in Nobin Chander Dey v. Secretary of State[2]. The plaintiff, in this case, contended that the Government had made a contract with him for the issue of a licence for the sale of ganja and had committed a breach of the contract. The High Court held that upon the evidence, no breach of contract had been proved. Secondly, even if there was a contract, the act had been done in the exercise of sovereign power and was thus not actionable.

2. Secretary of State v. Hari Bhanji [3]

In this case, the Madras High Court held that State immunity was confined to acts of the State. In the P & O Case, the ruling did not go beyond acts of State, while giving illustrations of situations where the immunity was available.

It was defined that Acts of State, are acts done in the exercise of sovereign power, where the act complained of is professedly done under the sanction of municipal law, and in the exercise of powers conferred by law. The mere fact that it is done by the sovereign powers and is not an act which could possibly be done by a private individual does not oust the jurisdiction of the civil court.

The Madras judgment in Hari Bhanji holds that the Government may not be liable for acts connected with public safety, even though they are not acts of the State. This view was re-iterated in Ross v. Secretary of State[4]. The Allahabad High Court took a similar view in Kishanchand v. Secretary of State [5].

However, in Secretary of Secretary of State v. Cockraft[6], making or repairing a military road was held to be a sovereign function and the Government was held not liable, for the negligence of its servants in the stacking of gravel on a road resulting in a carriage accident that injured the plaintiff.

Post-Constitution Judicial Decisions Relating to Vicarious Liability of State

State of Rajasthan v. Vidyawati [7]

The respondents filed a suit for the damages made by an employee (driver) of a State (Collector of Udaipur) and the case questioned whether the State was liable for the tortious act of its servant – The Court held that the liability of the State in respect of the tortious act by its servant within the scope of his employment and functioning as such was similar to that of any other employer.

It was held in this case that the State should be as much liable for tort in respect of tortuous acts committed by its servant within the scope of his employment and functioning as such, as any other employer.

Kasturilal v. State of UP[8]

The ruling in this case was given holding that the act, which gave rise to the present claim for damages, has been committed by the employee of the respondent during the course of its employment. Also, that employment belonged to a category of sovereign power. This removed any liability on the part of the state.

In this case, the plaintiff had been arrested by the police officers on a suspicion of possessing stolen property. Upon investigation, a large quantity of gold was found and seized under the provisions of the Code of Criminal Procedure. Ultimately, he was released, but the gold was not returned, as the Head Constable in charge of the maalkhana, where the said gold had been stored, had absconded with the gold.

The plaintiff thereupon brought a suit against the State of UP for the return of the gold or alternatively, for damages for the loss caused to him. It was found by the courts below, that the concerned police officers had failed to take the requisite care of the gold seized from the plaintiff, as provided by the UP Police Regulations.

Judgment

The trial court decreed the suit, but the decree was reversed on appeal by the High Court. When the matter was taken to the Supreme Court, the court found, on an appreciation of the relevant evidence, that the police officers were negligent in dealing with the plaintiff’s property and also, that they had not complied with the provisions of the UP Police Regulations.

However, the Supreme Court rejected the plaintiff’s claim, on the ground that “the act of negligence was committed by the police officers while dealing with the property of Ralia Ram, which they had seized in the exercise of their statutory powers. The power to arrest a person, to search him and to seize property found with him, are powers conferred on the specified officers by statute and they are powers which can be properly categorized as sovereign powers. Hence the basis of the judgment in Kasturi Lal was two-fold – The act was done in the purported exercise of statutory power. Secondly, the act was done in the exercise of a sovereign function.

Conclusion

In all the cases discussed before, the entity sought to be made liable is not the government but the State under the vicarious liability of state. So far as the government is concerned, it may well say that the statutory authority is neither accountable nor subordinate to it. Hence the government cannot be visited with the consequences flowing from a wrong order made by a statutory authority.

As far as the State is concerned, it cannot put forward any such plea inasmuch as the statute is enacted by it by Legislature. The appointment of the authority is also done either by the Statute itself or by such authority as may be authorized by the Statute. The act of the statutory authority in such a case is an act done for and on behalf of the State. Hence the state is held liable.

The state’s liability for the acts or omissions of statutory authorities arises only in cases where the statutory authority acts outside his legal authority while purporting to act pursuant to the legal authority conferred upon him and the act or omission, which causes or results in damage to a person, is not within the ambit of the statutory protection, if any, contained in such enactments. This rule is evolved for the obvious reason that an act done under a statute and in accordance with the statute can never amount to a tort as was said by the Supreme Court in Martin Burn Ltd. Vs. Calcutta Corporation [9]. The Court said, “A result flowing from a statutory provision is never an evil”.

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[1] (1861) 5 Bom HCR App I p.1

[2] I.L.R. 1 Cal. 11

[3] ILR (1882) 5 Madras 273

[4] (1913) 37 Mad. 55

[5] ILR (1974) II Delhi 637

[6] AIR 1915 Mad. 993; (1916) ILR 39 Mad. 351

[7] AIR 1962 SC 933

[8] AIR 1965 S.C 1039 at 1046

[9] AIR 1966 SC 529 at 535

Author Details: Vardhaman Jain