Case: State of Rajasthan Vs. Vidhyawati &amp; Another

The Trial Court dismissed the claim for compensation as against the State of Rajasthan, which was the second defendant in the suit for damages for tortious act of the first defendant, Lokumal, who is not a party to this appeal. On appeal by the plaintiffs against the judgment and decree of the Trial Court, the High Court of Rajasthan passed a decree in favour of the plaintiffs allowing compensation of Rs. 15,000/- against the State of Rajasthan also, which is the appellant in this Court.      2. The facts of this case may shortly be stated as follows. The first defendant. Lokumal, was a temporary employee of the appellant State, as a motor driver on probation. In February, 1952, be was employed as the driver of a Government jeep car, registered as No. RUM 49, under the Collector of Udaipur, The car had been sent to a workshop ion necessary repairs. After repairs had been carried out, the First defendant, while driving the car back along a public road, in the evening of February 11, 1952, knocked down one Jagdishlal who was walking on the footpath by the side of the public road in Udaipur city, causing him multiple injuries, including fractures of the skull and backbone, resulting in his death three days later, in the hospital where he had been removed for treatment. The plaintiffs, who are Jagdishlals widow and a minor daughter, aged three years, though her mother as next friend, sued the said Lokumal and the State of Rajasthan for damages for the tort aforesaid. They claimed the compensation of Rs. 25,000/- from both the defendants. The first defendant remained ex parte. The suit was contested only by the second defendant on a number of issues. But in view of the fact that born the Courts below have agreed in finding that the first defendant was rash and negligent in driving the jeep car resulting in the accident and the ultimate death of Jagdishlal, it is no more necessary to advert to all the questions raised by way of answer to the suit, except the one on which the appeal has been pressed before us. The second defendant, who was the respondent in the High Court, and is the appellant before us, contested the suit chiefly on the ground that it was not liable for the tortious act of its employee. The Trial Court, after an elaborate discussion of the evidence, decreed the suit against the first defendant ex-parte, and dismissed it without costs against the second defendant. On appeal by, the plaintiffs, the High Court of Rajasthan (Wanchoo C. J. and D.S. Dave J.) allowed the appeal and decreed the suit against the second defendant also, with costs in both the Courts. The State of Rajasthan applied for and obtained the necessary certificate "that the case fulfils the requirements of Art. 133(1)(c) of the Constitution of India". The High Court rightly observed that an important point of law of general public importance, namely, the extent, of the liability of the State, in tort, was involved.      3. In support of the Appeal, counsel for the Appellant raised substantially two questions, namely, (a) that under Art. 300 of the Constitution, the State of Rajasthan was not liable, as the corresponding Indian State would not have been liable if the case had arisen before the Constitution came into force; and (2) that the jeep car, the rash and negligent driving of which led to the claim in the suit, was being maintained "in exercise of sovereign powers" and not as part of any commercial activity of the State. The second question may shortly be disposed of before we address ourselves to the first question, which is the more serious of the two raised before us. Can it be said that when the jeep car was being driven back from the repair shop to the Collectors place when the accident took place, it was doing anything in connection with the exercise of sovereign powers of the State ? It has to be remembered that the injuries resulting in the death of Jagdishlal were not caused while the jeep car was being used in connection with the sovereign powers of the State. On the findings of the Courts below, it is clear that the tortious act complained of had been committed by the first defendant in circumstances wholly dissociated from the exercise of sovereign powers. The Trial Court took the view that as the car was being maintained for the use of the Collector in the discharge of his official duties, that circumstance alone was sufficient to take the case out of the category of cases where vicarious liability of the employer could arise, even though the car was not being used at the time of the occurrence for any purposes of the State. The Trial Court accepted the contention of the State of Rajasthan, on reaching the conclusion, after a discussion of the legal position, in these words :      Therefore it follows that the constitution and control of the Collectors office at Udaipur is an instance of exercise of sovereign powers."      On appeal, the High Court disagreed with the Trial Court on the legal issue. Its finding on this issue is in these words :      "In our opinion, the State is in no better position in so far as it supplies cars and keeps drivers for its civil service. It may be clarified that we are not here considering the case of drivers employed by the State for driving vehicles which are utilised for military or public service."      4. In the result, the High Court granted a decree to the plaintiffs as against the second defendant also for the sum of Rs. 15,000/-, in our opinion, the High Court has taken the correct view of the legal position, in view of the circumstances in which the occurrence took place.The exact question now before us arose in a case in Calcutta, before the Supreme Court of Calcutta, in the case of Peninsular and Oriental Steam Navigation Co. v. Secy. of State for India, 5 Bom HCR App 1. The Calcutta case appears to have been cited before the High Court of Bombay in the case of Narayan Krishna Land v. Gerard Noman, Collector of Bombay, 5 Bom HCR OC 1. The Bombay case related to an action of trespass, brought by the plaintiff against the Collector of Bombay in respect of certain land, which the Collector believed was Government property. Of immediate importance to us in this case is the report of the Calcutta case, which does not appear to have been reported in any Calcutta legal journal though, on the face of it, it was a judgment of far reaching importance and has always been cited as the leading case on the subject. It was a case decided by a Full Bench, consisting of Peacock, C. J., and Jackson and Wells, JJ. of the Supreme Court of Calcutta. It arose out of a reference by the Small Cause Court Judge under S. 55 of Act IX of 1850. The case, as stated to the Supreme Court, was to the following effect. A servant of the plaintiffs was proceeding on a highway in Calcutta driving a carriage drawn by a pair of horses belonging to the plaintiffs. The accident, which took place on the highway, was caused by the servants of the Government, employed in the Government dockyard at Kidderpore, acting in a negligent and rash manner. As a result of the negligent manner in which the Government employees in the dockyard were carrying a piece of iron funnel, one of the horses drawing the plaintiffs carriage was injured. The plaintiff company claimed damages against the Secretary of State for India for the damage thus caused. The learned Small Cause Court judge came to the finding that the defendants servants were wrongdoers in carrying the iron funnel in the centre of the road, and were, thus, liable for the consequences of what occurred. But he was in doubt as to the liability of the Secretary of State for the tortious acts of the Government servants concerned in the occurrence in which the injury was caused to the plaintiffs horse. So the question, which was referred to the Court for its answer, was whether the Secretary of State was liable for the damage occasioned by the negligence of the Government servants, assuming them to have been guilty of such negligence as would have rendered an ordinary employer liable. In the course of then judgment, their Lordships began by examining the question whether the proviso to the jurisdiction of the Small Cause Courts to the following effect could be a bar to the suit:      "Provided always that the Court shall not have jurisdiction in any matter concerning the revenue, or concerning any act ordered or done by the Governor, or Governor-General or any member of the Council. of India, or of any Presidency, in his public capacity, or done by any person by order of the Governor-General or Governor in Council, or concerning any act ordered or done by any Judge or Judicial Officer in the execution of his office, or by any person in pursuance of any judgment or order of any Court, or any such Judge or Judicial Officer, or in any suit for libel or slander." (Proviso to S. 25 of the Small Cause Courts Act).      The Court came to the conclusion that the proviso was not a bar to the suit. Having disposed of the preliminary question the Court addressed itself to the main controversy, which it described as "one of very considerable importance and of some difficulty". Then the Court considered the provisions of S. 65 of the Act of 1858, and pointed out that as the Queen could not be sued in her own courts, as the East India Company could have been, it was necessary to provide by that section the mode for enforcing the liabilities of the Company now devolved upon the Secretary of State. Then the Court addressed itself to the question: Would the East India Company have been liable in the present action if the Act (21 and 22 Vict, ch. 106) had not been passed? With reference to the provisions of 3 and 4 Wm IV, c. 85, it was pointed out that the Company not only exercised powers of government, but also carried on trade as merchants. The Court-then examined in great detail the provisions of the Act aforesaid and pointed out that by that Act the Company was directed to close its commercial business and cease to have any interest in the territorial acquisitions in India, which were to be held by the company until April 30, 1854, in trust for the Crown. Section 10 of that Act, which may be characterised as the ancestor of S. 65 of the Act of 1858, provided as follows :      "That so long as the possession and government of the said territories shall be continued to the said company, all persons and bodies politic shall and may have and take the same suits, remedies, and proceedings, legal and equitable, against the said Company, in respect of such debts and liabilities as aforesaid; and the property vested in the said company in trust as aforesaid shall be subject and liable to the same judgments and execution, in the same manner and form respectively as if the said property were hereby continued to the said Company to their own use."      It is noteworthy that the provisions of S. 10, quoted above, are materially similar to the latter part of S. 65 of the Act of 1858. It was in accordance with the provisions of S. 10, followed up by S. 65 aforesaid, that the Court laid it down that the Secretary of State for India was subject to the same liabilities as those which previously attached to the East India company.      9. Before the Supreme Court of Calcutta, it was contended by the learned Advocate-General, on behalf of the defendant, that the State cannot be liable for damages occasioned by the negligence of its officers or of persons in its employment. It was pointed out; "it is true that it is an attribute of sovereignty that a State cannot be sued in its own courts without its consent". "In England, the Crown", it was further pointed out "cannot be made liable for damages for the tortious acts of its servants either by petition of right or in any other manner, as laid down by Lord Lyndhurst in the case of Viscount Canterbury v. Attorney-General" (1843) 1 Ph 306. That decision was based upon the principle that the King cannot be guilty of personal negligence or misconduct, and consequently cannot be responsible for the negligence or misconduct of his servants. The court further pointed out that it was in view of these difficulties in the way of getting redress that the liability of the Secretary of State, in place of that of the East India Company, was specifically provided for by S. 10, aforesaid. The East India Company itself could not have claimed any such immunity is was available to the sovereign. This view was based on the opinion expressed by Grey, C.J., in the case of the Bank of Bengal v. The East India Company Bignell Rep 120, that "the fact of the Companys having been invested with powers usually called sovereign powers did not constitute them sovereigns". This dictum was also founded upon the recital in 53 Geo. III c. 155, by which the territories in the possession an under the government of the East India Company were vested in them without prejudice to the undoubted sovereignty of the Crown. The Court also pointed out that the liability of the Secretary of State was in no sense a personal liability, but had to be satisfied out of the revenues of India.      10. This case also meets the second branch of the argument that the State cannot be liable for the tortious acts of its servants, when such servants are engaged on an activity connected with the affairs of the State. In this connection it has to be remembered that under the Constitution we have established a welfare state, whose functions are not confined only to maintaining law and order, but extend to engaging in all activities including industry, public transport, state trading, to name only a few of them. In so far as the State activities have such wide ramifications involving not only the use of severeign powers but also its powers as employers in so many public sectors, it is too much to claim that the State should be immune from the consequences of tortious acts of its employees committed in the course of their employment as such. In this respect, the present set up of the Government is analogous to the position of the East India Company, which functioned not only as a Government with sovereign powers, as a delegate of the British Government, but also carried on trade and commerce, as also public transport like railways, post and telegraphs and road transport business. It was in the context of those facts that the Supreme Court of Calcutta repelled the argument advanced on behalf of the Secretary of State in these terms :      "It was contended in argument that the Secretary of State in Council, as regards his liability to be sued, trust be considered as the State, or as a public officer employed by the State. But, in our opinion his liability to be sued depends upon an express enactment in the 21st and 22nd Vict. c. 106, by which he is constituted a mere nominal defendant for the purpose of enforcing payment out of the revenues of India, of the debts and liabilities which had been contracted or incurred by the East India Company, or debts or liabilities of a similar nature, which might afterwards be contracted or incurred by the Government of India. We are further of opinion that the East India Company were not savereigns, and, therefore, could not claim all the exemption of a sovereign; and that they were not the public servants of Government, and, therefore, did not fall under the principle of the cases with regard to the liabilities of such persons ; but they were a company to whom sovereign powers were delegated, and who traded on their own account and for their own benefit, and were engaged in transactions partly for the purposes of government, and partly on their own account, which without any delegation of sovereign rights, might be carried on by private individuals. There is a great and clear distinction between acts done in the exercise of what are usually termed sovereign powers, and acts done in the conduct of undertakings which might be carried on by private individuals without having such powers delegated to them: Moodalay v. Morton (1785) 1 Bro C. C. 469.      11. It was also argued before that Court that the East India Company having the two-fold character of a sovereign power and of a trading company, it would be very difficult to determine whether a particular act had been done in the exercise of sovereign powers or of ifs activity in relation to trade and business. In answer to this contention, it was pointed out by the Court that the Company would not have been liable for any act done by its officers or soldiers in carrying on hostility or in seizing property as prize property or while engaged in military or nava action. In such cases no action would have lain even against the officers themselves. But the Company would have been liable for the negligence of their servants or officers in navigating a river steamer or in repairing the same or in doing any act in connection with such repairs.      12. The argument that a distinction had to be drawn between the liability under a contract and that arising out of a wrongful act, and that the latter category of liability, would not be within the mischief of the words of the section (S. 65) was rightly repelled with reference to the words of the Statute, which said "debts lawfully contracted and expenses or liabilities incurred". The latter expression liabilities incurred would include a liability arising out of a tortious act. The Court, after an elaborate consideration of all possible arguments in favour of the Secretary of State, came to the following conclusion, which is rightly summed up in the head-note in these words ;      "The Secretary of State in Council of India is liable for the damages occasioned by the negligence of servants in the service if Government if the negligence is such as would render an ordinary employer liable."

Court's reasoning:
5. The more important question raised on this appeal rests upon the true construction and effect of Art. 300(1) of the ConstitutionIt will be noticed that this Article consists of three parts, namely, (1) the first part provides for the form kind the cause-title in a suit and says that a State (omitting any reference to the Government of India) may sue or be sued by the name of the State and (2) that a State may sue or be sued in relation to its affairs in like cases as the corresponding Provinces or the corresponding Indian States might have sued or been sued it this Constitution had not been enacted; and (3) that the second part is subject to any provisions which may be made by an Act of the Legislature of the State concerned, in due exercise of its legislative functions, in pursuance of powers conferred by the Constitution. The learned Advocate-General for the State of Rajasthan argued that the second part of the Article has reference to the extent of the liability of a State to be sued, and that, therefore, we have to determine the question of the liability of the State in this case in terms of the Article. On the other hand, it has been argued on behalf of the plaintiffs-respondents that Chapter III of Part XII of the Constitution, which is headed as "Property, Contracts, Rights, Liabilities, Obligations and Suits", contains other Articles in the Chapter dealing with rights and liabilities, namely, Arts. 294 and 295, and that Art. 300 is confined to only the question in whose name suits and proceedings may be commenced, in which the Government of a State may figure as plaintiff or as defendant, and that the Article is not concerned with defining the extent of liability of a State. In other words, it was contended that Art. 300 was irrelevant for determining the vicarious liability of the defendant State in this case, and that there was nothing in this Article definitive of that liability. In our opinion, it is not correct to argue that the provisions of Art. 300 are wholly out of the way for determining the liability of the appellant State. It is true that Arts. 294 and 295 deal with rights to property, assets, liabilities and obligations of the erstwhile Governors Provinces or of the Indian States (specified in Part B of the First Schedule).But Arts, 294 and 295 are primarily concerned with the devolution of those rights, assets and liabilities, and generally speaking, provide for the succession of a State in respect of the rights and liabilities of an Indian State. That is to say, they do not define those rights and liabilities, but only, provide for substitution of one Government in place of the other.It is also true that the first part of Art. 300, as already indicated, deals only with the nomenclature of the parties to a suit or proceeding, but the second part defines the extent of liability by the use of the words "in the like cases" and refers back for the determination of such cases to the legal position before the enactment of the Constitution7. As compared to the terms of Art. 200, it will be noticed that part (i) of that Article corresponds to sub-s. (1) of S. 32 above, part (2) roughly, though not exactly, corresponds to sub-s. (2), and part (3) of the Article, as indicated above, does not find a place in S. 32,Sub-section (2) of S. 32 has specific reference to "remedies and has provided that the remedies against the Secretary of State in Council shall be the same as against the East India Company, if the Government of India Act of 1858, and the Government of India Act, 1915, had not been passed. We are, thus referred further back to the Act 21 and 22 Victoria Ch. CVI, entitled "An Act for the better Government of India." As this Act transferred the Government of India to Her Majesty, it had to make provisions for succession of power and authority, rights and liabilities. Section 65 of the Act of 1858 is in these terms :"The Secretary of State in Council shall and may sue and be sued as well in India as in England by the name of the Secretary of State in Council as a body corporate and all persons and bodies politic shall and may have and take the same suits, remedies and proceedings legal and equitable, against the Secretary of State in Council of India as they could have done against the said Company; and the property and effects hereby vested in Her Majesty for the purposes of the Government of India, or acquired for the said purposes, shall be subject and liable to the same judgments and executions as they would while vested in the said Company have been liable to in respect of debts and liabilities lawfully contracted and incurred by the said Company."It will thus be seen that by the chain of enactments beginning with the Act of 1858 and ending with the Constitution, the words "shall and may have and take the same suits, remedies and proceedings" in S. 65 above, by incorporation, apply to the Government of a State to the same extent as they applied to the East India CompanyThe history of events leading up to the formation of the State of Rajasthan has to be adverted to in this connection. It is clear, on a reference to the Government publication called "The White Paper on Indian States" (paragraphs 134 to 138, at pages 53-55) that the integration of the Rajputana States into one single state was effected in several stages. Rajasthan Union was originally formed by the smaller States, which later united and formed the united State of Rajasthan, inaugurated on March 25, 1948. Subsequently, bigger States joined and the second Rajasthan Union was inaugurated on April 18, 1948. By a further process of integration of some bigger States, a new United State of Rajasthan was inaugurated on March 30, 1949. There was a further accession of territory by the agreement contained in Appendix XLI, on May 10, 1949, with the result that the initial United State of Rajasthan with an area of 16,807 sq. miles developed into one of the biggest units in India, as the Rajasthan union, before the Constitution with an area of 1,28,424 sq. miles. And, finally, on the inauguration of the Constitution emerged the State of Rajasthan as one of the Part B States. It is clear that we cannot go beyond the last stage of the integration, as aforesaid, which brought into existence the State just before the coming into effect of the Constitution. As already pointed out, the provisions of the second of Art. 800 have to be traced back untill we reach the Government of India Act of 1858 (S. 65), which itself was based upon S. 10 of the Act (3 and 4 Wm. IV c. 85 of which the relevant portions have been set out above14. From the resume of the formation of the State of Rajasthan given above, it is clear that we need not travel beyond the stage when the Rajasthan Union was formed on the eve of the Constitution. It has not been shown that the Rajasthan Union would not have been liable for the tortious act of its employee, in the circumstances disclosed in the present case. The issue framed at the trial on this part of the controversy, was issue No. 9, in these terms:"Whether the State of Rajasthan is not liable for the act of Defendant No. 1 ?The State of Rajasthan has not shown that the Rajasthan Union, its predecessor, was not liable by any rule of positive enactment or by Common Law. It is clear from what has been said above that the Dominion of India, or any constituent Province of the Dominion, would have been liable in view of the provisions aforesaid of the Government of India Act, 1858. We have not been shown any provision of law, statutory or otherwise, which would exonerate the Rajasthan Union from vicarious liability for the acts of its servant, analogous to the Common Law of England. It was impossible, by reason of the maxim "The King can do no wrong to sue the Crown for the tortious act of its servant. But it was realised in the United Kingdom that that rule had become outmoded in the context of modern developments in statecraft, and Parliament intervened by enacting the Crown Proceedings Act, 1947, which came into force on January 1, 1948. Hence the very citadel of the absolute rule of immunity of the sovereign has now been blown up. Section 2(1) of the Act provides that the Crown shall be subject to all those liabilities, in tort, to which it would be subject if it were a private person of full age and capacity, in respect of torts committed by its servants or agents, subject to the other provisions of the Act. As already pointed out, the law applicable to India in respect of torts committed by a servant of the Government was very much in advance of the Common law, before the enactment of the Crown Proceedings Act, 1947, which has revolutionised the law in the United Kingdom, also. It has not been claimed before us that the common law of the United Kingdom before it was altered by the said Act with effect from 1948, applied to the Rajasthan Union in 1949 or even earlier. It must, therefore, be held that the state of Rajasthan has failed to discharge the burden of establishing the case raised in Issue No. 9, set out above15. Viewing the case from the point of view of first principles, there should be no difficulty in holding that the State should be as much liable for tort in respect of a tortious act committed by its servant within the scope of his employment and functioning as such, as any other employer. The immunity of the Crown in the United Kingdom was based on the old feudalistic notions of Justice, namely, that the King was incapable of doing a wrong, and, therefore, of authorising or instigating one, and that he could not be sued in his own courts. In India, ever since the time of the East India Company, the sovereign has been held liable to be sued in tort or in contract, and the Common Law immunity never operated in India. Now that we have, by our Constitution, established a Republican form of Government, and one of the objectives is to establish a Socialistic State with its varied industrial and other activities, employing a large army of servants, there is no justification, in principle, or in public interest, that the State should not be held liable vicariously for the tortious act of its servant. This Court has deliberately departed from the Common Law rule that a civil servant cannot maintain a suit against the Crown. In the case of State of Bihar v. Abdul Majid, 1954 SCR 786 (AIR 1954 SC 245)  ,this Court has recognised the right of a government servant to sue the Government for recovery of arrears of salary. When the rule of immunity in favour of the Crown, based on Common Law in the United Kingdom, has disappeared from the land of its birth there is no legal warrant for holding that it has any validity in this country, particularly after the Constitution. As the cause of action in this case arose after the coming into effect of the Constitution in our opinion, it would be only reconishing the old established rule, going back to more than 100 years at least, if we uphold the vicarious liability of the State. Art. 300 of the Constitution itself has saved the right of Parliament or the Legislature of a State to enact such law as it may think fit and proper in this behalf. But so long as the Legislature has not expressed its intention to the contrary, it must be held that the law what it has been ever since the days of the East India Company.